Our road map begins with a 20 billion deal. Freeport mcmoran getting into the Energy Business making two acquisitions. Plains exploration and mcmoran exploration. Concerns over the u. S. Economy as adp misses estimates. The blame goes to superstorm sandy. Goldman says the party is officially over for gold. Starbucks at an investors conference will add 1,500 stores in the u. S. Over the next five years. Wait until you hear what they said about china. A big day in media. Pandora ceo joins us live later this morning as the stock fell nearly 20 on weak guidance and netflix signs a big exclusive with disney. How much are they having to pay up for that . Lets deal with this big deal. As ive been telling you well see a lot of big deals i was wrong. Here we are. Freeport mcmoran buying not one but two companies. The combined price if you add it all together gets close to 20 billion. That does include debt. Lets go through some of the details. Its somewhat complex. Lets start with bigger of the two deals. Freeports purchase of plains. Approximately 6. 9 billion in total now. Its a cash and stock deal. 6531 shares and 39 bucks a share in cash. That adds up to 50 a share. Thats a fairly significant premium when we look at where pxp, that being the Ticker Symbol in question here had been trading. Lets go to the second deal as well and give you details on that. There the actual cash outlay is last. 3. 34 billion total. Freeport already owns about 4. 5 , 5 of mmp and pxp owns 31. 5 . You get 31. 5 and you get the other 4. 5 and only pay for 65 of the company overall. Theres the Royalty Trust which i wont get into. 14. 75. Significant premium over a stock that dropped dramatically, that being mmr because of the davy jones thing and gulf of mexico, 30,000 feet below the surface. They are a wildcatted r and they missed. Pxp. They picked off bp. Got some unbelievable assets. People scoffed at the deal at the time because people are so interested in eagleford which is onshore. This is offshore. Wow. They bought it. This is september they bought this. Pxp bought bp. The gulf of mexico from bp for 5. 5 million. Bp has a fire sale. Theres been discussion that pxp was having a bit of a funding gap. And that there were talks potentially that they would need to sell mmr stake. Some people speculating. I havent got a lot of background here at this point that perhaps that sparked it. The conversations started with do you want to buy ppr stake. When you have it overnight like this, its probably true. A lot of guys have funding gaps because they are huge believers. Theres a wildcat mentality. I got to tell you, this is fcx saying were a copper company. We could be in places other than arizona because they have trouble in indonesia and congo and who wants to be levered to two places where they could wake up and be nationalized. Most money assets are overseas. This gets them a bigger foot hofoothold in the United States. Bhp did this. Its not the only Mining Company getting more leverage in the energy market. Well keep an eye on shares of freeport. This is not your typical deal that investors immediately understand. What dont they know about the fiscal cliff . They look to be down 10 . Well watch it. As people know in this market, many times the stock price has been going up. Well keep an eye on this. It may be throwing people. What does it say about copper overall and the price of the metal. I worry, by the way, watch energy 21. This is exxi. Another company that bought old properties. One of the things thats happening thats driving this, okay, is that theres new technology. American technology thats able to access oil that the big guys have given up on whether it be exxon given up on energy 21 has or bp and it turns out that these fines may have been bigger so pxp takes advantage of the fact theres new technology. Pxp is a deal maker but ready to trade because Capital Gains taxes are going up. Could be a fiscal cliff. The gulf is hotter than its ever been even a few years ago it was ice cold. Big story in the journal about exploration in this country. Production 15year high. Brand new chapter here. Look at the bottom of your screen. Citigroup is cutting 11,000 jobs. We want to get to Kayla Tausche with more on that. We have a release that just hit the wire in citigroup where those jobs are coming from and a charge that the Company Plans to take in the Fourth Quarter because of these job cuts even though it expects them to generate 900 million in cost savings next year. Interestingly this is the first move toward really slimming down citi by the new ceo. He has a quote in here saying these actions are logical next steps in citis transformation and says theyre committed to strategy that continues to leverage in the Global Banking market. If you go through the list of where these jobs are actually coming from, Institutional Clients Group which is Investment Banking a quarter of the job cuts are going to come from there. My 2013 predictions i said that group would slim down by half. Interesting that they are cutting a big chunk of that group. Global Consumer Banking is responsible for 35 of the cuts and then going on through the other business lines like citi holdings, those are responsible for smaller portion of those jobs. Citi getting smaller. A billion dollars going to be the pretax charge in the Fourth Quarter of next year. 11,000 jobs a big move from the new ceo over there. Carl . All right. Thank you very much, kayla. Were reading through the release right now ourselves. Big strategic move. How many people work at this bank . I feel like theyve been firing forever. Citi did nothing after that great quarter. I think this may be keeping with the idea that citi is an international company. Dont need as much stuff here. Maybe. To the extent Financial Services are being commotitized. Reflective of changes going on overall at Financial Services as you get out of markets that are so transparent now that you cant make the margin that you once again. Therefore you have to focus on the cost size. I dont think people understand how much money they used to make. In a transaction you could hide gross credit. You could say youre buying this at 100 but you are getting to 98. No one is taking two anymore. Those were the ways you really made a lot of money if you were a sales trader. The bulk of the layoffs is from global Consumer Banking. Global consumer. They are talking brazil, hong kong those are growth markets. Thats fascinating. 35 coming from that. And 25 from institutional clients. What the heck are they doing . Are they retreating . The whole thing was to put everybody there. I guess its not a supermarket. They want to be bodega. They didnt think pandas strategy was any good. They wouldnt have fired him. Sorry. He quit. Speaking of jobs, as tough as citi news is moving onto jobs and economy in this country, adp says 118,000 private sector jobs were added in november. Thats below octobers 157. The slowdown in hiring due of course to superstorm sandy. Goldman lowering Fourth Quarter gdp to 1 from 1. 3 and they make a call this morning on gold. Lowering their 12month target to 1,800 saying if you believe growth is going to start to resume in 2013 is not tenable. 11year bull market in gold. I dont know why it would end. I didnt find look. Maybe you think that we go to fiscal cliff and its so deflationary that no one wants to own gold. You could argue that this is a return to the great recession. I dont know. In terms of slowdown in the economy and why inflation is dead. Inflation would be dealt a mortal blow if there was inflation by going over the fiscal cliff. Austerity does not breed inflation. Do you believe that sandy is a convenient excuse here for these adp numbers . I think sandy was terrible. Goldman upgrades Waste Management today. Anyone who has ever been to the giant dumps that Waste Management has, its where you dump dumping is an expensive thing. When youre a contractor and you have to clean up sandy of which theres immense damage, Waste Management gets a cut of everything. I think sandy is gigantic. The ripples continue to come. I think new york is going to be hurt very badly by sandy. Lets move onto starbucks. Starbucks today brewing more than coffee. Worlds Largest Coffee Company announcing during investor day today it plans to open 1,500 stores in the u. S. In the next five years. It plans to add more than 20,000 new cafes worldwide by 2014. Much of its growth coming from china. And of course there are a couple points that investors were looking carefully at and that is what it might say about Green Mountain coffee and its relationship there. Didnt say too much. Were watching gmc jump in the premarket. I know that you were saying hedge funds were watching whether the deal would go through over these allegations that perhaps tea isnt as organic as it is purported to be. They back the deal. They did indeed. They reiterate their intent to close that transaction prior to the end of this year. Any number of Hedge Fund Managers have been sending tea out and ordered it looked at by labs and found theres small amount of pesticides. It didnt go to a health issue but a representation issue and whether saying they were organic or free of pesticides entirely might have been misrepresenting things. They charge a high price for that tea. There were questions as to whether the clause which was in the merger agreement could be invoked by starbucks. During this meeting as part of this overall announcement this morning for this Analyst Meeting they reaffirm their commitment to that deal so those shorting the stock a little bit up and a lot down if the deal were to break this morning recovering and well see that deal should close very soon. That pesticide number that parts per million, this that something that everything has . I would think so. Not like youre drinking roundup. Im covered in pesticide right now. If you were to lick me it looks great. Its a sheen. Doubles as a hair gel. They do say that china will be the second largest market by 2014. Thats been one of their things. Other data point on starbucks is the new 400 gift card, which they will only make 5,000 of. You cant actually buy. You have to go to gilt. Com. Luxury item sold on gilt. Made of steel. I have a i thought they were talking about a 4 cup of coffee. If you go through it in 40 days, is that somehow a wakeup call . Wait a second. I spent 400 bucks on coffee. They are worried about lines. When they add 1,500, theyre worried about lines. Anyone that has seen they dont have concession at airports. They dont manage it. Theres lines. Howard schultz chipotle problem do. They want to eliminate the line issue. They are putting stores up. Schultz mae be a better adder of stores. I want to hear more about india. I think one thing that Howard Schultz said when he was on our show right here was that europe is turning. If europe turns, china is strong. This is not a yum situation. Those revenues are at 50 in 2012. This is a major, major group for starbucks. Now theyll link rewards card to some of these products. You go to the supermarket and somehow that will be linked that reinforces the ecosystem so consumers can get rewards even if they buy starbucks products out of the store. Short of the line, more complex the kitchen can be. The pipeline for new products in years to come. They have great stores. If the stores can handle more, Gross Margins could go up. Remember, the price of coffee has come down dramatically. Has the price of your cup of coffee come down . They dont really pass that on. Its like the prime rate when that gets lower. Rough morning for pandora. Ceo joe kennedy will discuss challenges facing that Company Later this morning live when he talks to Julia Boorstin and live coverage of the president with remarks on the fiscal cliff before the Business Roundtable. Can he convince Corporate Leaders he has the right solution for avoiding the fiscal cliff. One more look at futures this morning on a wednesday. Look like open 28. Squawk on the street is back in a minute. Theres a look at citi. The news on the bank this morning cutting 11,000 jobs. Still working on a percentage of what that is on the overall workforce. They think it will be a pretax charge of about a billion dollars. Savings of 900 million in 2013. Rising to about 1. 1 billion in 2014. Well keep an eye on that name. Very big. Yeah. Shares of pandora taking a hit in premarket trade. Online Music Service beat expectations with Third Quarter results. Ceo joe kennedy says pandoras advertisers are displaying caution about spending because of the fiscal cliff. Hell be on squawk on the street at 11 40 eastern time. And netflix paying for exclusive rights to stream disney movies. A lot of happenings moving stocks in a big way. With pandora, analysts give pandora a pass but they keep putting out bright spots in Third Quarter that did come in better than expected. Mobile monthization. This is the First Company that came out and blamed the fiscal cliff. One of the few companies that would not be worried about the fiscal cliff because of great growth opportunities. Could this be a competitive thing . I use them both. A huge fan of both. Jpmorgan says it doesnt change the thesis. The theme is that they, like others, monthization and mobile continues to do well and you get guidance and morgan says its frustrating. Guidance was terrible. Another disaster. It may be too early to buy pandora to put it in zynga groupon. Groupon, i dont know if you call the deal today. Its awesome. One of three different i can do. You can get two in one day. I dont know i was going to do my job but the opportunity of this is 28 deal for 14. One hour. What do you do for a whole hour . Do you read . Get a message. Pandora is joining that group. Everyone loves kennedy. Thats one of the things. We were skeptical. Contact costs is percent of overall. Netflix has the good news is they got the letter p. Remember robert klein . Songs that begin with the letter p. Here we go. We got a stock that begins with letter p. I remember robert klein. Hes still around. Is he . Last night on mad money, cramer focused on where he thinks you should steer your focus as countdown to the fiscal cliff is on. Find out how he gives you a head start this trading day with his mad dash up next and meet the ceo of the company combining social networking with the power of video and see if it should be the twitter of video. Look at future as we count you down to this wednesdays open. Implied open on the dow up 30 points. More squawk on the street straight ahead. If you think running a restaurant is hard, try running four. Fortunately weve got ink. It gives us 5x the rewards on our internet, phone charges and cable, plus at Office Supply stores. Rewards we put right back into our business. This is the only thing weve ever wanted to do and ink helps us do it. Make your mark with ink from chase. So, the 5. 3liter v8 silverado can tow up to 9,600 pounds . 315 horsepower. Whats that in reindeer power . [ laughing ] [ stops laughing ] [ male announcer ] chevys giving more. 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Are we talking a rush here . These are cheap assets in this country and they are deeper and a lot of other countries are blocking shale and fracking. Not in this country. We havent talked enough about shanghai up 3 . They will let Insurance Companies own more banks but other things are going on too. Thats important. Banks have been dogs. Consumer stocks are up. If you want the cheap play, baird talking about a china truck play and fracking play because they made engines. You think that china is coming back, you can pay for cummins. China warring last night. Gigantic move. They had it coming. Look, china was up big. Its small today versus other news. Think about that. This may be the end of the bear market in china. Apparently the lowest Assets Holding the stock market by consumers. This is huge and its overshadowed by the other bigger news. Well talk more about that in a bit. The special dividend parade marches on. Are companies that wont join in at a disadvantage. Well talk about that. Best buy now on board. The sound isnt sweet this morning for pandora. Stay tuned for a live interview with ceo. 11 40 a. M. Eastern. Having you ship my gifts couldnt be easier. Well, having a ton of locations doesnt hurt. And a santa to boot [ chuckles ] right, baby. Oh, sir. That i