Oil inventories on the way and the fed minutes, 2 00 p. M. Eastern time. Our road map begins with raids overnight in france. More from the ground in paris this hour. And a number of deals this hour. Norfolk southern and Canadian Pacific probably not going to happen. But air gas finds a buyer and a deal among some semiconductor companies. Retail, lowes, target, staples are all out with results. First up, this raid by heavily armed police in france targeted the suspected architect of the paris terror attracts. The operation ending with seven arrested and two dead. Forever more we go to saintdenis and our chief internation international correspondent, michelle carusocabrera. Good morning. Reporter good morning. Were on the street where the raid took place overnight. If you look over my shoulder, about seven buildings down on the left is the Apartment Building where the raid occurred on the second floor. Weve been watching for the last several hours police go in and out, removing items. Weve seen crime scene investigators in White Lab Coats going in and out. Heres the sequence of events according to the french prosecutor. They had followed a woman they believed connected to one of the individuals in the attack on friday night to this Apartment Building. They say special forces raided the apartment roughly 4 30 in the morning. We have cell phone video from neighbors who live in the area who recorded what happened. When you listen to it, there was a tremendous amount of gunshot volleys, explosions that could be heard. Take a listen. [ gunfire ] neighbors in the area said that went on for perhaps as long as 20 minutes. Then for roughly three hours there was still irregular gunfire, irregular explosions and then quiet for several hours as we awaited to see the outcome of the raids. When the french prosecutor spoke, he said the chronology was this, they went into the apartment, they arrested three individuals, then a woman wearing a suicide belt blew herself up. Another man in the apartment died. Then they arrested more individuals. Now its a total of seven. French president Francois Hollande spoke soon after the raids had been concluded he said specifically as i speak to you a particularly risky Police Operation just ended. It aimed last night to neutralize terrorists who were lodged in saintdenis with those who committed the attacks and crimes against god on friday night. What we are waiting to find out is whether or not they were able to get abdelhamid abaaoud. We have been told by the french prosecutor thats who they were targeting in the building. He is the individual that they say is the mastermind of the attacks that occurred here on friday night. We do not know the identities of those dead nor those arrested at this point. Carl, back to you. Michelle, any idea if and when today we might get some word on the outcome of those attacks . Well, the french prosecutors and the French Police have been fairly forthcoming. So it could be that we hear something today. A lot of the local french press clearly, as you would expect, very, very connected. And seem to be able to come up with leads and tips very quickly. So we are monitoring all of french radio, French Television as well, the french media as well as nbc news working to confirm anything they do come up with. Perhaps later today. I know that he was asked repeatedly by reporters whether or not they actually had the alleged mastermind. He would not answer the question at the time. They are aware of how everyone very much wants to know what happened. Michelle, well be coming back to you for more on that. Michelle carusocabrera in saintdenis. Guys, these air france flights diverted overnight to Salt Lake City and halifax. That soccer match in hanover canceled on what they said was concrete well be living with this for a while. Yeah. I just think you have to notice that theres two types of two views of the french. One is the french, hollande needs to stop the right wing, which is ageold 100yearold situation, france, how to stop the right wing from coming in. The deal with russia signifies a break with germany. This is the france of the battle of algiers, not the france of the battle of though reports of hollande is not backing away from letting refugees in, saying the country needs to remain open. Not completely turned on itself. I think that this kind of activity look, i think that again, im not a political guy. Im a student of the history of the way france conducts itself. This is not frenchlike of the new french, post world war ii other than when they decided to take it to algeria. I think those who follow the history of the French Foreign legion and algeria, knows there a way of french to be brutal and a way for the french to be democratic. Right now theyre going for brutal. We do have some corporate news. M a, you could call one deal grow to grow, one deal shrink to grow, one deal dont grow there. Air gas, being acquired by air liquid, 13. 4 billion. As for dont grow there. Norfolk southern saying Canadian Pacifics unsolicited takeover offer, very low premium deal. Any deal would face significant hurdles. They are saying, please. We have no interest. Conagra foods trying to shrink to grow. They will split into two companies, one with consumer brands, and healthy choice, largely frozen potato business. Good to see three different apartments within that house of brands of conagra. What people describe as second tier, old Fashion Center store brands that had no growth. Then there was the food service business, we know from restaurants coming back. Thats a decent business. Then the private label, which is mismatched that they overpaid for. Breaking the whole company up. Private label is gone, as we know. That was bought by treehouse. You broke and followed a lot of the stories following the air products bid for air gas. Peter mcquelson put it together, 98 domestic, just said no. Saying the 70 bid would not no way was worth what the company was. He was right. He was right. It was a long battle, over five years ago. It had some interesting twists and turns and including the fact that air products got two Board Members elected to air gas board who turned around and said your bid is not adequate. Its interesting to look at the two. Heres Norfolk Southern. Peter mcquellen said i can tell you we can do x. What happened in air products is similar with what happened to Norfolk Southern. Air products took advantage of the great recession. Air gas was in the high 60s. Stock goes to the 40s because of the great recession. He said when this ends, well go back. Which is what happened. Norfolk southern is down because of coal. 21 of the freight is coal, coal related. By the way, coal could be in secular decline but might bottom here because all the companies that can switch to natural gas have. Canadian pacific has a lot of oil. You know what . Guess what is not being shipped by rail . Right. Canadian pacific needs growth. They do. As for air gas, youre point is a good one. Hes in his mid 60s. Waited a few more years. Doubled what air products was probably willing to pay if they had gone to 75 back then, they may have won it. Decent multiple. 98 domestic. Air liquide looking for diversity. Looking to take the weak euro and put it to work. The reverse of what i thought would happen. Air products was trying to steal air gas. Hes a lawyer, by trade. Philadelphia, radnor. You mentioned what norfolk said about the bid. We had angies list the other day. Why do people think they deserve more. Some companies are down because of the funk. Talk about the funk. When i talk to ceos off line from mad money, they say, wow, people are down. I say why . Politics. They feel like the political dialogue is making it so our debases the notion of what is going on in the economy. Is home depot is the real economy . Lowes . Not so bad. I believe a lot of the ceos i deal with anyone industrial, people think we cant make money in this environment. Its so wrong. They can. Every deal, carl, is different. Has different characteristics. In the case of norfolk, twoyear regulatory process at the very least. As we know, quoting the ceo in the past, they believe would not end in approval given the Surface Transportation Board and the issues it has with how it goes about judging these deals. Do they actually enhance competition . Yeah. 117 this price last week. This year, Norfolk Southern. Not stopping norfolk from going up. Well see what cp is willing to do. Well come back to it later. Bill ackman a large shareholder there. How can you go a moment without talking about valeant. 70 bucks. Key to the market. 70. A lot of hedge funds are caught. Just relentless. Relentless. They still have son edison to lean on. A bridge too far that last deal they did. Well stay on top of developments surrounding the paris attacks as the National Controversy over Syrian Refugees heats up. Well talk to ron johnson later on this morning. Another look at the premarket. Have not gotten to target and lowes. Downgrade for exxon, upgrade for apple. More squawk on the street continues in a moment. Business expenses, im in charge of it all. So ive been snapping photos of my receipts and keeping track of them in quickbooks. Now im on top of my expenses, and my bees. Best 68,000 employees ever. Thats how we own it. It is wednesday that means one way or another oil will be a story around 10 30 a. M. Eastern time. Jackie is at the nymex. Its the moment we all wait for. Let me tell you whats happening before we get to that number. We have the epi last night reporting a draw down in crude inventories b a half Million Barrels. Heres what we know. There was a builtin cushion. Imports were down. Refineries are up. They are coming out of maintenance, which makes sense. This is the time of year we start to see build. Traders are looking for about a million barrel build here from the department of energy. As we know, the api doesnt always see eye to eye when it comes to computing this dateda. A we are watching the price at 41 a barrel, because of the geopolitical instability, this data, its not surprising. Were staying in a tight range to the low 40s. Not breaking under 40, but not going over 42. Its going to be touch and go when it comes to crude oil prices. The department of energy can change everything in just a little time. Ill see you then. One thing people have to recognize about oil, rbn put out great numbers this morning. They surveyed 31 oil and gas producers. Youll love this. Production up in the Third Quarter. Thats why we have this glut. Up. They did a the survey shows because the price of drilling is falling, youre producing more oil. Thats why you have this bubble. You said that before, but it appeared rigs were being taken out of service. Im confused then. The Third Quarter numbers, Oil Production is up. Fourth quarter wont be down much. Talking about was leveling off. Its remarkable how much more is being done with less. Here we sit here and think wait a second, bakken falling off. These numbers are unassailable. The total increase in 2015 Production Guidance to 43 Million Barrels since the initial investment. We are almost efficient to a fault. Exactly right. Theyre drilling a sweet spot. This rbn number is breathtaking. We are producing more more than we were a year ago. Its insane. If the price were to rise, your margins will be even better given the advances they seemingly have made. But, look, you talk about credit all the time. Nobody very few cutbacks in credit. The fact is you say wait a second, how can oil be so saudis are pumping, were pumping. Were in that zone now, in that zone where banks are reazest ire reassessi reassessing. There have not been as many bankrupt sis cies as many had anticipated. Last week spread blew out. It is interesting to think that production has fallen dramatically. Theres a production decline in bakken, high cost, but not at all in the eagleford. Leads us to retail. Lowes better than expected earnings. Comps up five. The retailer maintaining their guidance for the full year. Target matched the street with Third Quarter numbers. Revenues did beat. Retailer also raising the lowend of its full year guidance. Courtney reagan will have an exclusive with Brian Cornell at 12 15 p. M. Eastern time. About 20 of the target comp growth was online. Online up 20. Q2 up 30. Theres a debate going on there. My travel trust owns it. The stock was down justifiably because the online should have been 30. That was not so good. I think this Company Reported last week between macys and nordstrom, the stock would be up. The fact is that theyre up against psychologically up against tj, which was beautiful. Lowes again, and home depot, that wind at the back. Walmart turning around. I think that Brian Cornell, i would like to hear what he has to say. This was not the blowout number that i was looking for. So when target saw online grow 20, amazon 28, a much larger percents taj of their sales, do you applaud target . I think target is good. Certainly better than the other broad lines. The problem with target it needs to blow away. Thats what when you read lowes statement, theyre like happy days are here again. Target has a lot of apparel, doing much better than nordstrom and macys. Its offmall. People expect unbelievable things from Brian Cornell. The stock was at 77 not long ago. I thought that geez, i was surprised theyre consistent which is good. That online, 20. No. Not what you were hoping for . No. Or those who are long in the stock were hoping for. My travel trust owned it. Sure wish they owned home depot. Home depot quarter was, as i said, the home depot quarter was masterful. The Conference Call was beautiful. Once again, the cfo puts it in context about the need to refurbish the old houses. Look, household information. Home depot, just guessing. Lowes delivering. But, remember theyre in homes. Homes are going up. As thome taught us, when your home is going up, you no longer feel like youre spending, you feel like youre investing. People who go to home goods, home depot, lowes, they feel theyre investing. Apparel is not what people are investing in. Housing starts a disappointment but Single Family held in. It was multi that fell apart. You go to home depot for Single Family. Should target be down a buck . No. No theyll return a lot of capital. The stock would be at 74 if it reported on thursday. It had the misfortune of reporting today when were looking at lowes and thinking, you know what . We cant be in anything thats apparel. Brian cornell can turn it around by talking about the consistency, the right demographic. Star wars. He has do it. Got to do it. The thesis and the narrative has to get better. Well get cramers mad dash and the opening bell after the break. Look at the futures. Keurig Green Mountain tonight, cmg. More straight ahead. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive all right, mad dash for this wednesday. Hump day as we like to say here. Well hit apple. Yes, a lot of the chatter about apple is about iphone 6, supply chain. Whether people are cutting back that nonsense kept people out of stock and missed the greatest opportunity. Finally an intellectual analysis done by someone. Goldman sachs goes to conviction back. The shift is apple as a service, no longer just a Defense Company but the kind of services theyll offer and continuing Revenue Streams so it makes it the 30 discount to the s p seems absurd. This is actual thinking, david. This involves the frontal lobe, the cortex. It actually can fire cylinders, produces things that only that it can defy the imagination. This is Actual Research and thought. Not just, like i checked in with five guys, theyre not buying a lot of parts. I like this. I like this because it represents genuine homespun wisdom. All right. Real analysis from an analyst. Greatest opportunity of any stock youve ever seen. Did you just say that . No. Well, i think that no, i did not. I thought i heard it come out of your mouth. No, i think this Apple Service piece is good. I like it when periodically people think. Like think. You know . I think this is a very important multiyear way. Steve milanovich, love steve, but the other day he piled on and said the stock is going nowhere. This analyst weighed in, comes up with a refreshing piece about why the company is worth more than its selling for. I like it. All right. Recommended reading by mr. Cramer. I just oh. Apple is going down. I find that way suboptimal. Well keep an eye on apple, including the deals we mentioned earlier. We have a couple more we didnt get to, which we will mention. Squawk on the street coming back after this. My name is rene guerrero. Im a senior Field Technician for pg e here in san jose. Pg e is using new technology to improve our system, replacing pipelines throughout the city of san jose, to provide safe and reliable services. Raising a family here in the city of san jose has been a wonderful experience. My oldest son now works for pg e. When i do get a chance, an opportunity to work with him, its always a pleasure. I love my job and i care about the work i do. I know how hard our crews work for our customers. I want them to know that they do have a safe and reliable system. Together, were building a better california. Sup jj . Working hard . Here at the Td Ameritrade trader group, they work all the time. Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. The opening bell in a minutes time. Were waiting for word today in paris to see if the raids overnight have neutralized the threat in the city. Well find out more later today, we hope. In the meantime, plenty of macro news. China home prices up, not by as much as the month before. Only 27 cities, last month 39. This is one where longer term theyre hoping the twochild policy reverses. Talking about a four, fiveyear plan there. They have too much housing. Baltic straight index almost disappeared. Zinc hitting multiyear lows. Diana shipp downgrade there. They thought there would be an expected rebound. Day rates horrendous. Yes. We mentioned that upgrade of apple over at goldman. Theres a downgrade of exxon what well talk about in a moment. First the open here and a look at the s p at the bottom of the screen. At the big board today, Synchrony Financial celebrating its separation from ge. Of course we talk ed ed to keit sherin on the show yesterday. At the nasdaq, Intuitive Surgical, well talk to that companys ceo in less than an hour. Had a nice comeback. You have to be impressed by that im impressed by Intuitive Surgical as i am valeant which has turned its around. Turn itself around . What you are talking about . It is up. It was down earlier. If i go to valeants headquarters, does it say hedge funds live here . I dont know that they own it anymore. No . I dont know who owns it. The stock wouldnt be at 70 if nobody owned it. Value act owns a decent percentage, is percentage. Anything can bounce. We didnt mention fairchild semi. 20 bucks a share for fairchild semi. A company with storied roots, gene kleiner, back in 1957. It was part of national semi, got spun off again. Bought, 20 bucks a share. The transaction expected to be immediately on semi. Leadership and power semid e semiconductors. Top ten player, a lot of people think you need scale in the business. That was the avago deal, even corvo. On seminot doing well. Down over 5 . Off semi . Is that off semi . Off semi. We keep an eye on those stock prices to see how they react after the announcement of a deal, its very important in terms of weve been seeing so much merger and acquisition activity. I expect well see more judging from the banks and lawyers i talk to these are the kinds of things you do need to watch. It has a way of hurting confidence in the ceo who might be considering a deal if they watch and see more stock prices down. This year, the last three months, weve seen more of that doesnt seem to have chilled a lot of hot spirits, so to speak. Arnie sorenson came on and said how the starwood deal would be great. I thought it would go up. The deal is so complicated, it left people scratching their heads. As i said that morning, hyatt was there. They thought they had a deal. And they had two tracks going the whole way. Thats the max they could get out of these guys. Maybe theyre disappointed. Had it been alone, it would have gone higher. Theyve seen a lot. They must know something about the future performance of that business. Yes, but Arnie Sorenson wants to be in china. Fritz had the stock a little higher there. Stock was at 78 when fritz left. 15 of all u. S. Hotel rooms. Does that seem right . These are the ones where you have the card the starwood preferred, people use them. People love that starwood program. Theyre worried theyll change it. I know. Its a very generous program. Yes. Yeah. Thats on a lot of peoples minds. Glad you mentioned that. I saw some articles about it recognizing thats a major, major thing. Gopro is below 20 bucks. Piper takes their target to 15. Theyre starting to notice the cameras show up on zulily, gruopon. A third off. Yi keep thinking gopro versu fitbit. Gopro talks about underinvesting, fitbit overinvesting. The gopro product was a bust for the holidays. This was a 65 stock 90 days ago. Now 19. I told you when it peaked, when the pig was on the surf board, it was higher. The goats. That was it. That was that moment. When you see goats, time to get out. People say when can you buy gopro. I say its still early in terms of its decline. Notice they teamed up with groupon. And zynga in there, too. I did want to discuss perr o perrigo. I guess well do the faber report instead. Maybe we can quickly do perrigo. That stock back to 154. Why not . The incredible stunning win to remain independent shocking the bankers and lawyers who advised mylan and all the hedge funds in valeant, they all sold out in the low 140s, perrigo back to 154. Papa is doing a good job. Target breaking down. Is it. Yeah. As for the faber report, we mentioned Norfolk Southern a bit. Well do it again. Wow. Double intro. Norfolk southern, you saw they were up earlier. This after yesterday, Canadian Pacific does come with a letter, a bear hug saying we want to buy you. Norfolk southern outs them on the price. Cp didnt have the price in their release. Norfolk southern put it in, saying its a 9 premium. We have the details for you. Worth about 46 bucks, 72 cents in cash. 46. 72. There it is. Then this morning cp following with a longer release saying, yeah, thats what were offering you. As i reported previously, people familiar with the situation say Norfolk Southern has no interest in pursuing a deal here. The key question is would Canadian Pacific want to push things by trying to undertake a proxy fight . Replace the board . Do all the things you might need to do . This is a highly regulated industry. Potential deal could take two years. Theyre suggesting in their press release they would get a deal down by 2017. You get a sense as to what were talking about. Two years, highly regulated industry. Unusual to see anybody do something of a hostile nature. You have a ceo whose health is not great. Hunter harrison, hes down in florida. Thats where squires went to see him when they talked on friday. Well see where this goes from here. The people ive spoken to and the people who are close to the Norfolk Southern side dont believe that anything will get approved here. Anything can be approved here. And they completely disregard any of the virtues that cp sees in terms of putting the two companies together. They dont believe the company would benefit were there no regulatory burden. Youre definitive here. Im hearing it hard. Norfolk southern does not belong at these numbers if they walk away. One thing to keep in mind is the presence of bill ackman, over 9 of the shares are held by mr. Ackman. 9. 12 . We mentioned vrx many, many times, valeant, owns about 5. 84 of that company. At the robinhood conference on monday, he said that could be a better merger for allergan. How much is this him trying to fire shots and get things going in the right direction . Who knows. Brent saunders is trying to wipe out a lot of the brands that valeant has. Why would he buy them if hes trying to destroy them . He doesnt want them to talk. He wants them to die. That deal is that a bond reference . Yeah. Okay. Just wanted to make sure. Dow on track for a Third Straight gain. Apple leader. Lets get to pisani on the floor. Hi, guys. Mixed session in europe. France is down fractionally. In the u. S. , energy up. Oil is up. Defensive names like utilities lagging. Want to emphasize the retail story. Again, generally very good news. Lowes numbers were excellent like home depot yesterday. You want to quibble . Home depot 7. 3, theres a gap there. Everybody knows it. Its still a good number. Look at the earnings, up 35 year over year. 35 . They affirmed their guidance. Thats why lowes is such a monster year. Look at the numbers. 216, 271, 3. 29, 3. 95. On the upside. Lowes was in the 20s in 2012. Now its in the 70s. Thats why. You get that kind of earnings growth. Still not cheap. Both about 22 times forward earnings, great numbers overall. The story with home improvement, you know whats going on. We have a recovery going on in the housing market. We have more investment because of home prices are generally appreciating. You have 2 gdp growth. Thats enough to get some kind of overall expansion of wealth, particularly in people who own homes here. Thats the story. Lets move on target. The numbers in line. Samestore sales up 1. 9 . Thats a good comp. The traffic was up 1. 4 . Digital up 20 . Now, here might be a little bit of a problem. They were it was higher earlier in the year. If you look at target, thats why maybe target is down right now, 4. 8 . I think that will be a factor. Ipos pricing tonight, its a big one. Big night. Match group, 33. 3, 12 to 14. They are not changing the terms. Still 12 to 14. For ipo business theres pricing pressure everywhere. Well see if they get it done at that price. Same situation with square, payment provider, 27 million, 11 to 13. They kept those up. Those prices are not changing, across the street everywhere theres pricing pressure force all the ipos. Well watch carefully to see if they can get it done. Nyse last night made some changes in the order system. They will stop accepting new stop orders beginning february 26th. Theyre joining nasdaq who has already done that. Brokers still do stop orders but they have to do it internally. This is all about volatile days we had recently, like august 24th, where some stocks closed at 60, opened at 54, then suddenly bounced back. When you have a stop order, and that stock is sold at the bottom and it bounces back, you have unhappy customers. Theyre trying to raise awareness about the potential risk around volatile trading. I think a lot of people have to start using limit orders and other creative ways to avoid potentially getting stopped out on days when the stock bounces back. Its a sensible answer. They are joining nasdaq who has already stopped doing that. Its going to be a busy day on the fed front. We will hear from a new fed president and get the minutes at two. Rick santelli . Hi, rick. This could be the fourth day in a row where tenyear note yields close between 2. 26 and 2. 28 that started on friday that run. If you go back the previous five trading sessions, we in a range of 2. 31 to 2. 34. Very interesting. Hovering very close to some of the highest closing yields, especially last week, since mid september. Look at the twoday chart. You can see what the direction is. Its the scaling that most jumps out. August 1st, you see that september high around 2. 29. Granted were not quite there but hovering right on top of it or slightly above. Lets look at spreads, flattening curve associated with the market anticipating a fed rate hike. Tens minus twos, it could be flatenning a bit. 30s minus fives much more proguessive. Many talking about parity that will take a fed hike, an actual in the hand fed hike, not the verbiage that goes along with the potential of a fed hike. Thats comping to april, dollar index comping earlier to march. The unnoticed chart outside of trading floors is crb index, inflation. Maybe its a rough gauge, many still look at it you have to go back to 2002 to find lower closes. Carl, back to you. All right, rick, thank you very much. When we come back, former undersecretary of stake Nicholas Byrnes with his perspective on the fall oout surrounding the paris attacks. Were back in a moment. 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. Whats next for france, europe and the rest of the world in the fight against isis, joining us is former undersecretary of state, ambassador nick burns. Mr. Ambassador, good to have you. Good morning. Good morning. We have hollande coming here on the 24th then to moscow. Are you believing that isis is the pivot point around which both russia and the United States can actually unite . May be a way to have russia, the United States and france act together militarily in a more coordinated fashion. The russians have been focusing the majority of their air strikes on a syrian groups that we support, not the Islamic State. Now president putin will be under pressure to direct the air power to the Islamic State and that will lead to some implicit Cooperation Among france, United States and russia as we all go after targets against dash in Northern Syria and in iraq. Thats where this may be heading. The person who might be bring everybody together is hollande. He will be in washington, then travels to moscow. He wants to see a greater International Effort against the Islamic State. How does that happen if theres no agreement on what happens to assad f this effort is successful . I think thats on a separate track. Secretary kerry has been pushing the diplomatic negotiations. Thats going to take a long time. Its into the parallel track to the military effort. The issue of assad has been kicked down the road a bit. United states and the arab countries and europe want to see him go. But no one is demanding that happen now because there is no government to replace an Assad Government in the shortterm in damascus. Mr. Ambassador, jim cramer here. Still trying to get at what it needs to what it takes to make it so ukraine is not an issue. Is that possible . Can you walk away from the idea that two februarys ago we basically went back to cold war status and just table ukraine as a big issue . I dont think it is possible. I agree with your question and what you said. The fact is that putin crossed a major red line, broke International Law on annexing crimea. If hes willing to in syria we work with the russians on different issues, north carolina, iran, but we should not let putin have a bank shot and argue that his cooperation in syria is that we take the focus off ukraine. A lot of people doing the math on refugees here stateside. The number that weve allowed in so far, the number that the president wants to allow. The governors, its bleeding on to capitol hill, raising more fears about fiscal policy strife what is your take on it . I think theres been far too much fear mongering. The administration is planning on taking in 10,000 syrian refug refugees, not 250 figure like donald trump is saying. The United States and republican and democratic administrations has always taken the leadership position. Were not doing that. Germany is leading, france is leading, turkey is leading. We know how to do this. We know how to vet refugees for security purposes. Its a difficult and long process to get into this country as a refugee, but its in the best american tradition. Its shameful when leading politicians say we should only take Christian Refugees into our multi religious country in the United States. We have to step up. I think president obama is leading on this we ought to support him. Some have tried to make the defense that 2 of those accepted are men of combat age. Then we look at the raids overnight, reportedly one of the suspects who were killed was a woman. Are you willing to parse it that thinly . You know, if you look at people who attacked, terrorists last friday night, nearly all of them were citizens of france and belgium, they grew up in these communities, paris, brussels. We have to vet these incoming refugees for security purposes. But weve done this before. A republican president , gerald ford took in hundreds of thousands of vietnamese refugees after the vietnam war. We had to do security screening to make sure they werent vietcong at the time. This is something the United States has great experience in. We have a competent government and refugee process. We cant close the doors to this country. You cant dig a mote around the country and pull up the draw bridges. Were the leading global country. Its a humanitarian responsibility. We can keep ourselves safe in doing it. Ambassador, appreciate your time today. Thank you very much. Appreciate it. Ambassador nick burns. Well get stop trading with jim in a moment. Tomorrow, an interview with ken griffin of citadel. Dow up 106 points. Binge on, okay. Tmobis so you can stream all the movies, tv and sports you want without using your data. Its like. Free. So its okay that i binged an entire season during my kids piano recital . Ive done that. Yeah. Im binging right now. You know, i think weve made a real breakthrough here today. What . Aw, he dies in this episode. Introducing binge on. With tmobile, stream video free without using data from netflix, hbonow, hulu and many more. So wi got a job ews . Ill be programming at ge. Oh i got a job too, at zazzies. friends gasp the app where you put fruit hats on animals . I love that guys, ill be writing code that helps machines communicate. interrupting i just zazzied you. phone vibrates look at it friends giggle i can do dogs, hamsters, guinea pigs. You name it. 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Remember, south korea is lg, samsung, big customers of qualcomm this comes on top of the fact theres chinese customers not paying qualcomm, often a bad sign for business. Qualcomm has been replaced by intel, integrated device technologies, analog devices. Texas instruments. Those are the ones people want. This is cell phone. The more youre cell phone, the less people like you. Thats the problem with skyworks, corvo. Thats why i come back to the brilliant apple piece which says dont regard apple as a Cell Phone Company anymore. Thats that intellectual property. Janet a big holder of qualcomm. Smoked. Can it come back . Anything can come back. Valeant up 1. 11 today. Anything . Jim, youll have gmcr and sales force. I have marc benioff. Sales force, a newer tech company. What benioff gives you, social, mobile, connectivity, Artificial Intelligence and of course an outsideview of the world. Jim, well see you tonight. Thank you. Mad money, 6 00 p. M. When we come back, the latest on the paris attacks. Well talk with ron johnson. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive good wednesday morning. Welcome back to squawk on the street, im Carl Quintanilla with sara eisen, simon hobbs, david faber. Dow up almost triple digits. Nice upgrade of apple helping things. Oil steady. Housing starts had some good news, though overall a disappointment. Keeping an eye on crude. We start with the latest in france. Police raiding an apartment while hunting the suspectses of the architect of the paris terror attacks on friday. The operation ending with two dead and seven arrested. Michelle carusocabrera is live in the suburb of saintdenis with the latest. Reporter we are on the street where that raid took place overnight. Its about seven buildings down on the left. You can see police cars in front of it. For the last several hours we have seen police, crime scene investigators going in and out of the building removing items. There was video taken at the scene soon after the raid began, roughly at 4 30 in the morning. The video recorded the hail of gunfire that went on for some 15 minutes according to people who live in the neighborhood. [ gunfire ] then there was intermittent gunfire. At one point an explosion for several hours. French prosecutors said when the raid began, the special forces entered the apartment, a woman wearing a suicide vest blew herself up. Later in the day, reuters took pictures of the men being arrested, completely naked. There were seven arrests, two people dead, and that includes the woman who wore the suicide vest and another man in the apartment. The target of the raid, abdelhamid abaaoud. The architect, allege d architet of fridays attacks. No word on whether they got him in the raid. A late breaking development. Spanish Authorities Say that French Police have sent out an apb, all points bulletin for another suspect, salah abdeslam. Hes the subject of an international manhunt. This neighborhood where we are is not far from the stade de france which is where three suicide bombers blew themselves up in an attempt to kill parisians on friday night. As we have more information later on through the day, well bring it to you. Were waiting to see the identities of those killed and those who were arrested today. Guys, back to you. Michelle, you able to give us any information on these reports that an antidote for a potential gas attack is being prepared to be distributed through paris and france in general . I can give you no information about that at this time. No. Not from where we are right now. Were very focused on this crime scene at this point. So, apologies. Not at all. Thank you very much. Michelle carusocabrera live from paris. Joining us this morning, former Deputy Assistant secretary of defense for middle east policy, Brigadier General mark kimmet joins us. Good to have you with us. Thanks. We had a discussion about hollandes trip to the u. S. And the next trip to moscow what is the take on potentially joining putin after everything weve been through over the past year and a half . At the military level that makes sense. We can talk about the politic all day and night. At the end of the day its better to have one coordinated operation with all the parties involved working together, going against isis targets and the contribution of the Russian Military to this along with the 60nation coalition that we currently have would be helpful. Is there a sense that the operations that the french at least are taking in raqqah are constructive . Does it make you wonder why some of these were not done before . Well, militarily theyre constructive. But we have a larger issue that to many this feeds into the narrative and, in fact, the narrative that our adversaries are promoting is that this is exactly the reason why we fight. It will be used by them to attract, to motivate, to recruit more and more fighters. Thats unhelpful. General kimmitt based on the information were learning about this manhunt and the dramatic scene that unfolded in the saintdenis neighborhood, what does that tell but our and frances intelligence . That many of these people were on intelligence lists and close to french authorities and French Police, potentially escaping through borders of europe . What does that tell you about the abilities to act on them . The main message that were getting away from all of this in terms of intelligence is this is a relatively Intelligent Group of people that are taking advantage of the internet, encrypted messages no, no, no. I have it from go ahead. Forgive me, sir. Forgive me, general. Carry on. Again, theyre taking advantage of the capabilities inside the internet to command and control these operations, communicate with each other, by using encrypted technology that doesnt give us much of a signature, quite frankly all of our human intelligence with these groups is weak. General, i wonder if the discussion about Syrian Refugees may have taken our eyes off where we perhaps should be focused. Six of the suspects from friday are french nationals who spent most of their upbringing in france. There are thousands of potential jihadists who are under constant juteny in france. There must be at some point a question as to whether the french authorities have got this situation. As a foreign nation, how do you gauge whether they have sufficient forces and resilience to deal with what may become even more serious if you have an election in two weeks time in which the far right gains in popularity . Again, i think those are tactical and operational issues. The fact that we still have not figured out how to attack the narrative, how to test the ideology means that youre going to be attracting recruits whether they are home grown, whether they are lone wolves or on the ground inside the region. If we make this a military operation, a security operation alone, were going to be doing this for a generation. Until we can break down this narrative this ideology, which is seen as legitimate by most of the islamic world as a legitimate form, a bad form, nonetheless a legitimate form of islam, if we dont counter that well be doing this for years. General, appreciate your time. Thank you very much. Sure. General mark kimmitt joini i us. We are joined from capitol hill by general ron johnson. Thanks for joining us. Good morning. Plenty of questions as it relates to this manhunt, who was involved, how many, how the organization took place. We are piecing together some details. What have you learned based on the predawn dramatic events that happened in paris about isis capability, style and what we have to do next. What i learned is what we all learned as we watched on the tv screen this tragedy unfold, isis is not contained. Islamic terror is spreading, and that free nations are vulnerable. Thats what we learned. We will be going to a couple secure brieffuls later today and get some more details. The basic fact of the matter is were vulnerable and we need a far more robust intelligence gathering capability as our first line of defense and we have to defeat isis. We have to deny them territory. This is the civilized world against islamic terror. We have to take that threat seriously. What do we make of this grand coalition that president Francois Hollande is calling for between the United States, europe, the allies and russia. How complicated would that be for the u. S. To work in coordination with russia with the mystery of their position with president assad. How difficult would that be . Do you see this grand coalition becoming a reality . There are complications because we allowed this to spin out of control the last few years. The historic blunder of not leaving a stabilizing force behind in iraq, and the fraying of what coalitions weve had in the past, america should be leading this we should have been leading this coalition of the willing for the last few years. Its sad its got to take this kind of tragedy and the french to lead it. America should be leading this. This literally is the civilized world against islamic terror. Theyve been at war with us since the mid 90s. We have undertaken some wars. We wiped them out in some places. But we have not stuck with it. We have not left the stabilizing force behind. We better take this seriously and end this once and for all. What can you tell us i know based on your position, your communications with Homeland Security officials, what can you tell us about what extra is being done now to protect america from this threat that you have been warning about for a long time now . We obviously are at a heightened state of alert. A number of things are happening behind the scenes at airports, also at public events. But, again, we are a free nation, we have a lot of soft targets. We are vulnerable, which tells you that our first line of defense is a far more robust and effective intelligence gathering capability. Unfortunately we are weakening is that. Not only in terms of law but also technology. Technology continues to advance. The general was talking about encrypted accounts. Isis is sophisticated in using social media, using technology. We have to understand that. We have to beef up our own intelligence gathering capability. Senator, more immediately, a lot of the conversation inevitably is about what happens in syria and in the middle east. The terrorist attacks are on the streets of paris. As i mentioned there are 11,000, 12,000 suspected jihadists living in france. They are one commercial Airline Flight away from capitals, state capitals across this country. How does this nation respond to that . Beyond simply Airline Security . At what point is there a point at which you say im not sure my allies in france necessarily have this on their own, with all the information sharing we give them, there has to be more this country does there to protect us here. Well, listen, we are vulnerable. So, you have to let me repeat, we need a far more effective intelligence gathering capability and we have to defeat isis. We have to deny them territory. We have to wipe them out. Then we have to go to any other safe haven. We cannot allow any safe haven for islamic terror to continue to spread. We have to understand the reality of the situation. We can no longer deny it. Not call them the jv team, say theyre contained. Recognize and face the harsh reality and deal with it in a robust fashion. This is the civilized world against islamic terror. We have to engage in that fight and win that fight. This is a very virulent debate in this country in an environment where it looks like the president wants to shut down guantanamo bay, a third rail for many people in your party. At what point does the rubber hit the road in the practicality of passing the spending bills that have go through for the beginning of december. Paul ryan was indicating yesterday he is prepared to get more aggressive on that. Why would we close down guantanamo . Ive been there. Its a first class facility. Thats one area we can hold these terrorists so they dont engage in further acts of terror. Thats also a way you gather intelligence. You capture these people and over a series of years you interrogate them, test their stories. Why in the world would we want to shut down that operation is beyond me. Our first and foremost priority is keeping this nation safe. We need a xhancommander in chieo ja and weres that imperative. Weve seen the isis video with plots in the pipeline threatening the u. S. How seriously do you take some of these reported threats to d. C. Or other American Cities . Did you see what happened to paris on friday . We all have to take these threats seriously. Senator you think the threat is equivalent to what paris had been under previously. I think paris certainly paris has a bigger problem because they have a large muslim problem. We dont have such a large muslim population. There are not as many communities where the terrorists can khide. All free nations are vulnerable. We have got to take this seriously. I dont think weve taken it seriously enough. We let you go, i did want to ask you about the refugee debate raging across this country. Governor jeb bush breaking with some fellow republican governors and president ial candidates saying we should allow them in. Its in our history. He called it a noble ptradition. Do we have the capability to background check them to keep the country safe. Were Holding Hearings tomorrow. One of the secure briefings is tonight and well find out what that vetting process is. So, i understand people calling for a pause, its probably a reasonable reaction. Lets get the facts out there. Lets not let democragoguery ta hold. We hope you keep us updated after those hearings. Have a good day. Up next, the business of commerce continues rightly. Target lower after earnings today. Now down almost 10 so far this month. vo what does the world run on . It runs on optimism. Its what sparks ideas. Moves the world forward. Invest with those who see the world as unstoppable. Who have the curiosity to look beyond the expected and the conviction to be in it for the long term. Oppenheimerfunds believes thats the right way to invest. In this big, bold, beautiful world. Target better than expected Third Quarter sales. Raising yearend guidance. But the stock lower today. Almost 5 . Chris horvath joins us to talk about that. Good morning. Good morning. I heard a couple things. One that it was unspectacular, but given the environment fine is good enough. Others are pointing to this sequential slowdown in web sales as worrying. Where is your head. As you step back whats going on here is that Brian Cornell joined a year ago. He beat every quarter since joining, and this is the first where we didnt see an upbeat. Sales were good, but gross margin was down. So i think theres a question out there, a, whats the health of the consumer and, b, is the honeymoon over as it relates to the numbers and new ceo. That was one short honeymoon if its over. Yeah. I dont think its over. I think broadly, as you step back on the consumer, target putting up a 1. 9 comp for a 70 billion company with 20 of the mix in that troubled apparel, weathersensitive category, i look at the results and say thats pretty good overall. I think generally, as we look to yearend, the Consumer Group and retail group ends up rallies as santa does show up around december 25th. Do you think its fair the way apparel seems to have become the locusts of all things regarding retail . Yeah. You know, we get most of the questions were getting from investors these days, its is the consumer heading for a recession . I point to walmart, home depot, lowes and target. Thats a half trillion dollars in u. S. Sales. I dont know how you question the health of the consumer. Its not great. But its solid. So, i think the apparel issue has a lot to do with secular issues around internet encroachment and the weather has been flat out too warm against a favorable back drop. Im wondering when it comes to targets turnaround, you dont sound fully convinced yet. Walmart is trying to pull off a turnaround. We saw signs of growth in the traffic, sales number. Where are each of those companies relatively in their turnaround efforts . Yep. So if you think about targets turnaround, Brian Cornell doing a great job of driving signature categories around home and apparel. Driving better in stocks. The big question Going Forward for him is what can he do with food . Food is about 20 of the mix. He has not announce at Big Initiative there. Thats the big thing on tap for 2016. For walmart, i think theyre making progress. Traffic continues to accelerate. Ultimately they need to become more competitive online if they want to sustain above a 2 comp. Coming back on the General Health of the consumer, we talk about the move to online, amazon. But what about this move to services at the same time. The idea that people might spend more on travel or gyms or nail and hair. Stuff that were not picking up through the normal corporate reporting cycle. Thats a part of it. The consumer is time starved. As a person who works at jpmorgan and three children under 11, im searching for spare minutes on the weekend. I think people are timestarved and looking for experiences. So hopping out to the mall and buying apparel is not where theyre focused now. If you look at the spending in the home category, theyre spending on the environment, spending where they live. You could say the same thing as you suggest around the travel industry. Finally, chris, the times today has a piece quoting several analysts that the battle between traditional retailers and amazon is effectively over. That amazon is demonstrating they can make money, that Silicon Valley stopping investment in ecommerce because of amazon. Is it that simple . I think that is way too simplified. You know, if you look at it, home depot last year, 20 of their sales growth was online. If you look at the average retailer, the average retailer is growing their ecommerce business between 10 , 25 year over year. If you look at the overall ecommerce growth as reported, that is ahead of those numbers. I think theres misinterpretation. Yes, amazon has become more profitable. But retailers are a lot more competitive with better websites 40 of orders from best buy and home depot are picked up in store. Walmart ultimately rolls out this click and collect feature around grocery where you pull up, someone brings the cart out to your trunk and they load it for you and you drive away. Its going to be hard to get around the fact there are so many stores conveniently located to the consumer. Thats walmarts hope. Chris, thanks again. Thank you. Chris horvers, busy dad at jpmorgan. Coming up, the latest events in paris. We will talk to former fbi profiler clint van zandt. Straight ahead, a former fbi p profiler weighs in on the events in paris, and Richard Haass will join us live. Im here at the Td Ameritrade trader offices. Ahh. Steve, other than making me move stuff, 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. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive. Good morning. Im sue herera. French police raiding a church near the site of this mornings siege in saintdenis, a suburb north of paris. Officers broke down the door, climbed through the windows to search the premises. Its not known why police were checking that particular building. Residents were allowed back into the area following the police raid on the apartment in saintdenis. Seven people were arrested. Two were killed during the sevenhour siege. In manila, president obama urging Business Leaders to reduce emissions in operation and use their influence to pressure governments to sign on to the Global Climate change agreement. He and dozens other leaders are slated to convene in paris to finalize that agreement. Security tight at the vatican as 20,000 people gathered to listen to pope francis. Military police were checking bags as people arrived while plainclothes officered mingled with the crowd. And that is the news update. Lets get to jackie with the inventory report. Jackie . Welcome back to squawk on the street. Im jackie deangeles. The department of energy out with the energy report. A small build here, 252,000 barrels. The api predicted a draw. Traders were looking for a million barrel build. But you have to look at what happened in run rates. And total production numbers will be in focus as well. Right now prices are trading lower here. 41 even. We were higher. Five things to focus on when it comes to the crude trade, not just this data, but also whats happening with the data. Geopolitics very much in focus. December expiration on friday that creates volatility and there are less shorts in the market. Its a cautious tone here. Back to you. Thanks for the breaking numbers and the context. We have breaking news out of washington, d. C. Lets go to eamon javers. News from the new York State Department of Financial Services regarding barclays. This is an embargo release. Barclays will pay an additional 150 million penalty to the new York State Department of finances and is terminating its global fixed income, currency and commodities for misconduct relating to the last look process. This tells you where we are in the High Frequency trading wars back and forth. Ba they used the system to look at client orders that would be unprofitable for the bank because of price swings during milliseconds long latency hold periods. Barkleys developed this as a defensive measure against High Frequency traders to make sure prices were not moving in a way that would be unprofitable for barclays. The press release saying in certain instances when a client received a trade not acknowledged message and questioned barclays cited technical issues or vague responses. Look at this email this is a june 6, 2011 email. This to employees. Do not involve sales in any why whatsoever. In fact, avoid mentioning the existence of the whole bats last look functionality. If you get inquiries, just obfuscate and stonewall. We have reached out to barclays and will get their side of the story when we have it. French Police Continue to hunt for those responsible for fridays attacks, last night targeting one of the two suspected ring leaders. Our next guest worked in u. S. Counterintelligence and says the paris attacks could have a massive influence on other terror cells around the world. Clint van zandt joins us from fredericksburg, virginia. Welcome to the program. Good morning. From what you see on the television, from what you see Authorities Say, how do you think that will affect behavior . Well, one thing they have to be careful of is that, of course, this is theater as far as terrorists are concerned. This is a tremendous recruiting tool. Even the smallest attack in france or anywhere around the world will be lumped in with Something Like this. So if youre a terrorist, you have at least two goals. Number one, get all the Media Attention you can. Number two, just as we saw this assault by French Police today, theyre closing in on these terror cells. So, if youre a member of yet another cell, you may think in your mind i have to act very quickly to strike before the authorities find me and arrest me. Is there any response then that the authorities or the media can come up with that diffuses that to any extent . Thats always the challenge. Its your obligation and other networks to report these things. We dont want to give too much attention to the propaganda films where we have members of isis shaking their fingers at us while theyre dragging bodies behind their vehicles. Theres a balance between information and the fear and consternation that it concerns. But we have to be informed. New york has always been right. If you see something, say something. What do you and other members of the media, keep us informed, make us ready to dial 911 if we see something. Did it surprise you to learn these attackers were camping out so close to the scenes of the attack . And that some of them were already high profile targets . At least one on the french intelligence agencies . Some of these terrorists were known to u. S. Counterintelligence, too. Were going to be slow to talk about what we knew. We did know that. As far as the terrorists still being, as you know, just outside of paris when that assault took place today, once the assault takes place, the terrorists have two options, run, try to get out of the area, or hunker down, hope you dont get found, and in this case plan the second operation. That appears to be what they did. Now, the paris Police Authorities are telling us they developed this information based on cell phones recovered from the bodies of the previous decreasd deceased terrorists. The job is to seek these sells o cells out, find them. As chief negotiator for the fbi, you had to make hairtrigger decisions on whether to go in in certain situations. There is within the shadow of the European Commission and parliament a run down area of brussels where it would appear that jihadists live. And they consult without anybody paying attention. The local mayor suggested they lost control of that district. What would your judgment be when you know there are potential terrorists and masterminds in there . Would you go in . Disrupt . Or do you leave them . Number one, you would like to believe you have sources of intelligence already there. Undercover officers, paid informa informants, that you have the ability. As were told helped to take down this group this morning. Wiretaps going on. Justice may be blind, as in the United States we show justice with the eyes covered, but justice should not be stupid. If you know that potential exists, we need to watch it realize were told to watch any potential terror suspect 24 hours a day, takes about 20 Law Enforcement officers per suspect. When you do the math, theres not enough Police Officers to watch the number of suspects that we believe are out there. More than that, i think at some point the question will come back whether france is actually capable of dealing with this. There are 11,500 suspected jihadi terrorists in france. The opposition is saying lets put them under house arrest or tag them. With the ratios youre talking about, with the knowledge you have, if they start, its almost uncontainable. It very much is. They dont have the capability. Shortterm we can activate police, military, national guard, we can throw hundreds of Law Enforcement and military on the street. But you cant keep that up longterm. Its like in the attacks in january, some of the individuals involved in the french attacks had been under surveillance, Law Enforcement determined they were not that significant of a threat. And had to dedicate surveillance assets somewhere else. As soon as they did that, the individuals got back to planning and did the attack. It shows how we try to leapfrog from suspect to suspect. If were right good, if were wrong, we see another attack. Good to get your input, sir. When we come back, the president of the council on foreign relations, Richard Haass joins us with his take on the events in paris and the american response. Squawk on the street will be right back. Hi watson. Annabelle, your birthday is tomorrow. Im turning seven. What did you ask for . A princess. And a pony. You like things that begin with p. I like pink frosting too. Will you have a cake . Yeah. I was too sick to have one last year. The data your doctor shared shows you are healthy. Are you a doctor . No. I help doctors identify cancer treatments. I want to be a doctor someday. I can help with that too. Watson, i like you. You explsuper food . Is that recommend sya real thing . Cedar . Its a great school, but is it the right one for her . Is this really any better than the one you got last year . If we consolidate suppliers, whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Sure. Ok. But are you asking enough about how your wealth is managed . Wealth management at charles schwab. Welcome back to squawk on the street. Utilities and telecom, two sectors in the red trading today. Both competing as the worst performing in the s p 500 this ahead of the feds october meeting minutes. Weighing the sector down, pse g, nextera, first energy. All down by a percent in trading. Utilities as a group, the second worst performing sector this year behind energy stocks. These rate sensitive sectors will be a focus given the fed headlines anticipated today. Absolutely. Energy on top of the bunch leading the s p 500 higher today. Back to the situation in paris now with new raids overnight leading to more arrests and heightened tensions. For more on the International Response and what will be done in the fight against isis, we welcome Richard Haass. Good to see you. Thank you, sara. Lets talk about the u. S. Response. You wrote in project syndicate this is a war unconventional. Is america prepared and do we know how to fight that unconventional war . One way or another well find out. What i mean its unconventional, its not fought by soldiers on declared or defined battlefields. There will be some of that youll have elements of this that will look a lot like a war in places like iraq and syria. Though there the challenge is more than anything to find a ground partner. You have aspects of this that are anything but traditiontradi. You have a digital dimension, a digital battlefield because isises has been good at explo exploiting that space. As in paris, theres the whole Homeland Security, Law Enforcement, immigration dimension of this struggle. So this is, as i tried to argue, a war in multiple domains using multiple tools. What were seeing in terms of just an immediate response, france has stepped up air strikes, russia has been bombing, the u. S. Has been bombing. How coordinated or uncoordinated are these attacks, how effective are they . Certainly the u. S. And french attacks have been coordinated. Weve been helping with intelligence. Hopefully the russian aircraft, french aircraft are not getting in each others way. Again, i would not exaggerate what all of that can do. You cant win this from the air. Theres got to be a significant ground component. United states tried to create one from scratch. That failed miserably. Now were largely working with the kurds and selective arab tribes. That, i think, has some potential. But diplomacy is trying to see if you couldnt get a different government in damascus, no one longer headed by assad that would be a government that in principle we can partner with. I think thats going to be difficult if not impossible to bring about. So im guessing that we find limited local ground partners and you end up having a syria that looks like a multiple enclaves for years or decades to come. More on the russia question. Do you think this is the bow beginning of the end of moscows isolation from the west . Thats a good question. The russians seem to have put the situation in ukraine on kind of hold. So that certainly wont escalate. Its possible overtime that will reduce sanctions there. The bigger question is what role russia chooses to play in damascus and their isolation could grow or diminish depending on whether they play what is seen as a constructive role. So far the jury is out. The fact theyve been attacking groups that we have been supporting has not been a good start. But now that they themselves have been attacked, that might ab serious wakeup call. Its possible before this is done mr. Putin will become something of a partner. Sir, what happens to the the european capitals around the world . Thank god the bomb didnt go off yesterday in germany that was suspected at a big soccer game there. Listening to you, i dont take a huge amount of comfort that well be able to sort out these problems of these angry embedded jihadists in europe, who were there for al qaeda as they are for isis. How do we solve that problem and where the rubber meets the road for most people . The answer is you dont solve it, its not a problem. Its a condition. This is something youve got to learn to manage and live with. So, part of it is doing a better job at vetting those who want to return. Part of it is trying to keep tabs on individuals who have radical backgrounds and associatio associations, which is a Law Enforcement and intelligence problem. Figure out ways of radicalization. Youre talking about millions of people throughout europe and in the United States. So, even if a minute percentage of these millions goes radical and violent, as weve seen in paris you have an enormous problem on your hands. At some point as those add up, and as the pictures become more horrific potentially moving forward, at what point do you change your strategy to that and say this is more than an intelligence matter . When does it become a different order of magnitude that you say its in the United States interest to physically intervene if some form here to a greater extent, to help the situation. This is a hotbed in the same way syria is a hotbed. Again, theres no solution here. We have to look at ways of adjusting to this new normal. Did might mean taking a page out of israels book. Every time you go to a supermarket, movie theater, ball game, you get your packages, handbag inspected, go through medal detectors. We may try to reduce the softness of daily targets in our lives. Its not a pleasant future but this could well be in our future. Its a scary thought. Richard before we let you go, i wanted to ask you about the race for 2016 and how this changed that. You advised president s, you advised secretaries of states on this issue, on this region. What would you advise the president ial candidates now as the race turns into more one about a commander in chief than a more Traditional Campaign . That will inject a degree of seriousness. It will send the message that we are electing a commander in chief. Peoples knowledge of and Comfort Level with some of the real challenges president obama faces or his successor will face, they will be Chris Christie is giving a speech at the council on foreign relations, i believe. Youre going to start seeing more and more of the candidates step up to address these issues just like the democratic debate at the 11th hour was made to some extent focus on these issues. What theyre going to have to do is show theyre familiar with the issues, and theyve actually got some ideas about what to do about the challenges. Real solutions. Thank you, richard haas. Valuable as always. The president of the council on foreign relations. Jim grant will join us this afternoon. We get fed minutes. Well be back after this quick break. The company says its going to offer cass to about 70 of employees in key positions below the executive level as it aims to avoid mass departures from the heavily scrutinized company. Shares have fallen more than 70 since early august over concerns about its use of a u. S. Specialty Pharmaceutical Company as price spikes for some of its drugs. Those shares certainly in focus. Now off to chicago, Rick Santelli and the santelli exchange. Back to you. Thank you, dom. Jim grant is a busy guy, but maybe the bible of fixed income markets, swrim grant, of course, Interest Rate observer, read very aggressive loy this trading floor. Thank you so much for being our guest today. You are entirely welcome, rick. Nice to be here. All right. You know, im always amazed at how much Power Central banks and our fed have taken since the crisis and yet, how little americans know about the central bank. Would you say that savers in this country would really enjoy getting a 6 Interest Rate on any of their money . Would that be something you think they would like at this time of very low saving rates . Rick, around wrigley field, i think thats called a hanging curve ball. Savers would relish that. You know, the fed will pay 6 to the banks that hold shares. The equity in the regional banks Like Federal Reserve Bank of chicago or new york, but because only half of the price of those shares is paid in, the effective dividend is actually 12 . As much as an average american saving would relish 6 , he or she, i dare say, would like 12 even more. Now, it isnt just the member banks that are getting these dividends, which, by the way, are tax exempt. Theres too big to fail banks in that process as well. Maybe you could explain how that works. Too big to fail banks are, of course, banks in their own way. I mean, the way it works is who owns the fed . Well, we, the people, own the problem, but as for the institution, the ownership is apportioned among the 12 regional banks and to be able to partake of the feds favors such as the discount window, one bank must own shares up to a certain point stipulated point in the Federal Reserve bank in question. Now, the bank must own so many and no more, and the shares are not voting. It is purely a nominal state of ownership. What i think is really telling about this, rick, is that this is kind of a ghostly presence of Bank Governance past, so the bank has to buy the shares, but it only has to pay in half of the capital. Why . Because half is held in reserve in case of impairment or a bankruptcy of the Federal Reserve bank branch in question. This was the way it worked in america from the early dawn of the 19th century through the mid1930s. If you were a bank stockholder, you were on the hook for a capital call for the most part if your bank, the bank in which you owned a fractional interest, became impaired or insolvent. The Bank Shareholders owned the problem as well as receive the dividend. That is still the way it works at least theoretically, with respect to the Federal Reserve banks, the branches, the district banks, and the banks that belong to those, or that own the equity in those reserve banks. Thank you, jim. Listen, we only have about 30 seconds left. Quickly, we have the minutes today. I was wondering if you could give me some idea of how the conundrum of rates should be at zero, but a bad time to raise them currently. Is there an easy way out of this . No. Another easy no, there is no ease where i way out. Money talks and talks, but this is ridiculous. One hopes really just for mercy that they would do something so as to change the topic. You it said so well. This is not the ideal time in which to raise a rate. Everything from the price of copper to the state of leverage loan markets suggests that things are in the delicate way rather than the strong way. Just be glad that you and i, rick, are not running the fed. Not that that was a close call, but i think we can both be glad were not doing it. Excellent. Jim, thank you so much, and were going to go back to sarah eisen. As we all contemplate that. Thank you. Coming up, the governor of connecticut explains why his state will continue to accept Syrian Refugees. Squawk alley up next. Conquer the weather. Dont let it conquer you. With the capability and adaptability of lexus allweather drive. This is the pursuit of perfection. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. [martha and mildred are good to. Go. 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