fastest rate in almost two years. uk giant tesco is getting hammered, down about 15% on a profit warning. this joufr seas action comes after the dow and the s&p 500 posted their biggest drop since late october. commodities and tech stocks weighing on the markets. crude oil dropping more than 4%. check this out, it's up slightly at this point. it closed yesterday at 63.05 wti. still sitting below $64 a barrel at $63.65. brent sitting at $66.63. we've been watching all of in this morning. as you check this out, take a look at the futures this morning. not much to key off of in terms of positive news. s&p futures off by 6 and the nasdaq down by 14. a huge part of that has to be the lead story in the "wall street journal" saying the fed is now signaling it's going to shift on lower rates, actually raising rates in the next year. that takes away what some people had been anticipating, thinking that these low oil prices will take pressure off the fed. >> job number changed everything in people's minds. you get a series of in the 2s so we say we don't know if we're in the 2s, so then you understand zero interest rates. suddenly you're at 330 and you go, wait, 330 and no change. we went about a month where the markets were going um and the oil prices were going down. about a month, it was seen as good. now i think we're back to -- i like the china reasons. if asia was up today, you could have reverse today nuance of every one of those factors you mentioned. but today, it's -- you know, we like -- well, let's see what they can figure out. let's use this, this, this and this. but for whatever reason -- >> i have. >> you've become bearish. >> cash raising is all i'm saying. >> profit taking. >> i don't think it's wrong at some point. no r now you think 2015 is going to by a lousy year? >> everything is perfect. the market is perfect and only things can go wrong from that point. >> the jobs numbers being baked in -- >> oh, the markets had reflected, but no, i think it did -- >> that's your own wall of worry. >> no, we've had a pretty good call of worry. we've gone from 666 on the s&p to over 2,000 and the dow, what was it? what was the lows, 8,000 or something? >> i think it was even lower. >> i don't think, but all the way to 18. let's tell you about some of the corporate news going on this morning. apple shares drop about 6% from their 52-week high that they hit last month. that means the tech giant lost $42 billion in just that short period. that's what you get when you get a $700 billion company. down about 25% from their all-time high in december. check this out, the stock had drops 7% in the last week. and diamond foods is getting a boost. the snackmaker's earnings are beating the treat. we're going to talk to the cfo of verizon rival at&t. we're going to do that at about 6:30 eastern time. >> 6629. i saw it back in march 2009. it's weird how -- oh, march 2000 partnersh. i meant in the last one. i do a radio -- i didn't know. i'm not going to say, oh, you know? because i don't represent cnbc, you know? i said in my own opinion, that maybe it's time to -- if you've got big gains in certain things, you have some money, if it pulls back 10%, 15% or whatever. so i don't know. eunice has the story that is dictateding -- i'm not going to say it was the tail of the dog in asia today, but maybe the -- maybe we're less of the tail and a lot more of the dog today. we are keeping off asia i think today, eunice. >> yeah. we had a pretty bad day over here today. the shanghai stock market plunged by 5.9%. this is the biggest one-day fall that we've seen since 2009. there is a lot of different factors in there affecting the markets, but the main trigger, really, was that the regulators here changed a room so that it would make it more difficult for invisiters to use low grade corporate bonds as collateral to borrow money. we started seeing selling in the bond market, then that spilled over into the forex market. so the currency was at a four-month low. then that negative sentiment spilled over into the stock market. so that was one factor. the other factor, of course, is that the over the past several months and especially in the past couple of weeks, we've seen a lot of people put money into the shanghai stock market. there's been, you know, a huge rally yesterday. we crossed 3,000. and so because of that, a lot of people were saying we were poised for investors to take profits, anyway. in addition to than well inest versers said they were concerned about the noise or drum beat coming out from the government about think thanks going forward. the government is hoeding an economic work conference here. it's closed door, nothing official, but some of the commentary around it has been the government is going to have to lower its growth target for gdp in 2015. so the combination of all of these factor ves made people very, very nervous. >> thank you very much. we'll be watching today and we appreciate the update. we've been talking about stocks retreating from record highs and a number of key sectors coming under pressure. chief among them, energy, technology and industrials. with the dow still within striking distance of 18,000, investors remain bullish heading into the tail end of 2014. >> still bullish. and on the economy this morning, we have anika khan from wells fargo securities to talk about this. walking into this, some people are feeling nervous. what makes you so positive about things? >> i've learned the hard way over 44 years that it's tough to put the equity markets down between thanksgiving and new year's. it's the am bu lent time of the year. typically what happens if you are going to get weakness, you get weakness in the first couple of weeks. it tends to settle up the santa claus rally. >> let's talk through this year. what do you think happens in january? >> i came into lasted year saying the fed's balance sheet is going to expand by 10% or 12%. earnings were going to be up 10% or 12%. i expect the s&p 500 to be up 10% or 12%. i think i'll go with that same call this year. >> is this the time for people to be watching, maybe get something dry powder, ready to go? >> i wouldn't disagree with that. if you look at the high yield expect, it's been tell graphing a pullback. this is one of the longest periods of time where the market has not cooperated with that telegraph. so i think we trade higher into year-end after some time this week. then i think you do get some pullback into the january time frame. >> between the 1st and christmas, it does fall, you better get off the broad and wall? isn't there some expression like that? >> if santa fail toes call, the bears will roam on broad and wall. >> i wasn't even close. >> good enough. >> that's why we have you here. so it's that simple. guys that have missed the big winners need to put them into -- so that people that image vest money, that's how it works? >> december has been up smlg like 49 times and down 15 times. >> you think this week is going to be a lousy week, but then we're going to have a rally for -- what, when i have two to three more weeks before the end of the year? it's going to tank and then we're going to come flying back? >> because that is the season ability of the christmas season. >> amiko, jeff was talking about telegraphs. we wouldn't get much more telegraph of the "wall street journal" today. does that come as a surprise to you and what does it mean? >> no. i think that if we look at what the underlying economic fundamentals are telling us, we're seeing some really strong growth, of course, coming out of the u.s. we can look at the nonfarm payrolls report and the ism reports to see those strong fundamentals. we also are seeing that the core inflation rate is starting to slowly creep up and that could mean the fed will move mid 2015. all we have to do is lead the series of the consensus of the fomc members. the consensus is still mid 2015. >> some people are pointed to the lower energy prices and said because of that lack of inflation, that that will give the fed kind of cover for not raising rates next year. the journal points out today that ben bernanke looked to high oil prices and this is likely to look to the low oil prices, as well. do you agree? >> that's a really good point. if we looked at the lower oil prices and, of course, the decline in gasoline, retail gasoline prices, of course, that is going to boost discretionary income. we are seeing it on the headline for the pce deflator. that's the gauge that the fed looks at. however, we're not getting a lot of pass through to the core. so as long as we don't see that pass through to the core, inflationary gauges, the fed still has that cover to continue to keep rates as they are. >> jeff, how does the market deal with that? do you think we're in for a rocky ride because of the fed transition or clean handoff? >> i think it's a clean handoff. if you look at the historic data, if rates are below 5% and raising, it has historically been associated with rising equity prices because interest rates were going up for the right reason, that the economy was getting stronger, earnings were getting better and i think that's the handoff that's going to play this year. >> jeff, anika, thank you both for joining thus morning. >> you bet. >> let's talk about a big issue impacting all of the equity oil. the oil prices stabilizing after hit ago five-year low earlier this morning. predictions of a deeper slump, they're piling up. this, of course, coming after opec decided to leave production unchanged just a couple of weeks ago. here is what dennis gartman told "squawk box" europe earlier this morning. >> i think we have seen the end of opec as a viable entity. he think it's still broken. we'll see what happens a year from now, but i think opec as it has been in the past is a finished issue. >> john, good morning to you. >> good morning. >> the last guy we can have on any more. because he's calling for low 50s? >> low 50s, joe, yes. >> what's your number? >> it's in the low 50s. it has been for a while now, andrew. >> and when you say -- when does it get there and how long does it stay there? >> sometime in the late first quarter, early second quarter next year. i think it could stay there for a while. probably for a good part of next year. i think the supply response is going to be very slow to come. we continue to see growth in our shale plays. next month, again, another 100,000 barrels to the u.s. when the combine the shale. >> so when we see reports of pullbacks in terms of new permitting, which i always thought this was an approach to decide how much supply is coming online at any one point in time, are we looking at the wrong indicator? >> maybe the rate of growth will come down, but there's still growth and there's considerable growth. and it's not like these things stop on a dime. >> they take a while. >> yeah. >> wooerve talking about tefk of oil and china, it becomes almost self-fulfilling. god forbid there is a slowdown on demand. what if it does slow? >> it shouldn't, joe. the chinese economy is a very much manufacturing basis as a lowering input cost. >> it's the space gdp being raised a full percentage point because of the lower -- >> i hope you're right. but you're purely basing this on supply now? >> it's mostly a supply story, 80% of it, joe. >> 80%. >> so 20% of the demand can't bsh you can't see this flipping around at all? and my other question goes to the price issue that you're saying. six months in the high 50s? >> likely, yes. >> and what is the trigger to push it back and what does it push back to? >> i think the mean reverse will be in the area of 65 to 75. we have seen opec supply response. you will see our shale numbers come down a bit. >> when you get prices that low, even below what some of the shale cost in terms of the getting out of ground, refining, the prices associated with that, when will it start to impact the supply numbers? >> again, it won't occur i don't believe until mid next year later. we're seeing inland prices in the 50s right now. >> my worry is russia -- >> and venezuela. >> do you worry about those company in a meaningful way from a ghee your political risk issue and we've talked about the high yield market and how much of that is tied now to this energy world and whether those companies unto themselves are not going to be able to make payment. >> i don't think it will be enough to cause a contagion of the damage we saw in 2008 from the banks and their mortgage situation. >> okay. >> i do worry about the geopolitical situation, not because i have any great love or compassion for vladimir putin or venezuela, but the arab springs, things seem to go from bad to us to wovrt from us, saudi arabia or russia and jan. things just don't seem to go that much better for us in terms of our interest, u.s. interests, but that remains an open question. >> i'm going to consider that you're leaving us on a good note, john. as long as prices go lower, things should -- as long as prices go lower, at least in the short-term, things are good? >> absolutely. this is good for the u.s. economy, consumer spending is going to be able to be spent on things not in the gas tank. it's usually -- this is worse than a tax hike and it goes up, i always tell everybody that, because it's a transfer of wealth usually to oil producing countries. we're going to get the opposite benefit of that here. every other sector will benefit now. >> john, thank you. >> thank you. coming up, a big nor'easter targeting at least six states today. we're going to get the forecast from our friends at the -- it is, 34 degrees and rainey outside. perfect. and windy. so it's the umbrella -- >> turned inside out, yeah. i wore a hat in today. >> a hat does wonders for me. forget next-day shipping. amazon -- it's bikes, right? when "squawk box" comes right back, we'll have it. we did it. we did it! ♪ it is official, we gave the people what they wanted. the nation's strongest lte signal. this is a big deal! soak it in! just let it wash over you like a warm bath. >> over 10 million jobs created. the auto industry has rebounded back. >> i'll give it to you, you've employed a lot of people, mostly as secretary of defense. >> that's boosted our numbers a little bits. >> and that was the president last night on the colbert report. this was his third appearance on the show and his second as president. those are the show's final two weeks before colbert takes over for david letterman on cbs's late show. that's going to happen early next year. becky. a number of stories on amazon in the headlines this morning. "the wall street journal" reporting the company will start to try bike messengers for one-hour delivery in new york city. the e-commerce giants wants to be the world's largest pa czar. buyers and sellers will be able to negotiate costs on items of $100 or more. this will only be available in coin markets, china and sport collectives. and amazon saying it plan toes shift more of its drone testing to outside the u.s. unless it gets some sort of permission. >> i think it should be one of those -- this is not going be politically correct. i think it should be one of the those public/private partnerships and do the drone testing in the middle east. while we're over there, if there happens to pea terrorist enclave -- >> i agree with you 100%, that was not politically correct. >> then again, we do use drones and they have been effective. if you look at one thing the president has done -- >> more effective than bike messengers. >> but the president has been rock solid on -- and you see what these guys went through most recently? and i agree totally with -- >> and if you don't want american boots on the ground, that's how you do it. >> five miles and then a dog started backing a hundred miles away or something. if you take an american, we're coming. >> i agree with that, but it's much nicer. >> i don't think it's that politically incorrect. i think this is a public/priv e public/private -- >> you are walking down a thin line, i'll give you that. now to today's forecast. >> i think it's worse than snow for the most part. also of note, that entire conversation you just had made it so i can say whatever i want and probably i'll be okay. it's cold in new york city, windy, as well and rain. there is some snow with this, but you have to head north across parts of pennsylvania, in through new york state. it's still raining in places like new york. d.c. should be clearing out. maine on thursday, the backlash still snow showers in through syracuse. all along, there is an interior snow system. it's going to be cold wind and a lot of rain. now, when it does snow, it's going to be quite a bit of snow. 12 to 18 inch swath across upstate new york, into maine, new hampshire, large ski areas there. closer to home, we have an area with 3 to 5 inches, but it's deceptive. it will snow and rain. new york, philadelphia, hartford, boston, portland, main, we have flood watches. could be 2 to 3 inches of rain. one last thing to think about with this system, we have a threat of coastal flooding that has to do with high tide and you who it coincides with the winds coming onshore. much like what you can see with the storm surge. jersey, we could see some concerns between 8:00 a.m. and 10:00 a.m. is what we're going to be watching. that's when most of the high tide is at issue. we'll see those waves push onshore. so, guys, if you want that snow, you can do so. just head west about 150 miles or so. >> keith, thank you. disappointed you're not wearing a sweater this morning, but thank you, nonetheless. >> look at that shirt. weather and sports guys have a license to -- they can do whatever -- it doesn't even have to work. it's just that he is the weather guy. >> that actually does work. >> i know. i was saying it doesn't have to with weather and sports guys, right? >> and the sweater thing, i have to keep it fresh. i can't be wearing it every day. >> really? the sweater of the month is the way you do that. >> that's what we talked about, yeah. >> it's the gift that keeps on giving. >> there it is, keith. thank you for bringing us that awful weather report. we appreciate that. the energy markets in focus this morning with oil prices hitting five-year lows. kate kelly digging up news in the space for us. she is here at the table. kate. >> news noteworthy, crude is hitting a five-year low. a company based in houston is asking waut wall street for nearly $12 billion in wall street financing. in recent weeks, documents show look to build its second natural gas facility on the gulf coast, this time in corpus christi, texas, has won commitments for more than a dozen major banks for up to $16 million in credit as part of a seven-year revolving debt facility. the corpus christi facility, which will take natural gas and make it easier for exportation and transport it to other countries where the price of l&g is much higher should be in the area. because of the l&g contract, specifically tied to crude oil prices unlike more conventional nalt gas which is driven by weather, the prices in that market could impact in 2015 and beyond. and the company is depending on junk bond markets to stay alive and women we will in order to pay back bank lenders. if all goes well, this is according to these documents, and followed with an estimated 757 billion in 2016. so the deal is off so a very good start, andrew. market dynamic notwithstanding, the bond offerings are planning to do between the price of crude oil and what that could mean for l&g, a lot of market sensitivity in the pretty near future. >> who is going bankrupt? >> i think to get in -- >> i'm not trying to be. i just -- you hear from people who -- >> if they don't, are they going to be disappointed? >> i am not. but i keep hearing on the street six months from now if prices stay the way they are -- >> do you want a liquidation bankruptcy? >> we're in the 60s right now. >> i want to happen who is overleveraged. >> it's got to be. the tide comes down, there's some people on the wrong side of this. >> a lot of high yield issuers. i'm told to understand this you have to look play by play in terms of shale oil in the u.s. bakken, probably the place to focus. we've done a lot of reporting there. a lot of small drillers that work there that may be overleveraged. i think we should keep an out out for bankruptcy. that is, of course, an interesting indicator. a lot of this paper trading at below par. interestingly, though, l&g -- i'm sorry, l&g's kicker, their bonds are trading at par for this to be impact. so that tells you wall street is relatively comfortable. we've had an amazing stock market story. but this crude oil fall could be meaningful for them. >> thank you for that. i don't want anybody to go bankrupt. >> we can be hearing about -- >> no, we absolutely could. deutsche bank has been ahead of the game on that. they just issued new research on that yesterday saying things are looking surprisingly worse than they were about a month ago. they were predicting about a 30% default rate with oil at 60. >> what about like investment guys that might have been long. wouldn't we have margin calls already? wouldn't we have margin calls? >> people were actually selling apple and stock like cash. i don't know that to be true, but it's an interesting theory about what could be happening. >> all i know is, you know, we've run out of people to talk to about oil. because no one -- every single person every $5 they called another low. but -- and they're advising people that have skin in the game and people have been advised to buy at 80 and that are still holding on. we're going to see something happen. >> the issue is people talk about the -- of opec. >> opec's inability to act or rather their ability to act in concert not to have a production cut. recent and continuing lows and until we see meaningful production cuts here probably as well as with the cartel members, who knows what the downside is. >> remember, last week what did nick say? >> he was ready. >> 35 bucks or something. >> yeah. he said they gained out every inventory l eventuality. i watched that. it was a great interview. they have a scale and a quality of a company that's going to preserve them from a lot of this. it's the smaller guys that we need to keep an eye on right away, i think. when we return, the cf oo of at&t will join us on set. we'll be talking wireless price wars, the internet and much more. first, though, take a look at yesterday's s&p 500 winners and losers. hear it? >> yeah. >> thank you, guys. good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. if you need a doctor, but don't want to leave the comfort of your home, good luck. anyway, remember the -- they used to come with the little bag. >> a house call. >> walgreens is almost like that, though. >> is it? walgreen could have the answer. the company is trying out virtual medical visits. i would like a virtual -- that's how probes should be, right? a virtual probe. if the guy doesn't come, i wouldn't be nearly as ready. in a test project, patient necessary california and michigan can now contact a physician around the clock on a smartphone or tablet. the cost? $49. and, doctors can treat problems that aren't emergencies and don't require an actual physical exam. some examples like pink eye or andrew always has bronchitis. that's how he realizizes getting a z-pak for everything that happens. >> for exposing my medical -- >> i said that yesterday. >> it is a wonderful thing. >> you're largely responsible for the antibiotic resistants in society. there are times when they go -- or worse. but most of the times, you just talk to the guy and you say, this is what happens happening and he's able to tell you. >> the other thing is, and i noticed they're doing it at walgreen's, there's a company that's now doing kiosks at walmart and some other places where you walk into the kiosk, it has a screen, it's virtual, and you can take your pulse and all -- there's devices that you do yourself and on the other side is a doctor who is sitting in a center somewhere looking at you. >> do you go there if you're sick? at the kiosk i don't want to stand near. >> i don't think so. >> you want to lick the equipment there. >> i don't know enough about it, but i do know that they were in trials. other headlines going on at this hour, honda is expanding what it's kalg an investigation into its takata air bag recall globally, this bringing the total takata recall of all brands to more than 19 million. that's since 2008. apple's ipod trial, that's continuing even though a judge disqualified the last remaining plaintiff. the attorneys suing apple must identify a new lead plaintiff by today. so that's a hard deadline for them. we'll see where that trial goes. let's get a check on the markets this morning again. the futures here are under pressure. this comes after a big down day for the markets. yesterday with the dow by over a hundred points yesterday, this morning, dow futures are down by about 52 points. s&p futures are down by about 7 points. the nasdaq are also looking weaker. those futures down 15 points. the dow was down today. this will be the first time it's had losses and consecutive days all the way back to october 16th. you're right, it has been a very steady march higher. take a look at what happened in asia. this is part of the reasons we're seeing the markets weaker. at the end of the day, it was a bit of a mess there. the hang seng was off by 2.3%. europe seeing pressure this morning. in fact, right now, you'll see that the dax is off by about 0.9%. the cac off by 1.2%. the ftse off by over 1%. in greece, stocks down big, a decline of 10.5% as continued political jitters in the country add to declines and the worry that the eu is not going to step in and save them this time around. take a look at oil pries, as well. wti was down by more than 4% yesterday. it's up, but only by about 1%. trading at $63.76. >> 5% in any legitimate stock market around the world is going to -- >> 5% is something it's going to be. >> that wasn't even a percent. >> i did the math already. i think it's -- >> how much? >> 900. whisper. >> that's a lot. >> 5% drop in the market. next year is going to be a big one for at&t. the company is expected to complete its acquisition of at&t, enter emerging markets and deal with the evolving issues of net neutrality and tax reforms. joining us now, john stevens. i didn't know that that intro was going to be written that well and those are the three things that i was thinking about. if things are -- if things are going like -- i see the strategy. the directv deals get you where you want to be in terms of scale with video. it also internationally sets up some great opportunities. and then you -- against the back drop of not knowing what the hell is future brings in terms of net knew translatety, makes it difficult to navigate, doesn't it? >> absolutely. >> do you assume the best or prepare for the worst? >> absolutely. you put the other set of assets like we have, directv is a great example. it would be a national video presence, 100 million potential customers. we have a national wireless footprint over 300 million potential customers. and we're going to be a 70 million broadband company. so we're going to have the ability here in the u.s. to search on a national basis our customers' needs. but dtv brings the opportunities to expand into mexico and diversify our revenue base. if you look at the company after the dtv deal, 90% of our revenues will come from data, wireless, and video. that's a remade at&t from years ago when we were your telephone company. so that is great. we're excited about use of cell and our opportunity to go into mexico, create a 400 million consumer calling plan. if you think about it from the northern border of the united states down to the southern tip of mexico, have an ability everybody to call on net and bring quality services. we all know about the demographics of our country and how we are blepding together, mektsco is our third largest trading partner. so we're really excited about what we can do there, bring quality services and take an advantage of it. >> dependent on a reasonable private sector friendly government to do two of the most important things you're trying to do. >> if that goes the wrong way and the fcc folds because of the pressure from the president, then that is going to be a problem. >> you wish he would honest i, but he would pause on that, also. >> we're going to honest a commitment. if we lieutenant made those commitments, it is likely we would have paused on those investments, also. it puts us a future of the internet, of mobile data, broadband, back in the 1930s. that is not where this country wants to go. and if you look at what's happened in this competitive environment over the last 10 years, you can see where data per capita, internet use per capita is all exploding in the united states. the united states is one of the lead country necessary that across the world. >> i'm going to ask you a few questions. one goes to sports which is central in part two. some people think the sunday night is a huge component of it. do you expect sports to be able to stream over the top effectively to like lte through all of your customer toes at&t, ultimately? >> we would expect to have the capability to stream video over our network. we have positive coverage today, the most reliable -- >> do you think a year or two from now we'll be seeing the programming you have on directv available for all the at&t customers? i think people don't know if that's going to happen. >> close to 100 channels or more. today you can have it on your phone through the u-verse on the go process. the challenge with sports, andrew, it's a live broadcast game. movies, television shows, different. >> how does directv position you in the over the top world? you look at hbo, an over the top product. cbs now trying to go over the top. and i imagine overs. >> so when we sit down with the content guys, before we were a 6 million video purchaser. after the dtv deal, we're going to have 27 million, 28 million customers. we're bringing 100 million wireless contact points and we're going to bring 70 million broadband contact points, which will give the opportunity for the content guys to sell their services -- >> broadband that is going to be built out, that's already built out. and you don't count the directv folks. >> that includes the directv commitment. >> you know, we had randall on last week and we talked about how at&t has been the company that has spent more on direct investments than any other company in the united states in the last five years. he warned that this would be a hold on this. what do you do with that cash? do you sit on it, do you invest it in other countries? i can't believe you're yielding 5.4% already. >> yeah. so we've been very prudent on our balance sheet, trying to keep it to an a rating and we'll continue to do that. we paid a great dividend and we'll continue to do that. we're also look for opportunities outside the united states. the use of selling opportunities is one example. we are looking to deploy our capital movement and we'll keep doing that. >> and that is not a defender. that is something that you've always got there, right? >> yes. >> why don't you shave it for december and then grow it back and do the flip side of people that grow a beard deerg december? >> actually, joe, that's a matter to stay up with mrs. stevens. >> she likes the beard? >> she likes the beard. 35 years, i'm going to keep the beard. >> john, thank you. >> thank you. take care. when we come back this morning, betting on the angels, how the parent company of victoria's secret is leveraging what it does best, the shake up the holiday shopping season. daughter: do you and mom still have money with that broker? dad: yeah, 20 something years now. thinking about what you want to do with your money? daughter: looking at options. what do you guys pay in fees? dad: i don't know exactly. daughter: if you're not happy do they have to pay you back? dad: it doesn't really work that way. daughter: you sure? vo: are you asking enough questions about the way your wealth is managed? wealth management at charles schwab. ♪ hi. i'm new ensure active clear protein drink. >>clear huh? i'm not juice or fancy water. i've got 8 grams of protein. new ensure active clear protein. 8 grams protein. zero fat. ensure. take life in. i was thinking about htaking this speed test from comcast business. oh yeah? if they can't give us faster internet or save us money, they'll give us 150 bucks. sounds like a win win. guys! faster internet? i have never been on the internet and i am doing pretty well. does he even work here? don't listen to the naysayer. take the comcast business speed test. get faster speeds or more savings, or we'll give you $150. comcast business. built for business. welcome back and coming up, the "squawk" runway welcomes the angels. but first check out oil prices bouncing back just a bit from five-year lows hit earlier this morning. take a look at that. wti crude $63.72. we're back in a moment. act i. scene 3. open port twenty-two-oh-one-seven on the firewall for customer db access. install version two-point-three of db connector and ensure verbose flag is set in case of problems. (clapping sound) isn't the cloud supposed to make business easier? get the one that can connect to the systems that you already have. today there's a new way to work. and it's made with ibm. welcome back to "squawk box." l brands betting big on the angels. courtney reagan has more on that story. >> it's the most famous fashion show in the world. it airs tonight when the victoria's secret angels are clad with wings. l brands began 50 years ago in columbus. current brand names of v.s. and bath & body works. the stock is really gained more than 840% other the last 20 years. more than 350% in five years. 30% over the past year. that out-performs the s&p retail index by a wide margin for each of those periods. and appropriate for the holiday season, many point to the angels as early winners. the month of november, a strong one. up 7%. victoria's secret up 11%. l brands is called, quote, the best growth story in retail. there's huge growth potential ahead for l brands international opportunity. it's particularly large. susan anderson says victoria's secret has already created a niche with its new jog bras to make waves in the hot active wear category. >> i still go back to changing the name to l brands. why did they do that? >> the company was called the limited. but the limit sd no longer part of the company. now it's this house of brands. >> they used to have so many. it's hard to keep up with. >> all sorts of different things. now it's really those two main brands. >> who wants to be limited? >> you don't want to be limited. >> lilly aldridge, by the way, do you know who that is? >> yes. >> she's quite a beautiful angel. >> i did not know she was an angel. >> breaks my heart a little bit. >> broke mine too. so there you have it. >> what happened? >> i'll tell you the story during the commercial break. >> without victoria's secret, what would dicaprio do? he'd stay home, right? >> life isn't worth living without those angels. >> he would just read. >> is he dating another angel now? >> i don't know. when we come back, the exclusive cnbc all-america survey. a snapshot of the nation's economy. a 3% down payment for a house? why the nation's top two mortgage finance firms are once again letting home buyers put down less than the traditional 20%. housing expert robert shiller is our guest. "squawk box" will be right back. will that be all, sir? thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. and often even more. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $89.95 a month. comcast business. built for business. fuel costs falling. home prices rising. is there weakness ahead? robert shiller joins us. how health care is helping cleveland's comeback. a nor'easter is hitting the east coast, but the sun shining bright for consumers. a new survey data shows optimism is now at a post-recession high. the second hour of "squawk box" begins right now. ♪ welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. asian markets are falling sharply. 5% in shanghai overnight. all of it portends some weakness here. analysts, if they had to pick something to tie it to, talking about the drop in oil, profit taking which is so helpful whenever you're describing a selloff. liquidity fears and lower economic growth expectations. for whatever reason, that helped cause europe to be weaker. those are not huge -- scary. but there's some specific things happening there in greece once again. >> they pulled up the vote for president next week. they're trying to get some political stability. >> i saw some other member of the eu say no way. >> i saw that yesterday too. >> yeah. and then there is where the dow is this morning. we don't get a lot of big moves early in the morning. i don't know whether it's thin or what, but when the market opens is when you see the actual intent of traders on any given day. and starting 58, i don't know what that means. but we'll see. >> it's not bad on a day you've seen bigger declines overseas. >> but at 4:00, let's check out that quote at 4:00. >> that's right. let's get to some of our top stories this hour. the biggest, u.s. banks are comparing notes on the federal reserve's stress test. reuters says the executives are trying to shed sof light on a process the fed tries to keep quiet. honda will expand its recall to potentially defective takata air bags around the globe. it added about 2.6 million cars to that process. and the city of portland, oregon, is suing uber to stop operating there. uber began service in portland last week with no agreement over how it should be regulated. the results are in for the exclusive cnbc -- it's all-american or all-america? >> all-america. >> good catch, joe. nice. >> i got to do it. the all-america economic survey. all-american, that's a football and basketball thing, is it not? >> one would be like a collegiate contest, and this would be a survey. yes. >> you are definitely first team. >> thank you. >> in economists, steve. >> here's the deal, joe. forget asia. forget the fed. roll the christmas music. we're talking about the biggest intention of americans to spend on christmas or the holiday season in the past five years. you can see here this is about a 12% increase from what was a low estimate last year given our 800 respondents all across the nation. that's why it's called all america. this is still about 6.5% above the average of the past -- wow. almost eight years. so this number here is speaking to some of the better forecasts we've had about the holiday season. and really if you look at it, when we dig down into the finances of americans, we see that we are beating the average of the past six years in every single category. the americans who say it's a good time to invest. better than the average. americans 94% of them think their home prices will stay the same or increase. and those who are optimistic on the economy, actually some of these metrics, one, are hitting all-time post-recession highs. and this optimistic on the economy, approaching pre-crisis levels. then you can take this whole chart and translate this into spending. we said if you're going to spend more, why are you going to spend more? 4% said it's the stock market. 5% because their home values are higher. 8% because of the better economy. 8% because of lower gas prices. i want to stop here. no single one of these looks like it's a big deal. add them up, that's the core of the population that has some reason to go out there and spend more. one says my family is bigger and i need more gifts. and then 33% saying higher income. so kind of firing on all cylinders here certainly on a post-recession basis. and increasingly, guys, when it comes to the before we got to the financial crisis here. and it's all on cnbc.com if you want to see the details. are you skeptical, becky? >> no, no. what i want to ask you, looking at what people are spending. they spent the most in 2009 for this date. so is this a leading indicator or a lagging indicator? when you see optimism rising, is that something to tell you that the quarter could be turning? >> well, one of our pollsters when we had the conference call over the results, he said this survey is like the first snowfall of the season. will it stick? we have had had as you saw there. bumps before, so here's the question. are these temporary phenomena? a massive rise of optimism among republicans. republicans who were still net negative on the economy, one of the biggest surges we've seen from -- >> so it was taken just after the election. >> just after the election, so the takeover of the senate by the gop helping that out. lower gas prices. that could be temporary. what i do like about this is hitting not just the post-recession highs, but in some senses getting back to normal. we were lucky enough to start this thing in '06 and '07. so we have a metric for what happened before the crisis. some of these are getting back. >> if republicans believe what they say, then that makes sense. because they think that a lot of the policy -- if they can stop certain executive actions, they can stop certain obama administration edicts, they're -- you don't believe it. >> i'm good for change here. i did tell you, we asked nine different metrics or eight different metrics of republicans and they think the economy will be better, wages will be better, every single aspect we asked and they think it's going to be improved. >> just wait until 2016 when things really start. >> listen. can i -- you know, stop the presses. they might decide that rates need to go up after 330,000 jobs. but in reading this, i got nostalgic. >> did you shed a tear? >> they might -- >> can we zoom in on joe's eyes? >> they might remove the considerable period. when was it when we first -- >> september. >> no. but do you remember the first time i told you instead of doing anything -- >> oh, yeah, yeah, yeah. >> they're going to stay really, really, really -- >> you invented forward guidance. >> we need to find out when that was. >> was that six years ago? >> that was a long time ago. that was in the realm of that hole. it was out there. and by the way, joe, i know -- don't throw anything at me, but that's the one that seemed to have worked. the notion of open ended. every other one which was limited by we're going to do 600 billion and then stop, what happened when they stop snd they fell off. and the market knew it was going to stop. >> why do you think i'd throw something at you when it was my idea? >> because i don't think you liked qe 3. >> that was the one that worked. >> but you were also critical of qe 3. >> but we were talking about keeping rates low for a long time. >> the idea that when the government comes in with essentially a limited commitment to make something happen, that's why t.a.r.p. worked, in my opinion. not because it's 700 billion, but because it was we are going to stop this slide. it was an open ended commitment. i think that's what draghi is learning and i think carney had learned it long ago with the uk. draghi being the ecb president. >> you needed to define carney more than draghi. >> or lavorgna like yesterday. it's all on cnbc.com. coming a back at 10:00 with an interesting story about how -- are back in the stock market. the numbers about you go beyond the wealthy, beyond the retail. >> then the question becomes are they getting on the train just when the pros are getting off the train? >> i did some work on this, and i can tell you that this number coincides with the current year-over-year rate on the dow. it's not a good at predicting. >> so an interesting story. we'll definitely watch that. >> you know, if you had stopped just before i could have come off the -- >> going to tune in for that. freddie mac and fannie mae letting people get loans with as little as 3% down. we can't help feeling we've seen this movie before. here to talk about housing and a lot more, i want to talk about the markets. nob nobel laureate. you have a valuation index. i want to understand what you think is going on in the stock market right now. >> well, first of all i have this indicator specifically adjusted up tied to about the peak in 2007. maybe my message is getting across. i also do a questionnaire survey of individual and institutional investors. and especially among the institutional investors, they are tending to think the stock market is over priced. it hasn't been this bad since around 2000. i'm not as up to date on your numbers. my numbers, you know, i have a six-month moving average. but over the recent years, the decline in confidence in the valuation of the market has been striking. >> okay. so professor, you have a valuation confidence index. then you have a crash confidence index. what does that say right now? >> i ask people what the probability is of a stock market crash like 1929. i've been asking this same question since 2003. and the answers are showing -- it's not a dramatic drop, but there's a drop in confidence that we won't have a '29-style crash. i don't want to make too much of that. that number has wiggled around. but it is down. >> say that again. >> the confidence that we won't -- see, yeah. if you go back to 1987, remember october 19th. "the wall street journal" that morning had a plot of the stock market up to that date. and it superimposed on it the stock market up to 1929. people were really thinking 1929 on that day, but they're not -- it's not so dramatic now. you know, if people are worried about 1929, it may be a self-fulfilling prophecy. >> one of the reasons that people always say whenever we do regulations, it's like we always do regulations for the last crisis. and it's because we never really understand what the next one is really going to look like. we're just not smart enough, i don't think. but if you look at the extraordinary things that not only the fed but the entire world, if you look at just the way we've sort of operated for the past five years, i mean, where'd our balance sheet go from? we don't really know how this looks five years from now. i can certainly see there's some dislocation somewhere from all this fed action that we have not adjusted or worked into the equation. i don't know what it means and it scares me when you say these things. but that's a lot of money sloshing around that if it's on the wrong side of some trade, we're in trouble. >> the problem is, we like to be scientists and statisticians and do analysis. the problem is the kind of crisis we face since 2008 has been almost unprecedented. you have to go back to the depression to see it. one we like to show is the housing stock. the housing stock in the united states stopped growing for 15 years between 1930 and 1945. and it has grown virtually every year since then until 2008. and it's kind of stopped growing again. so, now, that's a sign that people need houses and they ought to go back and start buying. maybe they will. you know, that's a reasonable guess. but then the other question is why has it stopped for so long? that's a mystery, because we don't have enough observations to study that statistically. >> professor, the drop in oil prices you take as a good sign? or is there some not so silver lining or cloud in this we're not focused on? >> i think it's a good sign for the u.s. a bad sign for russia and some other countries. but historically oil prices have been very important. even in the 2007-'09 recession. we had oil hit $140 a barrel. that had something to do with the impact of that crisis. right now it's down to about $63 a barrel. it's an amazing drop in oil prices. but on the other hand, i would remind you that oil prices are not a random law. and the forecast, i think it's reasonable to think there'll be a jump back up before long. >> okay. professor, before we go, very briefly, what are you doing with your own money? >> well, i've been -- you know, i worry about valuation in the stock market. and i've been wondering if i should pull out. but i have not. and in fact, i'm still thinking even at the ratio of 2007 the expected return is still higher than you expect to get on either housing, real estate, or fixed incomes. so it still seems like -- i feel a little trepidation because i know my own indicator is looking kind of scary. i wouldn't over-go into the market, but i wouldn't be completely out either. >> raise a little cash, bob. come on. get some dry powder. raise a little cash. it sounds like you got one foot out the door. don't be afraid. make the move. >> maybe i'll do that. >> all right. >> thank you for joining us. >> i love giving him advice. when we come back this morning, we'll talk about what's moving the markets this week. dom chu takes a closer look at the megacap tech names that have take an tumble. and then more fallout from the hack attack on sony pictures. including leaked celebrity aliases. and then health care in cleveland. the sector that's helping rebound in the rust belt. stick around. "squawk box" will be right back. dad,thank you mom for said this oftprotecting my future.you. thank you for being my hero and my dad. military families are uniquely thankful for many things, the legacy of usaa auto insurance could be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life. will thank you. , sir? ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. and often even more. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $89.95 a month. comcast business. built for business. oil is getting much of our attention, megacap tech stocks are taking a hit. dominic chu gives us a read on the tech trouble. we actually had someone earlier say that you've got big winners in apple or tech, you're covering some of your margins in oil. she made that connection earlier. >> there are some theories about whether people are raising cash by selling some of the winners. maybe that's the case here. we don't know definitively whether that's the case. here's what we do know. a lot of these tech stocks are leading the way down. at least did yesterday. and that's why some investors are a bit worried. technology and financials have typically been some that have led. at least in normal markets. if you look at the s&p 500, this was the trading day yesterday. you call your attention to what happened right here around noon. that led to more losses throughout the day. that sharp dropoff, everybody said is it oil? that wasn't the sharp drop. take a look at the tech sector etf. that's another big indicator here. this sector overall, that's where you see the dropoff. in the s&p 500 really started to turn lower. that's what dragged a lot of things down. if you look at the components of that sector, you look at a name like apple. we just spoke about that, right? you can see around that noontime, that same dropoff right in the middle at noon yesterday. that was a huge move. of course, apple is the biggest weighted stock in the s&p 500. the second most heavy weighted stock in s&p 500 is microsoft. same move. around noon, that dropoff. so microsoft, apple both. and amazon.com. one that will be a focus for a lot of investors, that same move around there. that 12:00 noon area. you see the dropoff. if you have these kind of stock moves, it's important. oil is a big part of the market. but technology stocks overall make up 20%. so when these stocks move, that's what causes some of the massive moves in the market. that's why investors are worried. what we do know is investors are looking at some of these tech names. >> it's like when they make up the s&p or whatever, dom, they make it up and it's fair. but then, you know, like back before 2008, the financial stocks went up so much that they were, like, i don't know how much of the s&p at that point. and they were obviously way too -- they were part of it was overvalued. i don't know if it says the same thing about tech. now it's moved into where it's 20% all of a sudden. >> of the overall market. >> that's what they've gone up so much. look at apple. >> yes. well, tesla, i mean, not as much in the s&p 500. but microsoft, amazon, intel is another one. i didn't show it here. >> facebook. >> yeah. megacap tech stocks. >> google. >> some of these guys are in the s&p. >> yes. google did finish up marginally in yesterday's trade. some of these moves are big because we looked at them as a precursor of what happens. then when you have it mixed in with greece down 11%, with china down 9.5%, it calls into question whether or not there were aspects of the top. >> whether it's for oil or whatever, you do sell your winners if you have losses you have to cover. whether it's oil or something else. thank you, dom. coming up when we return, more fallout from that hacking attack on sony pictures including the aliases of celebrities, what they use to check in to hotels. find out which check in under cash money. plus the internal numbers that explain why sony passed on a new movie about steve jobs. we'll tell you about that when "squawk box" returns. 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[man] can it tell the flight attendant to please not wake me this time? the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? how can in china,sumption impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. get to the terminal across town. are all the green lights you? no. it's called grid iq. the 4:51 is leaving at 4:51. ♪ they cut the power. it'll fix itself. power's back on. quick thinking traffic lights and self correcting power grids make the world predictable. thrillingly predictable. more fallout from the cyber attack on sony pictures. among the private information that was leaked, the aliases that some celebrities use to check into hotels. according to documents obtained by fusion, some of the names. tom hanks goes by harry lauter and johnny madrid which sounds kind of dashing. natalie portman goes by lauren brown. rob schneider goes by nazzo good. >> i like that. you're not so good. >> and jessica alba has an alias. andrew? >> totally appropriate. cash money. she's got a billion-dollar company. she should call herself cash money. i'll ask her about that. because we're going to have her on cnbc. >> on thursday. >> because we'll be broadcasting from the conference. she's one of our guests. >> one of your guests. you're interviewing her? >> i am interviewing her. along with her partner brian who helped start the honest company. >> brian? >> brian leid, i believe is his last name go back. we need to tell you about the steve jobs movie. we're going to tease you again. and why it moves from sony to universal, nbc. >> will be a much better movie. won't be hacked. coming up, we're kicking off a series on the rust belt rebound. the main economic driver now in cleveland. we're going to talk to the ceo of the cleveland electronic. as we go to break, look at u.s. equity futures. e financial noise financial noise financial noise financial noise welcome back to "squawk box" this morning. among the stories that are front and center, north dakota set to unveil the strictest oil standards in its history today. every barrel of crude is going to need to be filtered for dangerous types of natural gas. the goal is to make crude by rail transport safer. also a unique deflation indicator out of japan. a fast food company there raising the price of its beef bowl dish for the first time in 24 years. the reason? higher import costs. and warren buffett climbing the billionaire ranks as hit all-time highs. forbes now ranking him as the second richest mand behind his good friend bill gates. let's get to steve leisman at the breaking news desk with the fresh data on small business confidence levels. steve? >> it happened. we waited and waited and waited, but the national federation of independent business finally reporting after all these years that its average has hit the average of the last eight years. or the last several years. it's up two points to 98.1 with four components rising, three falling. and this is the best level we've had since 2007. here's some of the details. biz expectations up 16%. sales expectations up 5%. and the earnings trends up 3% and creating new jobs up 1%. by the way, the expectation on this was 96.5, so we're blown by the expectations. there are your details of the survey there. four up, four down, three the same. the chief economist for nfib didn't like how we got there. he didn't like the idea it was all on expectations rather than assessments of the current trends. but, hey, we'll take it. it remained below the average for a very long time. and finally got there, joe. >> probably a bunch of republicans too. >> well, you know, again, the idea that the republicans took over the senate, we picked it up in our all-america survey. >> wow. big day for you. >> huge. i like blowing out the numbers here. >> nfib, both the -- did you know both of those things were happening today? you probably couldn't sleep. >> i was up late last night thinking about how exciting of a day it was going to be. >> i bet you were. talking about the rust belt in cleveland. scott cohn now. that one. scott? >> same guy. here in your home state, joe, so you know this. but what we used to call the rust belt has red light transformed. i'm in a place called the global center for health innovation in downtown cleveland. this is more than just sort of a showplace to show off the health care industry. it is a conference center. it's a place where companies can share and collaborate. and make this industry not only bigger but more efficient. i want to show you some numbers to take a look at how the economy here is transformed. in 2000, ohio still had just over a million manufacturing jobs. today that's down by about a third. look at health care. it's almost the mirror image of that. today roughly around 900,000 jobs. and a big reason for that is the cleveland clinic. a big driver of that. $6.5 billion facility. some 41,000 jobs and a lot of companies have sprung up around that. joining us here at the center for health innovation, dr. toby cosgrove who is the ceo of the cleveland clinic. this was your brain child, this center here. tell me about this transformation which you've witnessed. >> we see a tremendous growth in health care across the country. certainly the cleveland clinic is an example of that. right now we comp for gross economic impact in cleveland of $12.5 billion. and directly or indirectly affect 94,000 jobs. so health care is really a very big part of the economy in cleveland. >> but you're shedding jobs now, because shedding costs because health care is in -- as we all know and talk about every day -- a seismic shift. we cut jobs last year. will there be more cuts in 2015 many. >> we doubt we're going to see many more jobs lost. we're trying to drive the efficiency. it's now coming around how we actually take care of people and how we have gone much like every other industry has, consolidated, eliminated duplication of services, and driven the efficiency more and more as we've gone on. i think that is going to take down the cost of health care. the second part of it is we've got to make the city of cleveland a better place. >> so health care reform, the affordable care act, obamacare, is supposed to be about bringing down the cost curve. that directly affects the deliverers of health care. >> yes, it does. >> and it means you have to do more with less. >> right. >> so will this transformation be able to continue? will the health care economy be able to continue to expand when in a lot of ways you're contracting? >> well, i think health care economy across the united states is going to continue to not get a lot smaller because the population is increasing. so what we really want to do is stop the inflation rate of health care and i think we're doing that by driving the efficiency. >> and yet for the consumers, premiums are still going up. they're paying -- premiums are going up faster than their wages are going up, we now know. when is the consumer going to see benefits to this? >> well, the consumer, the cost is being shifted to the consumer. part of the things that happen with that is now we've got high deductible insurance. so you're responsible for the first $3,000 to $6,000 of your health care costs each year. and as a result of that, people are starting to shop. 44% of people who have private insurance have high deductibles. so as they shop, they're going to look for how you -- where you go to get your care at the lowest cost place. and that's going to drive the prices down across all of health care. so we expect that we're going to be paid more and that's why we have to be more efficient. >> control of congress in changing as we know. a lot of talk among the republicans about repealing obama care and changing it. is it going away? how's that going to change this? >> i don't think the affordable care act is going to go away. we're going to see changes of it much like we saw changes in social security law over time. but it's not going to get repealed. it will continue to morph and get better and better as we go forward. we know that we had to change the way we deliver care. we know we had to reduce the cost because it was starting to drive out things like education which we need to continue to support. so health care costs had to be controlled. this is one way to do it. and that's not a perfect law. probably never been a perfect law. >> what needs to change? >> well, i think what we're going to see is we've got unanticipated results. and as we're going to have to be flexible enough to change as we see what the unintended consequences are. and second we really need to manage to keep people healthy. we have to put more emphasis on keeping people well and driving down obesity problems and driving down smoking and people that have exercise and take care of themselves. >> joe kernen has a question. >> i don't know whether you're changing what we always perceived obamacare to be or wishful thinking, but it was more about coverage. that's almost indisputable. it was about coverage, not about cost containment. >> well, i think it was really about three things. i think it was about cost containment. i think it was about coverage. i think it was also about quality. and we've seen the quality go up as we've been more and more transparent about quality. we've certainly seen the coverage increase. and i think it's called the affordable care act to try to control cost. >> but you know that's the main criticism from most sides that it did more for coverage and much less to actually address the cost. i mean, utilization is down. people are choosing between, you know, health care and other things. it hasn't been flush economic times. we'll see what finally happens. and the law -- most of the things that might rear their ugly head are going to come next year, the year after, and the year after that when we'll really see it. so we'll see. i know maybe there won't be a repeal. you know how many of the 60 senators that voted for it are left in the senate now, doctor? >> there's been some mortality amongst those senators. >> yeah. a couple of them actually did pass away. other ones decided not to run and then mary landrieu is the latest casualty. that's the lead story in the journal. anyway, we appreciate it. if god forbid anything happens, cleveland clinic is number one on a lot of lists for where to get the best care. so we do appreciate that, doctor. >> thank you very much. >> you're welcome. >> thanks a lot. >> and scott cohn, you should move from chicago back here some day to new jersey. you know? >> he's in california. >> i missed the move back here. he left there and moved out to -- yeah. how do you like it? it's awesome where you're living right now? >> i love it. i love it. but i love also getting the chance to come back and talk to you guys. >> well, we love having you. this is perfect for both of us. but how far from the ocean are you? >> i walk there many days. >> he doesn't want anyone else coming out there. he's being very vague. could you be more vague? no, anyway, you look good. >> i'm close. it's good. >> you look healthy. thanks. when we come back this morning, the ripple effects of the plummeting price of oil. banks invested in the energy sector taking a hit. among them cullen-frost. take a look another the equity futures this morning. right now dow has doubled its losses. down by triple digits once again. s&p futures down 13 points. the nasdaq down by 30 points. buckle up. 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>> well, i think you're exactly right there. there is a lot of talk about there's a panic. and i think this is no time to panic. no time to retreat. i think it's going through an adjustment time. we're down, what? 30% in oil prices. it's going to move around. and the focus all seems to be on price. but i think you've got to look at duration too. how long is it going to stay at a certain price? and then we can kind of see where the activity's going to go. certainly our customers are looking at their capital expenditures, how much drilling will they do next year? and as we go through that period of time, we're staying very close to our customers. quite frankly, i'm very comfortable with where we are. now, i'm someone and our company has lived through the '80s in texas which was a pretty good blood bath. but this is totally different. we have wonderful technology. the industry with fracking is so positive. with 3d seismic and all the technology we have, as one of my old customers in west texas said, it's more like farming than wildcatting. and so i think we have a lot of opportunity. i think the other thing the talk is on oil, certainly natural gas. prices moved up a bit a couple weeks ago. we'll start to see the normal wintertime gyrations in prices. i think there's opportunity for us to grow that. i think we should not forget about the wonderful natural resources that we have in this great country. not only here in north dakota, pennsylvania. we're very blessed in this country. and obviously i think that we are at a time that there's a lot of the risk been taken out of it with hedging and so many -- most all customers that have any leverage have certainly protected them through '15 and part of '16. >> hedging works, but only works for so long. if these oil prices stay low as john told us this morning he thinks is the case, does that change the situation? >> well, certainly. but at the same time i think what hedging gives you an opportunity to adjust. and if you're hedged which many customers are through '15 and part of '16. the main thing it does is give you time to adjust your business model. >> karen finerman on "fast money" said she thinks it's a very well-run bank. she looks at the energy loans you have at 14% to 15%. that concerns her but more concerning she thinks everything in texas is tied to energy prices. if we're looking at a long slump, low prices for a long time, the point is your stock had a very high valuation at that point. what do you answer in response to that criticism? >> well, obviously i don't agree with her. first of all, she's wrong about texas being all focused on energy. if you look at it in the growth of jobs, energy, oil and gas industry is seventh. you've got hospitality, government, all kinds of other opportunities that are growing faster. if you look for ten months, we grew jobs for the federal reserve, 345,000 for the first ten months of this year. 2.6% of that is related to energy. so there's a lot of activity. yes, we have some wonderful natural resources and yes, it's a great opportunity for texas in oil and gas. but this is a very diversified state. our bank is very diversified. when you look at our loans, yes we have a little over 14% of our loans are to energy. but the rest of it is very diversified which follows the state averages. this isn't a bunch of cowboys riding on horses around oil and gas wells. this is a very sophisticated state that has good diversification and that is exactly where cullen-frost is. >> want to thank you for your time. we'd love to have you back. >> thank you so much. it's my pleasure. coming up when we return, movers ahead of the opening bell. joe has your list of stocks to watch. we'll do that next. then at the top of the hour, "squawk" market master mario gabelli and jeremy siegel are going to talk about the prospects for dow 18,000 by the end of the year. right now as we head to break, look at the equity futures. we are in the red with the dow off about 125 points. s&p 500 down 16 points. nasdaq off 33 points. back in a moment. location. location. (shouting) location. here's the location that matters the most. here. or here. or here. it's wherever this is. to get customers to come here and stay here, you're going to need an app that connects to all your systems. so they can bank, shop, do what they need to do, and you gotta do it fast. before the competition does. it's tough out here; you better be on the right cloud. today there's a new way to work. and it's made with ibm. welcome back to "squawk box." the hacking attack on sony pictures giving insight on why that studio passed on the steve jobs movie based on the biograp biography. coming in 25% below what they expected when dicaprio declined the lead role. christian bale also dropped out of that role. in november universal picked that movie up. fassbender took the role. we will see whether that picture makes it to the big screen. let's take a look at the aforementioned stocks to watch. united tech names a new cfo. he had spent 26 years at etx prior to that. lululemon was upgraded. the yoga maker, the apparel maker -- yeah. because you can't make yoga, can you? can you make yogi. that would be hannah barbera. anyway, the apparel maker addressed its supply chain issues and profit margins are reaching a turning point. american eagle upgraded to out-perform. the retailer's margins appear they're ready to recover. and it's also managing its inventories well. autozone's earnings and revenue beat the street. same store sales rose nearly 5% during the current quarter. and that's one stock that is going to be up today. a lot are not at least on the open, andrew. coming up when we return, stock picks from mario gabelli. going to join us on the set in a moment. plus media titans gathering in new york. unbundling and internet regulation. we'll talk to david in just a little bit as well. "squawk box" returns in just a moment. right! now you're gonna ask for my credit card - - so you can charge me on the down low two weeks later look, credit karma - are you talking to websites again? this website says 'free credit scores'. oh. credit karma! yeah, it's really free. look, you don't even have to put in your credit card information. what?! credit karma. really free credit scores. really. free. credit karma, i love you!. oil slides hitting stocks around the globe. the impact of oil and what stocks to be looking at right now with guest mario gabelli. it's clicks versus bricks. cnbc's all-america survey is out and what folks are saying about retail may shock you. we tell you how to play the sector. plus cocktails and a kickstarter. a man arguably the best job in the world, entrepreneur and host of the show "chug" is here as the final hour of "squawk box" begins right now. ♪ welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with andrew ross sorkin and becky quick. if you're just tuning in this morning, we're watching a global selloff unfold. we saw it over there earlier. now it's coming here, at least the triple digits. it wasn't that way when we started. we were down about 40 or 50. but it's because of what's happening in asia initially. stocks getting slammed overnight. china's benchmark index dropping as much as 6% at one point. now down 5.31% on the shanghai. among the catalysts, a drop in oil prices. i'm going to skip profit taking because i just am. and liquidity fears. europe keyed off about what is happening there. and you can see is down about 1.5 to 1.6% in france and the ftse. greek stocks are among the worst being hit. continued political jitters adding to the pressure. this is a movie we've seen before. we'll see how this plays out in greece. and oil prices hit a five-year low this morning. but we do have a little bit of a bounce. up 54 cents. that's not helping the equity markets though. let's tell you some stories you need to be watching this morning. the cnbc all-america survey say americans plan to spend more on holiday gifts this year than any time since 2009. they just took a nice shot of you joe. you look very studious there. in the meantime, small business confidence soaring up to a near eight-year high. owners are bullish about business conditions, sales, and earnings. they say they remain cautious about capital spending and hiring. and then two economic reports of note this morning. they're coming at 10:00 eastern time. october trade data and then the jolts report of job reporting and labor turnover. looking for more evidence it's looking a bit brighter. jeremy siegel predicted right here that the dow would hit 18k this year. it came within nine points of the milestone yesterday before the stumble. could be another slide today. what does professor siegel think for the rest of this year and in 2015? he is professor of finance at the wharton school. he joins us now. and our guest host mario gabelli joining us now. i'm sorry we said that again. i read what's in front of me. there have been times you've been less bullish in the past, haven't there? >> oh, yeah. the biggest time is of course was 2000 when the market was the most overvalued ever. and then i was very, very bearish at that time. will admit i didn't see the financial crisis because the dow and s&p weren't anywhere near as over-valued as before. yeah, that snuck up on me. but 2009 i was very proud to call that low in march of that year and stay bullish which many people did not through the next five years. >> right. from 7,600, we looked it up. >> 6,600. >> yeah. anyway. so that's quite a return. now, professor, we got within nine points of 18,000 which is, you know, that's close enough for government. we're definitely close enough for government work. but at this point, would you lighten up at all at this point? get some dry powder, take some profits? what we've heard from pretty savvy guys recently, jim paulsen for example, is that the market's already responded. all the good news is well known right now. about a better economy here and lower oil prices and all, you know, interest rates staying low for an extended period, inflation staying low. all those things are well known. you sure everyone hasn't already acted on their bullish intentions? >> no. in fact, i think this reaction the last couple days is much lower oil prices which is a very strong tail wind for the economy in 2015. remember we always heard about all those head winds, you know, defaults, and sequestration and all that. now for the furst time i think we will have a tail wind next year. now, the adjustment -- this drop as we've all been talking about is really quite dramatic. and we know the s&p is overweighted in some ways with a lot of oil stocks. so they're going to react. the tail wind is going to be coming in the next six, nine, twelve months. and i don't think that that has really been factored in to what we can see in 2015. i hope and i -- you know, we're all puzzled how can we have so much employment growth? ovk we saw those labor market figures last friday, and have such poor gdp growth? some way that is going to be resolved and i think we're going to have 3% to 4% gdp growth for perhaps in 2015 and i'll tell you. that's not been discounted yet in the market. >> okay. in listening to you, i tell you one thing i heard. that was the market in the past has been dealing with all of these things that people said were negative like the proverbial wall of worry. now they've all been removed and therefore the market -- and usually that's the sign. you know, once you're not worried about the wall of worry, that's a lot of the time when the guys that have already been in are handing off the stock to the people that weren't in. but you said some of the stuff has not been discounted effectively. okay. let me ask mario, it's like asking -- i can't think of an analogy quickly. >> you can do it, joe. >> but you're a bottoms up guy. >> yeah. we look at specific companies. hitchhiking on jeremy's comments, seven years ago we hoped that we would focus on jobs, jobs, jobs. now we focus on wages, wages, wages. that is a powerful stimulant to consumer spending which is an important part of the economy. so we think that will be a pretty good tail wind in 2015. and more importantly than that maybe we can come to grips as a united congress on the notion of putting out balance sheet in order for this country. and get a tax reform. those are two elements not in paulsen's equation. john's right. a lot of good news short-term is out. >> jim paulsen. >> who's john? >> jim paulsen. >> you pick yours, i pick mine. >> you think higher wages is more important than lower energy costs for the consumer over the next year? >> i would think that my combination of both what i get in and what i can spend are two elements, but i think you're going to have both. and that is if i go to the pump, the average car in the united states drives 12,000 miles. i get 22 miles on a gallon. that is an important -- >> people think when you start seeing wages go up, 5.8% unemployment, you think the labor market is tightening to the point inflation won't come back. that's when people start worrying. >> i don't disagree -- >> rates go up from zero. they've got to. >> but notwithstanding. thank you for flushing that out. that gives me a chance to talk about things later on. but you deal with the notion of wages. 70%. consumers net worth is at an all-time high. every day you're going to the pump. food prices are not going to go up as much. because of what's happening. and gasoline. and every week you're going to feel better when you -- but you don't do it right away. 70% of purchases, it's going to take a month when your bill is lower and you've got more money left over. >> i want to go to professor for a moment. do you think there's a correction coming at all next year? >> yeah. >> how big? >> we've gone so long. i think in 2015 we'll have our first correction which is defined as more than a 10% drop. >> we had one already. >> now, people -- people say doesn't that mean i i should wait for that? >> we had one a month ago. >> the answer is no because if it's up 15% and then goes down 10%, you're still better off -- >> you don't know when that's going to come. >> you count the ebola selloff? we had 9.9 on the s&p. you don't count that? you can't say we haven't had one. that counted. >> professor, you don't think it's coming so soon that if you're sitting with dry powder you wait for that moment at this point? >> right. absolutely. people always say i'm going to wait for that correction. and they're waiting and waiting and waiting. and the market is up 20% to 40%. at some point, yes, it will go down 10%. but that's still 30% higher than when you first said i'm waiting for that correction. that's the fallacy of that strategy wait for the correction. i think we'll have one. i'm not certain. i think we'll have one next year, but the market could be up 15%, 18% before that happens. i still think that given the tail winds that we're going to have, the market looks attractive to me. yeah, interest rates are going to come up, but not that much. the fed fund race is going to finish at 55, 75 basis. you know, maybe 1%. is that really going to tank stocks? no. >> jeremy, you talk about the year ending 2015 and 1%. >> yeah. >> on the fed funds rate. >> yeah. i think we could end 2015 at 1%, maybe three quarters a percent. that's not a scary rate at all in terms of equity. i mean, the average dividend yield on s&p. is still about 2%. so you're better off sitting with stocks that do nothing on price than holding cash. or holding bonds. so to me the money is still going to flow in that direction. i do want to comment about i wish we would have a grand bargain the next two years on taxes and spending and long-term deficit. but do you really think the republicans are going to be in the mood to bargain when they think they may have it all in two years? i think we'll have a stalemate over these next two years until we see what party controls the next presidency. >> i don't think either -- i don't know if i'd single out the republicans for not bargaining over the next two -- >> no. i agree. i'm just saying they are in a position and i would do that if i was a democrat in that position. i'm not saying they're not willing, it's just that they think their strategic position is likely to improve. >> one thing you're ruling out -- >> so i don't think we're going to get a great environment. though i'd love to. >> one thing you're ruling out which is significant is we've had a move in the market from 7,000 basically on the dow to 18,000. and you're ruling out a 20% bear market. you're saying we're still all systems go in terms of extension of what is really turning into a historic bull in terms of time and how far it's moved. so you don't think that you need to get off the train in any sense at this point. so we'll put that down. that's for 2015. >> a historic bear market that, you know, stocks are down 65% from october 2007 to march 2009. that was the most in 75 years. we ended the most undervalued in 75 years. that's the basis of this bull market. i don't think that we're overvalued now. you're going to have a bear market when the recession is imminent or the market gets frothy. way above what earnings are and the fed is really pulling on those interest rates. i don't see that happening in 2015. >> all right. thank you, professor siegel. mario will be here with us for the rest of the hour and we'll have a bunch of stock picks. thanks. up next, the all-america survey with stunning results on how we are shopping right now. who's winning the battle? is it online or the real thing? that plus the titans of media. plus the host of nat geo's hit show "chug." "squawk box" will be right back. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. you don't need to think about the energy that makes our lives possible. because we do. we're exxonmobil and powering the world responsibly is our job. because boiling an egg... isn't as simple as just boiling an egg. life takes energy. energy lives here. this morning. see how the market is setting itself up for the morning. not looking good with the dow looking like it's down 118 lower. the s&p 500 off about 15 points. we should also tell you shares of h & r block are getting hit hard today. posting a bigger than expected quarterly loss. one slice of our cnbc all-america economic survey is looking at where we are shopping right now. and there's one trend that could be very worrisome for some of the bricks and mortar as they battle the clicks. courtney reagan is here to explain. courtney, what's happening? >> you may not be surprised by this. online shopping gets a lot of attention at cnbc. for good reason. it's growing every year. though 90% of purchases are still made in physical stores, for the first time in cnbc's all-america survey history, online is the number one place americans are shop this holiday season. that's up from 18% when first asked in 2006. for the first time, eclipses big box stores. that may not mean the majority will occur online. but a destination for more americans than ever before. and for many americans, online shopping is a compliment to in-store shopping not necessarily a replacement. of those americans who researched potential purchases online, 41% are more likely to buy the item in a store trumping those likely to buy it online. this suggests the final check is that physical touch point. web roaming a is trend pushing to provide shoppers the availability and option to buy where they want to buy and research where they want to research. more evidence to suggest physical stores aren't going extinct, but retailers need to ramp up operations of both. >> okay. thank you for that. coming up, the king meets the prince. plus a christmas tradition returns to providence. then the media conference b. our own david faber is going to be along to talk about the changing landscape just minutes from now. and we'll introduce you to the man behind the first kickstarter-backed tv show. host zane lamprey is going to join us to tell us how he crowd sourced his way to success. "squawk box" returns in a moment. dad,thank you mom for said this oftprotecting my future.you. thank you for being my hero and my dad. military families are uniquely thankful for many things, the legacy of usaa auto insurance could be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life. welcome back to "squawk box," everybody. you guys are missing out on the commercial breaks. we're talking to mario gabelli who is our guest host. shares of tesla down again this morning. the stock off 25% from the all-time high in september. shares are on their worst seven-day slump ever down about 14% over that period. for their american tour, the duke and duchess of cambridge took their talents to brooklyn last night where they met king james himself. lebron james speaking with prince william, wife kate backstage at the barclays center following the nets/cavaliers game. the cavs winning on the road. lebron presented william and kate with a cavs jersey and a mini cavs jersey for prince george. in the meantime, let's turn our attention to mario gabelli. you didn't go to the game last night, did you? >> no, i did no. we were at another function. >> what goes on at the 15th annual arbitrage? >> why not do a simple thing? you can buy the knicks and the rangers but you get them for free. i can give you a billion and a half dollars by buying madison square garden today. that's the economic value that accrues to you as an owner. but any event, king james is there. let's hope, you know, the knicks are not going to do worse than they're doing now. >> we had news earlier on the program about autonation -- tell me your views. >> autozone. >> i apologize. >> you have the producers. i think within the next two or three months they'll have a lot more deals by finding deal on wall street than they did in previous cycles. yesterday announced they're having a lot of suitors. the stock has collapsed. and the users of energy, the owners of the cars are feeling better so that they buy parts at autozone, o'reilly's, napa. and those businesses are doing quite well. the stocks are going quite well. they benefit because there's 250 million cars on the road. there's maintenance. some companies have not been able to execute like pep boys where they have not done a good job. on balance, it's been a good industry. plus autozone is one of those where shrinking the cap, they've gone down as of last night. that's the company that had okay comps. then the question is what's the exit strategy. o'reilly's is down from shares to 105. those are pretty interesting companies. and in addition where do you buy your gas? you go into a gas station. some of us like joe sends his chauffeur to get his. >> you're confused among anchors. do you hear what he said? shrinking the market cap. you know what that means. >> buybacks. >> totally anti-buybacks. >> would you prefer buyback in most instances or a special dividend? >> no. dividends are not particularly helpful to me. >> because of the tax issue? >> no. capital gains and dividends are both at 23.8% for most individuals. i'm assuming you live in florida so you don't pay state tax. but the reason is i'm increasing my ownership of the company for my clients. when viacom has gone from 740 million shares to 420 and i kept my shares constant, i now own a bigger piece and the residual value some day will be worth did sh. >> you won't get anywhere though. he'll be right back where he was. because gabelli don't know anything. >> there's a high probability he's right in that case. but over priced to support it, you're 100% right. so you've got to determine what is the private or intrinsic market value. >> so either change your opinion or tell him where he's wrong. do one or the other. >> or both. >> here's my question. different question. it relates to buybacks. which is there are companies that institute buyback programs. and i would argue somewhat thoughtlessly just follow the buyback program as it is without looking at the value of the stock at any moment. >> how does anyone ever know what the value of the stock is? ceos always think their stocks are undervalued. >> when warren buffett announces it, he doesn't necessarily go through with it unless he actually thinks there's a great moment. but there are other companies that have pursued buyback programs that they announce it and they just close their eyes and every -- >> what ceo thinks they're going to fail? >> you don't want to invade your investment ratings so you have to be careful on that. but not beyond a certain multiple of ebita. and there's a company that those have recovering revenues. you've got to look at the cash flow character. >> there's also a difference. if ibm has got lower revenues than five years ago and the only way to get it to go up is buybacks, that's different from a company that's continuing to increase revenue and growing and just wants to shrink capital base. i'm talking about ibm too. i agree with you on ibm. >> we started on autozone so we can finish on that one. they also did one other thing. they didn't go to scan but they have their vendors increase their payables. if you look at the payables at autozone, 1.2 times inventory now. >> did we ever hear from buffett on ibm? >> we have not, no. hopefully we'll get him on soon to talk about this. >> when would we know? >> he's got time. he gets to file a little later. >> it looks like it could go under 160 today. it hasn't been there recently. it's down 160 and change today, right? >> yes. $160.82. >> that'll be telling. if he likes it at $180, he's got to love it at $160. unless he doesn't. >> but we'll find out if he bought more or sold any of it. >> and with him, he can say him buying a million shares is like anybody buying an odd lot. >> when he moves, he moves big. >> but cash spinoffs are the holy grail. that's what they did with the post. >> we'll talk about that in just a moment. we'll talk more about making money work in the media sector. our guest host again is mario gabelli. he'll give us his picks. as we head to a break, look out, people. here's a look at the u.s. equity futures. dow futures down 118 points. this reflects what happened overnight in china with their markets. 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(announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours. welcome back to "squawk box" this morning. among the stories that are front and center, apple's ipod class action trial, that continues. this is somewhat unusual because a judge disqualified the last remaining plaintiff. what that means is the attorney suing apple now have to identify a new plaintiff and the deadline for that is today. also amazon introducing a new service called make an offer. it offers customers to negotiate a lower price on some items. let's check out shares of verizon. we're doing that because it's falling after the company said short-term profit margins are under pressure from promotions to get customers to upgrade to the latest wireless devices. becky? >> all right. let's turn to mario gabelli to get some of his thoughts about what's been happening at media place. some of the opportunities in the market right now. mario, we're going to talk to david faber in just a moment at the conference. but you were there yesterday. what did you hear? what did you find out while you were there? >> i focused on stock specifics so i had some preconceived ideas. for example, graham holdings, the old "washington post" was there. they did a lot of financial engineering in 2013. for example, buffett got them to do a cash-rich spinoff. and that was pretty interesting. and now they're spinning off their cable one which is a cable asset. so you and i will get an asset worth almost $2 billion. i don't think that will affect the public price of the stock after the spinoff three or six months from now. so i want to own assets like this. the residual asset will have a lot of cash, underfunded pension. the question is how are they going to put that to work? that's a work in progress. >> david faber is actually live at the midtown conference. he's sitting down with a number of the media heavy hitters today. david, what do you have coming up for us this morning? >> you know, we're going to be talking with chris albrecht of starz. you may have seen the stock went down after we reported cbs wasn't interested and others may not have been. david zaslav who runs discovery. and later jeff bewkes. first time he's spoken in a tv interview since the unsolicited bid from fox. you might imagine certainly you want to talk about consolidation. you might want to talk about the bundle and whether it will hold or over the top and the threat it poses. but really front and center for a lot of these guys is simply the ad market right now. for these networks that continue to go down. and whether that is going to change or whether that's the new normal. >> okay. david, thank you. we'll be watching that and looking forward to all those interviews coming up in a bit. >> and liberty is missing. they had their own analyst about three weeks ago and they're not on the agenda for today or tomorrow. so we're going to watch what they're doing in the world. >> they're always doing something, mario, as you know. >> is anyone from viacom speaking today? >> no, that was yesterday. and today's cbs. >> that was yesterday. yeah. we got james murdoch right now speaking. he as you might imagine wasn't interested in doing an interview with us. but he's talking. app lot of talk about international as you might imagine. that tends to be the growth area for some of these companies. certainly discovery where revenues were up internationally but not domesticicly. sfox a big focus as well. >> you won't say, but angelique did a great job talking yesterday. >> you don't think we'd see they? >> faber, nice tie, number one. that's new. >> thank you. >> i haven't talked to you. did you see the rocket ship take off the other day? >> i did. and you know what? it was cool. but joe, you're making a reference to something that is a joke between the two of us that is 18 years old. i mean, nobody knows. >> it's not just between the two of you anymore because he talked about it on the air the whole day. but you still feel it. that's why the blog was so great. because you nailed what everybody feels when -- >> remember when they were forcing us to blog every day? that was any blog. >> one sentence. it's exciting to see a rocket ship. anyway, thank you, david. you did it. >> i think it was only about ten years ago. >> he was on deadline and he did get it done. >> what, david? >> i did. and i watched it and i thought of you as i often do whenever i see a rocket go into space now, joe. >> thank you. thanks, faber. >> you're welcome. let's talk more to mario. you were there for the viacom speech yesterday. >> they touched on other points. the global market place mobility, the notion of the smartphone, watch what you want when you want to watch it and how they're going to grow outside the united states. how they're buying back stock, $2.5 billion. they issued a billion dollars of debt with two puts. one, change the control. so if there's a change in control. but the second is -- >> meaning if sumner is gone. >> yes or their holdings and doesn't take us along, they'll have problems. >> can you walk us through what you think happens? >> first of all, national amusements control the stock on the "a" which is about 50 million of the -- there's 350 low vote. so 50 million have ten votes. they control. we already consulted attorneys. we're going to do more of that to make sure there's a take along that nobody buys the block of the voting stock without taking all of the voting stock -- >> who do you think is going to take it over? >> a lot of organizations and individuals starting to look at how do they put a bid together. there was a deal done in germany yesterday announced with a company trying to buy the control without taking everyone else out. that is not appropriated. >> and what do you think happens to cvs? >> i think les it makes sense t come back together. and both have been shrinking cab. >> did it make sense to separate two? >> yes. financial engineering like procter & gamble, it made sense to spin off duracell. you've got to have a free market system to spin it off and do extending over a period. you have to eliminate the general -- bring back the general public utilities doctorate to make it a lot easier than going through all the fancy footwork. >> you think that made sense for procter & gamble? >> well, that's a different issue. batteries are included in the portfolio. but it was look at the price paid after tax basis versus your cash flow. you're going to have two powerful businesses having it. but there are a lot of interesting opportunities in portable power. that doesn't just mean think about whatever you have on your ipad as a power source. think about portable power in a variety of ways and the technologies there. don't forget he bid the electric company in china. byd. >> i always call it boyd. >> i agree. >> it's so period. i do. you need to dvr gabelli, don't you? >> yeah. there's a lot in there. you have to listen closely. >> you're awfully kind. >> no, there is. >> i'll go faster. >> don't go faster. >> mario is our guest host. we'll have more with him throughout the morning. when we return, booze news. the host of nat geo's "chug" following his monkey rum business as we head to a break. take a look at some brewers to watch. there's a nice list there. 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(the guys starts to fizzle out) two... turtle... doves... i really went for it there ya you did... you really, really did now get 3 gigs of data on one line for $65 a month. switch to at&t, buy a new smartphone and get $150 credit per line. health can change in a minute. so cvs health is changing healthcare. making it more accessible and affordable, with over 900 locations for walk-in medical care. and more on the way. minuteclinic. another innovation from cvs health. because health is everything. good morning, everybody. if you are just waking up, look out. futures are under pressure this morning. right now the dow futures down close to 150 points below fair value. s&p futures down by almost 20 points. this is coming after some extreme weakness in china that has then carried out in european trading in the early trading there. keep an eye on this. we're getting closer to the opening bell. right now the nasdaq down about 42. pizza hut taking a page from taco bell's book. a crust with doritos. it's available only in australia. luc lucky aussies. >> i want to try that. >> no word on whether it will come to the u.s. remember pepsi used to own a lot of this. >> pepsi had a piece of pizza hut. >> and taco bell. they still have all this synergy. put them on everything. >> the dorito crunch taco was a hot seller. >> yes. that created jobs? >> that created 3,000 jobs. they opened more stores as a result. >> and it was -- you know, tasted pretty good, probably, too. but this one, innovation in pizza. >> you need a drink with. iz is a so we're going to talk about drinking right now. if you like drinking and making money to drink, you're going to love our next guest. the host of "chug." but here's the catch. the show was funded through kickstarter. it's the first television show at least we know of to be picked up by a network after such a campaign. raised nearly $600,000 to fund the first season. joining us now is world traveler and drink expert zane lamprey. owner of monkey rum. he's brought some monkey rum and he's also wearing the drinking jacket. >> i've got it all today. >> which is also funded on kickstarter. >> 50 grand? >> yeah. $50,000 was our goal. right now we're at $160,000. we're funded so it's going to happen. it's at thedrinkingjacket.com. >> can i ask you a kickstarter funding question? >> yeah. >> people who are funding you on kickstarter are effectively making donations as far as i can tell. >> yeah. >> right? so you will profit from this hopefully. >> yes. >> and what do they get for doing this? they get to watch it? i'm always trying to understand. you know, we talk about investors who invest in something and get something back from their investment. the kickstarter model is more of a contribution to me. >> there's two ways of doing it. for the drink jacket, you pledge a certain amount. if you reach the goal, then you get a jacket. that makes sense. >> how much does a jacket cost effectively? >> $85. >> 85 bucks. so if i donate 85 to the campaign, i get a jacket. >> exactly. but i'll give you one. you want one? >> make him pay. >> what does the drinking jacket do besides look nice on tv? >> thank you very much. this makes drinking easier. this has a bottle opening zipper here. this is a koozie pocket. and these are drinking gloves. they have a grip on there so you keep the drink cold and keep your hand warm. >> you spent a lot of time thinking about this. >> there's also a hidden flask pocket. >> how much are we drinking? do you have a barf bag somewhere? >> your friend behind you. >> cool. so you got to be in line sort of. did you invent a beer too? >> your matt keeps talking about stuff like that. i went drinking with him last night. was he late? he was late this morning, wasn't he? i know he was. >> the necessity is the mother of invention. >> that's right. that's correct. >> apparently smells. the director just told me. >> he's in a pile some place. >> come back to the show though. i want to understand the financing of the show. >> okay. so the show is a different scenario. i did a show called "three sheets" for three years. went to the travel channel and then spike. it moved around. at that point i sold the concept to mark cuban who made a show called "drinking made easy." did that for three years on his channel. then that turned into a music channel so we were left scramble to figure what to do. i was talking to my mom in syracuse saying i was pitching a show called "chug" where i would drink with the locals. and i pitched it to every network and they're all like, we're not sure. it's on the nose. we don't know about drinking as a show. so my mom said why don't you kickstart it? i hung up the phone in a rage and then went to veronica mars which is what she was referring to which was a tv show trying to make a movie. they tried to raise $2 million and they got it in two days. i said i guess this is a viable model. you know, they showed me that it was a possibility. and then the fans, that scenario is a little bit different. you're basically playing to view something first. >> but they already had a fan base. how did you get yours? >> i had a fan base from "three sheets" and "drinking made easy." mine was much smaller. right now my facebook is 150,000 people. but the kickstarter was 8,477. i got a percentage of those people and people who hadn't seen it before to take a leap of faith. without them i wouldn't have been able to do it. >> and so what's the most any particular person on kickstarter who you did not know beforehand give. >> my relatives didn't contribute. and my real friends, only my facebook friends contributed. i would say it was probably around 750. but what that was was a dinner and a party that i did one in l.a., chicago, new york. i went around and did these events. >> a lot of people give five or ten bucks? >> most would give i think 25 or 35 to get the download of the season which would be six episodes. and then an hour behind the scenes. and i was promising half-hour episodes. and i like to underpromise and over-deliver which is a model that hollywood hasn't adopted yet. and basically give the people an hour episode. so i ended up going into my pocket a bunch. i think kickstarter at the end of the day, they financed about half of the show. >> and then nat geo has come in. >> and acquired. it's sort of -- >> how long are you with -- so you're stuck with nat geo right now? >> yeah, i'm stuck with them. >> i want to talk to hoffman about this. >> you think they should be on cnbc? >> yes, i do. >> buy the syndication rights afterwards. >> i don't know. we didn't talk to you at all. you want me to -- >> yes. >> can my person call your person? >> i'm sure cnbc was probably one of the networks that said no, because every network said no as a concept. >> you don't know if we definitely said no. can we have another chance? >> i'll give you a chance because you're being very nice. so yes. >> we're the fastest growing primetime network in the world. >> look, i -- the show, it's funny. because people look at the show and at face value you think it's called "chug," this guy is drinking, it's not my cup of tea. if you watch the show, it's really about learning about the places you're going through the cultures of the people. >> it's a great idea. >> it is. >> it's a historical look at all of these things. >> if we could get marijuana in here somehow. >> from jamie dimon recently said you should never e-mail after having a drink. i looked at your twitter feed. i'm sure you drunk tweet. maybe even nine hours ago. >> you're right. i did. i did. and i saw it this morning, i'm like, i'm not going to erase it. >> i want a selfie pic like that with you after the show. >> true. >> can i plug monkey rum? >> you did right there. >> i have to say my partner ian crystal who is the driving force behind this, i appreciate him. >> are you going to sell this like what's her name did with the skinny vodka? >> yeah offers? i think we have to sell first. >> we're trying to help you here. >> yes. >> we got >> yes. >> we've got to go. >> your mother named you zane. >> yeah. >> that is a cool name. >> did they grow up on tip hill in syracuse? >> near it, yes. exactly. >> the lights are upside down and where the drink is prevalent. >> that will do. >> thank you very much. jim cramer talks about this morning's sell-off. there are a few winners out there. bluebird bio is a big one. the stock soaring on the news, up 51%. again, futures under pressure. how much money do you have in your pocket right now? i have $40, $21. could something that small make an impact on something as big as your retirement? i don't think so. well if you start putting that towards your retirement every week and let it grow over time, for twenty to thirty years, that retirement challenge might not seem so big after all. ♪ e financial noise financial noise financial noise financial noise welcome back. abercrombie and fitch shares are soaring. they just announced their ceo michael jeffries is retiring immediately. that's not what you like to see when you leave the company and the stock is up 7%. arthur martinez the chairman will be running things day to day. he used to be with sears. >> he was the savior. >> this will be an interesting stock. that stock is up $2 on the news he is stepping down. >> who took the logo off? >> that's the folks. >> this is the guy the article was written. >> talking about the white gloves and airplane and all this. >> the aftershave you had to wear. and some lame song they always had to play. all the flight attendants had to wear the same uniform. >> was this guy on? he said maybe plump kids like me and you were uncool. >> he had to the quest to be a cool kid himself. he was on our wall of shame on "mad money." >> i wondered if you put him on the wall of shame. >> i said if he left the company, it would have an immediate increase. he was a great destroyer of value. i think even a headless horseman will do better than that guy. >> we can buy something now and not feel bad about not being cool kids? >> i think he eliminated about 95% of the population. you had to be bradley cooper when he was 18, 20, maybe, maybe not. >> bad day today. >> one-day wonder? >> we have so much individual news that is not so great. bank of america said things are queasy. october was not a great month for the banks. that wouldn't shock me. verizon with the price war. spirit air downgrades. people sending down the airlines. there is one-day wonder, i don't know. we are up so, so much. it's okay. it's fine. >> good. thanks. we'll see you in a couple of minutes. >> what was the song? >> "take me home" by philip collins for the plane. [ male announcer ] your love for trading never stops. so open an account with schwab. and when a market move affects, say, a cloud computing stock you're holding, we can help you decide what to do. with tools that help you see how market activity is affecting your positions. so when the time comes to decide whether to scale in or scale out... you can make your move, wherever you are. and start working on your next big idea. ♪ laura is going to do 12 stocks in one minute. >> investment companies. infrastructure. nature star zilem. investments are simple. that is what i talked about last night. legg mason and t. rowe price and janus. christian hanson. all of them come together to create iii. the four of us seeing eye-to-eye how to make money. >> we had more than a minute. >> i've got more to do then. >> the notion of investments is simple. legg mason and janus are doing quite well. t. rowe is the steady hitter in that. it's a way to be a surrogate for the market. changing tastes of the american and public and the world population, less salt, less sugar but more of everything else that's nice and spicy. that's where the iff and christian hanson fit. in infrastructure we need. >> mario, thank you very much. >> always a privilege. >> join us tomorrow. "squawk on the street" begins right now. good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer. david faber is at the communications conference. it has been 1 1/2 months since the dow fell two days this a row. today might break that street. premarket rough on worries about the fed signaling an end. shanghai had its worst d

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