Morning. But those are pretty incredible images. Among our top business headlines were watching oil prices this morning. Crude down sharply after yesterdays gains of nearly 3 . We havent quite wiped out that gain but its still going to be driving the market today. Crude down about 2. 5 . Brent down close to 2 . Brent is slightly higher than crude but weve seen those levels reversing themselves. The move came after an unexpected rise in inventories reported by the American Petroleum institute. Well get the weekly report on inventories later this morning. As you know by now that can be market moving and city Energy Analyst telling cnbc that prices face further down side risk in the first half of 2016. That call based on expectations that opec will continue to try to pump the competition out of business. And thats what opec has been trying to do all along. The bidding war for pep boys appears to be over. Bridgestone saying it will not counter mondays offer from carl icahn. Offering to buy all of outstanding pep boys stock for 18. 50 a share in cash. Pep boys stock is down below the offer price. It traded through it in anticipation that bridgestone would come back and rival icahn bidding the price higher. It values the auto parts retailer and Service Center at 1 billion. And ride hailing app sidecar is putting its employees to work on new projects. It was a competitor to uber and lift with high profile backers. Sidecar said it had been outfunded by its competitors. It raised 39 million compared to lyfts 1 billion. It wont be a winner takes all market but a winner takes most. So maybe one, two, three. I think its an at t verizon story and thats the end. So its uber, lyft and then nobody. The networking effects of the way these businesses work you can have thousands of them. You cant even have five of them. Cant lose you. Only two. Two. Theres a lot of other things. I one arguing it. Im not saying you were. But theres people in the antitrust division that havent moved past the 1930s. Theres still a lot of companies trying to throw Business Models to see if it sticks and via which is 5 per ride. Uber raised 12 billion in financing. In actual cash. In actual cash. Its a real business isnt it . That is a real business. Did the light bulb just go on. At this moment . It takes a few stories. Do you think joe would take via . Would you share a car with somebody else . I dont think so. Youre opening yourself up to anyone else jumping into the car on your route with you between lets say 59th street and i dont think you have. Ive been on a bus. Yeah. Ive done that before. You dont use uber but you tell them where they want to be and then they say the car will come and pick you up quicker. And then decide what you want to do. I have experienced dropping the pin where ever you are and then the driver saying im over here do you want to just meet me here. My main thing is i dont want to get a flu shot from the uber driver. I dont want to open up my veins. We might still do that by the way. Im not doing that. I might do it. Would you eat lunch from an uber driver . That came out of an uber trunk . From chipotle . From depends on where its from. Not sushi probably. I have one more for you. We did amazon prime now yesterday. Where it shows up within an hour or two and they recommend a tip. How do you feel about that . I feel okay. You do, okay. I know how you feel about all tipping. You are the one dispatching that person in a fury. But ive never tipped the ups man. You never tipped a waiter or waitress. 20 across the board. This year i found in my newspaper that gets delivered every day to my apartment the envelope. The newspaper guys you have to give a tip to. Maybe i havent found it until now and i felt bad about it. The price of amazon prime now just went up as far as i can tell. I want you to get on to the next couple of stories because theres one coming up that i want to see here. We will he was governor for 8 years. I want to see if you can pronounce his name. Test of my own pronunciation. George pataky. Chinese central bank suspended foreign banks. The notice sent did not give a reason to the suspension. Including spot positions for the client. Seen as an effort to stabilize yuans exchange rate. Smaller new york governor announcing he is suspending his campaign. He made the announcement during a primetime tv ad on nbc news affiliates. That was the only component of it i didnt understand. Why would you spend money to tell people you are leaving. He had some left over dough. Never got any traction and hes a big security guy and even after that, it was 0 or 1 . Still a couple of guys like that. Couple of guys like that. What did you think of him . He was a fine governor. Tough to match mario for you. He was a good governor. Well go with kalobios. They filed for chapter 11 bankruptcy. They fired the ceo earlier this month. And listed its assets and liables on the range between 1 and 10 million. Check on the markets this morning, giving back some again because were off of oil as we normally do but not much. We have a big up day and it looks big when you see 192 points but it only got us back about 17720 on the industrials. Remember the highs for the year were up in the 21 and changes. And right around the flat line. And actually showing strength today. Europe was down. France is now turned around and up a little bit. You can see that. Some mixed trading but mostly red arrows in europe and asia. Not a whole lot happening. The shanghai is actually up but just a quarter of a percent. Theres one of the problems tod today. Finally the ten year, i saw 230 print earlier but its 287 right now. The euro is back down about 109 earlier. Thats where it is today. 109. In the quarter. And finally gold. Well let you know if anything ever starts look at the last month or so its just flat lining right around the 1070 area. For more on the markets with two trading days left in the year. Lets bring in jack. Jack, youre one of the first guys on squawk box. Remember one of the first hosts. 20 years ago. Here you are. You vn changed a bit. Come a long way. All the way to executive Vice President and not just any investment officer. Youre the chief investment officer. Am i right . My neck on the line. Well get to john in second for the quick backdrop. I get jack is intact but after this past year nothing to write home about. Same thing next year or better . Its still stretched. Theres a lot of High Expectations and the economy needs to come through and fulfill the expectations. If analysts are correct and Fourth Quarter comes in as they expect that will represent three consecutive quarters of profit declines. Id like to see the economy pick up. Id love to see more evidence that Energy Prices stabilize at the very least. And i think against that backdrop we can muddle along. Trade higher a little bit. I think one of the best things for next year is that the highest, largest cap, highest quality stocks are trading at same valuation as everybody else. So could be an interesting time to maybe upgrade and actually go into dividend shares as slight defense mechanism. When i think about the economy and the fed and i look at the Unemployment Rate and gdp its a very sort of mixed picture that i dont know if its very typical historically to see something where even though employment were at 5 right now. In the 8 years of clinton it was 5. 3 or 5. 4 and we thought that was great. During the 8 years of bush it was about the same and we thought of that as pretty good. So here we are below that as far as unemployment and were worried about whether this economy can take another quarter point increase or another two or three next year. I think the concern in many quarters and youre right know. Its very atypical at this point in the cycle. The concern is theres been a lot of debt issuance taken on and it appears that if Income Growth isnt that strong then youre going to get squeezed and thats the tension thats in the marketplace right now is that the income of Profit Growth may not be so significant as to offset the rising impact of Interest Rates. I dont know. Is there something about that employment number, john, that you really feel is misleading . Is it the Participation Rate or the number of part time people or what is it . Traditionally labor force Participation Rates pick up as the economy begins to grow. Thats not happened this time. You have lower Participation Rates for males and females and its both and i think theres an underlying change in the u. S. Economy thats all to the value of looking at the u3 or the Unemployment Rate that gets the most publicity. Can you tell jack anything positive about the underlying economy in terms of what it will do to corporate profits. It wants to do better than the past year. Is there any reason to think that could happen given the economic backdrop. Yes. I think if we could get Commodity Prices to stabilize, one of the huge factors bringing price appreciation down as i said commodities were starting to see wages rise. If we can start to see Household Income rise that could be a positive. Perhaps they overall we do have very strong Balance Sheets. They still have a fair amount of dry powder on the Balance Sheet side to continue to keep their income statements propped up. They had a lot of cash for awhile. Maybe they start investing for the longterm. Do you think we have sort of gotten away from supply Side Solutions . I saw an article that china looked around and said we have to go from we have to get away from an economy so well be more supply side. That seems to work in terms of spurring the economy. Theyre all over economics in china and the only place were questioning whether it works is here at this point. We have been lulled into this notion that it doesnt work. I think part of it, joe, is really just the recognition of available growth. I think if organic growth now is our potential growth rate is say 2. 5 . Our labor force is growing at. 5 . You know, if you squeeze a little bit you can get produ productivity up to 2 . And organic growth rates have come down. The problem is policy makers, management, shareholders are in denial and in order to grow faster than whats organically available to you, you have to do it by increasing your market share. Well, if youre a country, how do you do that . Lower their currency and steal share from your neighbors. If youre a company you can buy back shares. Look at earnings per share growth is double net Income Growth over the last ten years and of course theres buyouts to grow your top line so i think part of is it yeah supply side isnt working because there isnt enough organic growth available at the moment. And part of it is just this recognition. We cant take a 2. 5 donkey and somehow beat it into a 4 horse. We cant do 4 if we beat something. I still think were at 3 potential economy, arent we . This is america. Yeah, you can get the 3 . You focus on the supply side is right joe in the sense that if you listen to the underlying discussions a lot of it is labor force Participation Rates. Thats the supply side of labor. Thats a supply side on capital. So those respond to incentives and that gets to the hard portion. What is the incentives you need to get people more anticipating in the labor force. What are you going to do about tax rates or subsidies . What are you going to do about capital . Capital isnt going to invest unless it expects rate of return. So the supply side does matter. We dont call it that but its there. We hear from people that, those are zombie ideas. We hear that thats what drove us into the ditch and were not going to let these folks not going to let these folks get the keys back but we tried redistribution for 7 years now and all its done is redistribute more wealth to the wealthy. So i dont know. Maybe we need to im going to get you on this eventually. Im going to get you with me on this. Youre going to be with me on this. John and jack. Thank you both. Happy new year. Im asking questions of our guests. Hoping it seeps in. Just hoping that youre listening. Osmosis. You were glad that Airline Tickets went down. They did. Theres another piece today. Its going to hit the revenue for the first time. What i want to finally get to with you is that the middle class was not an aberration in this country because of world war ii that there is american exceptionalism that comes from freedom in your personal life and markets and you embrace that and embrace our style of economics in this country. And there is a chance for another morning in america. I hope theres a chance for another morning in america. I want there to be. Do you look at new york. Its a shining city. Yes. It is. Youre with me on this. Im with you. Even though youre a millennial. Even though. When we come back the breakneck pace of auto sales in china and later a closer look at the hidden costs cutting into your retirement savings. Right now take 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. Rescuers have now found 8 surviving miners that were trapped after a mine collapse on christmas day. Infrared cameras detected the miners waving their hands and authorities are drawing up plans to rescue them. Rescuers drilled a relief hole and have delivered food and provisions to the 8 trapped men. One person was killed in the collapse and nine are missing. After years of strong double digit growth car sales in china might be hitting a major speed bump. Eunice has that story. He is on the front line in the battle for chinese car buyers. At her dealership the 25yearold sales agent is under pressure to move 12 cars by the end of the year. Its very difficult for us to sell cars. In the past customers would always come after us, she says. But now we have to chase the customers. She competes in the Worlds Largest auto market. For years sales of sedans and suvs have grown in the double digits but so far this year new car sales are up only 3. 9 as the economy weakens. The manager says potential buyers here have turned price sensitive. Its common practice in the car market today to sell cars below cost because otherwise you wont sell anything at all, he says. On average, were losing nearly 1,000 on each car we sell. The average discount at several dealers is now around 10 . He says many are trying to boost after sales and other services to make up for the profit short fall. Were driving along the famous car street. It spans about 3 kilometers long. People come here to get their cars fixed and serviced and buy new models and they have been up all over the country. This year business is way down. The government has cut taxes on certain models to boost demand. Even so, she still worries she may not be able to meet her sales target. If i fail, i wont even get paid a penny for the whole month. The witherring market is imposing huge pressure on our company and on us as well as the entire auto industry. Eunice yoon, cnbc. Thanks. Back here at home, much of the United States recovering from a week of storms and blizzards. And we have the latest forecast from the weather channel. You have a one day shot to see the sun in the southeast and now back to rain across the southeastern states but its got going to last that long. A nice dry stretch coming after we see the rain in new orleans, birmingham, atlanta, charlotte and rain through today getting up through the d. C. Area and new york city. Possible showers there. The west, the story is the chill. Los angeles only 64 degrees for the high. But the overnight lows dipping into the 30s get you. Overnight tonight 41 in downtown l. A. Look at the readings tonight in denver, 6, 14 in chicago. Through the midwest spreading into portions of the northeast and the southeast as we get you into the start of the new year. New years eve, rain through portions of the south. South texas into Southern California and georgia. New years day fairly quite weather with a little bit of lake effect snow in the northeast. Possible rain and possible wintery weather to watch. Thats a look at your top weather stories. Back to you. Thanks. Well bring you a live update from the flood zone in missouri in the next hour. Heres something for you. Mike tyson posted this video. Having fun on his daughters hover board until suddenly he wasnt on the hover board anymore. The former heavyweight champion is apparently okay after the fall. Its all here on video and hes not the first guy to fall off one of these things. Thats for sure. But hes one of the more coordinated people you would think. I would think. Ive tried to do the paddle board and who is more coordinated than i am and i had trouble. Paddle board. Stand up. Can you do that . Yeah. Thats not hard. I fell every other way i fell this way, that way. I fell on my chest. Where were the cameras. I lost a pair of sunglasses and people do it with good waves too. Theres still something for you to strive for. Im not going to try it again. I can only imagine wind surfing of course you saw john carey would be president today. Coming up outside of the world of business that have you no, would he . Anyway, buzzing, including an upset of College Basketballs Top Ranked Team msu but the main guy hurt his knee like a week ago. Suspensions ahead of tomorrows orange bowl on the clemson team and mail carriers busted for dumping the mail in their closet. Heres a look at yesterdays s p 500 winners and losers. All right. Just one more day before the big event tomorrow at noon. Where xavier takes on villanova. Meanwhile, the number one team, michigan state, going into iowa, underdogs. Theyre number one. Unranked iowa, underdogs because their best player is hurt and they went in and there was a notion that they might bget bea by iowa. And it did happen. Its a tough team, iowa. Youre playing at the home court and it happened so now oklahoma and kansas might be 12 by monday and theyre going to beat on monday. We knew it already. Not even into march yet. Not even march yet. And its pretty exciting. And then just quickly, like two or three guys on the clemson team. I dont know what they did but theyre not allowed to play in the orange bowl. How many of them. I dont. But two or three of them three of them thats the number one team. I dont know. Starters . Im not sure. They were important players but not the backbone of the team, right . Theres a News Conference later today on exactly what the issue was. But some type of youll be reporting live from the News Conference of course. If they dont send me out to the flooding. You have to do it like when the producer is talking in your ear. Youre getting the news information coming to you. Barry owens used to do that. And you have to hold the microphone in your hand. Will you say sock it to me. Will you say it . Richard nixon said that. Anyway, youre doing a new man, this is unlike the seinfeld. When you dont get something in the mail and you think it got lost. He sticks it in the closet. Two mailmen in queens did that. One person threw about a thousand letters away. Its not funny. Because he was stressed out or angry and another person actually opened dozens of gift cards and began spending them. A mother sent her son a 100 dollar mastercard gift card and he never received it. They found this postal worker in his uniform using this card and other cards. In some cases he was buying it online and having it shipped to the post office where he worked. They could pick it up there. Theyre like bonds, arent they . Theyre not made out to you. No, anyone can use them. Pretty good scam. That is a pretty good scam. Giving a lot of guys ideas out there. How can you tell if theres a gift card in an envelope. You can probably feel it or often just open a sizable chunk of mail that comes in. They should be able to shut the cards down though if you claim theyre lost because they have tracking devices. If you keep the receipt. Im going to give my story to you. You have another story to talk about. Algorithms. That will tell you whether a movie is going to succeed or not. And its total crap and bs. We look and there has to be a strong usually a strong male. Yeah. I guess. And this and this and we can plug it into a computer and tell whats going to be a big hit. Number one, i dont believe it but what if they put this in gili, heavens gate and water world an they use those four to see what the absolute worst movies are and then do the opposite of those it might work. But do you believe you can figure out like thats almost artificial intelligent to figure out what people are going to like. You know fast and furious. But theyre not always going to work. The algorithm doesnt figure out if the story is any good. Assuming that things wont change too. I would have told you that the will smith concussion film would be a big hit. Why. Just off the basis of will something and the issue of football. But its your football. Its an antifootball. The beloved american game and will smith you think okay. But its an anti its that football but the computer doesnt know that. No, but im talking about you. Does the algorithm actually able to read the script. Theyre not going to use your algorithms to figure this out. Who wants to see something about the mortgage industry and especially hollywoods take on these terrible guys that cause the end of the world. So far so far my algorithm happens to be working. Well leave it there. Didnt work on concussion . No, as a creator my algorithm is work. From too big to fail. Im saying. Theres an algorithm that worked. What do you want . I dont know. Hbo. Well see. Coming up, portfolio picture and cnbc contributor is going to unveil his new investment ideas and well take a look at his winners in 2015 like google and jp morgan and his losing picks like chevron, qualcomm and united technologies. A quick check at whats happening in european markets right now. Welcome back. Were down 21 points now on the dow. Were probably not going to do 10 this year on the s p or the dow. But you never know. We have today and tomorrow. No one is around. Anybody that has any juices somewhere else. Arent they . St. Barts or something. People in aspen. I imagine. But here we are. Here we are. In the big city. In the big apple. Here we are a 3 45 a. M. Wake up call. Nasdaq is up about 8 though. Thats not bad. S p went positive yesterday. All the Hedge Fund Guys are down. Which is sort of satisfying in a way, isnt it . I want everybody to succeed joe. You forget that hedge funds also manage 401k money and pensions. I shouldnt associate it with the people running the hedge funds then. No. Okay. When you say it like that. So its not just fat cats. But then you make the opposite argument other times that a stock market is only good for the 1 and i say no, people in unions have and then you say no, no, so it depends on what were looking at. Whatever the opposite of that view is. And Energy Prices which if you want one major reason for probably all of the strange things going on in the differ markets, all the dislocations, i dont think anyone on the planet a year ago would have thought wed be below 37 for crude. It influences so many differ things in terms of all the Energy Stocks in the s p and high yield and yung and how many of these companies i mean, i look at some of them like did you see freeport . Chesapeake . And its companies that have gone down. Coal has other problems but theyre like penny stocks. Rewind a year when the fed was putting together the scenarios for the bank. Its the outlandish scenario for oil is that it rose to 100. To do the stress test was that it was going to rise. We havent seen the real bankruptcies yet. I think thats coming. Probably. They can still raise equity. What if it went back to 50 . If it stays at 35 its a problem. You have a problem and a lot of private equity guys will be buying things. And its parts of the world that will be bankrupt htoo. A new year might mean a make over for your portfolio but should you be betting on stocks in 2016. Here with his investment ideas fr the new year, michael farr and also a cnbc contributor. Happy end of the year to you. Happy end of the year to you guys, thanks, kayla. Youll be selling out of your top picks on december 31st and youll be redeploying your money into new picks. So before we get there refresh us on what youll be selling tomorrow. Ill be selling last years list and last years list was it turns out a little too defensive for the markets. We straw names like facebook and netflix and tesla all did very well. I didnt own many of those so im hoping that my new list for 2016, the 90 million market cap. About a market multiple. 11 Earnings Growth versus a market of around 6 and a 2. 2 dividend will leave me in better stead. Your first name was chevron. We were talking about oil and this weakness. Saudi is saying that theyre budgeting 45 barrel for next year. Opec says we wont get to 100 barrel until 2040. Why bet on chevron . Chevron is a fabulous company. They have tremendous cash flow and tremendous assets. I think at 35 a very negative scenario for oil has been already priced in. You get a 4. 7 dividend. Earnings fwroeth growth of arou. And theyre under pressure. You buy them when pes are high and sell them when theyre low. As i look at a couple of years oil prices will be higher and chevron in a much better position. So you want to hold this for two or three years . When do you see it paying off . Im a buy to hold investor. So in our main portfolios well hold this for three or four or five or six years. This is a one year portfolio. A lot of the bad news is in and has pretty descent prospects for 2016. You have a couple of defensive names on here. You have cvs, you have johnson johnson. Dividend plays there. Whats the strategy . Well, i think youll see a reallocation of risk in 2016. With the fed gone. With the fed not backstopping every big market down drop youll see a reallocation of risk. Away from the stocks and into stuff where earnings matter and Balance Sheets matter. Im sure i sound very Old Fashioned but cash flow and returns on equity. So these are companies that are doing really well. 10 to 14 Earnings Growth for cvs. I think well be on the high end of that. Its a very simple strag forwar company but if the s p earnings are forecast to grow at 5 and i can buy cvs and these other companies at market multiples and i get twice the Earnings Growth out of a cvs and other Earnings Companies i want to earn the higher growers. I dont want to pay more for them and i still want the added bonus of a dividend. It makes sense to me. The fang stocks that faired the best this year are not dividend players and the stocks have gone up more than anything else in the market. Investors have been patient and so willing to plug so much of their money into those stocks. I cant do you think that fades next year . I think the fed is really the answer there and risk has been rewarded. When the market dropped in 2014 in october the fed was right from. We were down 9. 8 . They said maybe the fed needs to do something and as he was speaking stocks started to go back up and that was the reaction of the fed. When we fell this august and we were down a thousand points the fed was silent. The feds reversed course. Theyre not going to shovel cash at this thing every time it turns around and starts to head lower. Therefore i think investors for the first time in several years will be deciding maybe it ought to Pay Attention to risk. Maybe i just cant invest with wild abandon. Therefore i think my list will be much more important this year. I want to give the viewers a quick run down of the rest of the names on your list. Sprouts, lowes, goldman and financials, qualcomm which has been a loser in i. T. So well see how that comes to bear. Well see you before the end of next year so well talk more about these. I look forward to it. Thanks so much. Happy new year to you. You can read more on cnbc. Com. Quick update on clemson, do you want me to talk to you or ill talk to kayla. Go for it. Okay. Theyre saying it was reportedly failed drug tests. The one guy t biggest loss is the second leading receiver, wide receiver on the team but they got another guy to come in and get even more catches. The other guy was a kicker that was supposed to do kick offs and extra points. The third guy was a reserved tight end that didnt have reception this season. So only the one guy is a big loss. Up next, were going to talk about americas retirement crisis. Nobody like andrew said has any savings. And that could be a problem. Well have that when we return. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Welcome back to squawk box. Hitting costs may take a bite out of retirement savings, it costs americans more than 17 billion in and reduce retime savings by 60 . The founder of americas 401k. We talked about your company. People dont realize about fees at all, and where can they go to figure it out . You know, its been there for three years now. For 30 years, the industry never provided disclosure related to the future paying. Disclosures out in 2012, and the problem is, they are 50 page documents. Fees are in plain sight, almost impossible for the average person to articulate how numbers add up. We have a site, showmethefees. Com, and in a moment, you get an idea how the plan stacks up. If im in vanguard, fidelity, what have you, put it in, boom, figure out how much the fees are . Not really because its the industry has gigged the system to where you might have a Vanguard Fund in your plan. Its five basis points, yet, look at the fees, you wonder, how is it this exact same fund goes for 1. 4 , right . Its because the industry. Whether its the brokerage community, the insurance companies, the record keepers, some other provider, they decided they have to get paid first. What you think you might have, inherently, foundation is good, at the end of the day, its not. You have a business which is trying to be a low fee business . Low cost business, but to do that, you need businesses, not employees. Handcuffed by the wellintentioned employer, the choices they made with providers. If you go to showmethefees. Com, how do you compare to industry averages . Go beyond that. We want your disclosure form and determine whats your plan actually paying . A difference of 23 over a court of 30 years causes you to run out of money 20 years earlier. We are living longer. Thats the problem. We outlive our resources. Whats a good checklist for the new year for people who maybe dont have a good microscope on what the 401k is . Its twofold. One, were not saving enough, right . Oftentimes, im asked, what do millennials do . Youre going to get old like mom and dad. That group of folks lives 40 years past the active work life. You have to sustain yourself. We have to increase our savings rate. Checklists, making new years resolutions, right, increase the savings, thats one thing. Wait, how much should people be saving . 1215 . Pretax or post tax . Roth 401k, we need numbers to be increased. Okay. Thank you for coming in. My pleasure. Come back, have the conversation about whether we should do what they do in australia, which is actually force you to save. Exactly right. An interesting dynamic. Curious what you think about th that. You have da that that millennials get old . Positive of it, yep. Did you know that . I have not met a millennial yet that think they will be old. No way. Nope, not happening. Not with them. Goes by in a minute. Appreciate it. Whats in the pipeline for drug prices next year the the playbook for 2016. I take prilosec otc each morning for my frequent heartburn because you cant beat zero heartburn ahhh the sweet taste of victory prilosec otc. One pill each morning. 24 hours. Zero heartburn. While youre watching this, im hacking your company. Grabbing your data. Stealing your customers secrets. Theres an army of us. Relentlessly unpicking your patchwork of security. Think youll spot us . You havent so far. The next wave of the internet requires the next wave of security. Were ready. Are you . Two more trading days left in 2015, and the s p 500 back in the black, but a drop in oil prices could have stocks slipping. Will 2016 bring more pain than gain for investors . Chatting up snapchat. The fast growing messaging app is the talk of wall street, and its not even publicly traded. Will that change in 2016 . A currency war on the home front. The battle over killing the penny. Is the iconic coin about to see its demise as the second hour of squawk box begins right now. Welcome back to squawk box, im andrew with joe and kayla, becky has the day off. Deadly storms in the midwest, missouri, and more than a dozen states brace for more rain and flooding as hundreds of homes are threatened by rising waters, several highways shut down, and theres been widespread evacuations. 13 died so far in missouri. A live report in a few moments. Residents in california feeling a midday rumble. A 4. 4 earthquake struck in the town of San Bernardino county, no immediate reports of damage. Lets get to kayla, though, with the other top stories. Thats a good one, though. In terms of top stories, that is a big one. Youd feel that. 4. 4 . Yes. I was in a 5. 9, like, a 4, and ten times stronger is a 5, and then temperature times stronger than a 5 is a 6. Where was it . San bernardino. The end of the road for bridgestone and attempt to take over pep boys. The company will not counter the latest offer from carl icahn. The investor offered to buy all outstanding shares for 18. 50 in cash, valuing them at a billion dollars. Stock is down 4 because it traded through the deal so its coming back a little bit. China central bank suspending three foreign banks from conducting Foreign Exchange business until the end of march. According to rioters, they did not give a reason for the suspension, and some Services Include liquidation for clients and other cross border banking services. The foreign banks were not revealed to. This is an effort to stabilize the yuans exchange rate. Khristine lagarde says Global Growth will be disappointing in the coming year, and rise in Interest Rates and slow down in china contributes to uncertainty and risks. Of course, she warn of that before, warnings of the same tune in 2016 this time. Nasdaq positive by three and a half points, dow opens down 22 point, and s p would open down by just about a point as we mentioned earlier in the show. The s p went positive for the year yesterday. The dow is still negative. The nasdaq is about notch an 8 gain if it closes this day. Of course, theres a couple more days of trading. In europe, we have gone negative in france, negative in italy, but not too bad. Just fraction of 1 into the red, joe. Crude is back under pressure, crude oil. This morning, prices falling sharply after yesterdays nearly 3 point rally, 3 percentage point rally. Energy Department Releases weekly inventory report on crude and stockpiles at 10 30 a. M. Eastern time. Right now, we are down giving back the 3 we got yesterday almost. With two trading days left in the year, s p is back in the black, nasdaq is up, and 8 , its not bad, but, you know, going into the nasdaq, theres more risk, so, i dont know. 8 s okay. You know, its not a great year for stocks. Leading the charge. Dow a half percent from being positive. Here to help us prepare for the trading day and next year, our guest host, chief market analyst at the lindsey group, and bill s smeed, cio of smeed capital management. That seems like so many things, too many different hats. Master of all how does that go . But master of none . Can you handle this, bill . Well, we have 11 employees, 2. 4 billion in capital. Thats a lot. Turnover averages 15 in six years. If youre not changing your stocks all the time, you dont have as much to manage. You can manage the company as well as that. Okay. All right. Ill give you the benefit of the doubt here. Theres a one man operation. Starting with you, peter. So, you, for a long time, thought about the unprecedented move that the fed did for the past five to six years, and its uncharted territory, never done before, could be some type of problem that we could have trying to unwind all this accommodation. So far, accept for, you know, a couple days where the market sold off, it seems like its going okay. Can you tell me what you think negative is going to happen as we go into next year and they try to do four increases, whatever they said they would do . Do you see something happening that precludes that or, you know, some dislocation somewhere . Immediate impact is the rising cost of capital for corporate america. The fed raised 25 points this year, but high yield spreads widened by 250 basis point, and Investment Grade widened by 100 plus. The rate hike is translated into much greater increases than the cost of capital for many companies. Many companies were tapping this is a credit driven economy, as we know. That rise in the cost of capital will have an impact, whether its companys expansion plans or stock buy back plans because companies have to reassess. Even though at the margin its such a small number. Yeah. Because the Collateral Damage to other areas of credit have been more pronounced, and thats my concern, is that the fed only has to move a little bit to have more of a broader ripple effect. Either people that say that the malinvestment, that its already engendered in stock buy backs, mergers, whatever, thats already damaged us by Holding Growth down to 2 . They say there doesnt have to be a cataclysmic event as they try to get out, that they already hurt our growth . That, and we pulled forward a lot of activity. We pulled forward returns and economic activity. I mean, auto sales is bright in the u. S. , but i wonder every day is how many auto sales did we pull forward with this attractive financing . The home buying tax credit, and tax rebate, short term bond you think theres a slow down in terms of autos . Im not sure. When does it hit . Thats the question. I dont know the answer of when it happens, but i have to believe that very generous credit terms in buying a car pulled forward a lot of sales. When it happens, im not sure. Bill, fist of all, you said 15 , did you manage 15 in 2015 . Turnover, 19 . No. What about a return on your average portfolio, what did you do in 2015 . Well, we only have one portfolio, and were a little bit ahead of the s p 500 this yeah. So flat. Well, id like to talk about what peter just mentioned i know. Youre flat . You didnt say yes or no. Youre flat for the year . No, i think were 27 basis points ahead of the s p net of all costs. S ps flat. Thats flat. Well, no, no. Were up 3plus percent. Count in the dividends in the s p. All right. We have dividends, own stocks for a long time. We collect dividends. Peters got a bit of a glass is half empty view of things. The first thing that i dont agree with him on is the idea that auto sales perking up is some kind of temporary thing. You know, theres 86 Million People in the United States between 2137 years old, late in life getting married and having kids, but theyre going to do a lot of things in five to ten years they have not done before, and its going to change the composition of our economy. We could easily have a housing boom in the next five years. The household formation between 20072013 was the worst in 60 years, and it exploded in 1415, and its only going up for the next five to six years. So, bill, you dont think as home prices rise, rates are up, millennials are not priced out of the market because they cant afford mortgage . Look, in the late 70s, the baby boomers in the same situation that the millennials will be in in five years, bewere charged 14 or 16 or 17 interest to buy a house, and house prices went up despite 14 and 15 and 16 interest because you get married, have children, you want a roof over your head. You want to not live in mr. Potters slums anymore. I think everybody forgets that right now, the average american that rents is spending 30 of the gross income on rent, and average household buys the average house with 20 down payment for a 15 of gross income, not counting the tax savings thats associated with owning the home, so if you want to arbitrage something, arbitrage 86 Million People getting ten years older in the next ten years, who dont yet, for the most part, own a home, and a majority of them buying a home in the next ten years, and thats what everyone is missing. Now, back to the fed. The thing that could cause rates to go up quite a bit is the sooner this housing phenomena takes place, the sooner that rates are going to rise, so you got a pretty good setup here for stocks. If you own stocks in what i call the revenge of the nerds, which are companies that do not do futuristic things like build homes, make mortgage lopes, or provide local television broadcast, you could do really well as the economy prospers, but if your money is invested in futuristic things that need 26yearold people to stay 26, youre in a mess right now. You know, ask chipotle how much fun it is to have that be your target market right now. Demographically, theres stuff there, right . Theres a boom in multifamily to respond to the 5 rental increases that weve seen. From a multifamily perspective, theres plenty of beds for millennials to move into it. I agree on housing. Were so below trend in the building of homes, that theres runway. Cars too. Its the core thing that im just wondering how much we pull forward. Hopefully we did not and can sustain 18 million annualized car sales. You have to believe, the whole purpose of the fed doing what they do is they want you to do things that you may have done tomorrow. Whats the saying . You can live in your car, but you cant drive your house to work . Right. Exactly. Some of the producers actually we have the lowest household formation for 60 years. They did not pull houses forward with the lower Interest Rates. We did in the mid2000s plenty of home sales. Thats the point. All right. You will not thanks, bill. You will not move into a 200 square footman hatten apartment and have kids in that . You want a house in the suburbs . He lives here. Undecided. Undecided. Its nice not to have the commute. I dont know millennials, they like the experience of living in an urban center, do they not . They do. Kids induce them to move out . Its hard. Intangible is the fact that the mind set changed. People would rather rent for their primary residence because of the mobility to accept another job in another city. If they live in the suburbs, they build apartments next to the train station to make it easier to commute. What happened to you . I like the short commute. Right. You dont im still in the city. Just a summer home out there is no summer home. Its not in new jersey. Its kopconnecticut. Theres no summer home. We have to go. Missouri has a weather issue. Yes, there is. More rain and flooding expected in the midwest thats killed 13 people, and morgan is joining us now from missouri. Good morning. Reporter a state of emergency here in missouri, and the governor called the National Guard issuing a state of emergency after 13 people were killed this weekend. In fact, these waters are expected to rise 15 feet above flood stage, and thats just by thursday, but, andrew, i want to show you where were standing here. When we arrived, the flood waters were to where the bench was behind me, but the water is moving so fast at that point, swelling, you can see ripples in the water, and behind me in the stores, theres sandbagging, where people placed bags between the stores and homes to keep water from seeping in. Something else, the National Weather service estimated that 50 of floodrelated fatalities are actually vehicle related. Thats why the governor said that 12 of the 13 people who died this weekend were actually swept away in their cars. Urging people across the midwest, especially in missouri, to avoid travel and avoid flooded roadways like these, andrew . Thank you for that, morgan, in the meantime, when we come back, the s p taking a beating this year, down 10 , but could 2016 be a bounce back year or trouble in china bring more pain . Talking about that when we return. Then, penny saved a penny earned . The battle to abolish the penny heating up. A former mint director offers his two cents. More squawk in a moment. Welcome back to squawk box. The futures showing a little bit of weakness on the open, a little worse, down 35 now, and nasdaq up earlier, still positive, s p down two points or so, and unless we get a gain a day and a gain tomorrow, it could end up basically flat in the s p and dow jones with the nasdaq the only one of the those three averages showing gains for the year. Tougher for material stocks, down 9 , the second worst performing sector behind energy. Can it turn over a new leaf in the new year, and material girl, like its things that move, with eggs the other thing, but now materials . Well, tell you what, materials are what move around in the planes, trains, and automobiling. Theres a segue here. You mentioned, joe, its a tough year for materials, but as seen in years past as well, the sector rallied this quarter, jumping 11 , second only to tech, so the question now, will that bounce carry over into the new year. According to the last year, the past 15 years, material stocks sold off in the first month of a new year, down on average, as you can see here, 1 preponderate 2 , that is slightly worse than the broader s ps. 75 slide. Names that bear the worst, chemical companies, trading lower over the past 15 years, falling 3. 5 on average in january. A factor changing that this year . Consolidation in the chemical space with analysts saying fmc could be another takeover target. Paper company averages a 3 drop. That trades negative twothirds of the time over 15 years. Another name, metals giant, alcoa, falling 3 as well, and it will be interesting to see how that fairs when the company splits into two next year. Potential outperformers, monsanto gaining 3 , and mosaic, and steel maker, new core, over the past 15 years jumped on average 2 in january. Back to you. Thank you so much. Joining us now, a writer with the wall street journal, greg, welcome. Great to be here. Energy is a choose your own adventure right now. Cap x, employment, look at high yield. Take your pick. Where do we see the effects . Thats the fascinating thing, the impact, things like junk bonds, broader economy, you know, years ago, tumbling Energy Prices were good for the market. Now were nervous when the market tumbles and energy is down. The reverberations, other funds that may be impacted by falling enterprises in 2016 also. When we saw third avenue, there was an idea there was a con they janet, and then it got quiet. Do you think now were in a waiting period because oil stabilized a little bit but there could be more pain . About 25 of all the issues are distressed. In other words, trading at 10 yield or more, the height in a decade or so. Theres more pain over the next few years, and you see its fascinating and people want to long energy. Even the guests. In our lifetimes, energy instin instincti instinctively, we go long. It seems premature. The average price a barrel they figure in is 45. Theres a little upside from here at least. A little. How long can the saudis with stand the pain . They have a young growing population, the debt to gdp is soaring, foreign reserves are tumbling. My view from the stuff weve written, they can handle the pain for a couple more years suggesting lower prices for a couple more years as they put fracker out of business. At some point, they cant take the business and have to get prices higher. How do you feel, though, about hedge funds that are long . Andrew hall, for example, down 20 , how long can he hold out . Fascinating. The guys been long forever. He did not believe in the energy revolution. Broadly speaking, we keep trying to hear what the hedge funds guyings have to say. They have been wrong for years. Theres no kind of bright star person out there to look to and say, well, at least they outperformed. When it comes to hall, i dont know. Good question. Hes been wrong for years. Do you remember seven years ago, talking about offshore leases and whether to do anything, and we heard over and over again that we cant really do anything about oil supply . We cant really incrementally add to the oil supply in the world. Yeah. No one pique oil, right . That too. We did not think domestically woe could make a didnt in the importing so much. Unbelievab unbelievable. Nobody knew this. Experts gave up on america and the chevrons of the world, went offshore. Technology worked with wells. Horizontal drilling, fracking things, ingenuity and innovation in the country that people do not appreciate. You have to get out there in the heartland to see the creativity. Overcoming the bets every time. Yeah, believer in that. The production, the rigs that came online from 201013, straight up and down, its, like, elevator up, stairs down from here. Do you see enough production comie ining offline that the jo stay in tact . Hours will not be reduced for the people employed mountain th industry . Thats why they are not spending what they save in gas because there is heightened nerves. Ive been out there, you see intense plain in the heartland in the economy, like oklahoma, texas, north dakota, and pennsylvania even. Yet, rigs have been impacted and production has not tumbled, going from 9 barrels a day, so the only time you get long, energy to me, get to 8 Million Barrels a day when Companies Like companies go bankrupt. Were not there yet. More pain, i would expect, over the next year or two unfortunately. What about the debt side . Howard marx, other grave dancers, they benefit buying up the debt. That goes one of two ways. Early, the distressed investors. People like carlisle and apollo, talk about how its the greatest opportunity in years, and some have been inching in, mark at avenue. Its not worked so far. Question is, and they are still interested and excited about energy and still going to be looking for bargains. To me, that means these Zombie Energy companies are alive longer than they should be because they shovel money at them. I think zombies are dead. Well, these are Different Energy businesses. Okay, all right. A little different. Dead but they have reanimated. Interesting. So it mixes not an exact analogy. Good, its early. Right. Lets roll. Craig, great. I know zombies. I know you do. Coming up, down goes tyson, hes in the in the ring, but he goes down hard in the video youre about to see. Thats coming up next. They wanted a down goes tyson what do they say . Try it, come on. Is. Welcome back to squawk box right here on cnbc, first in business worldwide. The stories front and center this hour, flood waters in missouri comet to rise. First responders moving in st. Louis. The Mississippi River expected to reach nearly 15 feet above flood stage, second worst flood on record. Also, gop president ial field is smaller. George announcing he is suspending the campaign, made during a prime time tv ad on affiliat affiliates. Had money leftover, and one more reason to star star wars video, helps the north American Box Office pass the 11 billion mark for the first time ever. The movie hauling in 600 million alone in north america. Among the other stories were following today, sea world is suing california over a ban on orka breeding. They are challenging a states commissions ruling that ban the company from breeding camtive killer whales. The Coastal Commission acted outside its authority because the theme parks whales are not part of the coastal or marine environment. Despite the fact after that documentary, joe, agreed to help make those orca whales feel they were in a Natural Environment and not have the shows they were known for that they were profiled for. Right. I defer to aandrew on this. You dont want the elephants to go by the wayside . I want to keep the elephants. I do. You dont care . I want to keep the horse and carriages. What about the whales . Im losing points to the animal loving audience here. I know. Thats the side i dont see. I like to point it out. I do. What about the whales . Have you been there . Not to sea world, but things like sea world, but i did watch that movie. Thatll upset you. You need to wear a raincoat, and not what you think im saying, not that, but wear a raincoat when you stand something under it . Just the coat. Unbelievable amount of water coming at you. Not the other kind, the cloak yal. Not what you a lot of times wear. This was a shocker. It was a shocker yesterday. When it came out, did you see it . It hit. I thought of cramer. I think hes on vacation. Hes off this week. Philadelphia eagles fired head coach chip kelly. They got a couple games left. 2621 overall three years with the team, let go before oh, one more game before the final game, not walking empty handed. Hes owed on the five year contract. He came with so much excitement and it seems like they had a going a few times, but there were games this year that were too much. Why not just wait a game . I dont know. Just one game left. Headlines said nearly after three years, like as if it was so long, nearly three years with the team. What he did in college, you would have thought that maybe that could transfer to they never had i dont know. Maybe they didnt have the right quarterback. They did not. Anyway, check this out why not use the right phrase here. Im going to do it. Im going to do it. Down goes frasier. That was howard. Can i look it up on youtube . Google it. He was a guy a long time sports caster. Check it out. Give me a second. Mike tyson knocked down a few times in his career, but this sometime down without a punch. How about getting knocked down by the hover board. He was doing well, showing off the foot work on his daughters board, but a phantom punch took iron mike out. He was okay after the fall. Since then, this video has gone viral. We see mike recently, in all three hangovers, wasnt he . I only saw the first one. I dont know about second. I dont think he was in the second. I think he made the second. I think he was in all three. Third definitely. Yep. That was in 1973. Thats not fair. You dont know about the frasier . Let me ask you this. Its a commercial break. Believe it or not, you know the guy from his grills. You know the George Foreman grill . He was a boxer. I know that. Honestly. He was a boxer, and them later he did the he was not just a grill barren . You know, he named his kids george. Why not . Thats what i would do. Every one of them could be George Foreman. Im going to try that. Probably too late for me. Coming up, whats in a pipeline for drug prices next year . Opening up the playbook for 2016, and the potential blockbuster ipo that everyone is chatting about. Does snapchat have the right stuff to make it on wall street . Thats coming up in the next half hour of squawk box. As 2015 closes, cnbc breaks out the 2016 playbook looking at ways you can make money in the coming years. Past performance, no energy, future. Were trying. Cant guarantee you make money, but drug prices, can you, can you make that guarantee . You got ideas that are going to work . No. Im just a reporter, not a stock reporter. Okay. All right. Do your package. All right. Lets do it. 2015 for the drug industry started strong continuing in euphoric rallies, but the second half, not as pretty, and in september, the tweet heard around the world, a Campaign Promise from Hillary Clinton ignited fears on drug prices. Heres what to expect in 2016. From candidate speeches to Congressional Committee hearings, pressure on drug prices continues. Democratic president ial candidates suggested measures like enabling medicare to negotiate on drug prices. Analysts doubt any real legislative change would come next year. Drug prices garnered International Headlines after the 5,000 price n, and valeant was in the cross hairs for similar moves. In 2016, expect the rest of the drug industry to distance itself from the practice, and critical scrutiny of price hikes like these to heighten. Despite the attention, drug prices overall are expected to rise according to a survey. Insurers and pharmacy benefit managers increasing pit competing drugs against each other to win discounts from manufacturers. Though branded drug prices continue to rise, their pace slows a bit, from 10 to 5 in the coming year begin all the pressure and drugs in the market competing with existing drugs. The pharmacy benefits managers can put in the screws and win discounts. You were just outside and ran back in. Coat, scarf. Everything. Yeah. All right. Quick question, is there an average they expect drug prices to rise across the board . I believe in the mid single digits, 58 . So normal, suitable range, not, like, crazy hikes . Theres outliers, price increases, which we saw from turing, and valeant participated in it as well. They have been secukewered. Others will be called out and see one or two Lightning Strike examples, i think the phrase Morgan Stanley used in a note, where politicians make examples of Certain Companies in the drug industry, but not across the board. We have to know because weve had the discussion all week about, you know, you get longer patent protection, and we want to, you know, spawn innovation, and we understand it costs a lot of money, and what is the metric to use in that Drug Companies results to show whether the profits, in fact, are higher than a normal free market would allow them to have . Would that be profitable . What are margins i dont think anybodys really for that. Whats fair for margins in the drug business, andrew, do you think . This is a question, everyone is talking about right now. Great question. What metric do we use . I dont know that anyone has the answer. 50 margin, you think thats too high, right . Whats apples margin . Like that, 40 , right . We have to do rather than hurting it, do something to bring apple down to the drug guys, right . But you have to look at the light social utility. Look at the biotech. For 25 years, they are uncomfortable, no margin, and then drugs on the market, they charge a lot. Over the life of a the company right. Margin, yes. Measure the margin, profit to margin. People need drugs, but theres millennials with iphones that are more important than drugs, right . You have to so utility of things like drugs, airline, economic utility, moving people around. Starbucks. Okay. By the way, you can argue that the iphone and phones have a huge social ewe tile utility. They are. Thats the outlook for 2017. Time to stop printing pennies . Last year alone, the u. S. Spent more than 130 million to make 8 billion pennies, and it now costs almost multiple cents to make each one of these 1 cents coins. The numbers next on squawk box. Welcome back to squawk box on cnbc. Futures right now, lets take a look at where they are trading. Nasdaq had been positive by just a few points, and now just negative by a fraction of one point. The dow would be down 34 points, s p down three, and yesterday, oil rally led us to a triple digit up day in the dow, but, of course, oil leading indicator, down today. Crude down close to 3 . Brent down about 2. 25 . Brent is now above crude. Key levels to watch there. Interesting flipflop. Natural gas down 6 , despite the fact andrew. Take andrew. Theres your billions. Look at the busses behind you. The bus with the billions ad. The billions ad, right there. There you have it, right there, can you see that . That is cool. Get a screen shot. That was skillful. The premier. The 17th. 17th, a sunday night. Martin luther king weekend. What kind of money . What good is it you cant say the word on the air. What good is the money if you cant say its a good line. Awesome. I cant claim credit for the line. I got partners. A whole team who worked on this. Every bus has an advertisement on every bus. We have to talk pennies. I dont know if you want to pick up pennies off the street, but you may not if this guy gets his way. Currency war at home, and nothing to do with dollar, euro, or yen. No. This fight is about the battle to kill the penny. Experts say its time to stop spending millions minting a coin thats not worth that. One of the largest gold and silver distributors in the world, and works at the u. S. Treasury department. Good morning to you, phil. Morning, andrew. The pennys worth the cents, but costs 1. 8 cents to make . Besides that, its useless. Nobody uses the penny anymore. Right. If you bend over and pick it up in the street, then, you know, you get paid less than minimum wage for your trouble. Most people just pass it up. I still grab it. If its a heads. Thats the separate issue. The question, though, becomes, not so much what the actual cost of the penny is, but there are economists that have views that if you take the penny out of circulation, that will distort prices and perhaps even press inflation. It would help. Yes. I dont think theres much to that argument. I think its an argument that has been used for the last 25 years by the penny lobby that supports keeping the penny. The reality is that about 2 r5 f all transactions are now in cash. 75 is in electronic forms of one type or another. Really, when you look at the possibility of rounding pennies, theres really only a few percentage of transactions that would even be affected by the elimination of the penny. My own thought is that, really, competition in the market place will discipline companies not to increase, but mcdonalds uses this 4. 99, all of that goes up at least a penny, right . Its all rounded up. No. Not necessarily. Its entirely possible it would be rounded down, and why would you irritate a customer over a penny . I think its just as likely the Competitive Pressure will drive companies to lower prices, and if they have the ability to raise prices because you eliminate a penny, they have the right in the market place today to raise prices. It really does not create a new situation. If you eliminate the penny, thats saving 105 million annually . Correct. Isnt that peanuts . If youre against the penny, be against the nickel that costs more than 5 citizen to make. Thats different. We have a better opportunity to change the composition of the nickel, and make it profitable or close to profitable. The penny is beyond hope. I think, you know, you take it a step at a time, and the pennys outlived its usefulness 25 years. Who is the penny leadership who wants pennies to remain . Well, for the most part, the production of the penny has been outsourced. The mint only stamps the coin, bags it, and sends it to the federal reserve. The penny blanks themselves are produced by private interests, and they and the zinc lobby, its not copper says here, welcome to the squawk box jungle. I guess its because of this. There are reports that guns n roses are going to reunite to headline the coachella music and art festival in april. Theres also negotiations for a summer tour. The last time that axel and slash played together was way back in 1993. That is a cool event out there in the desert. A lot of great bands. Have you been . I have not been, but i know the desert well. That part of california, yeah. Burning man, have you done burning man . Nevada. Nevada. Nevada. We have to do squawk box there one year. We have to get to the west coast. Trump said nevada. I have to email him, its nevada, nevada, nevada. Yule ya is waiting for us. How do you know that . Shes not chomping at the bit. She is. She is . Up and down year in the social space, between a big winner, more than 35 , and twitter is a big loser, down 37 . As we look into the 2016, the streets watching the next big social company to potentially go public, which is snapchat. Julia is here now with chatter on whether they will go public in the new year or not. Julia . Thats the question. Will they or wont they . As announced, they seem to be head for the an ipo in the second half of next year. The app is growing fast with massive scale with 100 million daily active snap shattchatters in november, there was 6 billion video views, tripling from may. 2015 revenue, a source tells me, expected to be 70 million, and should at least double next year. The company will not comment. Snapchats main source of revenue, ads, sponsored content, and channels within the discover section as well as live stories. They offer sponsored lenses. Now, ceo and the cofounder hired a chief operating officer from wall street a year ago, and in august, a new finance chief for mattel. The company is valued at 15 billion and raised nearly 1. 2 billion with the last round including an investment from fidelity. A source says the company is burning through a lot of cash on both the growing team as well as on band wideth. Challenges include scaling its ad format and management turnover losing top executives in the past year. They said this past may he knows the Companies Need to ipo. He did not say when. Hes watching the Public Markets carefully to see if they staustn the private market valuation. Although, the turnover raises red flags. It is just sky rocketing in popularity. Well see. Doesnt seem like its going to go out of vogue soon. Julia, thanks. No, certainly holding on to the users, which is perhaps the most important thing. All right. Thank you, julia. We thank peter this morning. We did not talk about the dollar. Thanks. Fallen against the yen and euro this month. Right. It was a oneway trade. Dollar topped out in march. Now you have backing off from the aggressiveness. They believe draghi is out of bullets and top the outside for a while. Peter, thanks. Squawk box will be right 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. Trump closing out 2015 in prime poll position. Now hes set to spend millions to take on Democratic Front runner, Hillary Clinton and her husband. The race for the white house, the economy, and more with our guest host, larry kudlow. Taking the toys out of times square. Toys r us shutting down the flag ship store at the cross roads of the world. The reason they are closing shop, straight ahead. Cord cutters listen up. A any report says millions of you regret the move to break up your bundle. Youll come crawling back. Dont touch that dial. The third hour of squawk box begins right 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, im joe with andrew, and kayla, and becky is off today, and were less than 90 minutes from the opening bell for the second to last trading session on wall street. The futures right now down where they have been most of the day, not quite 30, just a little over, actually. S p indicated down two, nasdaq still hanging on to a small gain. Markets in europe, about a half percent between, you know, kind of red, but nothing that is that significant at this point. Among the top stories at this hour, irans envoy to Opec Predicts Oil prices between 35 50 a barrel in 2016. He said oil wouldnt top 60 in the next four years. Thats according to the report from the oil ministrys news agency. Meantime, saudi arabias oil minister says the country satisfies customers demand and no longer limits production. He said they have no plans to change production policy. Energy prices at this hour have been the main focus of wall street for weeks and for months. Wti crude down 2. 5 . Brent down 2 . Currently brent is trading slightly higher. Nat gas down 5 . Its continued to extend losses in recent days albeit with temperatures getting colder, watching the Energy Complex as the chief says Global Economic growth will be disappointing next year yet again. Lagardes comments in an article written for a german newspaper. Among the risks . She cited the prospect of rising Interest Rates in america, and the economic slow down in china. In a developing story in the midwest, flood waters in massachuset missouri continue to rise, traffic disruptions expected, and rivers swelling to high water marks not seen in more than 20 years. The National Guard is assisting with evacuations and rescue efforts. Well keep you updated on the story throughout the morning. Andrew . Dupont planning 1700 job cuts in delaware and thousands more globally. The move comes in preparation for the merger with dow chemical. They will be split into three independent companies eventually. Side car is shutting down and putting its employees to work on new projects. The app was a competitor to uber and lyft with branson as a backer and Venture Capital arms. They were outfunded by the competitors, raising 39 million compared to uber and lyft. The home stretch in 2015, upbeat about the coming years, not seeing equity declines, and here with us now, eric young, investment strategist, and for the hour, the man of the hour, larry is here, ceo of kullow and company, and cnbc senior contributor. Good morning, everyone, thank you. Good morning to you. So a disappointing outlook. Youre in another camp . Yeah. Theres a lot of the global, you know, malaise concerns out there. One thing we remind people is historically, if we dont go in recession, the world does not go in recession. U. S. Is a driver of global demand. Something all the hand wringing about the global recession, those people could keep in mind. If the u. S. Does not go in recession, thats a lot less likely, and, generally speaking when oil prices come down and low oil prices, we think, drive the negatives out there, whether its high yield, u. S. Economy, and, generally, we do not get recessions when prices go down. Historically, we get recessions when prices go up. Its ironic. A lot of things that people are hung up about, were not that worried about. The thing we think is going 20 drive volatility next year is the fed, and, you know, every time theres better data than expected, people worry about the next meeting, and if theres a string of better data, is the fed behind the curve . Ultimately, we dont think they tighten much because we dont see a heck of a lot of growth from inflation, but enough hand wringing about it that markets are choppy. Could be like this year. Larry, ever the optimist . Whats the next year for you . I hope youre right, im ritirite i rooting for you, but theres glitches. Lower oil prices are good, not bad. All the wall street geniuses i dont know why im quoting you i love that. All the geniuses around tell me how bad it has. If not for falling oil and gasoline prices, wed be in recession. The consumer is being driven by lower gasoline prices. 3 a year on gdp report. Other than that, nothings going on, including business investment. Profits, which have been flat for two years, are falling. Economic profits, operating profits. Youre the man with the silver lining. You dont have one . Listen. Profits are falling, i call it as a see it. Because of energy. May get better from here. It may, and the republicans may capture the white house. Sorry about that. Thats a fair analogy, larry . It is. Profits are falling. Its more than energy. I think thats an issue. Look, i think the energy thing is concentrated in the junk bond market, unsettling, but its not going to kill. I dont know i dont want the fed to raise rates, okay . A 2 economy, which is being driven by lower Energy Prices, and commodities are falling everywhere you look, okay, why is the fed raising rates . Why . What do we need that for . If these were normal times and the commodity indexes were falling as they are now, i say the fed should ease. Okay. Im worried joe . Them you dont believe the Unemployment Rate . I dont. Participation rate guy . That is correct. Okay. Thats the only way you make the call. Their own model, joe, look at the model. Whats funny is that im not going to make it political, especially with you here, but the left sells both sides of that. For a while, they say, well, income inequality is bad. Not sharing, no trickle down, nothings happening, its awful. The minute you point out things are not great, then we hear them just trumpeting whats happened in seven years, adding more jobs, 5 unemployment, the only country in the world growing at 2 . Weve not had more jobs. I know. Im saying thats what they say. Weakest job report. If you add up the total from the bottom, its 8 million jobs. Its not me talking burks them ta but them talking. I know. Why is it grumpy cat . Republicans are grumpy cat. Some are. Not me. Youre the grumpy cat right now. Im saying its hard, again, with profits let me run it through with profits slumping, both s p operating profits and gdp net profit, profits falling, fed wants to raise rates four times, once every quarter for the next three years. If they do that, i guarantee you, you got a problem. I hope they dont. I didnt want them to raise rates a couple weeks ago. If they do, and we have commodities deflation, you got a problem. Yeah. I think the dot plot drives volatility next year. Markets looking for two hikes. The fed says four. We get volatility, but we dont think theres enough. Where do you end the year . One thing to say theres volatility, which is hard to disagree with that. Its a different debate about up a little. Up marginally . Down marginally or more begin whats going on . Its a nice time of the year. Ill be just down slightly. Look at this. You dont want to be too grumpy. No. CompleNew York Times, rich p up your alley. New york times had a piece in the front page of the paper, and you have a lot of material here, but one says for the wealthiest, a private tax system saving them billions. I imagine you want to talk about that. Whats your view . What we need desperately is tax reform. Thats what we need. We need personal tax reform, flatter rates, get rid of the crazy deductions and dodges. They are only doing it for good reasons. They want to save money. Same with tim cook. He reported on the political crap argument. Cook wouldnt be doing what hes doing for the shareholders if we had a 15 Corporate Tax rate with easy repatriation. We need to reform the tax code. What growth do we get if we do that . I mean, what kind of immediate stimulus does it create . What are the long term implications of it . To me, the sing the best thing we can do to grow the economy is totally reform the business tax. Corporate tax . By the way, republicans and democrats are not far apart on this . You think they are . Sometimes, sometimes, youre right. 15 Corporate Tax rate is my view. Im delighted mr. Trump picked that up. I apply that to Small Companies, the llcs as well as big guys, which hes done. Give me easy repatriation, full cash expensing, and ill give you, personally, a 4 Economic Growth rate for the next six to eight years, and it pays for hi itself, and we dont need all this tax. Whats relevant is that there are people that are able to pay 17 that dont want things to change, and they have the money to elect people keeping the status quo. The reason were not doing tax reform is not just obama and the left. The reason is because the guys benefitting from it dont want reform. I dont think so. Thats way we talked about. I know these guys, you know these guys. They want a clean tax system. Steve cohen wants a clean system. I talked to him a million times about this. All this clutter, you know, its true. Your effective rate coming down. Its not true they pay millions of dollars to accountants. Inefficient. Whats holding it back . Oh, the lobbyists, the washington establishments. Paid by the right or left . Both. George sorros is in here too, your buddy. I was not saying yes to him being my buddy. Soul mates. Godfather. His cell phone is ringing. Heres how you respond to kudlow. This is unfortunate. This is a leftright malaise in the system. Its the washington establishment versus good upstanding moral citizens like yourself who want a clean tax code, and so do i. Oil does not recover and republicans do not win . Whats the point . Something about a much a chance as republicans winning. Oils not going up. What was the point about republicans . Republicans making into the white house or sarcastically they would . What were you saying . They wouldnt or would make it in . I wish i knew who was going to win the election. I do. Im going to be totally honest, my forecasting this year in politics has been terrible. Absolutely. Youre not antitrump. He loves you. I like donald. I dont agree with everything, like the tax plan. You were with him on the muslim issue. No. Thought you wanted a res bit on everyone. Allowing everyone in. Everyone. Nothing to do with religion. I understand that. Because of what jim said, we dont have the information files on these. We are in a war. Its a very dangerous war. They are coming after us. Story in the paper today about out isis people were sneaking into england. Right. Were okay with information go back to reform. Were not near that. Were in a war. Close to lockdown as possible. I want no new visas, no waivers, no immigrant waivers. I want us to win the war first and foremost to protect the homeland. You should run for senate in connecticut. Wait a minute, maybe you are. Well continue the conversation with larry in a minute. Al, thank you. Happy new year guys. A great scenario. You may be right. Playing from the good side. Thanks, larry. The lords work. Happy new year to you. How do hikes impact the next year . Playbook next. Former pennsylvania governor joining us to talk about the president ial race, and larry sticks around. Heading to break, a happy birthday to tiger woods who turns the big 40 today and lebron james celebrating his 31st. Back in a moment. Checking out the listing on zillow i sent you . Yeah, i like it. This place has a great backyard. I cant believe were finally doing this. All of this. Stacey, benjamin. This is daniel. Youre not just looking for a house. Youre looking for a place for your life to happen. Zillow. Life. Is unpredictable. Life is deaths. And births. Sickness and health. Love and heartbreak. And covered california is there for it all. Not just to help keep you well. But to make sure the cost of being unwell doesnt ruin this whole life thing. Because its more than just health care. Its life care. Welcome back to squawk box. Youre off the phone . [ laughter ] put sorros down. Talk slowly. First time he came on, six, argt eight, i dont know how many years ago. He said, larry, you know im a west side liberal. [ laughter ] you never admitted that. First time on the show you said that. Youre a liberal . Hes making things up. I never heard that. Could have told me that. In fact, joe, an Upper West Side liberal. I do not believe i said that, at all. Can we i didnt say you were not a great reporter. I did not say you were not a great anchor. What i do remember saying is that my mother this went to the university of rochester, and he dated yes. Thats true. You dated she was my mothers roommate. Oh. I thought you said, your mother. I have getting uncomfortable here. You know how long ago it was. I know. This is one of the reasons our producers loved you because you made an admission right up front. On the air. It was not on the air. You want a New York Times guy on the air. He owns it. Its great. You were great, youre still great. Kind of you to say that. I have to get the tape. Feds rate hike not impacting Mortgage Rates yet, barely had impact on the ten year so far, but i thought 230 earlier. Is that going to change in 2016 . Diane joining us now with the look, and as you said, youre going to tell us whether that changes next year. Is it going to change . Well, i cant tell you exactly because as soon as we are talking about rising Mortgage Rates, all year, but and then after, even though it fell after the fed raised the fund rate, its moved in a tight range all year. Dont follow the fed, they follow bonds that loosely track the yield. Yesterday, when the target rally, bonds sold off, and rates moved higher, to the highest level since july. The popular fix at 4. 125 to 4. 25, according to mortgage news daily. We get the numbers usually on wednesday morning and rates, but they are closed this week. Historical historically, when they raise, rates move higher, but less dramatically. We could see 4. 5 or 5 , but thats really low. Credit availability is a much bigger deal for 2016. I have to harp on that. The good news is that is seems to be easing up slightly, guys . All right. Go ahead. Thanks. Joining us now for 2016 is the mortgage president and ceo, matt, and before we get into the demographic argument that we were having earlier about what the Mortgage Market and Housing Market looks like in ten years, how do you think in selloff in bonds seems to be unexpectedly coming in the market is going to, perhaps, hurt the Mortgage Market next year . What do you see . Yeah. You know, as fed raises rates, they are not tied directly to Mortgage Backed securities, but we see the trend going up, and now is the time to look at that as rates go up, harder on a 30year fix, but theres other options as well. They will be going up. Everyone talked about for years, now is the time we see it tick up, but they are low all together. They are still low historically. The problem is a lot of the millennials, myself including, who are first time home buyers have not been in the market when they were 8 , 9 , 10 , and im wondering how you think affordability plays into this . You know, in general, Mortgage Rates were low historical historically, but in ten years, they go up, high comparatively. Millennials think rates are up, but its perception. Representing against buying, now is a great time to buy, find someone to help you find a great deal for yourself, and now is the time to look at that. Matt, can i just ask on the question of interest rate, difficult for anyone to predicts, i noticed year to date, the years almost over, i score here in the 30 year mortgage rate, maybe not the best instrument, but its come down. The rates come down this year, and if im not mistaken, since the feds quarter point last week, Mortgage Rates have dropped a little bit, is that possible . Fed does another hike, and so forth, and then Housing Market comes down, and its a great time to buy a home. You know, its possible. It is never exactly true, but its possible to see whats going to happen with that and see that rates could come down. The odds are in the way things are trending, seems they tick up a little bit, but they are low. If its in the h4s, its affordability, as you talked about earlier, is wonderful. Equity in houses and the economy getting a little bit stronger, its a good thing, and millennials jump in the Mortgage Market we believe. Tens of millions of millennials, and a lot of them want to rent in the big cities because of the mobility for jobs, that there is not affordability problem, that multifamily will continue to be popular, and we were called out of touch city mice here, but tell us whats really going on because there are is question about with the desire of some of the people, is whether they want to stay in the city, whether they envision the American Dream now being buying a home in the suburbs. Is that true . You know, everyones different, but i believe millennials are a little bit slower to buying homes, but they are starting to now. We see the trend coming up more and more whether they want to rent or be in cities or they want to be in the suburbs, they are going to start buying homes shortly, and a lot are jumping in now as first time home buyers which is exciting to see because theyve never been in the process, and they dont know whether you go it 20 a large bank or mortgage broker, and they go to brokers seeing the opportunity to shop for the best deal in the suburbs or city, they find the right opportunity for them. See how long it takes to play out, though, maybe 2016, maybe a few years down the line. Well see, matt, appreciate the time this morning. Thank you. Thank you. Yes. You were right. This i Department Read the whole thing, and did you read the whole thing . I did. I mean, the Airline Industry is almost hypercompetitive at the time. According to the article you said youre ready for a mea culpa. Not a huge mea culpa, but contemplating how to react. [ laughter ] you said, if oil prices come down, and that is sort of what caused it, but in a free market way, take competition to the low cost guys. Bad news is others said the airline is like the railroads, the place to go, is maybe not because what happens is you have pressure on margins. Now youre worried about pressure on margins by the way, can i pile on on this . This is so much fun. [ laughter ] we got to go to a commercial, a commercial to make money. Were capitalists here at the table. I hope so, some of us. All oil prices are crashing. Yep. The guys cut back on seating to make money for the first time in a century. What you got against that . Nothing against that. Oh. My argument has been the social and economic utility of airlines is that in many routes, its not a free market, and direct flight and layoff flight is not a competitive market. They are not one to compare apples to apples. A layover flight . Are you a marketing guy in the Airlines Industry . Can i help you with the fundamentals . Go for it. When crude oil prices go down yes. I believe you believe they can. Yes. All other related oil, energy, gas goes down. Yes. Thats good for nine tenths of the economy other than those huge issues there. Including airlines. Assuming its hedged correctly. Assumed its hedged correctly. Some have hedges, creating issues, but theres a fuel surcharge on airlines, explain that. A fuel what . Surcharge. They got to make money. Thats called price of fuel is down. Thats part of the price. Theres a surcharge. Explain it. By the way, its almost a fair point. They will lift that surcharge as business comes back. Okay, thank you. You bog me down with facts. I cant stand when he does that. Hes finding like the smallest corn at the bottom of your foot. Oh oil and Energy Prices collapse, and hes beating up the airlines. You think prices come down more . Maybe the fuel prices are prices come down 5 . Fuel down 50 . We have to go, guys. A New York Knicks player shot youre staying here. We have more abuse in a minute. In stable condition, details next. Right now as we break, look at s ps biggest losers year to date. Back in a moment. Headlines this morning, having fun with larry this morning. Bidding war with pep boys is over. Not counting the offer from carl icahn. They value the retailer at about 1 billion. Also, China Central bank suspended three foreign banks from conducting Foreign Exchange business until the end of march according to reuters. That report did not name the foreign banks. The notice is sent to the banks did not give a reason for the suspension. The move is seen as an effort to stabilize the yuans exchange rate. Fa the Company Fired Martin Shkreli this month on security fraud charges. They were delisted this week, and Company Listed assets and liabilities in the range of only between 1 and 10 million. Okay. On this dirt bag punk fixing the prices what do you really think . I agree with your general philosophical frame work. Capitalism gone amuck, its wrong, he goes to jail. I agree with that. He makes the system look bad and hurts people in the process. Put him in prison for fraud or raising the drug prices . I dont know. Let him rot there. Let him rot in hell. Wow. Its a disease. Its got to be fixed. We made progress. I dont like price fixing. So before we got here, we tried to ask how would you gauge what a pharmaceutical company, a good one, how do you gauge when whats appropriate . Right. Whats appropriate . They get good stuff with the patent production longer, and it is hard. Agree. Drugs fail, so they recoop investments, but that does not mean you cant overcharge at times or some. Seems whats a profit margin thats see, now youre in a sticky area. I dont want to go there because im a market guy, but when you see something like, here, its, like, i dont know, driving to your house or something, driving to your friends house, you know, youll know it if its right, but you know if you made a wrong turn. This guy made a wrong turn. Peter made the point if you do something so well, its a legal monopoly because you do it so well, nothing wrong with 80 Profit Margins if you are able to, right . What did this kid charge in. 500 . This guy not withstanding. How do you judge a pfizer. Peters right about that. Thats a market function. I agree. If theres an al goply, such is life. Let others come in. Agree with peter. This guy is a dirt bag, deserves to be prosecuted. Really burns me up. Almost, once in a while, i did to the west side, not a lot. I have dinner with my agent on the west side, so i feel the vibes like i am today. Lets go to zaybars. One in the east side too. What is a dirt bag . On a vacuum cleaner . You have a beautiful culture here, and hes baiting me. You said it, like, six times. Wondering what the its something on a vacuum cleaner . Something very bad. Okay. Coming up, the political battlegrou battleground, talking trumps polling numbers, and Hillary Clintons chances, and more with former pennsylvania governor ed rendell. Thatll be fun with larry when we return. Bring your family and friends together to discover the best shows and movies with xfinitys winter watchlist. Later on, well conspire as we dream by the fire a beautiful sight, were happy tonight watching in a winter watchlist land, watching in a winter watchlist land xfinitys winter watchlist. Watch now with xfinity on demand your home for the best entertainment this holiday season. Welcome back to squawk box. The gop president ial field shrinks by one. Pataki suspending the campaign, making the announcement in a prime time tv ad on nbc news affiliates in early primary states. Joining us now to talk about the race for the white house, ed rendell, and still with us, our guest host, cnbc senior critter, larry kudlow. Wow. I wish there was a subject thats interesting to talk about in the race this year, governor. [ laughter ] do you i mean, just letting you start, unless you want to talk about chip kelly. That was fast comes in, gone, did he have a fair chance . Well, i think he had a fair chance because they gave him control of everything including picking the players, the personnel, and he made terrible personnel decisions. I think it was justified. I wish him well. I dont think hes a bad guy, but i dont think hes right for profootball. Okay. Ill tell you how ill start this. I have heard trump say the reason they are saying that they want to face or most worried about rubio, what a lot of Hillary Clinton people say, they are worried aboutrubio, and hes the nightmare they dont want to face, what do you think about the argument . Well, i think its really too soon to say who you fear the most. I mean, Donald Trumps a phenomena, catching the attention of 30 to 40 of the republican voter base, and our poos it saying hes just the republican, easy to beat in the fall, and his numbers might indicate that, but if we get sp into a Fall Campaign oneonone, who knows. Sometimes its be careful what you wish for, but donalds big weakness is on substance, and when there are 14 people in a debate or temperature people in a debate, you cant get into substance well. You cant ask questions about, well, you say this, but how do you get it done . A tax cut plan, but how do you pay for it . The questions are not asked. When the debates are down to three people or in the fall, oneonone, question is, can donald hold his own . Right. And i see what youre saying, but, again, he had a tax plan, introduced others things, introducing as much as a lot of the republicans kudlow. Yes. And candidate obama, i dont know if theres meat on the bone for what he was going to do either, you know, but i admit, donald trump always says, you know, whatever it is, its going to be terrific, and its going to be right. The greatest thing. Its basically other people do it too. Its politics. It is politics. That is something to build a great company. He has built a great company. No question. No question. The oneonone debates in the fall, there for 90 minutes, just the two of you, and you need real answers. You have to have real answers. The question is, can he develop real answers. Well step in for the proxies. First of all, happy new year, ed, i have not seen you for years and years and years, youre a good man. Used to be a regular guest on your show. You were darn good and still are. I say this on policy stuff. I think Hillary Clintons got big problems there too. I mean, look, shes got huge spending proposals. She wants to raise taxes on a bunch of people, adopted a tax the rich, not a progrowth. I regarded you as a progrowth governor, and i dont think shes a progrowth candidate right now. Thats an issue. Shes got big Foreign Policy gaps. You know the story here, the benghazi story, says it was a video, and now she changed her mind. These are huge things. The other thing is, and this is a dirty pool, and i dont want to spend 90 minutes on it, but if she talks about a war on women, donald trump will come back and nail her husband and nail her attacks on the women that he had affairs with. Its not clear regarding the policy discussion if it were oneonone. I think its a dog fight. Well, you know, youre right. You point out potential weaknesses in Hillary Clintons candidacy, an everyone has potential weak spots, but look at what happened in the benghazi hearings. Hillary clinton is a seasoned person who is smart, who understands policy, and she took those guys to school in the benghazi hearing. That couldnt have been a bigger home run for her if she had scripted it, and thats the type of knowledge and breath of knowledge that she has that does very well in those oneonone don debates. She was under fire for eight to nine hours from socalled professionals who do it for a living. Ed, i dont like disagrees with you, youre a good guy. Jim jordan, buddy from ohio, ripped her on that. Showed her quoting on the video, quoting on it was not a video. He trapped her. He nailed her. I agree it was almost nine wasted hours. I agree, but jim jordan brought out boosting her stock tremendously. It was a lie. Everybody knows its a lie. It was not a lie. Shes not going to live that down. The Intelligence Community was the one who initially said that this was a result of a reaction to the movie. That came from the Intelligence Community. It did not come from her. Thats well established. No, it did come from her. Benghazi was investigated by three Congressional Committees, all republican controlled, and a blue ribbon committee, and all found no wrong doing, nothing inappropriate, nothing that was done wrong. Well, i just wish shes armed with those were republican committees, larry, before the benghazi hearing that was on tv. I hate big hearings anyway. Well disagree with it. I agree with you on that. I agree with you on that. What i mean, governor no, my disappointment, governor, if i have ten minutes, you called me, kudlow, Hillary Clinton will see you for ten minutes, youre a conservative, a jerk, but shell give you ten minutes. I know her husband very well and like him very much, at least on policy. You know what i say . Senator, secretary of state, go for major full fledged progrowth Corporate Tax reform. Stop talking about taxing rich people and just get americas business tax rates for large and Small Companies way down so that the capital will flow back to the u. S. , and you know what the studies show . Whether its brookings or aei, right of center, left of center, biggest beneficiaries of Corporate Tax cuts are middle class wage earners. This is an argument trump should make too. I agree with you. No disagreement on that. The problem is we have a tax system that is broken. You need to get rid of virtually all the loopholes and expendstures. Three years ago, fortune did a survey of the top corporations in america and found what they effectively pay was not 35 , but 16. 5 , putting our tax rate in the middle of the world. Most of those things are done because the expenditures. I had a guy when i was on the speaking trail saying, i pay 35 , what do i do, governor . I said, hire a new accountant. They are cutting me off. They are taking us out, governor. Ill just say good to talk to you, larry. Yeah, i love you, terrific person, always have been. If you get me in to see her for nine minutes, eight minutes, ill meet the break and try to sell her on Corporate Tax cuts. Promise you this, if she gets elected, ill get you in the transition. Okay, sir, thank you. Larrys sticking around, but cord cutting costs you big time. Why you may not want to ditch the cable box or the bundle just yet. Welcome back, attention cord cutters, it may be more expensive than the cable bill once was according to a report that 24 of americans who ditched cable boxes will regret it in the next few years. Lets bring in the one behind the report, laura, media and internet analyst. Good morning. Right on, laura. Youre right. The tv business loves what youre saying, but if you look historically at media and technology, its ultimately disrupted the business. Youre talking her out of this, andrew . Honestly . Im not trying to. Just a question. God almighty. Do the numbers. You need game of thrones, thats 15 bucks because thats on hbo, and ten bucks for your hulu and netflix and cbs all access for your csi, and thats 50 bucks, and walking dead is on amc and thats not part of a bundle. Im not going to disagree on the economics. What i will disagree with you on, though, is the idea americans, better or worse, do not think economically and like to think they have choice. That its always about choice. You saw this even with airlines unbundling effectively all sorts of pieces of the bundle that they had. I thought you attacked airlines. You just attacked airlines. I know, i know, i know. Playing dirty pool. Welcome to my world. Laura, i have to say, youre right. Many want to complain about 70, but with choice, we have the numbers, right . We know that we know how many subscribers there are on showtime today, 400,000, and cbs all access is 500,000. Consumers say they want choice, but when you give them the economics, they rather would have sort of 300 channels for 70, rather than four channels for 50. Throw in trutv, and then i need that for basketball, and olympics come around, and i have to watch curling, and i need cnbc, even if i dont know anything about business news, and them just give me the 900 channels because i cant find anything to watch anyway. Thats so true. Thats so true. Its funny because we got some cord cutting going on or cord nerves, actually, and yet 42 million americans pay 10 for netflix. They add the to the bill, so they are adding a lot of costs todd tv bundle right now. Now, laura, you are right. App drew has been under a lot of pressure this year. Yes. Become very sbrefsed in the Economic Base Analysis is pluperfect correct. Shes on the money in terms of the economics, but the question is whether im looking at her and it is unfair. But millennials shes your only friend left here. I want to know what happens when we get a skinny bundle, when apple tv eventually comes out in two years. So it took charlie or again at dish two years on negotiate his skinny bun did he, which is like 20 channels for 20 a month, except if you want kids, you have to add five bucks and if you add sports, you have to add five bucks. But it took him two years. You saw apple walked away recently from their announcement that they will do a linear tv feed. Really one of the things that we calculated last week is that for every hour like csi, they get 30 cents. The minute they sell to netflix, they get 11 cents. And if they put it on youtube, they get 3 cents an hour. Unfortunately we have to run because we do have commercials on this network, but well have to have you back next week for a longer conversation. Unfortunately we were having too much fun before you got on. But wed like to have more fun with you in the new year about this very topic. Next week some every day. What an analyst. Phenomenal. When we return im blown away. Toys r us is shutting the door to its nyc flagship store. Courtney reagan will give us one last look next. What are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. We are inage neutral. Ageless. 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. Welcome back. It took years to make the decision, but this toys r us is closing for the last time today at 6 00 p. M. Gap and old navy are moving in. Toys r us says its looking for a new location for manhattan store, but hasnt found one yet. Record rental rates, record highs and are putting some retailers out of business. Crate and barrel closed its madison avenue store more than four years early. However the real estate board of new york says not every area is seeing higher average asking rents than a year ago. Average asking rent for ground floor up 3 . It is the second highest rate in manhattan at 2390 per square foot. Vice chairman for Retail Real Estate broker says even with numbers down, times square is still one of the healthiest rental markets in the city. There is big time Brand Awareness here. But as more shift online, we know traffic is lower. Cohead of the retail practice at Consulting Group Alex Partners says it might be worse for retailers in new york City Catering to tourists because you who wants to carry around a big bag when youre exploring the city especially if online ordering and delivery is an option. Squawk box will be right back. Dont let it conquer you. With the capability and adaptability of lexus allweather drive. This is the pursuit of perfection. Our guest host this morning, larry kudlow. And from the highest echelons of the republican party, i think youve been urged to run for senate. Is that a fair statement . Fair statement. Why do you know yet what the probability of that is . Judy and i will make up our minds perhaps late february. I wonder sometimes, i love having you here obviously for an hour, when i look at the senate, it seems so infectual. Even showe time and i dont know if i would either. You can pontificate here. And i love it. Can do you more between here or there . Ive been with this Network Close to 25 years. I love it. I love an trdrew ross sorkin. Kayla tausche. And joe you were one of the original originals. In some sense your wife started my career. The answer is i dont know. Its a very disrupting thing to do. Youre right, there are a lot of dopes in the senate. A lot of good people, but a lot of dopes in the senate. If they were as smart as andrew ross sorkin, id be much more challenged. Get something done. We would cross aisle and get something done. Well see. Its a trick cany bringusiness. We love having you. Kayla, thank you for being here. Squawk on the street starts right now. Good morning and welcome to squawk on the street. Michael is day pe debuting here. Take a look at futures. Two more trading days left of 2015 undid sister some future. Dow down about 33 points in early action. Nasdaq crossing over into
comparemela.com © 2020. All Rights Reserved.