conservatives are the ones that don't want 25% of government spending, why are they seen as lunatics when they're trying to reign in and stop things like what's happening in europe? >> the conservatives think, do you realize we're running out of money? the answer is, we're stealing from our kids. we're doing something that's profoundly immoral to the future of our country. the founders who fought and died for this is not so we can go over the fiscal cliff and all the nutty decisions we're doing right now which takes away from the citizens. it means the government is not doing what the government is set up to do. rick santelli is morally outraged by what's going on here, and he's the only one making any sense. the amazing thing is -- the misconception we've got is washington, d.c., there's no progress going on. that's wrong. there's a lot of progress going on. >> thank you. >> absolutely. >> join us on monday.

have a great weekend. "squawk on the street" begins right now. good friday morning. welcome to "squawk on the street." we're live from the new york stock exchange. i'm melissa lee, along with jim cramer and scott wapner. let's take a look at how we're setting up on the u.s. futures. it's all about the jobs reports for the month of december, a weaker than expected report. take a look at this, the markets looking at the s&p up by three points, the dow jones industrial average looking at about 1.5 here. in europe, it was really about the fomc minutes yesterday. it looks like a mixed bag, which is marginal changes across the board. the latest snapshot of the economy, 155,000 nonform jobs added in the month of december, with the unemployment rate at 7.8% below consensus. with warmer than normal temps and impact of sandy being felt, how good of a read is this?

goldman sachs upgrades for citi, conviction buy list, stronger bakes have fewer levers to pull in this tough environment. retail movers, target, underarmour, and we'll get cramer's take in just a few moments. a weaker than expected jobs report with december nonfarm payrolls coming in below stilts of 155,000. kelly evans is live at headquarters with a wrap-up of the details. >> a few people getting a sense of what we saw. i think one of the points here is job growth is becoming a little more consistent. we saw payrolls grow about 155,000 in december. in fact, that's almost bang on the average on the whole year. despite some of the choppiness early in the discovery, they're gaining traction now. a concern remains about 2013 in particular, what could happen when payroll taxes do increase on that point.

it was encouraging to see for the second straight month a growth in average hourly earnings as well. >> kelly, thank you. is that good enough to say that the average monthly job creation rate is the same as 2011 in 2012, that that's a reason to be optimistic about this? >> i think all things considered, it's a decent report. you can't be crazy about it. maybe a transition report. i think there's a lot of things happening in the economy right now that's hard to get a handle on. the last few weeks we did hear, for some people, good with business. others were bad. this is one of the least important reports that i've seen. i just don't think it's that important. >> but if you, yesterday, at 2:00 in the afternoon, all of a sudden we're worried, oh, my god, the fed is going to take the training wheels off, this definitely changes your opinion. if this wasn't good enough to say, ben bernanke's going to

change his policy anytime soon, is it? >> no, but i thought that yesterday was a bit of a travesty. >> overreaction, right? >> yeah. look, the economy comes back? we don't even know how much the gdp is going to be trimmed by what just happened in washington. or how much will be trimmed by this debt ceiling reduction. is everybody going to start forming businesses right now? i think possibly more businesses could be formed, but we're not -- all things considered, this was a surprisingly good number. but not good enough to make it so that suddenly there are guys that -- and let's talk about the feds, who wanted to tighten. some of them wanted it tightened for two years. what war are they fighting? i don't know. >> the language, you can understand why -- when you say several, that implies not a few, but perhaps a majority saying that qe-4 before 2014, i agree with you, i think it was a bit of a reaction. isi came out shortly after the

minutes and said do you want to fade any market moves on the notion that the fed is going to take the punch bowl away before the end of 2013. this is the same meeting they added to qe. people are all of a sudden freaked out by the notion that perhaps the punch bowl is gone. >> the voting membership of the fed is also changing in its makeup, right? evans and rosengren are two of the more dovish members. they're going over to the voting side of the next meeting. if you read some of the commentary this morning, that suggests any move by the fed will be pushed further off as that makeup changes, too. >> there's something to be said, as i've seen in multiple cycles, for the economy to come back, and rates go up a little, it's not bad that the economy hires people. 5.5% unemployment before the big downturn. we've got a lot of comments about banks today. banks have led every major single recovery in the last 30 years. you get a little curve. i don't want to be too didactic

to people at home, but the banks make more money if we have net interest margins. >> if you were bullish at 159.59 yesterday, are you bullish today after the employment report? >> i think the market's up huge in the last few days. look, the dow's half the gain in the last three days than it has in the last year. the fed tightens all over. if all over is down 20 dow points, i'll take all over any day of the week. >> take a look at where the strength was in job reports. goldman sachs in its preview note to the jobs report did point out that the seasonal temperatures was above normal. the temperatures were above normal in the month of december. they take a look the at the

temperatures and heating degrees and overlay the population dense si. >> in other words, they're spending too much time on that stuff. >> that's what economists do at goldman sachs. >> warmest weather. al gore did well, by the way. i think it's important to talk about the one thing on the rise that will help offset the washington drag. chris christian, the rebuild will be like hurricane andrew. it was a substantial add to the gdp. again, the national guard is still keeping track of the roads before you get to normandy beach, before you get to beach haven. the rebuild could be monumental usg, matsco, the fortune brands park that is now housing. this is meaningful. it's so meaningful that it can offset what is not helped from

washington, unless they raise taxes again. then i'm with rick santelli, enough. >> if we had the boom in construction jobs in the month of december, if we do get this passed -- and today is the vote, by the way, i believe at 10:55 in congress -- if we get that through, we could see that mog any fid in the months to come, hiring related to construction related to the rebuilding after sandy. >> of we worried after the hesitancy in the leadup so the fiscal cliff will repeat itself for another couple of months as we try to figure out that -- i mean, another embarrassment, is that what we have to deal with between now and march? >> i like to take counsel from people who know more than me, which is about 310 million. honeywell said -- he's been spot-on the whole day. if he was treasury secretary, jack lou, very hard working,

david coty, we would start talking about the real issues. but coty says yes. if he stopped hiring, now, i know the longer work hours from this number indicate they're going to have to start hiring. at the same time, i look at robert hef, i look at some of these companies and they say, wow, i don't know how much this health care act is going to change. a lot of people -- are they going to get sticker shock from health care this year and next year. these are all things that are going to work against the positives and moumt we've gotten. >> at least we have one issue resolved, and that is the tax implications. we know what the tax policy is going to be like. well, i think they could change it, theoretically. but we have a framework at this point. do you think there would be a less of a drag -- >> i think if you're serious about spending cuts, serious about military spending cuts, medicare spending cuts, that is

long term. and i think that's great. take a look at what happened with gerhardt, with germany, when they decided to get serious. they had one of the greatest economic expansions in germany. it could happen here. >> goldman sachs is making big calls on the banks. the firm upgrading sun trust to buy from neutral. downgrading both b & t and wells fargo to buy. and removing jpmorgan. now everybody in the world, jim, loves citi. they're coming out of the woodwork. >> after 20% in the past three months. >> wells fargo has been the best bank in this country for a very long time. they've taken mortgage markets from 10% to 30%. everybody all of a sudden loves

citi. that is terrific. it is behind the market. but you know something, these banks trade together. if you're going to get a really huge move in citi, you're going to find the rest of them pull up. jpmorgan has failed at the 44 level multiple times. i don't like going for second best of breed when you can have best of breed. >> i think what's interesting about this goldman note, they're essentially saying don't play best of breed, because they use all the tricks in the book. they've gone through cost cutting, everything to fight below the new environment. you want to go for the second best of the world, maybe they have more levers to pull. >> sun trust, like sun trust is -- i mention them -- to mention sun trust in the same sentence as wells fargo is to mention oragone when you're talking about the redskins. we're talking about a college team versus a pro team. >> with all due respect, you can't play with the big boys. >> i think wells fargo, by the

way, listen up, goldman, they've spent a fortune taking over this country. you have no idea what they can do if they ratchet back spending. i like wells, but i will say it is outrageous that one company has 30% of the mortgage market, and the only company you can get a loan from in this city. wells fargo took over the world. you want to sell wells fargo, you know, maybe you think the buffett is a seller, maybe he's a buyer, good. the idea of not so great and selling the great, that has never worked for me. it's never worked in my career. >> do you think the earnings prospects are getting better and will continue to improve? that will be better for the banks. >> look, i think the banks had a fabulous fourth quarter. but the banks are so far behind the market. it's extraordinary how inexpensive they might turn out to be. jpmorgan put out a phenomenal

piece, beginning of the year, their senior strategist he's the best there is. he said if the banks caught up, they could be monster good. i'm in that camp. >> have you noticed that the ten-year yield in the last few days, since december 28th, it's retired by 26 basis points. huge, huge move. >> on the bond market idea, what, tempers called it rich on this market, cooperman called it rich. the smart money absolutely agrees with you, jim. >> but the smart money has been saying -- i think buy and trade is happening. there was a lead story in the journal, etfs, look, i'm suspicious of that. that's that autopilot thing that hasn't worked for years. those people hate it when you say that. but look, bonds offer very little value. i use lindco and lind energy as an example.

versus some of the real estate investment trusts. medical and health care. there's a lot of bond alternatives. you don't have to be stopped. >> even a dividend yielder like j & j. >> j & j is so undervalued. stock up 7% to 8% last year? with a stroke of a pen they could get that stock to 80, just by breaking it up. put together by someone who, frankly, i know is revered, weldon. there's no reference here for it. >> what is the ten-year -- what is the yield on the ten-year have to get to before we decide that the great rotation is in the midst of happening from bonds to stocks? >> i would have told you when a dividend -- >> now? >> when we thought the tax was going to go to 40%, i would have said, you know, it goes up a half a percent, that's fine. but look, dividends were preserved. we never talk about how big that was, the dividend -- >> enormous.

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a couple of interesting calls from retailers this morning. target getting an upgrade to buy on neutral on improving earnings fundamentals. lululemon outperforming in both urban outfitters and underarmour. i don't know where you want to start here, jim. >> i think lulu, there could be margin pressure. there's interesting knowledge about a potential slowdown in canada. i want to call your attention to a deal with gap yesterday. if you go to the athletica website -- >> love it. >> yes. you will not see the word gap anywhere. this is a company to watch. it is part of gap. and i think they could hurt

lulu. at the same time i want to point out that underarmour is more of a technology company. the nhl almost bought a chunk of underarmour. nhl a very smart organization. target was supposed to miss badly, they didn't. i want to know how the dollar stores are doing versus target, walmart. there's a lot to sink your teeth in in these calls. if lulu wanted to take a profit, i'm not against it. >> what was interesting about lulu, everybody calls it a channel check. you don't know how robust the channel check is. they go onto the website, they see what's on sale. >> going into a lululemon store is technically a challenge. >> i've been in several stores. i don't consider one channel a check. >> she wants the remodels. >> i say at the summit store, guys go in, single guys go in and they're not looking at the merchandise. just pointing it out. >> what are they looking at? a different kind of merchandise?

>> do they have dark sunglasses on when they go in? the underarmour call. would you be a buyer of underarmor rather than nike? or would you go nike? since december the stocks have been going in different directions. >> i just think this guy, plank, is so the real deal, and this is a -- the technology play. the fabrics they're developing, what they're doing makes me feel like this is a very forward looking company. i would buy that stock. lululemon, i'm a little worried, but it's the athletic issue. >> you go onto the gap website, they push you to athletica. so there's a lot of leverage between the brands. one cart. one shopping cart is key. >> shopping cart, how about milk versus kindle. shopping cart is a bear. >> that's true. >> wondering what to do with your money on this jobs friday? don't worry, cramer is here to

help you set up for the weekend. his "mad dash" is next. and later, the chairman and ceo of zip car is here to tell us about a big change in the company's membership policy. plus we'll get his take on the deal with avis. let's look at futures here after the jobs report. closely watched after the release of the fed minutes. she knows you like no one else. and you wouldn't have it any other way. but your erectile dysfunction - you know, that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure.

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welcome back. a few minutes before the bell. time now for cramer's "mad dash" ahead of the market open. we'll start with google. the big news yesterday with the government. i keep hearing -- people love this stock on the halftime show. >> no. i think that's really important. you've got your halftime show and you've got to discuss it today. here's what's important for me. i'm going to take google versus microsoft, eric schmidt sits down, what do you want. microsoft will be, how dare you. the evil empire versus a nice federation. and i think that what matter is google has a better mousetrap. all of these guys complain, saying, google sends its stuff to google. why not? google's better. this was a very important decision. but here's what i've got to ask you. the last quarter was pat. do you just overlook that? >> they overlook anything. tum vision. you're looking forward, not back. >> in the end, i don't think

anyone expected things to go really badly. i remember when joe cline, one of the greatest people in law, the smartest guys ever to rise up, when he decided that microsoft had to be put down like a dog, that they might be -- and has become a dog, google, look out. i think if they get everything right, will go to this past quarter higher. >> economy improving, right? advertising not falling off a cliff. >> yep. >> maybe getting a little bit better. >> 70% share. i like it. i like it. >> how about transocean? >> this is really important. a lot of people say, look, jim, you keep saying certainty. certainty matters. you know what, i didn't know how much -- i don't even like transocean. but you know what, but once you found out that this company was not going to get $5 billion in fines, suddenly people say, oh, hey, hallelujah. when this happened, people thought they would have to pay nothing. but when you get certainty,

people know and they want to buy. i don't think that company is that great. >> how about avon? >> something's going on here. near term risk reward better, potential for more overtime. bank of america upgrade. something is going on here that this company is suddenly being liked by the industry. and i wonder if, and if david faber were here, is there a takeover coming? >> i think that's why they're betting the stock up? >> if the company were ever to stabilize, it's darn cheap. avon, herbalife, tubber wear. herb, where are you when i need you? i talked about credit markets doing better. they're talking about raising targets to 20. are you kidding me? i don't know anything that's better. but it's cheap. i'm a buyer. >> all right. that's the word on the "mad dash" from mr. cramer. the first reaction to today's jobs report from the white house. when labor secretary hilda solis joins us live. that's about ten minutes from

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you're watching cnbc "squawk on the street." we're at the financial capital of the world. we're looking at a modestly higher open on the back of a fairly in-line jobs report for the month of december. there are a lot of other asset classes we're watching as well. gold for one, 4 1/2-month low here, the longest run of weekly losses since 2004. silver, also the lowest levels since august. interesting to watch these things. also the currency marks. >> exactly. the dollar is moving higher, version us a basket of currency. is that in itself a head wind for stocks. >> we want to see it. as we get closer to earnings, you want them to be able to say, well, we're going to be able to raise numbers, you're not going to have that. don't want to see a strong dollar. >> there we have it, the opening bell is ringing for this first friday of 2013.

the international air cadet exchange over at the nyse. a lot to watch here, jim. we had a big week, plus a day, in the markets so far. >> so i think people have to understand that at the beginning of the year, a lot of money comes in. it distorts a lot of different flows. you get earnings. we're still going to be involved in guidance. i'm -- it is remarkable the market keeps holding up. the transports did okay yesterday. i think that we forget europe getting better. a lot of people say germany was not so good yesterday. i totally disagree. germany getting better. china getting better. we are the caboose, they can pull us up. >> when you look at earnings that are going to come out, the fourth quarter numbers are going to be probably impacted by the

cliff. and then looking ahead, the first quarter numbers are going to be impacted by the debt ceiling debate, by the other cliff. >> 2.0. >> go into international, try to find companies that are much less levered to the united states. that may be the way. i've been talking about mexico, brazil, india, these are countries that have very solid governments that don't seem mickey mouse. remember, i hearken back to michael, looking at the partisanship in our country. had esaid not since the reconstruction period, reconstruction in our country has it been this partisan. it's hard to invest in that environment. >> it's not going to get better anytime soon. >> there's only one good story out of washington. >> what is that? >> i know exactly where he's going. >> where am i headed? >> rg3, baby. >> thank you very much. that's the only thing out of washington -- they beat seattle. which i don't think they can do. they'll finally get the fiscal cliff, the debt ceiling off the

front pages and that's what's necessary. it's the great american athlete. >> we'll put a friendly wager on that one. my guys are looking good. >> that's all i'm saying. >> they're looking good. >> but washington remains the damper. it bothers me, because like having johnson & johnson up 50 cents, that goes away the moment some fed guy speaks. some fed guy grabs the mike and says, i'm worried about this or that. you know, harry reid will come out, that guy is a one-man put squad. have you ever seen it? we've got guys in the house who are just like, hey, blast the futures. i've never seen a group of people want the market lower than the people in washington. >> wow. that's an indictment in and of itself. >> they are just -- what a futures -- and they're an options maker's dream. they've got the worst rules down there. maybe some of these guys are buying puts before they grab the

mike. >> i hope not. >> you don't want to see any politician walk towards a microphone in the next three months. >> no, we don't. like the governor of california versus, like, green bay, washington, no, we don't want anybody getting near a mike unless it's governor christie. because man, he would be cool. >> no surprise on the weaker metals prices across the board. we're seeing a bit lower in the miners. volley down by 1.6%. we're also seeing references down by 1.3%. weakness there. across the board, really moderate moves in the markets. >> valley's been a huge hit. iron ore has been terrific. i don't want to lose the china trade. electricity consumption, freight trying to bottom here. i think the china story is big. and don't forget, they've got a

government there, other than the fact that they kill people who speak up, and they kill people who miss quarters, people who miss quarters over there. >> but they make the economy work. >> but they've got an economy -- >> up 46% in the fourth quarter in shanghai. >> i like that constitution, like jefferson was a smart guy, madison. they don't really have that. they've got a constitutional right for better earnings per share. if you don't take advantage of that country -- >> you can, i guess, be safe to look at any stock that has a sizeable amount of exposure to china at this point. >> i keep thinking about meeting howard shulze, came to new york, everyone hated it. they said, china's still good. skippy peanut butter. why did hormel buy skippy? >> they're better in china. >> etinger, a smart guy.

number one sandwich? number two? peanut butter. >> wasn't it yum not that long ago, spooked people about china. >> they blasted the heck out of me for taking on novak. i never take on novak. now, i had a ford fairmont. i don't know, maybe he had a better car. but you know what, i did have better health care at a farm workers' clinic. i had good health care. >> since faber's not here, i thought i would bring up ulta. he thinks it's a barometer of the economy. i'm -- sarcasm here. ulta down. they affirmed -- they only affirmed their q4. they only affirmed it. >> i used to joke, in the '90s when i would come on squawk, in the great market, i would say yahoo, pfizer.

and ulta has been one that will eventually run out. i'm concerned ulta had been one of the most powerful stocks. that one day my friend, herbert greenberg, said, listen, that thing is a ticking time bomb. that's putting words in your mouth, herb, i know, i do that constantly, i've been doing it for 20 years, and i think you have to be careful of ulta. one day there's going to be an ulta, right there. >> but there's a starbucks over there. that's not a big deal. why fought have an ulta? >> i had tea today instead of a cappuccino. >> imagine if you had had one. >> no, you don't want me to have one. >> you have a lot of yelling coming up with the football games. you've got to drink tea. >> one thing that is not happening is the eagles are not in. i'm following coaches in airports.

can we just get back to the days when the stock market's not dominated by washington and football's not dominated by washington? >> exactly. >> we want football to be dominated by washington. >> let's go to bob pisani, he's on the floor with more this morning. >> good morning. let's see, pretty modest open here today. decent numbers on the jobs report. gold's multimonth low. dollar index, you've seen what that's been doing, up 1.5% since the start of the year. the yen, what, 2 1/2-year low against the dollar. gold, 4 1/2-month low. the big debate is not so much about the stock market today, it's about the bond market. when stock guys start talking about the bond market, pay attention. because normally they worry more about what's going on with stocks. the question is, is the bond rally finally over, the multi-year bond rally finally over.

prices at the lowest levels since going back april or so. volume in bond etfs has increased dramatically since the start of the year, as the prices have started moving down. the big debate is why is the bond market moving here so much. it's not the threat of dramatic increase in inflation so much, not yet, most people are concerned, like greg, saying that it's the fact that recession has been less likely due to the fiscal cliff deal that's moving the bonds right now. there's still a lot of slack in the economy. i wouldn't get very excited about it. still, a lot of people, have you noticed, are really moving on the stock market today. rbc capital, for example, came out very aggressively today, overweighted all of the big names that are on the growth side, overweighted materials, industrials, financials, downgraded consumer staples and health care. i think that's a big issue. the street is getting there. the problem is, take a look at the major economies, the major indic

indices. russell 2000, historic high. europe 52-week highs, and many of the indexes right now, asia also up. before we go back, stock mutual funds continuing to get outflows this week. that's a problem. etfs inflows, we'll talk more about what that means in the next hour or so. back to you. >> thank you, bob. when stock guys talk about bonds, i wrote that down, we've got to be careful. how about a bond guy, maybe we'll talk about stocks. go ahead, rick. >> you always have a good sense of humor, james cramer. look at the 24-hour chart of tens. we traded up to 197. the cusp for historical comps is around 194. you'll see what i mean in a second. open this chart up towards april of last year. what you'll see is, briefly when we were above 194, highest yield since about the 25th of april. but as we've slipped down about a half a dozen basis points, we're comped to the 3rd of may. 30-year bond, see the same dynamic on a 24-hour chart.

we ran up overnight. we came back down, maybe it was the unemployment report just as expected. maybe it's that the longs get a bit nervous. whatever the dynamic is, you can see, quickly, if you look at the dollar index against the ten-year, hey, it's a little bit normal. we can see the dramatic correlation between the higher rates and dollar index. who's wagging who here. the last chart, another fresh high on the dollar versus the yen, coming back to july of 2010. melissa lee, back to you. >> rick santelli, thank you. now, back to the december jobs report. nonfarm payrolls rising 155,000, slightly less than some had expected. here first on cnbc is labor secretary hilda solis. madam secretary, glad to have you back. >> thank you. happy new year. >> happy new year to you. as the administration enters its second term, are we making any progress? i ask that question, because in 2012 we added on average 153,000

jobs per month. that is exactly the same rate as we saw in 2011. are we making some progress on the jobs front? >> yes, we are. and i believe that we are still healing. we've seen an economy that's actually added in a 34-month period 5.8 million private sector jobs. and this job report actually shows that there's continued steady growth. we even saw a small change in manufacturing, which is a good sign. we also saw health care industry, some of the other sectors, leisure and hospitality actually picked up. i think the consumer confidence is slowly coming back. but we still need a lot more to do. obviously the president remains focused on making sure that the benefits go to those people that have worked the hardest. that includes many in the middle class. i'm happy that there was that bipartisan agreement that came to help provide 98% of tax relief for millions and millions of americans. and small businesses. 97% of small businesses will

reap those benefits now. we won't go over that cliff. so i think there's more work to do. i'm very hopeful and optimistic that that will be done through the leadership of the president, with the leaders of the senate and the house. >> madam secretary, jim cramer here, good to see you. >> you, too. >> are we at a moment, speaking with tim cook at apple, he's saying it is cheap enough to bring people back here. are we at a moment where right now, the president of the united states should be speaking to major companies and saying, we're the country that you should be investing in, and coming to, because of cheap energy, because of what our labor costs are good. is this the time to launch an offense against all the other companies around the world and say, come here, united states, put your business here? >> jim, absolutely. he's been saying that for the last, i think, two and a half years, on some of his forums that he's had with major international business corporations who represent our u.s. economy here. he's been saying that time and time again. and some are taking advantage of

it. i still think we need to do more. obviously the discussions that you have on your programs can also help encourage that. we want to see products manufactured. we want to see the good jobs staying here. by and large, most other companies like the products we provide. if we can continue to instill that and bring those jobs back here, and increase our capacity to produce items, i think everyone's going to benefit. and certainly the president has done everything that he can. that's why he's actually brought us all together, members of his cabinet, with industry to work together to make sure the job training reflects what manufacturers want. that's really what our job is right now. and we're doing everything we can to cut those corners, and make the bureaucratic red tape go away. >> madam secretary, how many jobs do you think the fiscal cliff embarrassment cost this country? >> you know, all i can tell you is that we've helped to provide, i think, some stop gaps. and what i think about is, those 2 million people that would have lost their unemployment insurance. because think about it, all that

money that goes out in terms of what's being spent by that unemployment check helps to generate two additional dollars back in the community. everyone continues to keep their jobs. i can't give you an exact figure, but i'll tell you just by the movement that the president made, we've saved millions and millions of jobs. >> no, i understand your point of view. but it doesn't answer the question of, as long as the debacle went on, we at cnbc have asked people in washington to rise above through the entire process. it turned out to be a tremendous embarrassment. we talked to ceos every show of every single day over the last several months who said they're not hiring as a result of the uncertainty regarding the fiscal cliff. now we have the debt ceiling debate. so certainly we cost ourselves thousands, tens of thousands, maybe hundreds of thousands of jobs over the last several months because of this whole debacle. >> i'll tell you, i think the bipartisan agreement that was agreed to did help to provide the kind of effort that the

public, the american public wanted to see. and we're going to continue to see that move along. i know that the president has the support of the public. i don't think -- it's not for the president not wanting to do things. you have to have two people cooperating. >> madam secretary, the question, though, is simple, was there an impact on hiring in your estimation because of the fiscal cliff? and we ask that, because we're entering another phase in which we have to deal with spending cuts and the debt ceiling. so was there an impact, and then, will we see an impact in the next couple of months? >> i did not see a dramatic impact in this job report. i mean, if you look at the unemployment rate, it stayed about the same. what i do think is really important is that we continue to move forward, because we still have unfinished business in terms of infrastructure, job development in areas that are still needed, like construction, continuing our work in manufacturing, and renewable energy.

and also addressing other issues that need to be taken care of. do we keep our eye off the ball? no, we keep moving forward and making those investments and encouraging small business to continue to push up. that's why the president pushed for r & d, research and development, and giving incentives for business toss do the right thing and get involved in new types of industries. green industries, technological industries, things like that. >> sure. >> i'm encouraged. i'm encouraged. but you know, it takes two parties to come together. the president understands that. and will do everything in his power to see that happen. >> we got it. thank you very much, madam secretary. happy new year to you. >> happy new year. >> hilda solis. coming up next, the winner of our nail the number sweepstakes will be revealed. are you the winner of this fine notebook signed by the entire "squawk on the street" team? >> wow. >> find out, next. plus, goldman sachs chief economist jan hatzius tells us

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welcome back to "squawk on the street." i'm sharon epperson at the nymex. big moves in the gold market. we did see gold prices drop to a low, a 4 1/2-month low of $16.26 an ounce only to recover above the 1650 level. it had to do with the tmoc minutes, and the concern we may not see a further continuation of monetary policy that we've experienced. then the jobs data came out. the unemployment rate staying steady, 7.8%. again, more monetary policy now hinges on that unemployment rate. and that is the reason why we're seeing this rally back, or recovery back in the gold market. we're also watching, of course, the worst weekly losing streak, six weeks straight we've seen since 2004. key level to watch is going to be the 200-day moving average,

to see if gold can get above the 1685. if it can't, maybe more selling, and then that 1600 level is key. there's a lot of open interest at that strike price in the options market. of course, oil prices and other metals also under pressure with the firmness in the dollar. we'll have the oil inventory report at 11:00 a.m. >> sharon, thanks so much. sharon epperson for us there. don't go anywhere. lots more "squawk on the street" is straight ahead. coming up, holy krout, that's a huge rubber ducky. six stocks in 60 seconds. "squawk on the street" will be right back.

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i can't tell you, refiners are doing so well. >> humana. >> this is a bold call. barclays says this is the one to buy. i agree. if you're going to buy one, buy them. >> continental resources. >> this is a fantastic initiation of a buy by deutsche bank. they have the light sweet crude that we need of. we'll be exporting light sweet crude next year. >> i just wrote it down. >> morgan stanley likes this company. i think it's a dynamite company. >> lly, that must be -- >> people keep understating the power of the big drug companies. so maybe their alzheimer's drugs not working out. don't underestimate big pharma. it always surprises you with good numbers. >> speaking of good, what have you got coming up tonight? >> technology speculation. the first time, i have hated this stock for a long time. you'll want to hear it. a break-up play, a company that

i think is worth more in part than a whole. >> 6:00 and 11:00 tonight. have a good weekend, buddy. >> you, too. >> two pieces of data that could move the market, ism nonmanufacturing, factory orders hit the orders at the top of the hour. later, the creator of "law & order" joins us live, everything from the media industry and jobs and taxes. "squawk on the street" will be right back. ♪ ♪ [ male announcer ] its lightweight construction makes it nimble... ♪ its road gripping performance makes it a cadillac. introducing the all-new cadillac xts. available with advanced all-wheel drive. [ engine revving ] it's bringing the future forward.

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good morning. welcome to "squawk on the street." let's get to the road map for this hour. the jobs out this here, 155,000 jobs added. we've got the reaction from goldman sachs' chief economist. >> will victims of hurricane sandy finally get relief from capitol hill. we'll take you live to washington for the results in an hour. >> the man who created the "law & order" franchise, and hundreds of jobs along with it. dick wolf is here to tell us about his new crime novel. we would ask him how he would write the ending to the debt

debate in washington. rick santelli has breaking news on ism factory and nonfactory orders. >> november factory orders, unchanged. goose egg versus last month. and last month revised up .8 of 1%. ism nonmanufacturing, the service sector, stronger than expected at 56.1. 56.1 is the best level, well, since february of last year. best level since february of last year. which was 57.3. the recent high really was 56.0. that was in march. so definitely cozying up to close to one-year highs on the larger side of the economy. if you look at the dollar, it has given back a good chunk of its gains. the treasuries have regained some of their selling pressure earlier. the 30-year bond unchanged. albeit at a high level. hant seen it since may have. the ten-year note at 192, at one

point was at 197. it's up a basis point. >> certainly a good start for the year for bonds. important snapshot of the economy today. we learned that last month we added 155,000 jobs. it's the detail now that everybody is poring through. including our own senior economics reporter, steve liesman, who is in san diego, california, at the american economic association's annual meeting. steve, what is now the considered opinion on this set of figures? >> mildly positive. as you look into the report, simon, it looks pretty decent. it's not a big -- it's right along with trend at 155,000 jobs. pretty much you had upward revisions. some economists, though, are focusing on the private sector. we'll get to that in just a second. let me show you what some of the other good numbers are in it. the unemployment rate ticking up to 7.8%. average hourly earnings, that was good, 0.3%, up an average of weekly hours. and participation rate, however,

was unchanged. influx of almost 100,000 people into the work force. and that may be a good sign, because people were excited by the prospects of getting a job. the government was down almost 13,000, manufacturing up 25,000, construction up 30,000. those two numbers are good numbers worth watching. retail up -- down 11,000. you had big hiring in october, november, coming off in december. leisure/hospitality up 31,000. the unemployment rate over the past year, you can see we've come down quite a bit. but the decline looks to have leveled off, simon. one thing in the ism services number, the new orders index up to 69. that's a strong number and bodes well for the service sector in the months ahead. what we'll be watching in the months ahead, are the effect of the payroll tax increase. the expiration of those cuts

coming off now. and what effect that will have on the retail sector and retail hiring. there is some pessimism about the retail sector. >> let me frame it the other way around. the figures are actually quite good. the figure we've just reported here is quite good, in a period where we were obsessing about the fiscal cliff. i don't know whether we say the fiscal cliff didn't have an effect, or my word, how much better we could have grown without it. >> so the early consensus, and we want to see how the data gets revised, because the data could be revised in the months ahead, is the effect of the fiscal cliff came in the business investment numbers but not in the hiring, simon. which is a little bit unusual. usually the two sort of go together. you build factories and hire workers to build those factories. what happens was, they reduced capital spend rg, although november was a little bit better. we'll wait to see december. and they did not shed workers. it seems to be more of a

reluctance rather than a stepping back from plans to expand. >> steve, it's scott. so what do you think the fed is thinking looking at all of this this morning, and do you think the market overreacted to the read on the minutes yesterday afternoon? >> i think so, scott. i think that you do have a division, and i think that division was new news. especially because it was evenly divided. it was a real division between those who think qe ought to continue all the way through this year. our fed survey showed that the plurality of investors believe it's going to continue through all of 2013. these numbers, however, do not change that outlook, scott, in terms of it going throughout the year. 7.7%, not a lot of progress. i think the fed believes, at least some people op the fed, important people on the fed believe the unemployment rate is likely to tick up if the job market improves, because the

discouraged workers come back in, raise the base and end up increasing the unemployment rate as the job market improves. that 6.5%, which is the metric for the -- for raising interest rates is still a long way off, as substantial improvement in the unemployment rate still remains a story for the end of this year rather than the middle. >> steve, you're going to be speaking with bullard, i think, at 1:00, right? so i think it will be more interesting than ever to hear now from mr. bullard. put in context that the voting makeup for the fed at the next meeting at least changes, right? so charlie evans and eric rosengren are perceived to be more dovish, than maybe some of the comments we were reading from the minutes yesterday. so how does that all factor in? >> well, we get a little more dovish, i think, when you add these two -- those two doves that you mentioned and lose only williams from san francisco, who is not the doviest of the doves.

but he is definitely considered to be a person who has supported quantitative easing. so i think that that also speaks to a situation, scott, where you can expect qe to last longer into 2013. >> i didn't realize what the objective was for dovy, doviest of doves. >> i was struggling there. >> i like it. no, i think you're right. it's early on the west coast. >> would it be the hawkiest of the hawks? >> the hawkiest are the hawks, or the whitest of the doves, the most aggressive of the doves. i will work on it and get back to you, i promise. >> we're looking forward to the interview later. thank you very much. steve liesman joining us from san diego. >> mixed bag here. hugging the flat line essentially, jeff is with lpl

financial. jeff, happy new year to you. >> thanks, happy new year. >> you think the markets the remain range-bound? why? >> i think right now, investors are in a bit of a holding pattern waiting to see if there was any collateral damage from the fiscal cliff, as it relates to corporate profits for the fourth quarter. we got a deal done, but that doesn't mean corporate leaders weren't still paralyzed wondering what was going to take place or focused more on tax planning for their shareholders, or maybe even their executives than executing on business plans. we did see business spending down a little bit in terms of capital investment. we'll have to see if that translates into weaker results. alcoa and wells fargo and a few others will give us a glimpse to see if the corporate profits were able to make it through the cliff. >> i'm curious, if you do think that we're waiting to see what the collateral damage is, what

fuel did investors actually get in and markets held in pretty well since then. >> yeah, how long do those gains -- we did get a deal done. only natural to see a sense of relief that something actually took place. it isn't the complete deal. we know we've got a few mini cliffs, if you will, ahead of us here, on the sequester spending and a number of other issues in the months ahead. i think the market is a little bit of wait-and-see mode. we haven't gone over the cliff, we haven't gone to the full bear case scenario. the base case scenario isn't all that bright a case. we've still got earnings growth that will be relatively flat. so even though it's not declining, it's not a whole lot to get excited about. you've got to go with what's working and that's industrials right now. >> shouldn't you be excited about the fact that the economy seems to be turning, that europe's gotten off the mat, that china, the story there is brighter as well?

if you're a longer term investor, there are a lot of things to hang your hat on right now. >> these are the positives. don't get me wrong, these are important positives in these themes that we are focusing investors towards in their portfolios. definitely focusing on these issues of where we see auto sales and home building. china growth coming back around again. all these are very important. but remember, we've got a significant fiscal drag we're facing here in the u.s. europe is still in recession. so the picture's not bright yet. >> there's no fiscal drag here. you're going to run the deficit of 6%, 7%, 8% of the gdp. the government is still buying $85 million of assets a month. >> fiscal policy is not as aggressive as last year. the fed is doing a lot, but they're not increasing the amount of stimulus. they're keeping the status quo. talking about perhaps slowing the pace of stimulus over the course of the year. >> let me ask you specifically

about that then. because now the debate is clearly, given the minutes we had yesterday, at what point do they stop buying assets? it seems to me ma there's two sides to that. the effect on the real economy and the effect on the financial markets. as far as the real economy is concerned, it's people that were cynical that they were continuing to buy assets, when they stop can't we equally argue it won't really be detrimental to the economy except for what might happen on financial markets? >> i think it's why they stop is the real question. if they slow or stop because we see better economic momentum, certainly, that's a bullish scenario. if they stop because they're seeing rising costs associated with further increasing the fed's balance sheet and not offsetting the potential effect to the economic growth, that's a different conversation. >> the question of the degree to which asset prices are inflated by what is happening, or the belief of what is happening, for

example, silver is having a very bad day in the wake of the feds. >> yeah, that's right. and certainly precious metals have been a bit weaker here lately related to the idea that the fed might not be as stimulative. we've seen the fed funds futures curve shift up starting in january over the last 24 hours. i think that's premature. it suggests that maybe a brighter economic outlook as we get towards the end of this year, but certainly in the near term, the economy is certainly in need of all that fed stimulus. >> you do like industrials, is that sort of a back door way to play international growth as opposed to betting specifically on the u.s.? >> it is a little bit, certainly, benefiting from the revival of what's going on in china, you're right, melissa. but it's also benefiting from the themes we're seeing working here in the u.s. auto production, home construction playing into that as well. steve liesman talked about 25,000 jobs were created in the

manufacturing sector here in the last month. much better than the run rate of the prior four months. that suggests confidence among manufacturers if these trends are going to continue, both abroad and domestically. >> jack, good to see you. >> thanks for having me on. >> gold is on track for its worst weekly losing streak in eight years. we'll go straight to the trading floors to get insight into the moves next. and later on in the show, zip car's chairman and ceo will join us for his first interview which agreeing to be acquired by avis. [ male announcer ] where do you turn for legal matters?

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welcome back to "squawk on the street." brian shactman at the markets desk, looking at avon products, up 11.5% for the week. 2.75% today. the best performer in the s&p 500 yesterday. deutsche bank, they upgraded to buy from neutral at bank of america, merrill lynch, with a 20% price target. >> we're also watching shares of apple close to the session lows at this point, down almost 2%. there was a note out of deutsche bank's japanese team, they did some checks on their supply chain, which indicate a 30% quarter on quarter drop for the march quarter. seeing the impact there. apple shares down 2% at this point. >> gold is on its worst losing streak since may 2004. ira epstein joins us live now.

welcome to the program. what do you think of the price of action on the gold? >> thank you for having me, simon. i'm bearish on the gold market. if you go to the weekly charts, the weekly charts take a little bit more time to develop their formations, and the pattern is one of lower highs, lower lows, it's under what i consider a key moving average on the futures markets, which is the 18-day average of closes, and i can see this market making a pretty quick run here into the 1600 level, 16 1/4 zone. this bounce we're getting right now, which is a bounce off the lows, i don't think it's going to be long-lived. i think gold's lost its luster for the time being and investors are moving into more risk-on investments. >> what happened to the great argument about buying gold? the fed was printing money and it records inflation, that the indians were increasingly buying gold bars or gold jewelry, or the asian central banks were increasingly buying golds.

were those arguments phony? >> no, no, not at all. they're still occurring, simon. we have to look where gold is, where it's been, to where it's at. gold is still a 1600, $1700 commodity. the central banks are still buying their fair share of gold. investors have backed off on a certain amount of gold buying. look at u.s. coin sales, that has gone down a degree. etfs has repaced the need to hold the physical gold. the second part of the equation is where are we. we've just gotten through a situation where europe was in theory falling off the face of the earth. the u.s., it's not 2008 anymore. this is 2013. we're at a different part of our cycle. we're gradually starting to see growth. and we need to own that resource, it isn't as big as it was before. i'm more interested in a copper market right now because i think it has better stories in terms of infrastructure in america. eventually infrastructure in europe. and certainly, infrastructure,

manufacturing demands out of china. i'm not a bear on gold. i just don't think this is the year of the gold investment. i would be surprised if we don't trade roughly 1500 to 1750. that's the range i'm pretty much looking for this year. >> ira, does your view on copper get juiced at all by the fact that jpmorgan's going to come out with a physically-backed etf? do you think that will have an impact on the market? >> all you do when you come out with an etf is you put it right up, start taking from that etf demand. they'll buy the contracts, they're going to demand to store the metals somewhere. be it paper or whatever is there. that juices the demand. i think you're looking at over $4 copper, maybe 4 1/4 copper very soon. >> what do you think we should buy at this stage? >> i like the stock market. when you look at where we're at right now, i see the transition. bonds i think are in a back window, the low yields. i think they'll gradually, not all of a sudden move up.

the fed gave you an idea that they're starting to think about coming out of this fanatic printing of money. that doesn't mean they're stopping. they're going to look at each economic report. don't look at the 6.5% unemployment target they gave you. this is just the first warning. the market i think is going to come to its senses about that very shortly. >> happy new year, ira. good to see you. ira epstein joining us from chicago. >> he is the man responsible for the "law & order" and buyer, and now he is writing his own book. dick wolf is out with his debut novel and joins us live right after the break to tell us all about the book, the state of the media industry and much more. back in a bit. people really love snapshot from progressive, but don't just listen to me. listen to these happy progressive customers. i plugged in snapshot, and 30 days later, i was saving big on car insurance. with snapshot, i knew what i could save before i switched to progressive. the better i drive, the more i save. i wish our company had something this cool.

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welcome back. let's take a look where the markets are right now. we do have a mixed market. modest losses or gains. also following shares of apple this morning, which were at session lows just a few moments ago on some data out of japan. melissa's watching the banks this morning.

a number of interesting calls for those. >> the apple call is very interesting. deutsche bank japanese team looking at the supply chain, thinking there's a 30% decline quarter on quarter. that's what's moving the stock here. it is close to session lows. the banks, of course, major calls this morning. goldman sachs, citi getting an upgrade to the conviction buy list, so is sun trust. citigroup shares up 1.5%. the goldman call is really interesting, because they make the point it is not the strongest banks that will have the most upside, that could have the most biggest move in the stock prices. the strongest banks have done all the right things already to improve profitability, and they don't have any more bullets to fire. you want to go to some of the banks that have these opportunities. citi could wind down citi holdings, and that could be a major lever to the upside. banks there, moving, one spot of strength in today's market. >> let's move on. if you know what this sound is -- well, then your probably

be reeled into the day-long "law & order" marathons on tv now and then. if dick wolf has his way, we'll spend more time reelding in the coming months. television writer and producer, dick wolf, joins us to talk about his foray into the literary world. mr. wolf, thanks for coming on this morning. >> my pleasure. >> the difference between writing a novel and writing for television is what? >> well, i'd say one of the biggest differences that television is probably the most collaborative medium ever invented. it literally takes a village every week. and their writing staffs, it's a very different experience than being alone. you know, it's a throwback to -- a little bit to when i was a screenwriter, and that would be months of sitting in a room alone, too. so it wasn't totally unfamiliar. it's kind of freeing, though, to have the ability to say what's

inside people's heads, which you really can't do on film. >> right. the back story to this whole thing is amazing in and of itself. can you talk about that? >> absolutely. >> in relationship to 9/11? >> the book has sort of been gestating since 9/11. we were two weeks away from starting a five-hour mini series called "terror" which started in an al qaeda training camp in afghanistan, with 10-year-olds with their fists saying, god is great, death to america. the brother of one of them coming in, who was about 20, cutting to him because he was going to america to become a great hero, cut to him and three other guys driving across the canadian border, driving into new york city, setting a bomb off under the shuttle in times square, killing 3,500 people. and then releasing anthrax in the city. so needless to say, we had to

pull the plug on that on 9/11. it was pretty eerie. many of the contacts that i made during that period, i've stayed in touch with over the years. and they were very helpful in terms of the way certain specifics actually operate. i had no idea, until i really got into this, and stenographic photography and other things that are in the book, that i'd say the trade craft is pretty accurate. >> dick, why go the book route? i'm just curious what has changed in terms of the dynamics, maybe the demand for such a story line? showtime has had tremendous success with "homeland" which sort of delves in that area. >> look, the biggest problem -- not a problem, but i would love to do it as a mini series, but it's a form that's sort of out of favor right now. but i think this would be a great four or five-hour piece of

film. the biggest problem, the reason that i went this route was that, frankly, i don't think you can do a weekly series 22 times a year about terrorism. it just diminishes the impact of what we're really fighting. i think you need to present it in a sort of more unique format. >> mr. wolf, congratulations on the novel. look forward to reading it. thank you very much for coming on. >> thank you very much. i hope you enjoy it. >> up next, natural gas falling nearly 10% in the last month. is there a turn-around in sight? we'll get the latest inventory numbers. jan hatzius will join us live. k. tdd#: 1-800-345-2550 after that, it's on to germany. tdd#: 1-800-345-2550 then tonight, i'm trading 9500 miles away in japan. tdd#: 1-800-345-2550 with the new global account from schwab, tdd#: 1-800-345-2550 i hunt down opportunities around the world

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welcome back to "squawk on the street." i'm sharon epperson with breaking news from the energy department. natural gas storage levels fell by 135 billion cubic feet. 135 bcf, drawing in natural gas. that was in line with whatage hists were looking for, between 133 and 137. this sa bigger slide in natural gas in storage than we saw for the five-year average, which was around 111 bcf. we have seen natural gas prices rallies from the big logses that were put in earlier this week. and we are looking at further gains in natural gas in light of this number. i'm bringing in a trader here on the floor to talk more about what this natural gas move means

this week. we saw a slide to 305. now rallying back to the 330 level. what is the story? >> i think the bigger picture is the bearish move. it will take very, very cold weather to give us a big private movement on the upside. to me it's when they caught the market low. i think we're going back to the $3 area and reacting to the bigger picture which shows moderating temperatures over the longer term as opposed to the cold snap that the northeast is going through right now. that's probably why we have the down move over the last few sessions. >> you're in the options ring. we've seen very low volatility in the oil market. how do you trade that right now? really, what are you trading? is it news, is it washington, is it fundamental inventory data? >> well, i think it's all of that. it's a very low volatility market. we're on the upper end of the range. we'll have to see when we get into more negotiations in february with the government. we could come down off the upper end of that range than we are right now. >> ray carbone here on the floor

with me. we'll be back with the report on the energy market. >> back to the big news of the day. we asked labor secretary hilda solis the fiscal cliff had on the jobs number. take a listen. >> i did not see a dramatic impact in this job report. i mean, if you look at unemployment rate, it stayed about the same. what i do think is really important is that we continue to move forward, because we still have unfinished business. >> reaction from jan hatzius from goldman sachs. good to have you. your estimate was actually much higher than what we actually got. 200,000 jobs to be added was your forecast. would you agree with the labor secretary that there was no impact? and do we then make the assumption that fiscal cliff 2.0 as we head into the debt ceiling debate, won't have much of an impact either is this.

>> i think probably there probably wasn't a major impact. nothing jumps out. numbers were a little lower than we thought on the headline. there was an upward revision, some of the other details were a little more encouraging. i would say it was a little weaker than we thought. there was not a lot of news here. nothing that looked disturbing in the report. either in the establishment survey or household survey. as we go into fiscal cliff 2.0, i think the big question is whether we get substantially more fiscal tightening and fiscal drag on the economy than what's visible now. what we got after fiscal cliff 1.0 was roughly in line with expectations if not a touch more positive. of course, there's the second act, and we don't know what the ending is yet. >> jan, why are you discounting the idea that the figure could have been stronger without the fiscal cliff? >> i wouldn't discount it entirely. i'm just saying there's nothing here that really jumps out as a

major effect of the fiscal cliff. >> did you see something hugely important, that all the sound and the fury and hours of television, and the newsprint and angst on capitol hill did not affect the american economy? that's something very profou. because a lot of market professionals are, therefore, if what you're saying is true, is focusing on the tail that is wagging and not the dog that is stationary. >> i would guess i would say it was a very important issue. but the real issue for me was always, how much fiscal drag would you get out of the fiscal debate, and out of all the decisions that have to be made. and it could have been that you would have gotten a much larger amount, a couple of percentage points, maybe 3% or 4% out of this whole discussion of fiscal drag. but it didn't happen. at least so far. we haven't reached the ending yet. >> it's not the political impasse then, it's the net result? we're still running huge deficits.

>> i would say the net result is growth negative in 2013. but not as bad as it could have been. we expect about a 1.5 percentage point drag from fiscal policy on gdp growth. that's not good. especially in an environment where the economy is still not growing very fast. but it could have been worse. >> what was your read of yesterday at 2:00, when the market read that the fed was ready to take the punch bowl away. this jobs report doesn't suggest that's going to happen anytime soon. and your thesis on the economy certainly wouldn't suggest that you think it's going to happen anytime soon, right? >> that's right. and i think that the minute -- you know, reaction to the minutes is sometimes -- you know, it's sometimes a little erratic, because there are a lot of people around the table, 19 people, 12 voters, and the minutes have tomari all of the views around the table. >> but consider the number of asset classes that moved on that perception. you not only got equities, you

had bonds, gold, the dollar, everything moved as a result of the perception in the market that, oh, my god, qe is going away. >> i think sometimes that's a little bit difficult in appreciating that not everybody around the table has the same amount of influence on the decision. what the chairman thinks, what the leadership thinks isn't identified in the minutes. my expectation is that qe is still going to run for a long time through 2013, even 2014 at a reduced pace. but, you know, i think that's obviously only going to become clear over time and it will depend on the economic data. >> given that we've survived the fiscal cliff, at least part one of the debate, and we're heading into the second one, what are the major caveats in terms of drags on growth at this point? is it the debate fiscal cliff 2.0, earnings? what's the number one concern in your view? >> i think fill cal polifiscal

policy is at the top of the list. and the ex per ration of the payroll tax in particular. >> 2% increase, you're concerned about impacting consumer spending, et cetera? >> that's right. it's about $125 billion. so it's a significant amount of money that is no longer going to be going to the consumer. and the january, february data on consumer spending, auto sales, things like that are going to be pretty important. we'll get a much better sense of how big an impact it does have. there was a little bit of good news in the consumer income today. you have a decent increase in average hourly earnings and hours worked. >> just before you go, jan, can i sku, you're very evidence based, you do move markets with the analysis that you've come out with. how concerned are you that the fed is targeting the rate of unemployment? it's so erratic based on the survey, who may or may not come

back. >> i am a little concerned about it. i'm sympathetic to the idea that guidance on monetary policy should be based on outcomes, on economic indicators. but i agree with you that there is a risk, that if you're very focused on one indicator, that you're going to be led astray by noise in that indicator. now, fortunately, the feds made it pretty clear that they're not going to be exclusively focused on the 6.5% number. that was clear in the chairman's press conference and also clear in the minutes. but there's still some risk. >> nice to see you. jan hatzius from goldman sachs. >> several new products set to hit the market. brand-new flavors, new store locations, increasing competition with jamba juice's ceo after the break. >> still ahead, the house is headed for a vote on aid for superstorm sandy victims.

we will get the latest from congress. this is cnbc on payroll friday. ♪

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a number of big players continue to get into the juice business, including starbucks. how can some of the smaller players avoid getting squeezed. joining us now, jamba juice ceo james white. a lot of money to some people, but a minnow in terms of stock market capitalization. welcome to the program, sir. i hear that you ran the nasdaq bell this morning. and i know that you've got now a new product line, which is healthy meals for kids. which surprised me. because they seem to have titles like, cheesy stuffed pretzel and pizza swell with turkey. >> thanks for having me on. and we're absolutely thrilled to introduce our jam ba kids' meals, which are a healthy meal

for kids that bring four great smoothies for young people. and the meals also have two and a half servings of fruits and vegetables. one full serving of whole grains, and a great source of protein. so we think it's really the perfect complement for busy moms and kids. >> you should be congratulated. this sa big turn-around story for you over the past four years. i'm fascinated as to what the ultimate aim of the company can be. i see that you're kind of doing a -- you believe you should be taking up -- offering products in the eating and drinking day, if it were. >> for us, we've been focused for 20-plus years on healthy living, and really the mission of the company is inspiring, simplifying healthy living. the turn-around and

transformation of jamba has been focused on delivering more good for you and better for you platforms in the past four years. >> the reason that i ask is becau because -- a large part of the company was about taking the eye off the ball. i wonder in terms of maximizing returns for your shareholders, you should be looking at areas that bigger players might buy you for, rather than satisfying the whole market. do you see what i'm driving at? >> the point i make, if we just look at 2012 jamba appreciated. we have delivered at the top end of our sector in terms of the course of the past year. we've had eight consecutive quarters. we're focused on the healthy living space, and really have been for 22 years.

>> the thing is that it's such a popular space now, mr. white. even starbucks is entering into the fresh juice business. how do you make your brand stand out? because you've got the supermarket shelves of wala, owned by coca-cola, then starbucks, with the evolution fresh stores. where do you fit in? and have you seen any impact from starbucks entering the juice market? >> really, for us, the bigger players that have entered the fresh juice and smoothie market have done nothing but elevate the importance of healthier on-the-go solutions. jamba added 40-plus units in 2012. so we're growing. we actually think we're playing into a trend that we helped create 22 years ago. our brand is recognized as one of the healthiest brands in the marketplace, with even all the bigger players included. where lots of the bigger players are trying to make their

offerings healthier, jamba has been healthy for 22 years and we're focused on also bringing that same goodness to kids with the jamba kid offering. >> your stock probably got a boost also from this elevation of the space. up 78% in the past year. what's your plan here? in terms of expansion, do you plan to go it alone, or -- >> the go-for plan for jamba, we've got a very aggressive growth plan, we think. we play uniquely in the better for you space. we plan to add 50 to 75 units this current year. we're expanding internationally. and importantly, we're starting to play a significant leadership role in schools, k through 12. we launched a growth platform for us, our jamba go platform. we're in hundreds of schools with plans in '13 to have some

1,500 locations served. >> you promise me that the cheesy stuffed pretzel is healthy? >> the cheesy stuffed pretzel is absolutely healthy. has a full serving of whole grain. >> i get it. i get it. it's a big day for you. congratulations on the product launch. nice to meet you, mr. white. james white there. >> thanks for having me. we're excited about 2013. >> good luck. simon, you said the pizza turkey swirl, tt sounded appetizing. >> right about now it does, i'll tell you that. >> still ahead, we're taking a peek at a collection of wines worth more than $6 million. $6 million. stick around. "squawk on the street" will be right back. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first.

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rick santelli here. today's rendition of the santelli exchange. normally on the first friday of every month i talk about the unemployment rate.

the jobs report, hey, more people came into the workforce. it was as expected. i wish it was better, but that's not what we're going to talk about. what i didn't get in the mail, and i'm disappointed, i was supposed to get mire fed special decoder ring. that's all right, because i read exactly what it can do and a couple guys on the floor have working models. not that far, december 11th and 12th. that's when the fed announced the -- cumulatively 80 billion, 85 billion. what's going on, you saw our rise above buttons. we are preparing for the fiscal cliff. i think the fed really was worked about it, and i think the decoder ring aptly shows us the fed wanted to give us all a bit of insurance by making sure that the equity markets weren't going

to tank as the negotiations progressed. then all of a sudden flash forward to the minutes of that meeting that we saw yesterday at 2:00 eastern. they can pretty much write these minutes any way they want. it's probably kind of the right idea, but not word for word. what i gathered from it, and this is where the decoder ring comes in, i detected qe 4 remorse. what i think that statement is doing is trying to send a message that people can't see, that they may have erred. by taking the dynamic of the stock market and the rambunctiousness that could have occurred during that t.a.r.p. vote, which i wish we would have spent more time on, that they ended up basically giving

congress a pass on dos the right thing, addressing spending, dealing with the fiscal concerns. trust me. with the kind of deficit with the rate of exchange it currently is, when a child is born 5, 10 years from now, we'll cross a magic threshold, maybe its 22 trillion, or whatever it is, the growth will won't be able to keep up. my fed decoder ring says wake up. a nonentitlement reforming solution. i think that's what was embedded if in the minutes of that statement. 6. after the break, liquid assets worth millions. she knows you like no one else.

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in today's million dollar minute we're getting a taste. there are rare bottles of wine worth millions. >> reporter: it may not scream luxury, but inside these crates

are more than 900,000 bottles of collectible wine. we're at domaine wine storages warehouse. this single collection of over 4500 rare bottled is owned by one collector. >> this wine is so scarce that they normally only sell it in a three-packs. sell foss about $189,000 a case. >> now, collectors love these large formats, they're rare, they look great when you put them on the table and many say they improve the taste of the wine. the priciest is the methuselah of 2002. worth about $80,000. >> worth about two grand per glass. >> wow, did he actually open up the $80,000 bottle and you drank

it? >> $2,000 per glass. >> is that what you were drinking? >> they did pour it, i didn't drink it. that was the file shot. >> yeah, right. >> what's interesting, people talk about the collectibles market, but each is very different. wine is actually way off its peak in 2010, about 20, 25%, even 50% in terms of prices. the reason is simp -- china. the rich chinese were paying anything for the first-growth bordeauxes, and not getting rational on prices and burgundies have become the hot item. china accounts for half of the market. >> did the french teach them to buy french wine. arguably french wine is not the best in the world. >> it's a bron thing, right? what they call table power. when you put a bottle of drc,

chinese know brands. for the french it was about the brands. the french have the brands. now they're moving from bordeauxs to burgundies. always great to see in person. scott, good to have you for the past couple hours. see you shortly. >> in an hour or so. here's what you might have missed if you're just tuning in. welcome to hour three of "squawk on the street." here's what's happening so far. >> even if you're a liberal, you think somebody should be helped and that the rich should pay something like whatever we call the fair share. nobody thinks the fair share should go into pocket of a rich guy that has a better lobbyist. that's just not right. >> the president is skillful. he knows what to do. he's been told he has several options. he has a lot of us willing to work with him on this. this is his job to do. >> december non-farm payrolls

increased. >> i think there's a lot of things happening in the economy right now, very hard to get last few weeks we did hear for some people what's good with business. others were bad. this is one of the least important reports i have seen. >> there we have it, the opening bell. >> this job report actually shows that there's continued steady growth, we even saw a small change in manufacturing, which is a good sign. we also saw health care industry, some of the other sectors and business and professions, leisure and hospitality actually picked up. >> we expect about a 1 1/2 percentage point drag from fiscal policy on gdp growth. that's not good, especially in an environment where the economy is still not growing very fast, but it could have been worse. got some breaking news here on crude oil inventories.

sharon is at the nymex. >> we're looking at wti oil futures recovering after a surprising number from the energy department. crude supplies fell in the last week by 11.1 million barrels, a decline of 11.1 million barrels. analysts was looking for them to be down only about 1 million barrels. gas and supplies were up by 2.6 million barrels. that's pretty much in line with estimates. and distillates rose more than expected. up by 4.6 million barrels. the other factors that traders are watches at the end of the year kind of a lot of companies trying to figure out what the inventories are. they'll also be watches very carefully what happens to the refined fuels that are transported along the mississippi river, a possible shutdown there perhaps as soon as this week could significantly

impact commodities. we'll be watching that for you. back to you. >> thank you, sharon. congress is voting on a package for relief for superstorm sandy. the house did not vote on a measure which angered a number of congressmen and new jersey governor chris christie. >> it's just -- it is why the american people hate congress. it's why they hate them, and governor cuomo and i are as frustrated as two people can be, because unlike people in congress, we have actual responsibilities, and we have a responsibility to make things happen. for more on the vote, let's bring in eamon javers. will this pass? >> it's expected to pass. what we're doing this is on suspension. in house lingo, that means they need two thirds of the votes in the chamber in order to pass this bill. we saw this political firestorm earlier in the week with chris yiie. a number of republican lawmakers had a near mutiny against

speaker boehner, who did not bring this measure up for sandy aid at the waning minutes of the 112th congress. he punted it until today. now they're getting this down payment on about $9 billion for the national flood insurance program and the speaker has promised an up or down vote on or about january 15th for an additional $51 billion, so this is expected to pass. that sets up another big fight for spending later in the month. >> why do they have to wait another ten days for the rest of the money. why does the vote have to take stephen more days? >> well, this is the political agreement that's been set up between conservatives in the house who adopt like this bill. they would like to see this offset by spending cuts. a group called the club for growth, a very conservative group sent out a note urging members to not vote for this program, saying flood insurance is not the business of the federal government, this should be private insurance in the first place, the government

shouldn't even be offering this kind of aid. then there's questions about what's in the $52 billion, where there's pork barrel spending in there inserted by the senate. they need time to work that out and figure out what will go in that final package. the idea was to do a down paper today of this $9 billion, which is expected to pass and refight the fight over the $51 billion once they've had time to sort it out. >> eamon javers, thank you. let's get the road map for the next hour. >> the unemployment rate is holding steady. was the number weak enough to keep the fed easing and buying 85 billion of assets a month. two top strategies will be here to weigh in. the chairman and ceo scott griffith will drop by post 9 for his first interview since agreeing to be acquired by avis.

and new york's health department finds fracking could be conducted safely in the state, according to "new york times." what would that mean for the state's decision on whether to allow the controversial technique and its potential impact on the new york economy, jobs and growth. we will explore. well, markets are reacting positively to this morning's job data. dee, let's start out with you. what were some of the surprises, the bright spots in this report. >> the overwhelming sense was more of the same. that's what we have seen over the past year. the real surprise was the 2.1% rise in our earnings year on

year. that's stronger than we have seen in quite some time and suggests that workers are getting a big more bargaining power at this time. >> at the same time they are dealing with a 2% payroll tax increase with the first paycheck. will that be completely washed away? >> we do think that growth is going to slow down in the 11 1/2 to 2% range. in terms of stock market reas, if we do have they headwinds action does that get born out in the stock market? can we 1i6r7ly go higher than here? >> we think that generally speaking the -- >> go ahead, rod. >> go ahead. sorry. >> that's all right. i think when it comes to stocks,

you know, for the last six months and you have seen this continuously, the stock market is able to go up as long as the really bat news doesn't come to pass. so much everybody is muddled through if we're muddles through and sees some growth in asia. what you're going to see is stock markets higher at the end of the year when a bit of earnings growth, because there's still plenty of bears out there who are really worried about the disaster scenario. >> i have to challenge this assertion that we just muddle through. i can't see anything big on the horizon, politics withstanding that could prevent that from happening.

you could say the economy is really beginning to turn. >> simon, it's great. you're quite right to talk about cycles. the challenge with cycles is they're so muted in an environment with tremendous access capacity, but i agree with you. for the last couple months, the cycle within this sort of muddle-thus environment, i think if you want to look at two places where i think are reflecting that, the first is the treasury bond market. and you saw how it reacted. i think that's an overreact. >> what makes you think you simply muddle through? >> in economic terms? >> yes. >> because there's going to be

some fiscal drag coming through. numbs corporate spending comes back really strongly. what will cap it in your views? even though much of them were averted. so that's going to hold growth back in the first half of the year. the second half we do think looks better. housing is still at relatively low levels. it is on an up trend, it will continue to be, but it's not in

a position to add one to two percentages points to growth. as it has in the past. >> thank you both for your time. let's get a market flashback. almost 3% on heavy volume, already over a million shares above their daily average. they had margins decline. and i looked through the report and call looking for positive signs. they did say the demand is basically it was in line. by news out of the zipcar. the car sharing service agreed to be acquired by avis in a deal worth half a billion. still ahead, we will hair from

zipcar's chairman scott griffith, his first since that deal was done on television. also ahead rick santelli with "the santelli exchange." what are you working on? >> a cool guest, chuck peterman, the founder and ceo of trim tabs. we'll talk about today's employment report, and about one of his favorite etfs, all in about ten minutes. not nine minutes, not eight minutes, but ten minutes. tradin. we create easy-to-use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! we knew you needed a platform that could really help you elevate your trading. so we built it. chances of making this? it's a lot easier to find out if a trade is potentially profitable. just use our trade & probability calculator and there it is. for all the reasons you trade options -

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now to the capital markets. garry kaminsky after 25 years, there's still one indicator that remains your favorite. >> it is, with apologies in advance to doug cass, which i'm certainly he will e-mail us and say he doesn't believe in this. he as right on a lot of things, but wrong on this. if you look at the indicator for mutual fund, so forget the fiscal cliffs. if you just paid attention to the data that tom lee at jpmorgan tracks unbelievably well, large-cap funds, because that's where the closets hangs out. these are the number of funds tracked that track the s&p 500 by 5%.

47%, almost half the funds. only 18% beat it. what does this all mean? it's very simple. if you looked at they numbers, and saw where they were trailing the benchmark. when more caught up, got short the s&p, i req been you probably beat the s&p 2:1 performance to

now period, and that is because relative performance is the driving factor when your managers go to work every day. if you look at "wall street journal" today, there's a great story which talks about how many people are giving up on the active managers. it's not that surprising. why? i want to put up a chart here. the ironic thing here is that many active managers, who are trying to beat the s&p have actually invested in plaquerock and there's a ten-year performance. the fact is they buy blackrock, because they know blackrock benefits from this trend. the point here is relative performance really matters, and the proof is there. thanks to tom lee for the data, we're the first to show it to you. >> when you look at the performance of is the mutual

fund, do you include or exclude the fees? just strict performance? >> obviously if you're an investor, you look at the total return. remember, mutual funds, the fees are included when you buy a mutual fund, the fees are wrapped in there. tom lee's group is just looking at performance and looking at it versus the benchmark. for the average investor, the signal is you really want to be in emtfs. >> the likelihood is if you're trying to get market performance, you're better on the not trying to do it. you create significant add the value. >> but then to take it one step further, the companies that make their business off the actively managed mutual funds, this is a headwind for them, terrible, terrible data. so who are they? would you not invest based on

this thesis? >> well, you have to look at each of the different assets managers, look at their funds and see whether or not they're beating the benchmark or not. some funds are and some aren't. the point here is if you're trying to determine what will make the storm go up or down, i continue to believe if you look at this data at the beginning of every month, their relative benchmark, that is a great telltale for what the stock market is going to do and the 2012 data, once again, if you just looked at his data every month, you outperform it 2:1 if you just got invested. before i go, a shoutout to my mother-in-law, happy birth date on the west coast. you guys both are not married, but you know if you want a happy mother-in-law, you wish her a happy birthday on air. >> always learning something. full of information today. >> yeah. mcdreamin' of a cup of joe after patrick dempsey is.

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trim tabs estimates the u.s. economy adds 145,000 to 165,000 jobs in december in line with the estimate of 155,000 jobs. rim santelli has more. >> thank you, melissa, and welcome, chuck. always good to have you here. >> good to be with you. >> your pick for the numbers was smack on. there were many. this report in many ways matched up to expectations. >> well, it's the first time our number was dead-on. we picked this number a few days ago, so that scares me a bit.

but the most important takeaway that i see -- we track cash as you know. we're not interested in investor opinions or analyst pins nor government estimates. we track cash. so that's how we come up with that number. we're also seeing that in december there was 50, 60 billion increase in income become recognized, money that would have been recognized in 13, based on income tax collections. there was increase in wages and salaries, 60 billion went from front running into 12. so that means that in december there's going to be 60 billion less -- i mean january, 60 billion less income. simply by the 60 billion switch.

so in reality, there will be no growth in take-home pay. this is austerity. last year was boosted by the mortgage rates dropping below four. we're not going to see the boost. so i guess what i'm saying is we're shaping up to a lower year that no one is expecting. i guess my question is, chuck, how are the lags here? in other words, i don't dispute your numbers, but how long will it be before what you just described actually starts to show up in the more sensitive data like jobs, like retail sales? >> i think january numbers will

be weak. we saw big gains in housing, cars, all that stuff. in december people had money. i don't know how much extra stock was sold. capital gains are probably going to surge for the fourth quarter. that's money that people have and are spending or whatever, but that money is probably gone now that we're in january, so end of january into february, we're going to see weak numbers -- start to see weak numbers. >> i could talk to you all day about this, because i remember the op-ed that warren buffett wrote. i think they do matter, but we have breaking news, and i'm sorry to cut you short. thank you for being our guest, chuck. melissa lee, breaking news? yes, we do have breaking news on the sandy aid vote. >> as expected, the house did come up with enough votes to pass the 9.7 billion sandy aid bill. they've just finished voting. the vote clock wound down.

now we move on to january 15th where they'll debate a much bigger package. the fight over that one is just beginning. >> eamon javers, thank you for keeping us updated. ? just a few minutes time europe will close. we'll have the details on the impact on the u.s. session, right after this. mine was earned off vietnam in 1968. over the south pacific in 1943. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection, and because usaa's commitment to serve the military, veterans and their families is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve.

let's have a look at how re traded through the day. you can see they did move fractionally higher as the data came through. still obviously a huge debate about what the federal reserve is going to do moving forward. we actually saw that, of course, moving the metal prices. so again today, silver is in negative territory. some of these smaller issues, fred nillo is a mexico-based silver miner. partly on a downgrate from ubs, there you go.

now, what's interesting on the data front today is we may be seeing a bottoming-out process, at least not eurozone. the managers index surveys thousands of -- it's still below 50. it's getting less below 50. there is a slight deterioration in the uk economy, though, according to the data. i just want to show you one more issue, which has spence's today. if you've traveled to the united kingdom, legions, generations of britons from the middle class have bought their underwear from spences. presumably partly of where we're going potentially with the uk economy. >> it's rarely you can get underwear into a hit on european clothes. >> it's the space for the uk. >> as i learn from you, simon.

>> indeed all my socks, even now, i order them online. >> really? you get them shipped and the exchange rate instead of going to walmart -- >> i can't seem to -- >> yeah. we can't go two long without mentioning the battle over herb herballife. >> melissa, ever sill bill ackman made his three-hour long case why he's short of herb alive, there's been some speculation he may have exited part of his position. i talk to him last night. this morning he told me we stand by everything we said, we haven't covered a share, and we look forward to the company's rebuttal. the profits of this, of course, will go to charity, about you in the wake of his coms, plenty of others have come out, including

john hempton action who will be with me later on "street signs" activist robert chapman, who's made it his biggest position is actively talking about the company. he herbalife says he'll likely have a rerebuttal to that -- leaving that to a web presentation. instead, he believes that they should educate investors about the industry. he rates the stock as a buy. also, this is interesting. today we had bush's rame ramel dionicio had an outperform, and then slashed the price, citing the recent

sell-off. >> herb, if the company -- michael johnson has been very, very vocal in terms of getting right to the tv and defends his position. if they do not use the analyst meeting as an opportunity to provide a full rebuttal and simply use it as an educational opportunity, i don't think that will go too well. >> i don't think so, either. he talked about shredding, he used that word, shredding the presentation at his presentation. i think people want to see a point-by-point rebuttal, want to see him come out swinging. anything short of that, remember, this is theirs to lose based on the presentation. >> i have to ask you about this video, sort of making its rounds yesterday. it's an interview between mr. johnson, the ceo, and madeline albrec albrecht. this is a strange thing, it's a seven-plus minute video and she says, well i'm a fan of the

products, blah blah blah, what's the deal behind this? is she getting paid. >> she's a paid consultant to the company. you have to understand that when you see these things. you know, they have consultants, they have a good amount of money and they paid -- they're very proud of that, by the way. >> still a consultant even though she has her own firm? >> right. her consulting firm is a consultant to the company, we have confirmed that 789d so, yes, absolutely. >> herb, good to see you. let's go to bob pisani with a look at what's moving here on the big board. >> very modest gains, but a huge week, and this is right across the board. this is a very rare week, you will not see this very often, where basically they came for about every kind of big name, even the small names. take a look at where we are. look how odd this is. everything is up 4%. historic highs here in the russell and s&p.

nasdaq up 4.6%. in terms of the sectors, very interesting things happen. again, not much difference between here's the four top sectors of the week, everything's up 4.4 to 5%. here's the two bottom, consumer staples and utilities, but even they're up 3.6 and 3.5%. in other words, the distribution between the high and low not much here. basically they seems to have come from everything. however, there is a difference. this is where you want to watch money and the flow of money. look at exchange-traded funds. i watch the flowing here very carefully. creations, you can create and redeem baskets of stocks for all these funds. here's the biggest etf in the world, the s.p.y. the market maker will create new baskets of these exchange-traded funds.

there was big creations in the last week. in the spdr, in the russell 2000 shares, and in the emerging market fund. this is the second biggest emerging market fund that's out there. in other words, they came and bought, even though you're down a bit, they came in looking to buy these, and the market makers created new shares. there's another way to look at this. the flip side of this is people who were going in and redeeming, where people are saying i want to sell this fund, the market makers are literally going out and liquidating parts of it. we saw liquidation this week in the gold trust, number one, we saw liquidation in the consumer tapele funds as well. that's a stock sector. that's very interesting, a defensive name that people are getting out of that. we also saw some liquidations as well. in the -- that should be the interneat treasury bond fun. so we're seeing some liquidation, some of the bond funds as well. it's been a big year for

exchange-traded funds, look at this. 27%ic in in their assets. 1.35 trillion in exchange-traded funds, a tenth the side of mutual fund, but it's growing rapidly, and their inflows right across the board. remember, there's been outflowing from u.s. mutual funds. inflows across the board in everything. why do i talk about exchange-traded funds? lower costs than mutual funds. they trade intraday. they're more transparent. you can see everything they're holding, and they're more tax efficient. that tax efficiency, melissa and simon, was one of the reasons they saw more inflows in the fourth quarter, as these concerns about higher taxes under the fiscal cliff came into play as well. >> great points, bob, thank you. bob pisani. new york's health department finding fracking could be conducted safely in the say, according to "new york times."

wayne deangelo is special counsel on energy and environmental matters in the consulting firm kellie fry. >> i would think for a lot of the companies that wand to frack in the state, this could be po templeally game changing. at the same time there's some controversy about the validity of this study, which had southbound kept secret. a copy was obtained by the times. a spokesperson say the documents is merely a victimry. nearly a year old and there would be substantial changes to that version. what do you know about this document and whether it's up to date and could be used to make the case that flacking is okay in new york? >> the study is only a years old, and i would say the biggest -- the key factor here is it is entirely consistent with what industry has been saying for years and what the data has shown. hydraulic fracturing is not new technology. it's been used for over 60 years

in over a million wells. there's never been a case of groundwater contamination in the united states. it's safe technology, being effectively managed in the states where it's being done. those they findings need to be put into place in a final finding i think they're entirely consistent with the data from the various states. >> hang on. hang on. we should make clear here that you are essentially a lawyer who argues on behalf of regulated companies, essentially helping them to get through regulation. i mean, it is your job to ease industry into these situations. you're not an independent observer of the process here, are you? >> no, that's correct. i represent energy companies and i represent manufacturers that are benefiting from lower gas prices and from being able to set product into a domestic

energy industry that's healthy and robust. >> there are those who would say actually this is a justification from cuomo for not doing a bigger study and it's been delayed for a year, and all is not well from their side either. think don't see this as the end of the process. you know, this is a leaked document that's clearly an old document, not put out by the administration, therefore i wonder what use it is in taking it is -- and knowing where we should go. >> well, again, this is not part of a final report. it is an interim finding that's going to be used, but you have to look at where this stands with all the other data out there. federally and done in all the other states that is entirely consistent. all in extraction, all energy at all has environmental impacts and hydraulic fracturing is not the same, but what this study said and what has been said across the board with near

unanimity is that these environmental impacts are manageable, and have been managed effectively by the states. >> so, wayne, last quick question. today we did get the latest read on jobs growth for the month of december. and it was, you know, a decent report, but still we're looking as a nation for more sources of job growth. what is the case that you make to try and -- the stand of where the companies are, which is how many jobs could this actually create in the state of new york? >> well, in the state of new york, i don't have specific job numbers there, but if you look where hydraulic fracturing is being done and look in the past four years where it's really taken off, nationally hydraulic fracturing has accounted and all energy extraction from shale gas has accounted for 1.75 million jobs at a really desperate time in this country. going forward to 2015, that number could jump to 2.5 million, and 3.5 million by

2035. >> if states lie new york open up the gates, right? >> yes. it does require us to tap the resources that are available to us domestically. we don't have analysis of the health implications. that's the issue. >> these health implications have been studied for four years by new york. i would say at this point the delay is more political than based on actually getting to the data. >> wayne, good to see you. >> good to see you. thanks very much. you know, another piece of data, another piece of news out from zipcar today after of course it made headlines by being the first big deal of 2013. avis budget pays half a billion to get their hands on the car-sharing service. we have all the details straight from the source when scott griffith joins us exclusively next on cnbc. [ lisa ] my name's lisa, and chantix helped me quit. i honestly loved smoking,

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the hour. it kicked off the week announcing a deal that would transition zipcar into a subsidiary of avis budget rental,r. zipcar is meanwhile, launching a new access plan which would let members drive zipcars and advance with no annual fee. we're joined exclusively on cnbc. good morning, a big week. first let's talk about what you're announcing today, which is that in canada, and iably it's a piled project, basically people get access to the fleet for free during the week, they don't have to pay an annual membership fee. is that right? >> we're trying to open up to make trial of our service easier, limiting it to weekdays only, access to the fleet, plus the zipbands that we have in many cities, so it gives the opportunities for people thinking about it.

>> why now? is it because -- it's 20% of your revenue, membership fees. are you doing it now because you have the bit under the stock or the takeover? >> no, we had planned this last quarter, we announced it today. we've got trialing this for a couple weeks, so it's both a trial program, plus a retention program. in terms of fees, fees are an important part of our model. we have the leading brand, the best technology, and we make an easy upgrade path to go to the weekend, you just pay the fee and get in on the weekend. >> half a million from avis, it silenced some of your critics. always that you would have a higher cost structure, but the fact is that you're going to sell out at a 32% discount to the ipo. in fact you're going to sell out

at half of what the shares were valued. is that an admission that the economies of scale are just too important and i had to dive in with a partner? >> here's what we looked at. what does the customer want? how do we deliver it best? is it best as an independent company? is it best as part of avis budget? we looked at several options. we found that speed and scale really matter now. we understand that more services under our common brand would be highly attractive to the customer based on what we serve. we think that's best done under this deal we're doing today. i think it's a game changer in personal mobility, our ability to scale faster, offer more trip types in more places faster is going to come from this deal. i think it's also an acknowledgement that we have started a revolution. >> maybe also acknowledgement that perhaps your critics got part of that criticism right in that you needed a deeper pocket

partner or backer in order to expand to the scale that you thought that you would. i mean your ipo wasn't too long ago. in that road show you had a multiyear expansion plan. between that time and the time you sold to avis, what happened to change your view of the world so much so where you go from we're going to expand aggressively on our own to where we need an avis as a partner. >> i think the pace of expansion has accelebrated at the nominal. look at new services coming in now. moems are trying to be to get into the space. even uber- -- especially the urban consumer, they're accessing mobility by the trip across an array of services, where it's zipcar or uber-or bike sharing, and we think the infrastructure plus our brand oa pole position to lead that

trend. >> you have created a seamless customer experience. that's very unusual in the sector and you should take great pleasure from that. let me ask you one more question before you go, the question that everybody asks me. a, are rates going to go up? is avis going to jack up your rates? and secondly, what happens to younger people 18 to 21 who you do allow to use your service. avis, unless forced by state local legislation, and if they do, they'll charge them an extra $50 a day? >> here's diligence i did to see how this deal might work out. does avis budget and ron nelson and his team really understand that we have to protect the brand? that's so important in this business model and we have to protect the user and customer experience that we've developed. i believe we'll get to call our own shots and continue to serve the age groups that we have and continue to go through -- i think this is going to be even

better because our cost structure will likely improve, we'll have more trip types in more places faster globally. it is exciting. this is a game changer and a complete validation of the revolution that we starred many years ago. >> always good to see you, scott griffith, chairman and ceo of zipcar. on "grey's anatomy," as you know, patrick dempsey's character is known for saving patients. in real life he may be saving a coffee chain. jane wells halls the latest details next. as we head to break, take a look at the dow 30 heat map. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data.

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welcome back to "squawk on the street." i'm jane wells. here out west, dr. mcdreamy says he's won the opportunity to save a very sick patient. tully's coffee beating out starbucks with a $9.15 million bid. he said we met the green monster, looked her in the eye and she blinked. we got it, thank you, seattle. the green monster he's referring to is starbucks which was among the bidders to buy tully's 47 owned and operated stores out of bankruptcy and save 500 jobs. dempsey has been in seattle this

week tweeting this photo from a tully's on wednesday. seattle is the town where his hit show "gray's anatomy" is bas based. it would have cost hundreds of employees their jobs. dempsey adds, after a celebratory cup of joe we will immediately begin the transition of the company and implementing our vision for quality customer service. his group may have to pay $200,000 kill fee to a private equity firm. again dempsey's bid is more than twice that. what experience does the actor have in turning around a retail business? well, he he does have help apparently. up to now he had help launching a fragrance for avon. he owns a racing team. he also has the patrick dempsey center for cancer, hope and healing. dempsey says, "i will be making

seattle my home away from home and spending a significant amount of time in the community." that's assuming a bankruptcy judge approves the sale at a hearing one week from today. we hope to be there. but if the actor's team actually offered to pay more than starbucks, are they paying too much? or did he offer less but tully's creditors like dempsey's plans to save jobs and lend his star power? we will find out. "squawk on the street" will be right back. a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% 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.

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