>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. and as joe mentioned, the economic agenda is packed today. we have a lot of things that are going on. so let's start with the markets. the s&p is coming off of its first back to back losses of the month. the futures this morning indicated down by just by a little bit. dow futures town by 12 points. nasdaq is down by just about 4.5. on our calendar today at 8:30 eastern time, we get october's consumer price index and the retail sales number pes.both the headline numbers are seen unchanged. coming up at 10:00, we have business inventory and existing home sales. sales are forecast to decline by a little more than 2%. this is important because obviously the fed is watching every number that comes out right now. fast forward to this afternoon and the fed will be in focus. to get the minutes from last month's fomc meeting, they are set to be released at 2:00 p.m. eastern time. speaking in washington, ben bernanke said the central bank

will be maintaining its ultra easing monetary policy for as long as needed. >> in particular, the target for the federal funds rate is likely to remain near zero for a considerable time after the asset purchases ends, perhaps for a time after the threshold is crossed and at least until the preponderance of the data supports the removing of the. the big question, of course, is when the taper begins. as for his life after the fed, ben bernanke says he looks forward to speaking and writing. beyond the economy, we'll get a number of key corporate results today. quarterly results are due from deere, jcpenney and lowe's. >> in the meantime, we have a little bit of corporate news for you. yahoo! is increasing its stock buyback by another $5 billion.

it will be selling notes that mature in 2018. about $200 million of the proceeds will be used for the stock buyback. shares rising on the news in after hours trading. ceo marissa mayer speaking at its salesforce.com meeting last evening. >> we don't think we're treating ours as mobile first. when you look at what's happening with the mobile trend overall in our industry, it's clear that it is a -- and you can ride it through the invention. yahoo! like many companies, has to constantly reinvent itself. the scary part about reinvention is it happens with platform shift. >> there's a little bit of financial industry news for you this morning. jpmorgan holding a conference call with analysts after yesterday's announcement with that mortgage settlement with the government. jamie dimon explaining that most

of the toxic numbers were inherited. >> bear stearns, did not had not happened that way, it was a house on fire. it was imploding. we did it because we had to. we never expected this to happen. >> pete williams caught up with attorney general eric holder, talked about the government settlement. >> one of the things that we worked on through this settlement was the possibility of the criminal investigation woon would not be precluded. that investigation will continue and it is possible that individuals can be held criminally liable. >> well, guys, there you have it. a little bit of back and forth. but i think the larger story here is we're going to see either more settlements of magnitude of these types of numbers, at least, whether it comes to bofa or this critical yam case. >> i think this is a template and they're going to be looking for something to make yields in the future. that's been something the company has always been reluctant to do. >> one quick note, and we talked

to analysts about this yesterday, the $13 billion headline number is and sounds like a very big number. and i don't want to be dismissive of it. but in truth, after taxes and after you break down how the number is calculated, it is probably half of that number in total. so much of it is going to come in the form of different relieves and other things, that it's hard to put a true number. >> that -- that $4 billion that goes back to consumers may be in things that they give out in lowering interest rates or refinancing the different things. so it's still $13 billion. and it's not necessarily over. it still opens them up to the potential for a lot of additional fines. >> we should keep an eye on all the other bank stobs stocks. if you think this is the temporary plate, you have bofa, wells fargo and -- >> did you ever hear of these banks that sold mortgages that were valued far in excess of

what the people's home were valued at. i had to even think about that to figure out how they got to that. they sold the mortgages before the housing bubble burst, so -- at the time, that was was the houses were. >> a lot of them had mortgages they couldn't keep up with. maybe they had balloon rates or other issues. but jpmorgan knitted criminal wrongdoing. >> if you twist someone's arm enough, they will say uncle. >> they basically admitted to a list of facts which was somewhat different than a true -- >> there's a lot of nuance in this. >> this is clearly, as we all know, a highly negotiated -- >> exactly. and when you're negotiating with the government, i suggest that you say yes, sir, thank you, may i have another or else you're going to get more than just one more. >> but it does give a lot of fodder to the critics. >> the critics don't need

additional fodder. when you have people outside the capital with -- you know, you really have a mob mentality here. i was just stunned what they agreed to some of the things. >> what i heard from bernanke i liked. i'm just glad everything is going along as planned. what is the number for unemployment that we're bargaining? >> 6 point -- >> well, we heard from him when we get there. we're just going to keep it -- we may still say easy and then when we get to 5.5%, we may -- and then we get to 5 and then when we finally get to zero based on what we're doing and everybody in the country has a job, oh, so he knows -- >> there is knew yansz here, too, because they don't believe in some of the jobs numbers. >> but they seem to see this steady dropping in the rate and there's no bumps in the road and -- >> the problem is they don't

believe early unemployment is as low as the rate suggests. >> do you know in this current economy, can we get 6% again? >> i don't know. >> but remember, john hillsenwrath and others have been saying part of what they may do is keep rates low so it gives them a little cover to go ahead and taper, just to say it's not -- because they're trial to -- >> i don't think it's coming any time soon, though. >> but they're trying to emphasize that tapering isn't tight tightening. >> i think they might do 10 billion in december. >> i think they might, too. >> i didn't decide that. i didn't think that until you said that. >> remember seinfeld? >> but in case you were worried -- and now i'm seeing

that opposite day occurs in what i say now. by the way, there will be no more sarcasm from me. >> you're being sarcastic right now. >> no, i'm not. remember i talked about private equity. you know how much i defend private equity, when i was sort of taking a "new york times" viewpoint and saying, well, geithner has joined the other low lives -- >> the darkside, right. >> i was making a point that, wow, when romney was running, they were the worst people in the world. but now that he's defeated romney, now geithner can go join the same industry. people are picking that up saying i was bashing private equity. >> some of our viewers -- >> well, no, it's people lying in wait on the other side that know -- most of the time they know wa you're saying and they don't care because they will remove thv remove this much. >> that was the private equity guys. >> i guess. i don't know. have you not watched the show

before? have you never seen me? have we not read any -- >> we should have -- >> all i'm saying is you have to worry about what you say and you have to worry about the opposite of what you say. because they were use either one. and this internet world is like the wild wild west. if the "new york times" has one letter wrong in someone's name, they feel it -- and these people that blog, these people that follow, these people that tweet, they can write whatever they want and nothing will ever goes back. >> i know what you're going to tell me, that apparently home depot is taking business from lowes. >> yes. >> let's get to lowes. 47 cents a share. missed the expectation. also the year is below where -- instead of home depot, which at least hit expectations, the year is 2019 and the company is

talking about, what, 215. and they're a penny shy here. that would mean that the fourth quarter would probably not hit 33 cents. they don't sell more during christmas, do they? >> no, they don't. now, look at same-store sales. the comps were strong, just not as strong as we saw from home depot. >> they're up 6.2%. >> is that right? >> yeah, third quarter, up 6.2%. that's weird considering that total sales of fiscal year up 6%. okay. >> so they -- they did say -- it's not a terrible number. it's just relatively speaking compared to what we heard from home depot yesterday. that was a stronger report. and you can see that reflected right now in the stock. it's indicated down. >> it is a negative --

>> 48.60 to 49.90. >> it's like a bad pattern. >> a bad what? >> it's like a bad pattern. home depot always has better earnings. >> it used to be when -- >> it used to be the opposite. >> a kinder, gentler lowes -- >> but the past couple of years, it's been -- >> frank -- people love frank. anyway, all right, let's check on the markets this morning. yesterday, what i said at the top of the show was i -- you know, i really do think a lot of this has to do with the fed. and you don't think they're going to taper. but fed minutes come out today and yesterday the market was unable to hold on to its gains. we are going to wait and see. if people are right and there's a lot of soers about bernanke, people are starting to think that this huge move we've seen

in all the markets is getting into bubble territory and maybe fed induced. and if the fed shows they may start to remove some of the accommodation -- >> if he wants to set the situation up to begin the taper himself. >> and what's the terminal pricing liesman always talked about? and that is where people -- the minute starts -- it's like wh when -- do you remember when paulson said, i have a bazooka. you don't need to use the bazooka. >> but you have to convince them that you're willing to use it. >> they price it to the termi l terminal. have you got a bazooka in your pocket or do you just like me? anyway, we'll see whether the markets are turn around after being down 20 in the premarkets after losing about eight i think

points or so yesterday. oil. take a quick look. even if the globe does recover, oil may have seen some of its best levels. we can't get guys come in. >> we had one guy yesterday. >> barely. we have to look high and low for people that think oil is not coming back up. the ten-year, this one we'll be watching when the minutes come out, 2.72%. it almost reflects that -- that's that strong jobs number that we had above 200 when people were looking for 1.350. it stayed up above 2.% because they think they are on track to do some tapering. 1.35. cabo is looking good again. finally, take a quick look at gold.

it's been struggling to get back to the 1300 level. it's time for the global markets report. ross westgate is standing by. how old is little george now? do you have any updates? that's basically all you have to talk about over there, isn't it? not a lot of other things happening in your -- >> yeah. no, we haven't gotten any updates, actually. maybe we'll get one at christmas with a family photo. >> oh, my god. >> the minute you see that, you have to send it over here. >> i will do that. and picking up your conversation about bazookas, i think the biggest and baddest bazooka is draghi's program. he's talked about it and it may never be used. it's very successful to bring back in spanish and italian yields from those spreads. but it may never see the light of day. we'll never know how big it was or how effective it might be. >> that's the way it should be.

i like that. we have a time bazooka now. we may keep rates at zero till the hereafter, until we're all dead, apparently. after we go past 2020 and 2030, i think then we go to our next life, whatever we come back as. might still be zero, but it is amazing. that's a pretty big bazooka wsh isn't it? >> yes. >> how does that work? can you borrow it and know you're going to make a profit? doesn't that create a lot of speculation and money? >> it does all sorts of things. but they've had interest rates in japan now for 10, 15 years, haven't they? we'll see. >> yeah. >> it's a huge experiment, joe. no one knows where it's going to finish. but investors have been able to ride it. here is the down day. we are at the low of the moment.

7 to 2 is where we stand at the moment. not huge losses. the ftse was down 70.4%. we heard from the bank of england, as well been they expect inflation to come down temporarily. but they reiterate this point saying even if we hit our target of 7%, it doesn't mean we're going raise rates. we can look at the trade at that point. growth and inflation. we still don't need to do anything. handling home at this point that rates will stay low even if they hit their target. the cac 40 is down 0.3% today. there's one stock outperforming, tf1, which is the french broadcaster. very happy because last night, france qualified for the world cup, the football world cup,

soccer world cup if you pursue it next year. the ftse mib in utley down around spdz 4 business. european banks are back in favor with u.s. investors. t. rowe price and blackrock are investing some in of the biggest lenders in the third quarter. banks slightly weaker. some people say maybe they missed the boat, they should have done it with draghi's omt or they're early because the growth still here isn't necessarily that strong. up 0.1% froeth in the last quarter. that's where we stand in europe. back to you. >> ross, thank you very much. in the meantime, back here in the united states, president obama will be meeting with representatives from the national social of insurance commissioners today. as you might expect, they are expected to talk about issues with the implementation of the health care law. many commissioners have been

hesitant to embrace obama care say they are to determine whether to rerace current policies. the pl preside the president saying they could keep those, but it's a difficult path to get from here to there. speaking of health care, the project manager of health ca care.com says up to 40% of the technology needed to run the website has not been built. the deputy chief entertainment centers may not be ready until mid january. coming up, how do you feel about your job? why happiness could have a lot to do with where you live. all right. plus are ae form plan from the top tax writer in the senate. as we head to break, let's get a check on the national weather forecast. who do we have over there? we have alex wallace. >> good morning to you. tracking some showers right here

in the middle of the country throughout the midwest. you can see from the downpours moving through northern missouri. this is all going to track its way east. chicago, you're getting into this rain later on this afternoon. around st. louis, as well, could see some of those showers. now, the other story we're tracking is cold air on the move. it's plunging its way through the planes. temperatures will be dropping between now and then. it's pretty significant. and anyone east of this needs to be looking out. this cold air mass is going to be working eastbound as we head into the weekend. we have a cold front in the eastern half of the country, eventually heading off the east coast and that sets the stage for this weekend to be much, much colder for a lot of area. more "squawk box" coming up next.

welcome back, everybody. right now, it's time for the executive emg. the nation's largest cell phone carriers are rejecting the idea of a kill switch for stolen smartphones. samsung electronics have proposed making a switch that would make stolen or lost phones inoperable. they want to make that a standard feature. but the wireless industry says kill switches are not the

answer. guys, this is a big, big deal and this is something that you're starting to get law enforcement officers involved with. apparently one out of every three burglaries in the united states is involving a cell phone or a -- >> a conspiracy theory among some, .law enforcement specifically is that the reason why the telephone companies don't want to allow this type of feature is not the hacking issue. it's that they sell insurance. millions if not billions of dollars worth of insurance on your phone. and i think it's billions. if that's the case, they have a clear reason not to do this. >> you look at those, if the hacking issue is real, the idea that i could just shut -- if people could start shutting people's phones down, that would be a real -- >> how do they start using your phone if -- like they could never figure out mine. mine is 1, 2, 3, 4.

i have trouble remembering it. >> wow, that is a good sxuecure password. apple may have figured this out first, if you have your fingerprint. >> no one is going to figure out 1,23, 4. how would you get into mine to make a phone call? >> i'd have to turn your phone off. >> huh? >> i could try to turn your phone off. >> if i stole my phone, how could you use it to make phone calls? >> typing in 1, 2, 3, 4. >> no one knows that. how do they figure that out? what if i had a really good -- or if i did 4, 3, 2, 1. what if i had a good one? i'm not worried about it. >> but the whole point is, if you couldn't actually make these phones work, nobody would ever steal them. >> it would have to be a

standard that every phone had. the problem with it thinking it's an apple iphone and i can't steal it doesn't stop thieves from trying because they're not going to know if you have one that they can't get into or not. >> you can shut your phone down right now. if you ever want to use the find your phone feature or erase your phone if you lose your phone, but you need to have your user i.d. and your password. now we know th11, 2, 3, 4, is yr password -- >> you know, it might change it now. i might go 5, 6, 7, 8. >> you're using your noggin. >> all right. congress is now trying to jump start stalled efforts for reform. senator max baucus has unveiled a draft that will allow foreign

corporations to bring business back into the united states. bachus would impose immediate. the tax code itself is pretty complicated. i guess the question becomes is this something that could even pass given how frayed relationships are in congress? >> this one, you know, it's very -- it's like trying to give something to everyone. that's the appeal of an overall flat tax is that you would get the lobbying out of it. the hellish twin center of central planning and government central planning is corporate cronyism. if you do something with a lot of moving parts that allow some companies to hire lobbyists to gain the deal that they get, it's not -- we need to do it in a way where there's no way to

gain. we have to bring it back somehow because it's just sitting over there. even if it goes to shareholders or dividends, some of it is going to help the economy here. we have to make it not advantageous to build facilities abroad. but to do it this way, this is like a half measure to sort of -- well, we're going to let some of it come back. other stuff is going to be taxed immediately. that's going to employ more lawyers. >> you're right that a simpler plan is a better one. it's an incredibly difficult time to try and get the two sides to cooperate. >> it shouldn't be. >> bachus has said he's not standing for re-election next year. so you have a limited amount of time to -- >> it shouldn't be. because you just said 7.4% unemployment, the fed thinks that understates the real number. >> right. right. >> so why is it difficult for to us be doing things that would allow our own domestic corporations to flourish? >> it's not ruing the day in washington at this point. i don't think the republicans

are even all that ever apart when it comes to what to do with corporate taxes. >> obama says he's open to tax reform. >> it really should be happening. there is a deal that could be had there. >> get something done. there's something to be done. >> i wish something would be done. >> he talked to the 28%. he said that number. it's just how you get there. >> he said it and then he moved on to six different things. >> joe and andrew, i know you two are both happy at work. >> so happy to be here. happy to be together, happy to be with you. and right now, my -- i mean, what's your happiest pleasure? >> my foot is under the deck, your foot is under the desk and we're -- >> what? what did you think it was? >> and we've been here all morning long holding feet. >> well, you two are happy, but the question as to whether or not most people are happy -- ow! >> could be based on where you live. a study by mste monster.com fou that 50% of american workers either dislike or hate their

jobs. this was the highest level of job satisfaction among workers surveyed in seven countries. canadians are the happiest workforce. other happy workforces include the netherlands and india. america actually i think had the most people who loved their jobs, a really high percentage, more than 25% i think or maybe 22% who said that they would do it even for free. and it had the highest number of people who were uncontent in those jobs. >> these -- i don't like these kinds of studies. i just don't. a happiness index. i've seen the way they calculate some of them where they come up with -- >> how happy are you? >> i'm very happy. but they will look at the -- antidepressant usage, they look at the weirdest things and it's a really subjective way. then they come one some ranking. i forget, i remember there was some country where i wouldn't want to visit where -- >> happy place? very happy place. and anyone can design a -- >> you went to school in colorado. >> but i think it says more

about the psyche of people in that country. this survey, all they did was ask if you love your job, if you like it a lot, if you like it, if you are unhappy, it went down the scale. i think it was a straightforward question which tells you more about the psyche of people. >> what if you said yes and it sounded like yes? who knows. i like it here. i don't like people saying things about new jersey, like you. >> thank you. >> and i like cnbc. and i like "squawk box." >> there you go. >> i like all three, too. >> one big happy family. >> but in putting my foot over there, i think i just unplugged something because i got it stuck in a cord and couldn't get it out. we weren't really playing foot'sy. we don't to that. >> we hold toes. >> when we come back, we're going to talk markets ahead of today's deluge of economic data and inventory.

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stocks posting mild loss e at the close yesterday as the s&p logged its first two-day decline this month. that speaks volumes. joining us now is david wu from bank of america merrill lynch joining us onset. he's out with a new report on where the u.s. recovery stands in the global context. jeff, i haven't had an update in a while. now we're getting into some -- i don't know if it's nose bleed levels. maybe the market was lagging for years. should people start to say, i've had enough, i'm going to consolidate my gains and maybe step aside? >> i don't think so, joe. as of yesterday, you got the

third most bullish reading out of the option traitors in the past ten years. i think in the timing models like they did last july and august suggest a small pullback here. i don't think valuations are out of sight. we're trading at about 16.4 times this year's estimate. if we trade that same pe multiple, you're talking about a little over 2,000 on the s&p. interest i'm glad we have some people that disagree with you. you want that. i'm watching business coverage and a lot of it is -- almost everybody is asking that question. everyone is asking, have we gone up too far?

garbage in, garbage out. you do forwards, you do currents, you back out gap stuff, you do a ten-year average of stuff. you can't even get a straight answer from these guys about what the multiple actually is. what did you say the multiple is? >> 16.4. that's using the s&p's bottom up consensus earnings question for this year. and next year's between 121 and 1 is 22. >> and the earnings side at risk given the options risks are at highs for so long and that was down? >> i don't believe in regression on the mean in profit margins. what you're seeing is a lot of small and medium sized companies do is outsource to the clouds, your ip budget. i think that bodies well in the new year.

i was upup in detroit on a couple of plant tours. if you talk to the plant managers, they're wearing their equipment out. they can't keep up with demand. i believe that's the sweet spot for the stock market. the growth is simple, but it's sustainable. >> joe, i'm interested in two questions. how well are you doing relative to other countries? two, the fact that you are doing well with is a more structural, cyclical, if it's more structural, you tend to think it's more sustainable.

what's even more remarkable is the fact that this is the first time in 20 years the u.s. is in first place. >> using the same metric? >> using the same. the u.s. has done more poorly than any country in the world as far as it's ranking amount. this is the first time they're ever in first place. >> what has changed? >> in each of the last eight quarters, we've seen improvement with our fiscal deficit and low unemployment race. from that point, it's very remarkable. >> can you translate that to gdp? >> somewhere between close to 2.7% and 3%. but i think clearly the risk is to the upside.

it's declining to the upside. then you're going to see more inflation, higher interest rates. i think that could be a bigger problem for the stock market. >> things might be getting too good. >> yeah. but i think the big story is -- the biggest story, what's driving this recovery so far, is that it's import substitution. this is the first time in 20 years outside of u.s. recession that america is spending on u.s. produced goods and services. this is about shell, cars. do you know four years ago, this country only produced 6 of 3% of the cars sold here. as of last month, that number jumped to 72%. >> ford and gm, for the first time in ten years, my claims in the u.s. economy combined for the first time.

that's more people turning 65 than people finding work every month. >> and i feel better about myself as every one of them turns not that much better. but i mean, i don't feel like you at 30 -- what are you, 31 is or something? all right. do you feel better, too? don't you feel a little better? >> i think the economy is stronger than the service figures suggest. i think a lot of people are transactioning in cash. i was in scottsdale last week and i saw a lot of transactions in cash. it's not recorded or captured as well -- >> black market? you're putting black market stuff into your numbers now? >> no, no, no, i'm talking ab t transactions at restaurants, those kind of things.

>> all right. we've had some people on that had us worried. i like being number one. it's not a stupid index. i saw you just kind of go, oh, it's not a european country, right? are you happy? happy we're number one? >> we should be. coming up, the girl scouts have a message for dan loeb, the fake dan loeb. we'll tell you what that story is about. and next hour, michael dell will be joining us to talk about everything from taking his company private to his outlook for technology. it will be an interesting conversation. we're coming right back in just a moment.

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welcome back, everyone. on today's agenda, we are waiting for quarterly results for jcpenney and deere before the bell. we heard from lowes this hour. lowes came in a penny shy from expectations. qualcomm is holding its annual shareholder meeting today. analysts say they'll be paying attention for the insights on the smartphones, the american market, the emerging market demand at the low end. aaa is going to unveil its thanksgiving travel forecast. that will include information on how much travelers spend .how they travel. and how airline ticket traveler

costs compare to last year. that's your "squawk box" planner. andrew, over to you. >> we have a story now that is part real and part fiction. in vanity fair, they posted a fictional letter to dan loeb. the ceo of girl scouts of america asked "vanity fair" if she could respond. it was a pretend letter from dan loeb to the girl scouts saying he wanted to take a stake in the company. >> vanity fair wrote it? >> pretending to be him, saying he would want to take a 19% stake in the company going on to say how do you defend the expensive proposition of keeping a fifth avenue address for your headquarters and have you ever actually seen a girl scout in manhattan? and he also said the idea that canceling lemon --

>> he was upset about the cancellation of the lemon chalet -- >> and the waxy taste in the thin mints. and he said something horrible about the dosidos. >> he was very upset about the dosidos. >> she answered -- >> it's the most fattening confection after them. that was a fictional letter. and she decided to write a real letter back to him saying -- it says first and foremost, i apoll fwiez from the bottom of my coconut heart for these treats. you see every year girls sell cookies and it turns out your beloved lemon chalet creams weren't beloved by the rest of the public and by the rest of the public, i mean anyone. >> we can get her hour on at the

beginning of the next hour. she lives out by me. was this your idea to do this? >> my favorite line was when she said she will bring these cookies back if he visits me at my cookie castle address in a life size cream chalet and hand delivers a check for $1 billion. >> i saw mr. loeb monday. he told me he was bored with the whole story. that was two days ago. you liked it today, though. >> a contra indicator that i am. >> coming up, the pulse of the consumer. we're going to drag that music out again for to use. we're going to talk to the company behind international online transactions. the retail giant such as macy's and j. crew. we'll do all that when "squawk box" returns and maybe have that music you like. t retirement. those dreams, there's just no way we're going to let them die. ♪

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welcome back everybody. the national e kmors market is expanding more than twice it is in the united states. our next guest is looking to cash in on the growing opportunity. joining me now, michael, the ceo of border free. it works with a lot of retailers. you help with web presence overseas setting up? >> that's right. border free is a global company to work with retailers helping them extend online to sell

around the world. >> j crew, macy, crate and barrel, a lot of brands people know. i go to macy's come or neiman marcus and it looks like a normal site. what does it provide? >> technology that detects where the consumer is coming from and helps them flip the site into context that makes sense to the international user. you're coming from the u.s. >> you'll make it in portuguese if you know i speak that language. you know based on my ip address? >> that's right. it shows local currency and products you can buy for that particular country. >> i imagine there are complications trying to sell to other countries and overseas. one is how to get the stuff there and currency you brought up. how do you deal with those problems? >> we help the customer giving

them the ability to shop in the local currency. if you were coming in from brazil on play says for example would be in brazilian. there's no mystery at the end of the month when they get the credit card statement and see the conversion rate they weren't expecting. everything is priced locally. in terms of transportation, the thing that's important is the whole process moving products from the u.s. to a different country is getting them through customs and delivered to the customer's door. those can show up with extra collections from the customer. we take care of those up front. we're trying to give the consumer the power and experience as a u.s. customer obviously shopping from a different geography. >> you're not someone that sets it up and leaves. you run these full time. how is the partnership? >> we integrate the website and important to let them know it's their website.

we're with them through the process of the transaction. in many ways they rely on us to make sure the transaction gets fulfilled. >> never thought about the complications and how hard it would be for every retail toer get and running. >> if the consumer experience isn't good, it isn't marketabilimarketable and good for a time where things are taking off globally. coming up, ben bernanke's thoughts on qe. we've got his actual thoughts on it. news makers of the morning, michael dell. "squawk box" will be right back.

today with ten days before black friday, this luxury retailer going big while others shy away. the big

management and markets. today's guest host knows about both. bill george, former ceo now proce professor joining us. >> plus market reaction to fed chairman ben bernanke's speech at the national economics club as the second hour of "squawk box" begins right now. >> good morning. welcome back to "squawk box" here on cnbc.

take a look at futures and how things are setting up this morning. across the board dow looks like 1 point. s&p 500 and also nasdaq little up. meaningless at this moment. jp morgan agreeing to pay $13 billion in the settlement. the deal won't have immediate impact on future earnings. eric holder says the jp morgan was not an isolated case and his fraud investigations are far from over. keep an eye on bank stocks today. you don't know what's going to happen. what are you looking at? >> have you heard it referred to this bank pedalled mortgages to investors that cost much more than their homes were worth? isn't that a great way if you really wanted to characterize? they pedalled mortgages that cost much more than people's homes were worth. any way.

go ahead. >> we have a couple other pieces of news. lowe's did not match the performance of competitor home depot. lowes earning 47 cents per share for the third quarter, a penny below estimates. the company boosted the year outlook but still below street consensus. home depot had a beating quarter and raised the yearly guidance. this is short of good news. americans are keeping credit card debt in check. credit card debt per borrower fell during the third quarter. late payment rate did rise and remains near the lowest level in six years. >> in a speech delivered last night, ben bernanke sited the feds efforts to revamp the economy. we have the wrap up of the speech. do you have something prepared to read. i can't talk to you?

>> talk to me. >> we said we were going to bring you his thoughts. >> my producer didn't think i'd get to the second sign. that's her. >> we promised viewers we'd have his thoughts. do you have his thoughts or just comments? >> i try to do the best with both. >> he has his interpretation. >> he could have been thinking about i'll paint the ceiling pink. he could have been thinking anything. >> i'm pretty sure he wasn't thinking that. >> you wanted to interrupt my report to get that comment out. >> he said the way it's going now, we may go longer at zero. once we get down to employment goals we may keep them on as if he knows he can get us down to 6%. it's clock work. >> it's all you about shaping expectations. it was a valid victory speech, farewell speech. >> okay then. >> that's what it was. he was extolling the vir vitues

transparency. >> the federal funds rate is likely to remain near zero perhaps after the unemployment threshold is crossed and tlooirs until the preponderance supports the data. >> he doesn't know. >> he doesn't. what's the difference? he's telling you what he thinks is going to happen when. >> it could be 2030. >> it could be. what's your point? >> if you're in a position you think it all depends on you whether congress or not, it's not about the fed. >> i don't think he's saying when we put it there. he's saying when we get there. he's being very dovish. >> i hope he's right. people think we're way above -- >> he's telling us when fed gets to 6 1/2.

doesn't mean automatically we raise rates. it means stand around, look around. it's a trigger. >> what will he do when it gets to three? or gets down to zero? >> by zero they will be higher. >> that's where they plan to go. here's another thing he did. next sound bite was he talked for the first time about what he might do when he departs. >> i look forward -- you know before i became a policy maker, i was an academic and worked on issues related to the things i've been doing the last 11 or so years. i look forward to writing and speaking and having more time to contemplate some interesting issues. thank you. is there no will for him there? >> i didn't think about it. it's taken me years to read a

script with interpretations. there's a lot of attention of release of minutes. the feds spent a lot of time talking about communication, how to convince markets. it would remain low for long. that would discuss inflation and thresholds changing. that's something we're going to look for in the 6 1/2, maybe talked about making it six or two and putting inflation threshold 1 1/2%. that's a crutch. >> you wrote all that stuff. why can't you come out and tell us what -- >> he did -- >> no, i know. you know what you want to say. >> take a listen. >> steve it's great setting things up. those guidelines are for the control room. >> joe is right. after having been a print recorder 30 years, i lean on the written word. >> it's getting it organized.

>> i have no time for organized thoughts. >> that we know. >> let's welcome our guest hoist bill george. he's currently at harvard business school. bill, we're so glad you're here. so many things to talk about. let's start off you by what steve was discussing. what's happened with the fed? what do you think will happen? >> i'm a fan of bernanke. in my opinion he saved us in '08. we have no fiscal policy in this country. he's trying to off set the monetary policy. he's gone as far as he can go. we've got to pull out of this. i think they'll keep interest rates low. >> you say you're a fan. are you a fan of what's happening now? >> we have an imbalanced economy. we're hanging on for dear life trying to get the unemployment down. i think there's too much money in the economy.

it's eventual got to come out. they're not going to do hit with unemployment rates. >> are they paying too much after tension to what washington and congress is doing and trying to catch the fallout? >> they have to. they cannot ignore. congress is doing nothing. they're not going to do anything. they're trying to keep the economy on even keel. i think if not for the fed, we'll be in more trouble. >> do you think it feels like 7.4? >> the private sector is adding jobs on a steady basis. nothing great. unfortunately over industry adding jobs as huge resist answer from the government. regulators are after every industry adding jobs. health care, it, certainly energy. tho those are the three gross sectors. >> when you say fiscal policy from congress, you're saying get out of the way. your not saying you like congress to do -- >> i'd like a tax policy.

>> you're not saying another $800 billion stimulus. >> i'm not looking for stim luslus stimulus. get out of the way. >> those are not the things you're talking about? >> no, i'm not. would you like to buy from canadians or nigeria? canadians. >> by asking you questions is to set you up in the way i want you to answer it. i'm going to get flak. >> shell gas is the greatest thing that's happened to the country in 350 -- in 50 years. let it flow. >> some people think they want high infrastructure. >> i like infrastructure. go to switzerland or germany. >> we're spending 1%.

>> we could save in other areas. think about that? would you consider that? >> can i ask a regulation question. you made you're career on the world of health care. obama care good or bad in the context of removing regulations that you're talking about? >> terrible. we're focussing on the wrong things. >> it's becoming -- >> terrible is a good word. >> andrew, here's what we've got. this is titanic. everyone is looking at the tip, healthcare.gov. it's not solved by the end of the month. trust me. we've got a long way to go. that's part of the problem. we're starting to reveal. if you don't get it fixed now, it's going to get much, much worse. look at the fiasco trying to take people's insurance plans away, give them back -- >> are you in the camp of fixing it or repealing it? >> you're not going to repeal

it. by 2017 this is going to be locked. no one is going to repeal it. the president is never going to. >> we've got to fix it. the president better move now. approval ratings 42%. 57% against this. you better act now. >> how can he fix it? >> i've got lots of ways to fix hit. you can't give them back their policy that were taken away. >> insurance commissioners have to sign off you and insurance companies have to blow up what they've done for six years. >> how do you fix it? >> my little office lost they're health care. they can change it but change all their doctors. when people start losing their doctors they're going to be very upset. >> and driving past three hospitals on the way to the one that offers you treatment. >> you're going to get a lot of upset people if you don't act quickly. >> act quickly to do what?

i don't know how to undo big problems he laid out? >> first of all the bar is way too high. no plan would qualify under this. they are high deductible plans. you get a reduction for taking care of your health. under the current law, you don't get reductions. >> if you get pregnant, are you covered for that? what about substance abuse. that guy in toronto, that can look at anyone. you better have substance abuse options in your plan. that's what i want you to have because i say you have to. >> you've priced your plan. based on the fact you're going to are have 38% of people under the age of 34. not going to happen. if you were 26 years old just went off your parent's plan, what would you do if healthy? pay the penalty. working at starbucks or the retail store. you're going to postpone as long as you can hoping something will come. >> i'm worried about adverse

selection next year. move ahead of those things? >> how do you? >> get a fix of minimum conditions up here. until you give people incentive for living healthy lives. right now becky, we're going to have huge no plow effect of costs. it will not happen in this president's term. it will happen about 2018-2020. you're going to have huge 1 to 2 trillion. >> do you have to undo the premise of pre-existing conditions. that's expensive. what joe talked act, maternity, that's not a matter of taking care of yourself. >> let me select that. if i want that maternity care, i want to select that. >> if you want maternity, it's going to be expensive. >> you have to lower the bar. you have tow permit incentives for living healthy lives. right now the big cost issue is

let's be honest, obesity. it's politically incorrect. that's the big driver. we've got to move on that is and give incentives for people living healthy lives. >> does that mean if you pass certain tests you get the incentive reduction or if your bmi is a certain level. >> starting the bar here. you get reductions every time your bmi is reduced. i think we have to do that. because we have an increasingly unhealthy population in the country. that's going to cost more. first time in history we've asked the healthy young to pay for unhealthy old. why should young people come along and pay for me. >> we've always been doing that in some tomorrow form. semi unrelated question. obama care is not helping bring

down but there was an issue on the table in washington about taxes on products made by companies and medical devices and whether the margins, profits of companies like yours are too high and one of the things that has to happen is costs of those types of products that has to come down. >> let's have a little competition. >> profits were too high. >> i'm make the argument it was going on in washington not making it myself. >> i'm a pro competition guy. med tronnic and medical device people refuse to pay subsidies to get this bill through like people did. >> this is a tax on revenue. >> do you think this is a lobbying game? yes. i know how angry max bah cuss and manuel were at the device companies. they punished them. med tronnic gets hurt. they have a huge revenue base. think about startup you

companies that have no profits and get hit. >> if not monopoly, how do you -- >> you use that term with a straight face. >> it's too high -- >> it does not compute. >> is there really a competitive marketplace? second question, the fact the government and taxes are paying for products. if you're 90 years old should you get a titanium hip when you could get a cheaper one. med tronnic on the other side is saying you should be able to get the titanium hip. >> it's a competitive marketplace. ask people at st. jude whether they compete on price for pacemakers. it's highly competitive for hips. should you have a choice? should you go with what your doctor says? this is best for you andrew, or your mother?

>> we're in a political market. it's not absurd to say the government could consider. they can do it. >> my doctor hopefully will always tell me to get the most expensive greatest hip that exists. that may not be the right thing in the larger policy perspective, right is this. >> right. andrew, i want you to have fiscal incentive to do the right thing. you have you responsibility. every medtronic plan is based on that. you have a choice. pay less or more. >> you're going to pay for the hip if you want top of the line. >> hospitals are moving in the right way to bring down costs. on the board of mayo clinic, associated with a number of hospitals. they're working to reduce costs. as long as you're treating disease and not health, they're trying to shift from disease to health. get rid of fee for service. i'll pay you a lot of money.

i don't want heart surgery. i'll pay you a lot of money to have heart surgery or spine surgery. we've got to move there and get going. this train wreck is coming down the tracks to mix metaphors of the titanic. you better see what's coming, the cliff ahead. if you don't, you've got big problems. sorry to be so outspoken. >> this is great. you're getting to real solution. that's helpful. fortunately bill is with us the rest of the program. bill george our guest host. steve, we'll see you back later too. >> you going to have a script with sound bites and elements? we can count on that. >> we've got to go and come back. we have a great interview coming up. up next, chairman ben bernanke saying rates staying low. the chief officer is weighing in on what that means.

check it out. michael dell joins us to talk about the pc market and his company's future now that it's come back. "squawk box" comes back in just a moment.

fed chairman ben bernanke saying central bank remains committed to stimulus program for as long as needed. the fed funds rate will likely

remain zero for a considerable time after it ends. how you will markets react to this? we're going to ask the chief officer for division of barkley and minutes that we have today. we've been talk act the fed for so long. i'd like to talk about business and whether ceos are spending and things like that. you really can't. it's so important and such an underpinning of what we're seeing day in and day out isn't it? >> this market can be described in three words. ly driven market. all were voicing similar concerns that the relationship between prices and fundamentals

get stretched. the market is not seeming expensive, it's underlyingme fundamentals. the indication prices tell an investor is less clear because of money in the system. >> i understand how the money in the system finds it way to the stock market and other classes. why is it that the great he liquidity is not stopped up by the economic engine? that's what the feds are hoping that the baton gets passed and it does improve the underlying economy itself. you think all that seed money would be good and economy could catch up. >> the question is why isn't it creating more jobs? >> why isn't it getting in the economy and creating jobs?

>> inside banker ball right. i think essentially that money printed was never destined for the economy you and i live in right. that money was really always for the financial economy. the fed is paying interest rate rates on reserves. you want that money moving, don't pay interest on those reserves. maybe tax deposits? that's not a great idea. interest rates paying on excess reserves will get money moving. >> what you describe goes back to -- democrats should be against it because it's wealth gap getting wider. republicans should be before it because it's lining pockets of rich friends. that's all that's happening. >> people that own the assets are the ones benefits. >> no one is really talking about this. i think we're at a juncture in

economics profession if you will. i'm not an economist and will not attempt to play one on tv. >> why do you wear the bow tie then? >> it's easier to clean shirts than ties. >> i assumed you were an economist because of the time. >> we're at the cross roads because depending on how this works out t economics and central banking path we've gone down will be validated and solid fied or ruined for pay couple of generations. it sounds dramatic. when you heard the feds talking about serious people floating the idea that perhaps a bit of a bubble is not a bad thing, right. the notion of what the natural interest rate. i think the natural interest rate is the economic equivalent of the yeti.

it moves around depending on the environment you're in. you have a part of the profession which is in fact talking to itself about these things. not talking to the market per se. it's all very untested. while this is happening, you see this money flowing into the system. it is creating a delinking of prices to value. that's the problem that those of us that work in the real economy are dealing with and have to clean up. >> let me ask you a question. i have a lot of friends that own small businesses. they're having trouble getting money. they can't get money. why is the money not getting down there? these people are good creditors, the ones to add the jobs. it's not the big companies to add the jobs. yes they're adding inning thailand, china and brazil. small businesses are bringing

back the jobs market yet they can't get money to expand the business. why don't we trickle down? >> this is not only happening in the united states. if you go to uk or continent you hear this a lot. some of this is the echo of the financial crisis. banks continue to repair balance shiites and lending standards go up. these folks are deserving of the capital though. >> thank you for joining us this morning. thank you for the tie. i'm going to wear a tie later this week like this gentleman. won't look as good as him probably. coming up, going to talk to dell founder, michael dell, in just a moment. i'm beth...

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welcome back to "squawk box" everyone. in our headline this is morning a jury is deliberating for a second day trying to determine how much sam sung owes apple. sang sung copied apple iphone key features.

sam sung says it on the side $52 million. nissan is ramping up the all electric leaf model. demand has jumped. it's made at a plant in tennessee. nissan hasn't determined how much it will boost production. busy day for production numbers. we'll get sales on home sales and business inventories. the fed releases the minutes from the foc movements. it's been a month since dell went private after 25 years public. let's find out how the private life is treating the company. good morning michael. how are you? >> can you hear us, michael? >> i'm great. how are you? >> we're great. thank you for joining us this morning. here's where i want to start.

i was thinking about this. everyone wants to root for you. everyone wants to see dell succeed. a number of shareholders were frustrated when your company was sold. some call it a steal. if five years from now you succeed and succeed remarkably as a private company and go back to private markets at some huge p multiple of how the company was when you bought it, how should shareholders feel about that? >> we're reinventing our business, taking risks, doing a lot of things i did when i started the company. during the 25 years we were a public company, i'm proud of our record for shareholders. our stock increased 13,000%, 25

times better than s&p 500 during that period. we had a difficult process to take the company private. we're thrilled now. investing aggressively and growing around the world. couldn't be more excited. >> what are you doing behind the scenes now that you're private that you couldn't when you were a public company? >> one of the first things is you sort of get out of this 89 day planning cycle public companies are subjected to. having the assets and customer relationships we have and breath of it solutions we have, we're able to go after growth. so i was just in europe two weeks ago. we got double digit growth in germany. investing aggressively in building relationships with the s andbes, enormous growth opportunity. emerging markets are coming back. we're building out solutions not just focused on the near term

but thinking about the cloud, mobile big data, opportunities and cllenges that it represents. again, with an incredible brand and great set of asset, fantastic team and strong balance sheet. couldn't be more excited about the position we're in and the opportunity to change the industry once again. >> michael, is there a good example of a project you always wanted to pursue when you were a public company that you're now able? specific project or initiative? >> you know, i think certainly as we look at our business, there's a couple of areas we're going to make big bets. we've got a fantastic event coming up here next month called delle world. i'm going to be back on cnbc as you'll be with us on the show floor. we're going to be talking about those things, revealing new

technology we're working on here. we're increasing investments. i think you'll see the fruits of that. what i can tell you is that our teams are energized. the customer reception has been quite positive. we're out there being aggressive. >> mike, i said all along i thought you paid a fair price for the company. i admire how you hung in there against folk out there. do you think people like carle acahn were ever serious? >> they were just trying to talk the price up. ultimately that got resolved. the person in question didn't own a share of the stock until after the deal was announced and had no long term intentions or

good intentions for the company or its shareholders or the people inside the company. >> i like what warren buffett said on the station. he thinks you ought to run the company for shareholders going to stay not those going to leave. do you think companies should consider going private or are entrepreneurs where you were 30 years ago think about staying private indefinitely? >> out in the start up world i've been spending more time with a number of interesting new startups in our industry. there's a desire to stay private longer. certainly there's a roll the public markets play. that's an attractive step at some point for companies. companies have a desire to stay private longer. they're not so entranced by the the public market and

availability of debt capital at very attractive rates. and i think the increasingly burdensome layers of governing and compliance and related issues that have been placed on companies, it's a challenge. >> michael, is the goal ultimately to take dell public once again down the road? >> don't have any plans to do that, becky. we're a family owned company. we'll stay that way until we decide to do something different. >> michael assuming other companies take your lead and go private, what is the right model to go it? one of the criticisms of this particular process the dell situation was involved in, once you teamed up you with silver

lake, it became comeply kaicate challenging, hard to find others who wanted to be or could be long term shareholders to compete with what you put together. >> not to rehash the past, but the process was led by the independent directors. i was willing to partner with any participant who was willing to pay the highest price. that was the case then and absolutely what occurred. ultimately the bid by myself and silver lake was the highest price available for the company. >> right. let's talk tech for a little bit. we spend a lot of time talking about microsoft and the future of microsoft. your pc business is depending a little at least on microsoft. what's your take about the direction of that company? who should run it after steve? >> you know, i think the board

is going through a thorough process. i'm impressed with what i'm hearing so far. we'll wait for them to reach conclusions. microsoft is an important partner for dell in the industry. i'm sure they'll come up with a great solution there. our business is not as dependent on the pc as it was 10 or 20 years ago. we've broadened our business considerably in the enterprise, solutions software. i will tell you we're seeking renewed growth in what we think of as the client part of our business. emerging markets are coming back. we have this whole move to the virtual client which is quite strong. helping our customers adopt to all opportunities out there with cloud, mobile, take advantage of their data. microsoft is a very good partner for us.

they're though the only partner. we're a customer based company. that has us part eerer i ee eer with i a lot of companies. >> you're at a college dorm. tell me your opinion on whether social is ever able to be to the point it makes sense? it's hard for me to adopt new things. i look at what's happening and maybe not that good at this point. it's hard for me to really see we do this and i'm going to be tweeting 20 years from now a thousand times a day. i don't know. are these things going to figural out a way to make money on all this stuff? >> i think what we're seeing inside companies is the collaboration among teams and

sharing of information is incredibly powerful. this is where you see the applicable in business. you get excitement in the market and whatever you're talking about in terms of the latest ipo and stock movements and that sort of thing. what we see is how this is improving the speed at which teams collaborate, share information and progress occurs. we see it in our own company and helping custer manies do omers . how do you get the knowledge quickly? this is a big challenge. tools like the kinds that are being developed now are really

going to accelerate that kind of process. >> thank you for joining us. started virtually in a garage and doing it all over again. >> couldn't afford a garage. did it in a dorm room. >> dorm room, not a garage. >> appreciate you. sounds like we'll see you in about a month. >> what was that a b to b answer. remember the last bubble had to move on from consumer to b to b. that was going to be the big money maker when corporations utilize it as a tool. can the consumer validate just us playing around with this stupid stuff? can that validate the evaluations or does it need to become a $120 billion tool for facebook? >> it can eventually become

that. >> but does it need to? >> i wouldn't bet against michael dell. he's the real dell. >> i give him a lot of credit for hang in there. take a look at shares of jcpenn jcpenney. stock came out trading down, under expectations. sales down by 4.8%. they had positive sales for the month of october and said the trends are improving. we'll talk about this when we come back. bny mellon turns insights like these into powerful investment strategies. for a university endowment. it funds a marine biologist... who studies the peruvian anchovy. invested in the world. bny mellon.

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we just mentioned jcpenney to recap. company lost $1.81 a share which is basically what the street thought, $1.77 expectations. revenue was in line. the company is encouraged by sales trends. there have been some. >> they've sold something in the first few weeks. someone went in and actually purchased something. >> you figured comps had to level off at some point. you can't lose 30% quarter after quarter. >> remember last october? think about that.

>> they're up .1%? >> they didn't say. they says positive comps in october. >> that might mean they sold something. >> don't put your life savings on that. profit guidance shortly below the level but above consensus. lows reported 47 cents, penny below. four year guidance slightly below. when we come back, our guest host has ideas on who he thinks should replace the leader at microsoft. ceos are nervous. going to play out plans how to embrace or not embrace the activist investor and how you should do it. we have a great name of names tomorrow including the ceo

of gram funds. tune in at 6:30 eastern time. we'll get you ready for another big trading day after the release of fed minutes today. "squawk box" is right back.

practice at harvard business school and former ceo of medtronic. you have ideas of who you think

should be running microsoft. >> i was struck with bill gates emotion yesterday. i couldn't tell if that was for the company or steve bomber. time for steve to move on. 14 was too much. the company needs a total transformation. normally like internal promotion, they have to go outside. internal candidates are names being floated. my favorite was cheryl sandburg. she would have been terrific. a lot of talk. i have the greatest admiration. i think allen is one of the top ceos in the united states today. he is a tech guy at all, 68 years old. they could get seven years out of him. >> are you coming out in favor of him. he has no great experience. do you think he's the right person to change things at microsoft? >> i'd take allen. i'd make sure he was teamed with a tech guy, maybe coo.

>> and get yearly physicals? >> yeah. he's a young guy. you said you don't know if he can last seven years. >> he can live seven year, i want to make sure he has the -- >> you could get seven years out of him? yeah. 70 is the new 50 guys. >> it is. >> he's got a lot of energy. i think this guy will build a team. i have a lot of confidence. he'll be a successor. i don't want to see him leave. he has a successor lined up. he'd do the same thing at microsoft. bomber did not. shame on steve for not having a successor. kevin is a nice guy but not the successor. this thing needs a reshape. you've got to have someone from the outside. where we going to go? they need a plan. >> we'll talk about activist investors later.

is this the scariest thing out there for any ceo or board? >> they're all worried about it. if procter & gamble resigned. i don't know any ceos are not thinking about it. i have ideas how to deal with it. >> it's the talk? >> absolutely. may not be on cnbc but is privately. absolutely. >> we're going to talk more to bill george about this. he's our guest host. he's got strong thoughts about this. >> coming up, another hour with bill george. inflation dat that could be moving markets and jcpenney sales in focus. we'll get a preview of the holiday season "squawk box" returns in just a minute. over the next 40 years

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s&p 500 coming off back to back losses. will the day's fed minutes restart the losses or extend another day? . jcpenney missed expectations. we'll dig through the report with the analyst and look ahead to the retailers holiday expectations. >> there's a sale at pennies. first look at the redesigned chevy colorado. the president of gm north

america is going to tell us why the company is recommitted to mid size pickup trucks when competitors exited the market. the third hour of "squawk box" starts right now. "squawk box" here on cnbc. first in business worldwide. something about a truck. our guest host this morning, bill george. you got a truck? >> no. >> he's a professor at harvard business school, former ceo of medtronic. former member of goldman sachs. >> you've got great ideas about the affordable care act. do you talk to people implementing it? do they want your idea? >> absolutely not. >> here's what i thought.

i thought they'd say this bill george guy is at harvard. he's probably one of us. let's call him up. they called you up and heard one sentence out of you. they said we called a guy from harvard. this isn't what we expected. >> michael porter and people have great solutions. they don't listen. bring in the pros. bring in george al verizon, hhs. bring in someone that knows how to do it. >> you're a ceo. they don't want you. they want academics. >> we don't need politicians joe. i know you love politicians. we need some professionals. >> they want academics. >> you can't solve a management problem with politics. hall is going to involve a

problem of health care exchange? are you kidding? come on. you've got to get serious. they're not serious. >> you're preaching to the choir. that was my point. >> throughout the administration, right? >> including secretary of the treasury. >> all the bay down the line. >> it's time to say that. >> people are sick of me saying it. >> just said it. >> thank you. let's talk more about the morning's headlines. a lot of earning reports came in this morning. jcpenney lost $1.81 a share, four cents wider than estimated. the stock is up 5.4%. that was not the case when the stock hit. it immediately sunk. they've been talk about october and november sales trends something they said they finally had positives in the month of october. maybe that turned things around. stock up to $9.

we're going to talk to an analyst in a few minutes. we heard from home improvement retailer lowes. it lost a quarter profit for the share. the forecast is still a little short of the street's consensus. this is a stark contrast from home depot where hit raised expectations, beat on every metric. lows down 2.8%, decline of $1.44. heavy equipment maker deere helped by higher prices and lower taxes. that stock is up 3.8%. the project manager of healthcare.gov says up to 40% of the technology needed to run the new obama health care insurance marketplace has not been built. separately several tech experts testified yesterday the health site is hitled with security plaus that put user data of

people at risk. they said it's large and inefficient, leaves it vulnerable to attacks and difficult to protect. according to the expert's testimony, the healthcare.gov runs on 5 million lines of code, 25 as much as the code of the one of the world's busiest sites facebook. let's get a check on markets. u.s. equity flat. dow down six points. s&p 500 down over a point. nasdaq up less than a point. if you've been watching what happened in asia overnight, you can see nikkei closed down by a third of a point. shanghai up two thirds of a point. in europe and early trading there, at least right now, some red arrows, modest declines. cac half a percentage point. joining us, mark freeman

chief investment officer of west holdings group. westwood income opportunity fund manager. i'll talk to you chris. i'm thinking less transparency might make more sense. >> i'm sorry mark. go ahead. >> more than happy to answer. >> go ahead. >> joe, i'm mark. >> i want to go not to westwood. who's on first? >> i'm on first or second. >> you in the glasses go. >> look, are we going to get additional transparency today? >> probably not. we'll get more important to what bernanke said last night, the message is still the same. rates stay low basically forever from from there.

they're commitmented to quantitati quantitative easing as long as it takes. the the minutes are not recorded. it's planned. >> it's about shaping investments and reinforcing the message. >> we found out there was a time they didn't know they were being tape add. remember? we found out they were being taped. that was better wasn't it? >> i think it's probably better for them. >> better for us. we may get the right story. >> they were kind of shocked. >> now it's just what they want us to hear not what they're actually -- >> this is like a giant tape records ee recorder in the middle of the table. such a short lag from the meeting. it's about reinforcing the message. >> how about you chris? >> good morning joe. no i expect the same. i expect very little new evidence to sway guys from changing opinions or tone.

quite frankly why should they change? data overall has continued to indicate slow growth. nothing but slow growth since the recession ended for the last four years. i really don't expect to see a change of tone right now as we go to the last few legs of the year and going into bernanke's most likely departure beginning of february. i don't expect to see the taper tone change all that much. >> you're not bothered by that? you must be long. >> well you know, at this point, i think we've talked about this for so long. you have to remember back in may, the ten year was back at 1.6%. we spiked up to 3% on the change of inflection from the fed. i think we've already talked about this beyond belief at this point. until they get to the point they actually start selling securities in the open market, i think we're in this environment that continues to be close to

near nirvana for investors. >> wow. let's do a trillion a month? why not? >> i think there's a limit. >> this isn't working is it? >> depends on how you define as work. >> jobs. >> no. i make the point quantitative easing isn't designed to create jobs. >> that's what someone else said. what's it designed for? >> the you ultimately think what are they trying to do? create a wealth effect okay. quantitative easing doesn't drive growth. it's not going to drive earnings or growth. >> that's all they've got? >> that's all they've got. >> at least you're admitting it's a blunt instrument. >> it hasn't been blunt.

it's been strong in terms of if you look at what it's designed to do, target evaluations, it's very -- >> eventually is this supposed to have a positive feedback effect on the underlying economy? >> i think we already have seen a positive impact on the underlying economy. absolutely. obviously we've seen the price of homes increase double digit. we've seen big item purchases, cars doing well, truck cycle most likely on the horizon. it has had a positive impact. i would say that where we are right now with interest rates, i think this really reflective of low growth environment we've continued to have. whether or not they decide to taper 5 billion or 10 billion month over month over the coming months that's not a big deal. the big deal is what's going to make us decelerate rapidly or accelerate rapidly from the low

growth environment we're in. i don't think we see it until business confidence picks up. it's a different question to be answered. >> that's a chicken and egg thing. why isn't that picked up? let us bond. inner democrats against qe. >> we'll touch toes. >> let's be against qe. it's adding to income disparity. >> that's your new reason to take that to the bank? >> don't you think that is? >> i can feel virtuous to myself about not liking qe. >> that's almost like a libertarian view. i had the libertarian view before we need to clear the markets, see where we'd be without this stuff. now i'm going from a progressive point of view we're helping people that don't need help. people that need help, it's not trickling down fast enough. >> we should get the music with the halo. >> bernanke says that every

time. the man on the street, even the saver getting crushed now, says those guys would be in worse shape -- >> if everybody falls back -- >> this keeps congress and the white house from getting their act together. they can rely on fed. they don't have to legislation or reform taxes or do anything to stimulate the economy with fiscal policy. they can settle back and say bernanke will take care of it. now it's janet yellen. >> i'm giving you an argument. >> i hate rich people. >> okay. mark, chris, thanks for joining us. talking about jcpenney up next. we're going to dig through the results with an analyst. later, ford and chrysler have exited the mid size pickup truck business. gm is recommitting. we'll get a look at the thank

you colorado live. check out the "squawk box" market indicator. it is red at the moment.

welcome back everybody. jcpenney reporting a bigger loss than expected this morning. the company is making upbeat comments about the november sales trend. joining us will frohnhoefer. jcpenney shares sold off on this news. when people heard about the sales trend, stock picked up. what is the right interpretation? >> it's right to pick up. we saw weaker sales than anticipated. sales were down 4.8 versus street 4.5. how far the trend in sales was growing months over months in the third quarter. the company is now guiding for positive comparables into the fourth quarter. >> one thing you said before was that people are focussing on j jcpenney. if it comes in lower, investors

will be concerned. i saw cash equivalence of $1.2 billion. does that concern you? >> the price they gave is over $2 billion. they mentioned in the press release they paid down 200 million on the revolving credit situation. >> michael is a stand up guy. he has a lot of support from venders. i know that's the case. people trust him. it's tough to turn something around when comps decline. trying to keep consumers in the stores and coming back. they had to offer steep discounts to get people back? . >> they did that. it should be recalled their home department was empty in stores as they remodelled it. bringing back traffic and

customers back in took big effort. >> you have a price target of 22 dollars. i wonder how confident you feel in this. at this point looks like they're stemming losses. stemming losses and getting people back in the doors are two different issues. >> my price target is actually $11. it's considered to be an ambitious price target. the reason why i put that target on there is if they're able to make it to the fourth quarter, the leverage will be implied to pay the money to the revolver. the more debt they're able to pay down, the more they can get finances in order and more stock because of the high amount of debt the company put on. >> $11 is your price target. are you thinking this is more of a short term trade, get in and out?

where do you think we'll be from a year from now? >> it's a 12 month target. they have the tools to succeed in the fourth quarter. overall they need the market to help them out in terms of being able to recapture customers they lost. it's long term because if they work out issues they've had this year and turn it in and around the fourth quarter, they've set themselves up for a good period in 2014. >> haven't they just gone back to the past? where's the strategy? i don't see any strategy. what would attract you to go in and shop for your child? >> they're in a tough position. they had great advertising and marketing that got people to go in the store and it wasn't delivered. fool me once. >> it's a short term trade maybe. it's a long term investment. i don't see it. they lost 60% the last year. i don't see it coming back. >> i would disagree. the main issue sheer they lost quite a bit largely because they

made bad operational mistakes in the previous regime. what they're trying to do is stabilize the company. if they're able to bring the comps back by 2015, they'll set themselves up for long term recovery. it's been painful this year with the amount they've given to shock holders and debt they've been forced to raise in the marketplace to right their situation and promotional situation. this is necessary pain. >> will they be able to invest in the stores? this is not sears and kmart. >> they've spent $1.4 billion in 2013 if i get the spending correct. they've done a lot of work on refreshing the stores in home departments. it's been brought up to scratch. they've done a tremendous amount of spending this year. the question is will they be able to keep it fresh? that's depending on 2014

numbers. the fourth quarter is very important. the amount of cash they can pull out to keep the stores green, if you will. >> thanks for your time. >> my pleasure. thanks guys. >> i was just clued into something. on a true progressive, doesn't want to end qe because of the income disparity. you keep that going but com up with an additional government program to deal with the disparity that you're causing from the initial program. then you have the program plus another program. that's the way. you don't end the first one causing the disparity. >> we'll come up with liberals first. then you redistribute after. >> should i run as a far left candidate? >> we'll make you secretary of congress.

let's go back to the question of activist investors. you said everybody is scared out there. how is the ceo and board to deal with activist investor that comes knocking saying i own one to five percent of your company. >> you and your board take the boy scott motto, be prepared. i encourage boards to look and say how would a act vis look at it? tell us how you'd come at our company. one good thing the activist says, none of this hangs together. an example of a company that did it well and still doing it, peps co. they looked ed it and justify billion of profit every year from the snack business and soft

drink business. nelson comes and says let's break it up. they've brought it through. the board is with them. they know the mission and strategy. they're staying focused and not pulled off course. they know how to take the nancy reagan pledge, just say no. >> they can do that. others can't. >> why can't they? >> there are times when activists come with good ideas and sometimes bad ideas. the question becomes if you're a member of management and trying to fend them off in advance whether you're going to start -- michael dell is living on an 89 day cycle. you're going to make shorter term decisions knowing that you're going to be up for a vote this the proxy coming. then the question becomes, if you're actually right in your part of management and you're being attacked on all side, what do you do then? >> you don't let it get to that situation. activists have good ideas.

ralph came to home depot, did the right thing. look at how they're doing. he did absolutely the right thing. the board doesn't have a long term view. you make the numbers every quarter. i miss one quarter and get beaten up. keep your costs in line. if you have businesses that aren't paying out -- >> if look at quarterly management that's not always best long term investment. >> anyone in our company that sacrificed long term to make quarterly numbers is gone. >> if you're trying to play against that, what do you do? >> i'm not worried about carl icahn. if we have big holders, i'm going to stay to the target. i'm not going to wait on an attack. i'm going to make sure we're aligned for the long term. they need to buy into our long term. if they don't, i've got a bigger

problem. >> i asked this question last week. is activism a force for good in all of this? force for evil in all of this? democracy is messy. it doesn't always work. overall it's a good thing. where do you land? >> i have reservations about it. i'm afraid it's going to pull great corporations off track and get them short term to stop investing long term. if they're serious about running companies, look what eddie did for sears, what happened in jcpenney. >> the flip side is you talk about entrenched boards of 60, 70s, 80s. >> how to move them out. >> how do you keep the balance ? >> we need to think about advance. >> ceos are quaking in their boots. your advice is don't. stay true to yourself? >> get in there and do -- don't wait for activists to show up.

take the action now. do it. if you've got weak businesses, spin them off. act now in advance. have your advisors lined up. you know who they are. those are things you should do. trim your costs. that's the problem with proctor. they waited until they got the activists on top of them. they shouldn't have done that. >> i guess we could go too far. i go back to before it became popular. at that point were ceos too entrenched too boys club you or not enough? i say unequivalent. they were too entrenched. >> that's because investors -- >> they had the boards lined up. we were airing on the side of ceos being too entrenched. >> maybe it's gone too far. >> you were a ceo. i think you still carry that around with you. right? because i say prior to that.

ceos didn't have to answer to anyone. they were almost imperial. they're chairman. we don't split the two up. activists did you a favor. at least now people realize ceos aren't god. >> we have the best generation of ceos in this country we've ever had. i can name names and tell you we've got the best generation of ceos. these guys are not entrenched i want to make sure they stay to course. the ones i worry about are the ones that play short term and destroy companies. i've seen it happen where they don't do their jobs. joe, why would you stay 14 years? >> we've all got an example of a ceo who was entrenched and had the board in his pocket. as a result the stock never moved and shareholders were suffering. >> move on. you can't if the guy is playing golf every weekend. >> the board has got to step up.

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welcome back to "squawk box" you were looking at a live shot of dc. seconds away from cpi and retail sales. we've got rick here. >> sales up four tenths of 1% headline is better than expected. x auto 2% up. auto and gas up three tenths. this number isn't bad. last month minus one tenth headline stands at 0. next numbers, control gas group shifted one tenths up three tenths. better than expected. inflation down one tenth on headline cpi.

there's no inflation whatsoever. if you look at dow one tenth, last time up two tenths, no revisions. pull out all important food and energy, up one tenth as expected. year over year exactly what we were looking for. up 1% year over year on headline. that's versus 1.2 as expected. if you look at ex food and energy, maybe a more accurate gauge if you believe the see series of numbers inlightens you. 1.7 as expected. what's the after math? let's see. we have the preopening dow up a nick at 11. interest rates up a basis point 2.72 to 2.73. i don't know this changes the dynamic. it tells me one thing for sure, we're not in crisis anymore.

it might not be what people want but not in crisis mode. mr. bernanke and mrs. yellen. >> i wish we had a reaction box from steve leaseman watching during the report. >> he redeemed himself. steve didn't initially like the comment about there is no inflation. steve says there is no inflation. that was your comment. >> i didn't understand if it was sarcastic or realistic or what? >> is whirly bird janet used yet? >> in december, we could taper 85 billion. >> blow it out. all at once. >> what do you think? >> i have no idea. i think our taper and fed programs are a lot like fax policy in france right now. >> lovely. steve, you want to take that on? >> i want to talk about the

retail sales numbers. we spent less at the gas pump. i don't want to do it. >> i know. >> i heard you say serenity now. i'm focused on the data. happy. here we go. we spent less money at gasoline station because we had a decline on prices. we spent it on sweaters. 1.4% increase on clothing. we had a decline in vehicles related to the labor day calendar et cetera. food and beverage up 1.3%. consumer may be healthier than we thought. part that feeds in, i'm wondering perhaps we get a revision higher in the gdp estimates for fourth quarter. there does not appear to be inflation in measured numbers we

follow here. we remain the feds metrics for where they want inflation to be. 1% year over year on items. take out all important food and energy, up 1.7%. we've been basically rounding down to 0-1 or up to 0-2 for quite a few months. that's where inflation is. did you say sweater on purpose? >> you know sorkin's sweater. >> i haven't broken out the sweaters this year yet. i own new sweaters that i'll break out. it hasn't been that cold. >> it is now. >> i'm trying to youthen myself. >> euthanize? >> i'm going to be with you. >> no. >> you're going to wear a sweater? >> you wear one and i'll wear one. >> i'll call you in the morning

and we can coordinate colors. >> what also reminds me of sign field. i would never lend you a sweater. you would stretch out the neck with that head of yours. remember he's going into the 12 step program and won't apologize to george for saying that. i would not lend you a sweater. i tell you that much. what do you think? >> i'll call you and we'll color coordinate. >> i don't have a sweater. >> we'll go shopping together. how about that? >> we've got no time. now you want to argue? >> what are you saying? >> he wants to understand what you're saying. it was not understanding. >> are you say there isn't or is an inflation problem? >> if you look at inflation or ppi level -- i'm not the tallest

guy in the world. if you have a seven foot basketball player and seven months later ticks down a little bit, it looks down. it's still much taller than the average person. i think the person is that we're looking at an index in terms of percentage change. we forget that these indexes were at all time highs. we look at monthly changes. that's my read. plus i think that i'd rather calculate the way we did in re began years make it multiples higher. >> i'm going to translate in a way less understandable for people. he's talking about an interesting concept called price level versus the price change. that's what rick is talking about. there's an interesting argument about that. the debate is among economists, in fed policy. should fed target a price level or change in the price? that's what he's talking about. he has an argument there worth discussing. we had a pump up in price level.

should the fed target even lower inflation as in deflation to get back to that price level? interesting idea. >> on that note, going to leave it there. thank you. everyone play along nicely. >> okay. when we come back, we'll unveil the redesigned chevy colorado life from the la auto show. first, the ceo of a liquor company dispelling rumors he plans to buy a rival despite numbers on their market shares. we'll be right back.

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welcome back everybody. the ceo says his company will make its own bourbon and doesn't need beam. they've been seen as an attractive target to take on scotch brands. diageo says it will compete for the ultra premium end of the bourbon market with the launch of two brands. orphan barrel and blade and bow. when we come back, we head to the la auto show.

the president of gm north america unveils the new designed chevy colorado. "squawk box" will be right back.

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it's cnbc on demand. online and away. welcome back to "squawk box" now. let's get to phil at the auto show. we've played every country music song that has anything to do with a truck. >> as a former country dj, i appreciate that. behind us is the new chevy colorado, your new mid size truck, goes to showrooms taowars the end of next year. why trucks and why now. >> there's risk in hit which is exciting for us. we went out of the market a few years back with the coloradcolo. this version for chevrolet is

aimed for the west coast. it has a different face than the sill very ra dough. >> we're two pounds lighter than the competition today. if you look at this truck here, we're bringing out something 900 to 1000 pounds lighter. prieting from the operating cost. >> the first vehicle i got into was the new cadillac elr. i had the chance to drive it. you've got that rolling to showrooms next year. two things stand out. a lot of people talk about how much demand is out there for the electric vehicle cadillac. what do you think about that? >> we'll see.

what we have is something compelling from the handcrafted standpoint. the integration safety and range and fun to drive factor is different than the volt. i picked up my yesterday before i came out here. it's spectacular. >> you're charging $76,000 for this. a lot of people look at this and say $76,000 for a caddy shell wrapped around a chevy bolt. is it worth it? >> i think it is. it's the next generation of our technology. we use the battery, more performance and fund to drive than the bolt was. pure chevrolet value and operating cost. this is a different formula of elegance and tile. it punctuates the luxury brand. copy no one.

>> andrew has a question for you. great to see you. what do you make of the investigation going on with tesla. do you think batteries are more dangerous than traditional vehicles? >> i could give commentary on competition around this. i'm not going to do that. i'll answer the question around batteries versus safety. look at the volt. if volt is something we run through the center of the car. part of the structure we armor with everything we've got. we've never had an incident with any of those cars. le millions of miles put on it. millions of saved. any time you store energy in a tank or car, battery or gasoline, there's inherit risks. it's up to us as manufactures to provide those cars and safety elements that provide protection no matter what stored energy is on the car. that's what we've done with elr

and volt. we're proud of that. >> i want to compliment you on what gm is doing to retool the whole product line to make better cars and trucks. i personally experience had the. my question is this, how much further can you go on the energy front? are you going much more heavily to cng and other things to change the energy mix? >> we're doing all of that a. i comepliment the energy for th united states and what we're doing. we're introducing cng on a fleet basis. we put in the first refuelling station in texas. we're building off that basis. you're going to see retail things with the impala. we're exploring aggressively here. that's exciting given our energy reserves in the united states that are on tap.

lots of potential. we're excited about it. >> one last question for you. do you think the big fleet owners could ucoyo convert like and u big trucks on the road like this? >> i do. we look at a high deliver ri system in the car to deliver to the engine. the cost of entry into that is r relatively low. i do see that happening and expanding. >> you had a board meeting yesterday. i know you're not talking about the future with how long he's at general motors. at some point he's going to step a side. how much discussion is there about the production of the company? >> i wish i could answer that. i will not speculate.

i gave an update on products and launches. it was interested. it was a fun day for us. i can't speculate. dan is a wonderful man and has done a corner but it's not up to me, it's up to the board and dan. those are personal decisions as well. so great man. done a great job for our company and people like me that have been around for a long time really appreciate that. >> mark royce, head of gm north america. a lot of talk about electric but these guys have decided let's go against the tide and talk a little bit about trucks. back to you. >> just ordered up three or four more -- where i grew up, we drove trucks. he's driving his father's old truck, he leaves it on the station his father had on. >> when you didn't think of.

>> david allen poe? >> i don't know that. ♪ i was drunk the day my mama got out of prison ♪ and i went to pick her up in the rain ♪ >> my friend said he had written the perfect country song and i said he didn't because it didn't have drunk, mama and truck. >> your eyes are totally glazed over. >> we are losing share big time because of dan ackerman and mulally. that's the big change. leadership has made the difference, they're focusing on car design instead of finance. >> when we come back, jcpenney

among the stocks to watch this morning. we'll check in with jim cramer at the new york stock exchange and get his thoughts on this. squawk will be right back. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading.

welcome back, everybody. let's get back to the new york stock exchange. jim cramer is joining us.

jcpenney, the stock initially sold off. it has since come back. i wonder are you a believer in this or not? >> i'm a believer it can stay alive. we're going to have to probably stop talking about it. if it stays alive, it's no big deal. doesn't have hedge funds anymore. it's okay. there are so many better stocks to talk about. if this is the quarter they said we're not going out of business, so you can just let gus down our thing like we used to, it's going to get kohl's-like status soon. >> that is a great, great take and probably the smartest thing i've heard all morning about this stock. it's there, it not going away. it's not necessarily something you're going to jump on. >> terry lundgren delivered an amazing quarter. women's apparel and men's apparel were strong but pvh had an incredibly strong relationship with the previous guy and i think that relationship is continuing, pvh has been down. if you really think jc penny's

around, you want to buy some of the companies supplying them because you know the inventory is morning. >> how about lowe's? >> my charitable trust owns lowe's. you have to say this one is up, it looks like they're not outexecuting home depot. at the same time i think there were many people who believed that lowe's would ascend home depot and that turned out not to be the case. >> coming up, we'll get the last word from our guest host bill george. and coming up, an interview with ford order evp and president of

the americas.

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ge is revolutionizing power. supercharging turbines with advanced hardware and innovative software. using data predictively to help power entire cities. so the turbines of today... will power us all... into the future. ♪ . time now for the last word with our guest host bill george. the last word today is energy. go. >> the hottest thing right now is energy technology. it's not only redede reducing t amount of co 2 in the atmosphere

but it's also putting america in the driver's seat. this has a long run if we can let keystone and the oil company work and we have a great opportunity become more competitive visa vee tee vis-a- of the world. >> "squawk on the street" begins right now. ♪ i really want to love somebody, i really want to dance the night away ♪ good wednesday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. bernanke gave dovish comments last night at the economic club of washington. we'll talk about that and the flurry of earnings out today. 10-year yield may see some action.