♪ with the kids jingle belling good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernin and andrew. the fed is likely to dominate this week's market conversation. policy makers will gather tomorrow for the start of a two-day meeting. an announcement is due wednesday afternoon. chairman ben bernanke will then hold a news conference. some economists are looking for the fed to announce the start of a taper with the back drop of a budget deal. steve will have more in the next half hour. by the way, stocks are coming off of their second loss. the stocks this morning look like they're up pretty sharply. right now the dow futures up by 87 points above fair value. s&p up by 8.5. only 14% believe that the market

will rise. only 5% think it will crash, but this poll suggests the general public is less optimistic than investment officials. i don't know if that's a counter indicator or not. we'll talk about that. in the meantime, if you are looking for a vote of confidence, you can check out the corporate bond market. buyers of corporate debt are looking at comparable bonds since 2007. they're on pace to surpass last year's record. sales of investment grade bonds are already at the highest ever. these statistics are all evidence of bond buyers increasing effort that companies will repay them. andrew, good morning. >> hey, thank you, becky. good morning to you. hope you have a great weekend. we have corporate news including a headline. i imagine we're talking about a lot today. aig reportedly valuing its aircraft leasing business at $4.5 billion.

we have them tomorrow. aig boss bob benmosche will talk about it. workers at amazon's german operation is going on strike today. it's part of a long-running pay dispute. it comes in the midst of the crucial holiday season. amazon employs about 9,000 people in germany. today expected to be the busiest day of the year for ups. some 34 million packages will be picked up across the world. that's double the u.s. volume. they expect to deliver 129 million packages the week before christmas. they say the company will be delivering 300 packages per second at its busiest time. also we should say the u.s. postal service calls today its peak mailing day for cards, letters and packages. if you have a holiday card to get out, today is the day to do it. u.s.p.s. expects to process 607 million pieces of mail today.

joe, where do you stand on digital holiday cards versus the in print by mail snail mail version? >> they don't do it for me. >> they don't do it for you? >> no. >> get the real thing. >> i didn't know if you thought the whole world was moving in this digital direction. >> they're free, too, right? >> actually not anymore. i mean, some are. >> what? >> well, if you do paperless post, that costs money. >> paperless what? >> paperless post. the clever cards that look like they're real. that actually costs you money per card. you have to buy the digital stamps. like bitcoins. >> who had the bitcoin. that was your paper, wasn't it? did you read it? >> which piece. >> no. was it that or "the washington post." >> no, that was "the new york times." >> that suggested what? >> that bitcoin is an idea oelg. >> yes, it is an ideology. i've written that.

>> it was interesting. it covers the gamut from, you know, crazy libertarian conservative all the way to socialist. everybody can embrace it. the libertarian because they want to get all the central banks out of the picture and no longer worry about, you know, defacing the currency and not printing too much and it's secret and surreptitious. >> i don't understand it. >> mark andres son says the media has it wrong on this. >> i don't have it wrong because i really don't understand it. >> i think mark's view is that digital currency -- i could be wrong on this. the digital currency is the future, not necessarily bitcoin. so my view is -- >> he's zblsh bitcoin goes to hel in a hand basket. i think it becomes the napster. >> mark andreson said you had it

right. >> i'm not surprised. >> no, that john got it right. >> that will be the day. >> what did you say? >> he said it was like the beginning of the internet where there was something there, we didn't know what it was and some things survived and some didn't. >> purely by accident. >> i put it in the napster category. i put it in the napster category. digital currency will exist. i'm not sure bitcoin will be it. >> if you send me one of those -- you know, if you send me some stupid card on the internet, that's not going to fly with me, andrew. as far as gifts go, you know i don't need the nose hair clipper anymore. >> i've got that down. i marked that. >> it's tough to buy for wives. >> do you use it? >> oh, my gosh, you did use it. >> very easy to breathe today. >> but you don't want to do too much. >> you don't have any hair left up there. >> well, i don't really know

whether -- have you looked before? >> how do the ears look? how clean are the ears? >> the ears are good. although it was the opening weekend for the new hobbit movie. >> hair on your toes and your -- >> how do the ears look? are they feeling clear? >> ears are good. ears are good. >> shoulder hair? >> no. no. >> no. >> in washington news, the senate is going to do this. you know, these guys. the senate will convene this afternoon. they all have to get their say, don't they? then each one of them comes along and says i'm going to support it. i'm going to support it. thanks. now we know your name and your name's in the paper now. the budget, they'll support the budget. the chamber's number two democrat dick durbin says the legislation -- i think he's just trying to make sure we have enough. he says it's still short of the votes needed to pass. >> the struggle is still on in the united states senate.

we will need about eight republicans to come our way. i feel we'll have a good strong showing from the democratic side. we need bipartisan support to pass it. >> yeah. it's a new idea for some of the democrats, bipartisan. so now he wants some bipartisan support. didn't always have that for everything. it should -- it was a huge lopsided victory in the house. that's normally the one you worry about. last week the house passed a budget deal that was negotiated by paul ryan and i didn't know about it. i didn't see it. got his irish up. paul ryan said that boehner had gotten his irish up a bit. >> good phrase. >> he did. sick of some of this stuff. and then what's going on with keystone? >> what is going on with keystone, joe? >> turns out the pipeline is losing support from a major u.s. customer. harold hands, continental

resources had committed to ship crude. the company now says it is no longer needed. in the years since pipeline construction has been delayed, it's turned to railroads to get its oil. we've had harold hamm on a few times. he says they're no longer counting on keystone. >> really? if they built the pipeline, would they still stick with the railroads? >> i don't know. what does canada think? >> speaking of the oil industry, exchesapeake ceo have filed for a public offering to raise up the $2 billion. the money would be used to buy and drill oil and gas within the united states. mcclendon started this in 2008. he left in april after clashing with the board. >> will you give him money?

>> i don't have any money. >> if you had money? >> if i had money i'd probably find somewhere else to -- i don't know. would you? >> led to civil and criminal probes of the company. >> yeah. an internal investigation by chesapeake's board cleared him of any intentional wrongdoing. >> he created this whole series of other companies that were his personal sort of peaks that somehow did business with the companies. very clever exchange. >> right. i don't know. >> the money. i don't know. >> i've got my eye now on a jet, a used jet. >> that's what you're thinking of buying? >> right. >> is it this big? is it this big? fly it around. >> oh, yeah, it's at least that big. >> toy. >> geez. >> your jet. >> yeah, my jet. so we were talking last week about that cessna citation.

so one of our viewers who was in the commercial aviation business for four years said look at a dussault falcon 10. >> how much does that run for. >> eight seventy-five. >> $875,000. >> presnoend. >> yes. >> still costs $4,000 an hour to run. >> i came to the conclusion that you need to buy one of those cards and then spend $4,000 and then sings you need like a five-hour flight down and back, it's ten times as expensive as commercial so we're back to commercial people. we just are. >> i don't think any of us are not ever going to be commercial people. >> but, but i could get together with like 50 or 60 people and pool our resources and own a jet. >> and then what? >> park it. >> isn't it nice to sit here -- >> i told greco like his boat, he'd have it on one of those trailers. >> blocks.

>> on blocks in front of his double wide. >> maybe if we get -- >> next to the above ground pool. >> right. >> no, but you should look -- i will show you a picture. it's beautiful. beautiful. 1990. only 7200 miles on it. >> nothing like ply g5. >> i can't really have this conversation. i fly jetblue. >> we have robert frank on all the time. we sit next to these guys and we know them and we think we're like them. the rich really are different. you know why? >> they have money. >> they have money. >> i've heard about that. >> i'm not lusting to are this anymore. i'm lusting for happiness, a long life. >> and world peace. >> and world peace. >> you gave me your cold. >> i gave you my cold. we have some legal news talking about how the rich may be different. closing arguments are expected in the insider case in the case of michael steinberg. the government resting its case

on friday after four weeks of testimony. steinberg's lawyer says the defense will call at most only a few witnesses and present its case in less than one day. a former sec manager is charged with five counts of securities fraud and conspiracy to commit securities fraud for trading based on alleged insider information. he denies wrongdoing. he will not be testifying himself so i always wonder remember when fab didn't testify. they rested immediately. this is almost like that. is that the right strategy? >> 7200 hours, not 7200 miles. >> i'm going to show you a picture. >> you do that. in the meantime, a former top swiss banger is due to appear in a florida court today. he faces charges for allegedly helping rich americans avoid taxes hanging over him. he was arrested in italy after

first being charged in 2008. he denies the charges. i don't know if anybody saw the piece over the weekend in "the new york times" about a new island i never focused on called the coats. >> no. >> this is a new tax haven. you can put all of your money -- it's better than the caymans. it's better than switzerland or anywhere. apparently the u.s. government is not going after them. nobody is going after them. all of these people in the -- >> now that the "new york times" has written the story, that will be the next target. >> if you have money over there and i sue you in the united states -- >> yeah. >> -- people have been settling for seven to ten cents on the dollar because they know how difficult it actually is to get the money from overseas. >> the regulators have done better at going after these and now that they've broken the swiss banks, money is fungible.

regulators travel, too. >> we will see. we will see. this island is used for mostly individuals, not for multi-nationals. >> not for multi-nationals. >> which is one of the reasons they thought it would continue. >> smaller potatoes at that point. >> right. we should mention the aig news that you mentioned earlier is official now. that company is selling its aircraft leasing business. >> selling it to air kpap holdings of the nether lands. >> thank god. this has taken a year. i want to talk to bob about this. the whole thing was strange how they got into this deal, they didn't get into it, now they have a new buyer today. >> this is the major airlines. they leagues two of the major airlines. not like a business you're planning on running. >> no. >> citation. >> here's one right here, 575. $575,000. >> get it and put it on blocks. >> did you know you could buy a jet for $575,000. >> doesn't matter, i can't

afford any of it. that's ridiculous. >> one day's worth of work. >> it is. >> anyway. >> how much is -- you could easily buy one and take us around with him. >> couple thousand of those planes. >> anyway -- >> let me tell you about another story. christie's is about to tell detroit about how much its artwork is worth. it may have to sell off its artwork to pay off its bills. there's a private campaign to raise $500 million to keep the artwork from being sold. christie's could also suggest alternatives, maybe something like using the art as collateral to secure loans or lines of credit or to create a partnership with another museum where detroit's art would be leased on a long-term basis. the auction house said that detroit could establish a frus

for which museums get the art. i wonder if this raises questions. >> if you give art, if you're someone who does it, why would you continue to give art to the museum if you know it could eventually be sold off to repay their debts. my guess is people will come up with new things like trusts where you give it to them and if they ever want to sell it or you let them borrow it or keep it on a permanent basis, if they ever try to sell it it reverts back to the trust or something. why would you -- if you give it to a museum you want the public to see it. if they turn around and sell it, then it defeats the entire purpose of why you gave it to them. >> lone -- >> personal nentsly loan. >> permanent loan but a way to claw back if you think you'll sell it off and put it in private hands. >> you should become a legal advisor to the art industry. >> i'm sure they've already gotten there. i'm sure they've thought about this. right now let's talk about the global markets report. ross westgate is standing by in london. good morning. >> good morning to you, becky.

good morning, everybody. we are a little bit further as we go to the first trading session of the week here in europe. last week the ftse 100 was down 1.7%. investors are currently outpacing decliners. the ftse, the numbers are up half of 1%. xetra dax is up 1%. we had eurozone pmis out today. they were a tick up to 51.7 in november. again, sharp divergence between germany and france new manufacturing numbers paring through the german business activity. french composite pmiss on a seven month low. 47 in december. they were 48 in november. france looks like it could well be in recession. they had a negative third quarter. big divergence and big problem for the ecb. ftse up 1.4% this morning. a big focus on moncler jackets.

if you are a big skier, they have the big, puff ji jackets. soaring on its debut this morning. the stocks soaring up 40%. trading for the first time in milan. shares said to be 27% times oversubscribed. they've had a bit of a party in milan as a result. staying in italy as well, telecom italia stock up. biggest gain in europe. this is how they raised their stake in the telecom operator around 10%. it didn't break the rules by not disclosing it earlier. deutsch telecom up 3.8% today. sprint reporting modeling for deutsch telecom's t-mobile. they may make an offer in the first half of the year. they long argued for more consolidation. what the regulator has to say for it will be another matter. that's the update in europe.

back to you. okay. thanks, ross. we'll see you coming up. google robots in the news. google is joining a race. why the company is snapping up -- the creator of the world's fastest running robot. that story is next. google also has my guy working there, raymond kerzwall who is working on a few things like curing debt. first squawk news. i watched the first series. i saw all of that. that was beautiful. very first time the bengals get the ball they missed getting the first down by inches. i thought they should go for it. instead they decided to punt it and he snand too far left. can't hang on to t. why do i bother to watch the steelers. 30-20 steelers over the bengals. new orleans lost yesterday to st. louis. the patriots lost.

very weird. know as we head to break, let's check on the national forecast. another winter storm. you know who i got a message from? >> who. >> russell wilson. >> bring it. >> we are talking to the seattle. that team looks good. dick is friends with him. he's coming on. he went to wisconsin. we're going back and forth. hey, russell. i let you watch the squawk. anyway, another winter storm -- >> what? >> yeah, another winter storm pounding large parts of the country. reynolds wolf joins us from the weather channel. he can explain how all of this snow like in egypt and israel actually indicates the planet is warming. explain that. >> absolutely. we can do that and we can do that in 30 seconds. a, we have these weird fluctuations. they happen from time to time. there was the case by the pyramids. we're going to see some fluctuations in our own part of the world. this weekend we did have some snow in places like maine, certainly in new york city. a few locations got up to a foot in upstate maine. we're going to see changes later

on. blame it on the jet stream. we'll see a ridge develop for the eastern third of the country. warmer times for nashville, charlotte. the nation's capital. not quite into new york city but it will be close enough that you will see a dramatic improvement in terms of the warmer conditions. enjoy. we will see a big downturn. your forecast, los angeles, partly sunny skies. dallas, same story. new york, looking fine. no delay for a commercial break. sit tight. we have more "squawk box" coming up right around the corner. ♪ i wanna spread a little love this year ♪ [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event.

this is the pursuit of perfection.

time now for the executive edge. this is our daily segment focused on giving business leaders a leg up. first of all we got a word on amaz amazon's drones. now google has robots. this video shows an example of one of the firm's creations. this is called big dog. it's a four-legged robot that can climb over uneven terrain even when attacked, even when you're kicking it trying to knock it off course. then there's cheetah which the ft says -- claims holds the world's record for the fastest legged robot in the world. it can run super fast. run something like 29 miles an hour. google's objective for its

growing collection of robots is still unclear. there's the guys kicking it. there's the guys kicking it. gentleman, what do you think? >> so i saw actually a year ago at the google event, i don't know if it was the founder of the company or the ceo came and spoke and showed the videos of these robots. it was just astonishing. what i wonder is what google is up to. if you look at these images, it will stay on its feet with the ice. >> i think those are two people in there. >> no. it's an amazing -- you should see -- i don't know how much more video we have -- >> cheerlly these guys have never watched these movies. it's going to get mad some day and rip their leg off. >> would you try to do a downward dog with either of those machines? >> no. we saw that video after you had seen them. i remember seeing it. remember? >> you showed this. you brought it back. >> the question is -- >> what do you do with it? >> yeah. what do you think google wants to do?

what do you think this is about? >> i think they're about exploring all kinds of -- they have the money, the brain power, the ability to do it. >> i think they had to borrow the money to -- >> two pieces. this company is effectively a military contractor. that's what this company is. now google is in business with the u.s. government. >> i think they're super smart, interesting people who want to learn about everything they can. >> it is pretty neat. someone wrote the code for the way those legs were moving i guess. >> i know. >> it's amazing. it's amazing. good chance to show a video. >> it is. let's talk about another story. you can move over lab rats. researchers have another study. amgen is using grizzly bears to learn more about obesity. grizzly bears can take inasmuch as 58,000 calories a day. they can weigh 1,000 pounds. they add massive amounts of weight before hibernating, like 100 pounds or more.

it creates bad cholesterol that rises for them. their bloop spiked pressure spi. i don't know if you read through that whole story, but there was a story about sharks where sharks have -- it's almost impossible to give a shark cancer. they have anticancer somethings to fight tumors. >> yeah. they've tried that. a lot of like latril, when you go to these different countries to get stuff that's not fda approved, shark, you know, extracts from shark or something that people use. i don't know at this point whether you hear the anecdotal story that it does something but then i don't think that it's ever really been proven that it's effective. you know, we can learn a lot from just the metabolism of all of these different animals, how they process the bad cholesterol. do they get heart disease from the bad cholesterol?

it's interesting. their metabolism to be able to do that before you hibernate. >> how do you think their metabolism compares to yours? >> i'm not sure really. >> when you sleep, don't you like getting all -- don't you feel like you're -- have you ever tried to sleep without a blanket? >> i can't. i like the weight of a blanket. >> i do. >> even if it's a summer, i like the weight. >> i have something that's heavy and it slowly slides down. somebody i'm sleeping with throws off my side. but not naming any names. not mentioning any names. i like that. >> makes us feel safe. >> i don't know. i like the heaviness. my wife, same thing. >> what's with these women? >> i think they're very warm blooded. >> i'm under the covers. i'm the one that gets them ripped off. >> you're the tv wife. you have two husbands. that's the reverse. >> thanks. you guys are more like brothers. beyonce, did you guys hear this? >> yes. >> she is turning to social

media to sell her latest album and is up ending the music industry's conventional wisdom in the process of this. at midnight last thursday she released her latest album by writing something that said, surprise, to her over 8 million instagram followers. at the same time, her full album appeared for sales on itunes. when the numbers are in "the new york times" reports that beyonce is expected to have one of the biggest sales. she was bored by the way they were doing it. >> i was impressed. you can be beyonce, you can be lady gaga. >> lady gaga, the story is what happened to her. >> right. >> you saw that story. >> she's struggling. >> she jumped the shark like four years ago. she's gotten crazier and crazier. did you see her in a picasso outfit. >> i saw her in a christmas tree. >> the picasso outfit, her face

had stuff to look like boardwalk empire. >> beyonce, she won't have a record zmp. >> it gives her a lot of independence. >> if she does it all herself, she doesn't need any help. >> she should get all of the money. >> probably weighed it. probably thought, you know, jay-z, some brain power together. >> sports agent. >> who's going to buy img. >> ari might buy it. ari gets it or peter chernon. the bids come in a little lower. >> you read that one. >> and i think the other folks -- >> it would help wme with something. >> i don't think icm gets it. they're hooked up with carlisle. i don't believe they'll get it. >> are we done? >> everybody very unhappy about the bids. >> you two keep talking amongst yourselves. when we come back, will it be ben or janet who kicks off the taper? it's coming down to the wire and now the fed's policy announcement is just two days

away so is the economy ready for the fed to start to pull away? joe, he has some pretty strong thoughts on this. we'll talk more about that right after this. also, amazon wants to be the king of the retail jungle, but at what cost? and who's paying the price for online consumer domination. we'll go on that in the next half hour of "squawk box." first, as we head to break, take a look at last week's winners and losers. ♪ ♪

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welcome back, everybody. the fed will hold its last policy meeting this year at the end of the week. on wednesday afternoon we will finally learn if we get a december taper or if we have to wait until 2014. joining us is drew mattis, the deputy economist at ubs and let me ask you, neither one of you thinks that we're going to really get a taper? >> in december? >> right not this week? >> probably not. >> too soon. there's too little inflation, right, and unemployment is still a little too high. i think it's funny. everyone went to these are the biggest group of doves to oh, they're going o taper in december. >> because leaseman told us, too. >> they have a budget due. >> there will be no liquidity this week. if they go this week -- >> that's interesting. >> it will be a mistake as much as i think they should taper as

soon as possible. tapering in my mind does not include december. >> because there's so little trading it could throw things out of whack. >> you lost your nerve. >> i haven't lost my nerve. >> i'm as nervy as i ever was. >> 10 billion. just cut it by 10, 15. >> we're looking for a 10 billion taper all treasuries. >> what are you doing what they do it? >> what do i do when they do it? >> i say i told you so as loudly as possible. >> what about you, michael? do you think they'll hold off and they should hold off? >> i think they're looking for signs of more sustainable growth. as drew mentioned, inflation performs under. you put those two pieces together. we think it could go as late as march. possibly in january. >> if they think it's not as effective as it was before -- >> not as effective. they don't think it's ineffective.

>> if you think the economy is improving. if you're looking for a reason to get out of it and use another tool, they've been talking up this idea that rates are going to stay at zero for basically forever. >> for some time, right. >> by doing all of that and putting all that talk out and having so many different fed officials saying the same coordinated message, it makes everybody think they want to start the taper as soon as possible. >> i think they want to start the taper when they're pretty comfortable the economy is worth it. the worst thing is to start to taper and take it back. real option value for waiting. real premium for being patient right now. i think that's what we're seeing. that's why generally on the street people are thinking december, probably not. we're looking to see a little bit better data, payroll, clarity on the fiscal side. the news was we may be battling over the debt limit. in the end it won't hold the fed back if the data is good. the data is not quite as good as they're looking for. close call. >> is december bernanke's last meeting or does he still have january? >> he still has january.

the reason we went in january is because i kind of view it as him backing up again. bernanke wants a chapter of his book. once we get past the holiday shopping season, if you risk driving mortgage rates higher, you want them driven higher. a lower credit period. opening lemding standards. what you need in this economy is lower lending. everyone thought they were going to taper 90%. >> we were calling for january back in september. >> even when everyone thought they were going to taper? >> we were out on a limb. it was a lonely place to be but it turns out -- >> everyone who thought they were going to taper last time -- >> got burned. >> no, is saying they don't think they're going to taper. >> they had to change. >> and you got the budget deal done. if you thought they were going

to do it back then, then you must certainly think they're going to do it now. >> we moved it to january. >> you thought they were going in september? >> now you say they're not going to go. >> here's the question. why didn't they go? >> i can't explain it. neither can i explain why they should go now? >> if you thought theyshed go back then then you think they should go now. >> that's not the case. they're actsing irrationally. how can you forecast that? >> i would disagree. >> of course you do. they are data dependent. the data is getting better. >> the data is better and we got the deal. >> is the data good enough? we talked about this in the beginning. the inflation numbers have continued to fall. >> do you want to disrupt christmas? >> i will say the -- if the fed is watching every data point that's coming out, the retail mood has not been a great one. >> that's right. >> consumers have not been willing to spend as much as they thought. even the people who are

wealthier, steve's survey and the nrf. >> consumer spending in the fourth quarter looks like it can be above three. everyone is sitting at one, we're sitting above two. people told us we were crazy. some of the tracking estimates, you would be high twos for the fourth quarter depending ong inventories and imports. the numbers have gotten better in a rapid fashion for no discernible reason. that's where the fed will fall back on the inflation sides and say, let's weight. >> let me throw something back at you. this is the meeting where bernanke can answer questions. he can answer all of the questions surrounding it and make sure people understood. >> the fed has made it clear. they don't want to feel like they can only move four times a year. he also said, look, we can call one any time we want to. there's a press conference.

i'm not sure that's true, actually. in the fed's view, they go small. they go very slow. we don't think it will be done until the end of the year at the earliest. they will be gradual. they don't want to pull the rug out of the markets. they don't see this as the best tool. >> why don't they start it with one? >> well, at some point -- >> and that really raises the question. when 90% of the market was looking for september and you're worried about disrupting the market, why not meet market expectations by going in september. this is where the disconnect between the fed and the markets come in. 5 billion, no taper. there's no difference between those two. anyone in the market understands there's a significant difference. >> if they fully did it based on congress and their notion that they would go through what we went through, they fully didn't do it because of that. >> now we didn't do it. >> i think it was really data

first and sort of back up -- >> the data was why we thought they were going to do it. >> but it wasn't from -- basically from july on the data was on the down side. >> if we did it on low inflation we might never taper. >> well, do you need to see some inflation? >> you know where i stand on this. i think loan rates are holding the economy back. >> i'm not listening to you. i'm writing you off. i'll see what this guy says. >> we'll see what my fan base says to your fan base. >> we'll call the jokers back and see what happens. >> drew, michael, thanks a lot. coming up, another weekend of lousy weather. did the snow, rain and ice keep movie goers from the box office and shoppers from the mall? we'll find out if there was any winners and losers thanks to mother nature. later, aig chief will be our very special guest. should we expect any new deals in the coming year? we got one this morning. find out at 8:00 a.m. eastern

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in hollywood news, the hobbit. the dissolution of smaug. there was no three pieces of the hobbit. it was much shorter than lord of the rings. it's warner brothers. >> he's not in it but he's in the movie. >> i think they're going two for the final. >> that's okay. i like it. they can stretch it out as long as they want. >> "the hobbit" wasn't as good as "the lord of the rings."

anyway, taking the top spot at the weekend box office for 73.7 million in ticket sales. disney's animated tail "frozen" fell to number two. it brought domestic sales to $164.4 million. apparently legolus is shooting arrows everywhere along new york city with his friend leonardo. these guys are cutting a wide swath. >> because they are men, you're saying? >> yeah. the sword. can you imagine those two guys? >> i can't imagine. >> huh? >> i can't imagine. >> you've thought about it vicariously. >> i'm looking forward "the wolf of wall street." >> i'm not. >> i want to see it. >> that guy was such a -- we had him here. >> the writer of the book? >> the person that -- >> real person. >> yeah.

the bucket shop operator. he's not interesting. he's just a low life. there's nothing interesting -- he stole from widows a and orphans. >> that's the story. they did it. >> he's making a lot of money on it, too. >> anyway, we will continue this debate during the commercial break. in the meantime -- >> is it universal? >> if it was, would you say it was fantastic? >> yes. >> coming up, amazon's world. the online retail giant taking yet another big step to take on warehouse clubs but how far will jeff bezos go to get control of your wallet. we've got the answer when "squawk box" returns. my mantra? family first.

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coming up -- not really coming up, we're going to talk about amazon continuing to expand its empire with the latest venture, amazon pantry. the buy in bulk delivery service will give warehouse club stores like costco and sam's club a run for their money. what other kinds of innovations is the company hiding up its sleeve? joining us now to talk about is technology reporter "usa today" and our own jon fortt. what is this about? what is amazon going to be in

five years from now? >> all about getting you to spend as much money as possible at amazon.com. if you buy your electronic gadgets and your christmas gifts but they want you spending much more frequently and they want you spending a lot more. they want it to be more like a walmart where a lot of people go to get their groceries as well as other types of products. >> here's the thing i can't figure out. do they become the last mile provider of distribution. not just for amazon but for everything? there's part of me that thinks the starting pantry but they're also starting to do groceries. once you get into the grocery business and delivering same day and doing same day in other places, that their ambition and you think about the drones they claim coming in the air, which i think is kind of a pr stunt that's never going to happen. there's actually sort of a grander ambition that even being what alistair suggests is the walmart of everything.

>> and bezos is in newspapers now. to get stuff to your door or driveway. they do seem to be working on that. logistics an issue for them. but it's interesting, they're moving not just into that area of getting stuff to your door but also into more consumer packaged goods, trying to figure out how to make it profitable or at least -- >> right. >> almost profitable for them to deliver that sort of stuff to you. that's where this pantry thing fits in. and, of course, the drone experiment. >> the one thing that doesn't make sense about pantry, pantry stuff, except for paper towels light in terms of weight, most of the stuff is relatively heavy. so how do you distribute that and get it to your home at a reasonable price given the enormous weight and typically the way shipping costs relate to how heavy these things are? >> yeah, that's the key. and that's why this type of sector, which is huge hasn't

really taken off ecommerce wise yet. and amazon's approach is going to be with a set size box and it's going to have a weight limit and prime members only. so you're going to have to pack as many cans as you can. the problem is, as you say which is like take the typical pack of coke. it would cost amazon about the same amount as that coke costs to ship it. they want to pack as many products in there as possible. >> we always talk about amazon in the context of a retail experience. and yet a huge part of their business has nothing to do with retail at all. it's basically providing the cloud. it's a storage services company. long-term, how big is that a piece of the business versus this sort of consumer facing piece that we all focus on? >> i tried to press bezos on that a little bit when we talked a couple of months ago. that area is rapidly growing. it started off, they were just

using their sort of unused cycle of their equipment they were using for retail to do the cloud stuff. now, it's its own area. google's jumping in. they're going to have price competition there. but they clearly have a philosophy and a road map for that business that's pretty extensive. it's going to be a long time before revenue wise it gets anywhere close to the retail business. but it's significant because of the insider. >> by the way, did you see the robot that google just bought? >> that freaks me out. >> that freaks you out? >> yeah. >> that's what we were talking about in the last of hour. thank you, guys. appreciate it. when we come back, fed matters, whole world is watching ben bernanke's new moves. he'll tell us what he sees in terms of the taper timing. and at 8:00 a.m., aig ceo bob benmosche, he'll join us for an hour. it's been one year since the

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call 1-888-628-2419 to learn more. so you can take charge of your trading. ♪ i wanna spread a little love this year ♪ [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection.

a new week for "squawk box." snow on the ground and a chill in the air. wicked weather causing havoc for holiday shoppers. but who wins when jack frost is nipping at your nose. "squawk" rings up the retail winners and losers. former fed governor rick mishkin will weigh in on the taper timing. and then at 8:00 a.m., the "squawk" ceo call, aig's robert benmosche will join the gang in the studio to provide wisdom ahead of the holidays. "squawk box" begins right now.

>> good morning. and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin. our top story this morning, fed policy makers. they're going to be gathering tomorrow for the start of a two-day meeting. an announcement is due wednesday afternoon. and chairman ben bernanke will hold a news conference right after it. some economists are looking for the fed to announce the start of the taper with the backdrop of improving data. steve liesman will have a little bit more in a moment. he is on their side. and then there's other people on the other side of this debate. also, stocks coming off their second weekly loss in a row. futures at this hour, take a look, dow looks like it would open much higher. nasdaq would open up close to 20 points higher and the s&p 500 a little over eight points higher. in corporate news, it is official, aig selling the aircraft leasing business to air cap holdings of the netherlands.

the deal worth about $5 billion in cash and stock. and bob benmosche is going to join us in the next hour starting at 8:00 eastern time. we can talk to him about that transaction and a lot more. and then global news, watching the situation in the ukraine, russia reportedly says it could grant ukraine a loan. thousands of protesters camping out on the bitterly cold main square yesterday. camping in independent square since last month, angry at the last-minute refusal signing an agreement bringing the country closer to the european union. and now senator john mccain is warning that the unite could take concrete action against ukraine if the government cracks down on descent. sanctions would deserve serious consideration by congress if yup cra ukraine signed a deal. the buzz story this morning about is google and this

crazy-looking robot. looks like a dog sort of. google acquired the maker of the world's fastest running robot and other realistic animal-like machines supplied to the u.s. military. this video shows one example of the firm's creations called big dog. it's a four-legged robot that can climb over uneven terrain even when attacked. then there's cheetah that holds the record for the fastest legged robot in the world. running at more than 29 miles an hour. . but at the same time, google has filed to change their name legally to sky net, which no one has mentioned in all of this. >> look at that. >> it is cool. >> looks like a person. >> looks like two people. >> dressed up like a robot. >> two very strange people. >> can i say something? you give andrew for such grief

how he says manhattan and button. >> legged? >> no, what are those things -- >> the whole time you said robut. >> it's like autos. well, german guy had something to do with making the auto initially, right? auto. >> why do you see margariter -- >> margarita. >> that's what i don't know. you put "r." >> where am i putting an "r"? >> my friend from long island had a friend named linder. >> you got the button and manhattan. >> it is worse. >> now your children are saddled with this now. >> hopefully not. i'm still working on that. >> we'll see. let's get back to the week's top market story, the fed. steve liesman joins us onset and, steve, you still feeling totally confident it's coming this week?

>> we're past that. we did that last week. let's now go back to the text. let's go back to the text. >> you want to de-emphasize your call? >> no, what i normally do on the week of the meeting. >> well, we just said a lot of people are expecting a taper. they're not. i would say 1 in 10 are expecting a taper. >> exact data on that tomorrow when we present the results of our cnbc fed survey. >> what do you think it is? >> can i get to my script? >> what do you think it's going to be tomorrow? >> tomorrow? is tuesday. >> how many people are expecting the taper? give me your ballpark. >> i think somewhere at a third. >> a third. >> all right. go ahead. >> we're going to look at -- >> hide behind your script. go ahead and read it. >> i'm not hiding. >> if you're uncomfortable -- >> let's go back to what janet yellen said about tapering. >> okay. >> during her -- >> is as the fomc indicated in the most recent statement, we do see strength in the private

sector of the economy. and we are expecting continued progress going forward. so while there's no set time that we will decide to reduce the pace of our purchases at each meeting we're attempting to assess whether or not the outlook is meeting the criterion that we have set out to begin to reduce the pace of purchases. >> they're going to talk about it. they're going to think about it. now let's go through what different people have said. jim bullard who said -- on the wall. have a look there. a small taper at the december meeting might recognize labor market improvement. >> that is so different than when he was onset with us. >> very different. i changed along with him. i thought jim was a good guy to follow along. dennis lockhart, the atlanta fed president. what did he say? the trajectory of the recovery, outlook of the economy justifies consideration of such a move.

moving on to even charlie evans, noncommittal, i'll be open-minded. everything else equal, i'd like to see a couple of months of good numbers. >> couple more months? >> couple months. >> what's different. >> then there's john williams -- san francisco fed president, i wasn't as far away from being willing to initiate a small taper as some other fed officials. now if the great stek could take the wide view. this is the center of the board. so it's certainly a close call. and my call is more likely than not. one other thing, i want to leave you with what bernanke said in a very important november 19 speech. >> when ultimately asset purchases do slow, it will likely be because the committee has progressed sufficiently for the economy progressed sufficiently for the committee to rely more heavily on rate policies. the associated forward guidance

and the substantial continued holdings of securities to maintain progress towards maximum employment and price stability. >> this is what the chairman wants to do. he wants to pivot. and that's a big story. he wants to pivot from a qe policy to one that's based on forward guidance and based on rates. whether or not that's december or january, it's coming soon. that's the direction of policy. >> echoed by several fed officials, too. going back to this idea that we will keep rates low for an extended period of time. it's been coordinated almost, it seems. >> exactly. >> and the other thing, becky, he said in the november 19th speech. he said at 6.5%, we don't have to hike rates. we can pause and look around. this concept, the semantics are it's a threshold, not a trigger. we can do it at that point. i would like to point out, remember 7% in june what it was, chairman bernanke. the place where qe would end. >> that's interesting. >> how things have changed. >> 10 billion is so minor,

steve. >> are you going to sit there and sell stocks because the fed is buying $75 billion not $85 billion? >> if you're a simpleton like me, if they didn't do it because they were worried about it. we got a budget deal. >> and the market have gotten there already. >> and two good employment reports. >> and i've been emphasizing this whole week the behavior of the short end of the curve tells the fed that -- >> it's okay. >> they believe in the promise of what you talked about, becky, that they're going to be lower for longer even amid the taper. >> and inflation's not going to pick up between now and january. not like people can say, well, there's no inflation. >> that's the only consideration on the other side. >> it's not going to pick up by january. why ever do it? >> right. >> let's bring in another voice, as well. joining us with his thoughts with how the fed will be handling any sort of tapering is rick michigan. an economics professor at columbia, and, rick, it's great to see you. >> good to see you.

>> help us out a little bit here. what do you think in terms of -- i know you thought back in september they should have tapered at that point but they blinked. what do you think happens now? >> well, i think that i agree with steve that i think the moved slightly over 50% that they're going to taper. but i think the key thing to understand here is that what's going on is that there's really two different kind of tools the fed has in terms of expansion monetary policy. the issue of asset purchases is one that has a lot of extra baggage. way of thinking of this is there's a balance sheet capacity of the fed and they're running up against that. they don't want this huge balance sheet. they want eventually the balance sheet to return to normal. and also, they do not plan to sell assets. so this is why they need to taper and why i think they should have done it earlier. on the other hand, they don't -- they actually do want to have more expansionary policy. they want to do this pivot. want to move to using their

forward guidance as the key policy tool. and basically put the tapering and the balance sheet tool away for use during more crucial and more critical times when, in fact, they may need it. so they have to do this at some point. i think as long as the markets are stable. and i think that's the key that the markets seem to have been able to adjust to the talk of taper this time where they haven't in september. and also the fact that the budget deal, the congress looks like it's backing away from this insanity, you know, they may have a little bit of craziness there, it's not quite the same. all of this helps them to move to the main tool of monetary policy. >> the thing that makes me most nervous are the number of people who say they won't. they argue it's the circular logic where the fed won't taper because the market's not ready for it. it's like sort of closing your eyes to the tank in front of you. that tank is not there because

i've closed my eyes and don't see it. how does that factor in right now. is that sort of -- i guess i could call that willful blindness on the part of market participants. is that decisive for the fed? >> well, i think that it's actually -- ben bernanke was involved thinking about some of these issues which is you don't want to get into the circular kind of situation where you always follow the market. the market's going a certain way, you keep on following it. it's extremely important in terms of managing expectations to have the central bank do what it thinks is right and hope the market gets it. i think the market will get this and i think that's what the fed needs to do. >> rick, i want to go back to your first point. because what you say is really important. everyone may have grasped what you may have said. >> part of it is the size of the balance sheet. it's going to create a political problem down the road because if you want to lay out your theory

on this, they're giving money to the treasury. that's not going to be the case as interest rates go up. >> right. big time. typically the federal reserve gives on the order around $30 billion to the treasury every year. it's been a lot more than that recently because of the fact the balance sheet has been so huge. the problem is that as we get back to more normalcy, the fed is locked into holding all these long-term assets where they will not get any increase in the interest rates and, yet, they'll be raising interest rates on what they have to pay out to banks on reserves. the result will be the income situation will deteriorate. and that means at some point, they're not going to be able to pay any money to the treasury and that could be a political problem for them. the bigger that balance sheet is, the more it's in long-term assets, which very key is that the purchases are not short-term assets, they're long-term security where is the interest rates are locked in, more of a problem that creates for them. that's the balance sheet capacity problem that they have to deal with. and this is one of the reasons why although the tapering is a tool for expansion -- excuse me,

although asset purchases is a tool, it has a major flaw and that's one of the reasons why the fed wants to move to the other tool which is much cleaner for them. >> rick, we have your former colleague who argued that one of the risks or costs of quantitative easing was misallocation of credit. and he said that one of the things you see is a lack of capital expenditures. and he thinks that's because of fear of the unwind of quantitative easing. do you find that -- is that one of the valid criticisms in your opinion of qe? >> no. you know, i really don't think that's a big issue. the markets basically can work around this. that the biggest problem -- it's a remarkable problem is that, for example, corporations are rolling in cash. the banks are more than willing to lend. there's plenty of money out there. it's people basically are reluctant to invest. this is because there's been a lot of uncertainty. i think one of the things that the fed needs to do is decrease

the uncertainty. september, the problem there was that they basically said -- sort of said they were going to do something and then backed off. that creates uncertainty. but the big problem here is the u.s. government, which has been creating a lot of uncertainty. but maybe the congress is backing off of this, you know, let's play chicken with each other. and i think that's very, very healthy. that may actually may be more important to helping the economy than anything else. >> right. professor, that you think very much for joining us. we hope to see you again. >> you're very welcome. >> coming up, the top movie at the weekend box office. first, though, two hollywood passings, peter o'toole died at age 81, an eight-time oscar nominee, appeared in dozens of film during a career spanning decades and joan fontane has died. she gained fame in "suspicion" and "rebecca."

welcome back to "squawk box." warner brother's "the hobbit," taking the top spot. smaug, smug. >> smaug. >> $73.7 million in sales. "frozen" falling to number two

in the third weekend while bringing the overall domestic ticket total to $164.4 million. not bad. >> it's frauzen. >> andrew mentioned "the hobbit," t-- >> it's like a problem with the air and l.a. >> smaug. >> here's our own eunice eun with a look at real life desolation from smog. >> try breathing in this town. the desolation of smaug hits theaters in china next year, but the desolation of smog is already here. cities are battling with what's known here as the airpacolypse. people here live in fear of the death cloud. but the state media has been

making the most of it and that it could block potential military strikes. smog could be one of the last dragons of middle earth, but our smog can be seen from space. cnbc, beijing. >> good story. still to come on "squawk box," our newsmaker of the morning. aig boss bob benmosche will have his company's multibillion dollar deal today. plus his outlook for the new year. first, though, a bullish sign from the corporate bond market. what's really in store in 2014? we'll ask our guest strategist when "squawk box" returns. life's an adventure when you're with her.

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that's what they can do with you. ameriprise financial. more within reach. welcome back. a new "associated press" poll shows most americans see the stock market flat or lower by next year. only 14% believe the market will rise. 5% think it should crash. the general public is less optimistic than investment professionals. so you've got to -- you've got to pick your group to do the opposite. and who is the real contrarian? i think the market's going to be up next year. and the reason i've said it because the factors, it's hard to -- even with commodities, a trend's usually your friend. and you've got to be really smart to cause the -- or to call

a reversal in realtime. it's really easy to look back and say it was obvious. >> right. >> but most of the time, a trend continues. and if the momentum in the economy is something overall globally that's giving people confidence to boost stock prices 20% in one year, it's unlikely you're going to be smart enough to know when to get off of that train. >> right. >> even if it's only 5 or 10 or 15%. i think we'll be higher next year. >> i agree with you. >> and in -- i'm sorry, but a lot of times the public unfortunately is not in early on. and a lot of times they come in towards the end. >> left holding the bag. >> yeah. to let the people with that already have money end up getting cashing out and they're left holding the bag and that's bad. meantime, if you're looking for a vote of confidence in the economy, check out the corporate bond market. a story in today's "wall street journal" points out that buyers of corporate debt are demanding the smallest interest rate premium to comparable government

bonds since 2007. sales of new junk rated corporate bonds are on pace to surpass last year's record. all of this is bolstering confidence that, you know, the overall economy's better. and sales of investment grade bond this year already at the highest ever. these stats are all evidence that bond buyers are increasingly comfortable that companies will repay them, which would be nice if you're buying bonds. >> it would be nice, right? >> yeah, that would make it a whole lot easier to feel good about buying them. joining us for the rest of the hour is director of global macro at fidelity investments, co-portfolio manager. can we talk to you about not only stocks but any asset class? we can? can we talk to you about all of these assets, not just in this country but globally? >> yeah. >> really? >> yeah. >> you're like a renaissance man. >> i may not have a good answer, but you can ask me.

>> we can talk to you about it. so mac owe trends for -- since we're getting close to the end of 2013. what do you think about 2014? and, you know, go over bonds and equities and here as well as emerging markets or even europe? >> well, good morning. i see three paths. the path that the fed would like to see i think is one of escaped velocity of a sustained higher growth rate of gdp, obviously haven't had it so far. >> is that just for here in this country? or does it matter globally? >> here for this country, but in the context of a more synchronized global expansion, which we're getting now. if you look at the pmi, about 3/4 of countries are hitting 50 now. europe has improved, germany's pmi at 54, china around 51. the japanese survey was very strong. so we're definitely seeing an uptick in economic activity and it's more synchronized around the world. we had synchronized global

expansion from '03 to '07, the whole globalization emerging market boom at the time. and then it was synchronized on the way down, but the deleveraging. and then it was synchronized in '09 and '10. and since 2010, it's been very fragmented. and things are starting to come together a little bit. the fed, if they could see 3% plus growth and payrolls, they can taper all they want and nobody will care. >> hold that thought. >> jurrien's going to be with us for the rest of the hour. >> we'll get your answer all straight through equities, bonds. >> you got it. when we come back, though, stormy weather for the retailers. did this winter storm delay more big spending or are retailers in a panic because the spending may not happen? we'll have that story right after this. [ male announcer ] this december, experience the gift of unsurpassed craftsmanship and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection.

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welcome back to "squawk box" on cnbc, first in business worldwide. a number of global headlines we've got for you this morning. new surveys showing that chinese manufacturing continue to expand slightly in december.

growth was a bit slower than the previous month. it's the latest sign that the world's second biggest economy is undergoing a shaky recovery. meantime, check this out in japan, a quarterly survey of business sentiment showing that manufacturers are more upbeat about the state of the world's third largest economy under abe's recovery program. and we continue to watch the situation in ukraine. reportedly said it could grant ukraine a loan if kiev asked for it. now senator john mccain warning that the u.s. could take concrete action against ukraine if the government cracks down on descent. >> dissent. >> joining us now is michael pont. also, our guest host this hour is jurrien timmer. thanks for joining us. >> thanks, becky. >> you think 2014 is going to be a grind higher for interest

rates around the globe? >> we do. and it'll be different from the move higher this year in that we expect it's the economy that will be leading rates higher, not just the fed. earlier this year, it was really the fed's reaction function that pushed rates higher. we expect that gdp growth in the u.s. will be a bit higher as well as global growth and that's what we think will push rates modestly higher from here. >> so that's actually good news, right? it's a situation with higher rates, but it's higher rates for the right reason and the markets should be able to handle that? >> that's right. the fed earlier this year was worried about the rise in rates, tightening of financial conditions because the economy hadn't lifted off yet. we think the fed will be more comfortable with a further rise in rates next year because it will be under a stronger economy. >> jurrien sounds like something you agree with. something you were explaining, too. >> i agree that's what the fed would love to see. this liftoff, escape velocity. larger payroll gains, they can taper all they want. bond yields would go up, nobody

would care, there'll be stronger growth. in the summer, they tried that, liquidity conditions tightened and they had to sort of backtrack. i think the thinking is that maybe now they're getting enough momentum and now the fiscal problems are sort of pushed aside for a while. but the question is, are the upticks we're seeing in the economic data, the pmi, the payrolls, the gdp, are they going to last? are they part of a trend or a seasonal blip? we don't know yet. >> what do you think? what are the biggest risks that would prevent us from hitting that escape velocity? >> well, we're watching consumer spending quite closely. consumer spending appears to have actually picked up from the third quarter to the fourth quarter. real final sales are actually running close to 3% in q4 after around 2% of the past several quarters. so growth does look to have picked up. we're watching the consumer pretty closely. >> what would you -- if you're the fed and watching the consumer pretty closely, is that an argument for waiting and not

actually starting the taper until maybe january or march? >> well, the market's pretty set up to taper whether it be december, january or march. so we think that matters less than the potential for increased forward guidance. that's what we'll be watching more for this week of whether they try to disentangle tightening from tapering. >> right. >> because the market's already set up for tapering. >> michael, let's talk a little bit about global issues. in japan, there's a lot of concern because of the drop of public support for shinzo abe's cabinet at this point. what does that tell you? what is your concern about that? >> well, the big concern we're watching for next year is the impact of the consumption tax where essentially going from 5% up to 8%. that's a big hit to the japanese consumer. at a time when the big increase from fiscal spending and the move in the currency is already starting to wane. >> so what would you tell people in terms of what they're looking

at bonds, japanese bonds. >> we do think they'll go higher here, but, again, there's greater concern in japan that things were lower in the u.s. >> michael, thank you very much for joining us today. >> thanks, becky. >> we'll have more from jurrien in a little bit. he's our guest host for the hour. we're going to talk retail winners and losers next. and at the top of the hour, a special "squawk" ceo call with aig ceo robert benmosche. he'll be our special guest starting at 8:00 a.m. eastern. "squawk box" will be right back. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly

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♪ retailers from the midwest to the northeast probably took a

hit from winter storm electra as it dropped accumulating snow, sleet and freezing rain on the second to last shopping weekend before christmas. cnbc's courtney reagan joins us from herald square in new york with more on this. and the retailers love it when it's cold but they don't love the snow and the sleet, right? >> that's exactly right, becky. they like the cold, but they want to keep it dry. although, right here, you can hardly see evidence of the snow in herald square. but electra did move through, dropping snow and ice from missouri to maine. it was a pretty big storm, disrupting one of the key holiday shopping weekends before christmas. now we've only got one more. and if you take a look at the damage that electra did, dropping up to 18 inches of snow in some parts of maine and vermont, retailers really white knuckling it through the last eight days. typically, the last two weeks pulling anywhere between 20% and 30% of all holiday sales. but with this year's compressed season and a lot of procrastination we're hearing from consumers, it seems that

the final stretch is actually going to be more important than ever before. the latest nrf survey indicates consumers are further behind when it comes to checking off those lists. some shoppers did brave the malls this weekend. of course, finding the shorter lines sidelined many and they shopped online. those online consumers could likely have some problems, too. take a look at fedex, they're saying it's memphis hub and flight operations experience substantial disruptions on december 13th due to winter weather and high winds, potential delays are possible for shipment deliveries across the u.s. so now, of course, andrew, the big question remains, was this past weekend lost all together, or will the traffic and sales shift to this week and this weekend? it all remains to be scene. but i'm sure that retailers remain very, very nervous. we know this holiday season has been tepid at best, especially for the sales and those promotions continue to tick up. back to you guys. >> so here's my question for you, courtney. how much does it ultimately

matter if so many of the sales are supposed to be online anyway, this season? >> well, so, it actually depends on where the sales come from online. if you think about it, andrew, macy's is a winner on a lot of lists. and macy's wins online and in store. that all sort of goes to the same pot. of course, we talk about amazon taking share. i know you talked about it earlier on the show. anywhere between 85% and 95% of all retail sales are done in store. it really, really does matter. and when you lose a weekend due to weather, you're running out of time. so people like my mother are going to get a little nervous when it comes to online shipping. she's going to hit the stores when she had intended to do it online. she's nervous she's running out of time now. >> are there any publicly traded retailers that have a bigger presence on the west coast than the east coast and so they're actually going to do better because of the weather situation? >> well, certainly, there are. in some even off price. exactly, nordstrom or off-price stores are more in the west,

southwest and southeast. so they're going to miss a lot of these big snowstorms. you've got jc penney, macy's, big concentration in the northeast. then, again, it's december, it snows at this time every year and christmas comes on the 25th every year. so some people are going to go out and brave it no matter what. >> you know, courtney, evan if people do show up for the last nine days, we're on the countdown at this point. even if people show up at this point, my guess is, the retailers who have had issues to this point, it's too late because they're nervous, they have all of this inventory. they're offering things at deep, deep discounts. even if they make the sales, they're not going to be profitable sales. >> reporter: exactly. and i think some consumers have actually gotten smarter over the years and started to realize that. and instead of bulking up on the black friday weekend, they wait until the end because they're taking advantage of those discounts that come out of desperation more or less. so while they do make the sale, it is in a much-compressed margin. and you've got folks who have

waited until last minute and will pay whatever price they need to pay to make sure they have something to give. you get a little bit of both. but in the grand scheme of things, you're going to be getting those sales at a compressed margin. >> i'll admit. i was out yesterday, and if you're waiting, you could be in a bad situation because some retailers are going to run out of stock. i was at a disney store, i was looking for pajamas, they were 40% off. none of the right sizes, they sent me to the online place. i'm out of luck. i waited too long. >> what's matt wearing? >> it was. the rest of us all got something. >> he wears disney jammys. >> i was going to get him a pair, but he gets none now. >> they have a little thing in the back that opens up -- >> no, they were mickey pants. he's getting none because the men who were the ones sold out first. >> he started out with this as a joke, but it's turned serious. >> i'm horrified. >> yes, courtney, it's an issue.

there are certainly places where supplies are running out. >> reporter: it is. >> right. >> reporter: and retailers have kept inventories low this season on purpose. they don't want to get stuck with the situation they were in a couple years ago. they had way too much. that, of course, is not what investors want to see. not what they want to deal with at the end of the season. they keep that inventory low. if you wait, you could be in trouble. and i'm hearing the same thing about how there is product but the sizes could be the issue. >> one other question. we had -- who did we have on last week who said the winter's actually good for certain retailers who sell winter apparel. >> steve saddove. >> it's a high-margin product. is there a winner from that perspective in all of this? >> exactly. so that's what becky and i were kind of talking about at the top. the retailers like it when it's cold, but when it's dry. so anybody that sells the winter apparel, that's the department stores, the macy's, the kohl's, the jc penney, they like it. they can sell the sweaters, the coats, which didn't move well

last year. december was the warmest in about 11 years. >> exact opposite situation occur where they don't sell any winter coats. that's even worse. >> exactly. >> things should go according to plan. >> courtney, thank you for that report. >> thanks. >> stay warm. you look warm. how cold is it out today? >> she's ignoring you. >> no. >> she's like -- >> no, it's like -- >> she's like, i'm not the weather man. >> it was 27 when i came in. it's chilly out. >> i do have a -- i have some batman bottoms. >> and do they open up in the back, too? >> no, they don't. they're the cool batman insignia. blue with like a yellow bat -- >> you looked like the caped crusader himself. >> batman is cooler than disney. >> do you wear the cape, too? >> no, just when i'm -- whole

different thing we're talking about. yeah. >> well, when we come back, we're going to talk about stories making headlines. plus, what to watch in 2014. finally thoughts from our guest hosts, we'll have jurrien timmer talking about the markets. then we'll welcome bob benmosche for an hour. how aig is fairing one year after paying off the debt from the financial crisis. "squawk box" will be right back.

welcome back, everybody. today is expected to be the busiest day of the year for u.p.s. some 34 million packages will be picked up across the world. that is double the normal volume. the company expects to deliver more than 129 million packages the week before christmas. half of them coming to my house because i did all of my shopping online. a u.p.s. spokesman says the company will be delivering about 300 packages a second at its busiest time. the united states postal service also calls today its peak mailing day for cards, letters and packages. and man, i'm behind on that issue. the u.s. postal service expects to process 607 million pieces of mail just today. that's crazy. >> do you know, andrew, when we go to barnes and noble, right, you look at what you want to buy and don't buy them there. the guys there tell you to -- you buy them online. >> what do you mean? it's cheaper to buy the same book online? >> and have it sent. >> really?

oh, the salespeople are telling you that? >> i don't know whether eshd have said that, but i think so. it wasn't me, i was there when it was happening. i was there when it was happening. >> well, sometimes when they were out of stock. i had a store tell me -- >> instead of carrying it, it was sent to us. and maybe because you put them all together. i'm not sure why. >> i don't know why either. >> i walked into barnes and noble yesterday and thought about buying a book and didn't. >> i'm going to get a history of everything that happened from like the year 1,000 till all through the renaissance in every country -- because i was looking and i don't know any of it. what happened to us with history in school? >> natalie is studying the middle ages and i've had to go back and bone up on it. >> do you know any of it? >> some of it. some of it kind of comes back to you. >> i wish i would have been more engaged. >> we all do, after the fact. >> instead of worrying about every social -- i wish i'd done

all studying. >> right. and when your parents told you and you thought -- >> yeah. >> i know about that. in washington news, the senate will convene this afternoon. on the agenda, take a look. the budget deal, but chamber's number two democrat, says the legislation is still short of the votes needed to pass. >> the struggle is still on in the united states senate. we will need about eight republicans to come our way. i feel we'll have a good, strong showing from the democratic side. but we need bipartisan support to pass it. >> and last week, the house passed the budget deal negotiated by the leaders of the house and senate budget committees. >> 55 democrats. that means you only need five. >> someone's hanging out, holding on for it. in legal news, closing arguments are expected today in the insider trading case against fo michael steinberg. steinberg's lawyers say the

defense will call at most just a few witnesses and present its case in less than a day. the former s.a.c. manager is charged with five counts of securities fraud and conspiracy to commit securities fraud for trading in dell nvidia and others -- or at least those two based on alleged insider information. but he denies any wrong doing. let's get back to our guest host fidelity investment's jurrien timmer. stocks globally possibly an attractive investment? >> we like the u.s., europe, japan. at least i like japan. >> think it'll be an up year? >> if the fed gets even remotely close to escaped velocity and it can taper and the market doesn't care and the rates can go up a little bit. i think stocks can have an up year. the problem is price has exceeded the fundamentals. earnings growth up, s&p's up 25

plus. there's a disconnect. multiple expansion and that comes from the easy money sort of liquidity of the fed. how do you manage to taper, obviously, is going to matter. i think one of the outcomes we could be seeing is if we don't get escaped velocity and the fed is unable to taper and we stay in the 1.5% to 2% growth track, at what point does the fed balance sheet get so big they're going to have to get out even though the data isn't ready yet. and next year, i was talking to becky, they're gaining and losing rosengren and evans who are doves from the voting ranks. and so the whole fomc is going to tilt more hawkish. the fed tapering next year with more dissent. they're probably not going to like that. how they navigate and decouple forward rate guidance from tapering. i think that was the communications error they made over the spring and summer they

didn't really distinguish well enough between the two. so the market just said, okay, they're starting a tightening cycle. and then, you know, you saw what happened to mortgage rates and they had to backtrack. so this time i think the market is more prepared, you see the s&p close to 1,800. you know, the ten-year at 2.90 or so. i think the market is in a better place now to handle it. really decouples the rate guidance from the taper. >> would double digits in the s&p surprise you for 2014? >> it would surprise me just because the market is well ahead of what's happening in earnings. earnings growth has slowed down to a couple of percentage points. earnings would have to reaccelerate and, you know -- >> a lot of companies have bought back so much stock. that's going to help them in terms of earnings per share. >> yeah. >> the earnings per share is actually stronger than net income if you take away the share buybacks.

net income, i think, is negative in terms of growth. so earnings would need to reaccelerate. you would need to see that synchronized global expansion. >> where would the ten-year be? can we handle 4% if it's with economic growth. >> if it's with escaped velocity, i think the market can handle 3.5% to 4%. if the market -- if the bond market sells off because rates rise because investors are selling their bond funds and the economy is not strong enough, then it will hamper growth like it did in the spring and the fed would have to backtrack once again. >> and commodities are -- >> china. china has structural issues. >> any inflation on the horizon? >> no inflation. and that's the big threat to the fed. the core barely at 1%. which is below the target. and that would be a reason not to taper. the fed's going to lead into balance sheet capacity issues. they cannot keep doing this forever.

they're going to be at 5 trillion or 6 trillion. and they can't grow that big. >> it's beautiful, too. >> do you know who makes it? i can tell you, it's a hackett suit. >> and the tie of a similar -- >> the tie is a hackett tie. >> the reason i bring this up. did you get a flannel suit for davos? >> i own -- >> you've got to wear flannel in the winter. anywhere in a cold climate. >> you could wear it outside. >> by this guy zegna. >> zenya. >> i say zegna. >> we've got another man who is wearing a beautiful suit right over there. coming up, a very special hour with the ceo of aig. it's been a year since the insurance and financial giant paid off the bailout.

robert benmosche tells us where the company stands. his outlook for 2014 and his comments on a very big deal announced just about an hour ago, we're back in a moment. (vo) you are a business pro. seeker of the sublime. you can separate runway ridiculousness... from fashion that flies off the shelves. and you...rent from national. because only national lets you choose any car in the aisle... and go.

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aig's ceo robert benmosche joins us for a special one-hour event. a year after paying back its government bailout. where does the company stand? how has the economy changed? what does 2014 have in store? benmosche goes on the record with "squawk box." and it all begins right now. >> welcome back. just kidding. welcome back to "squawk box" here on cnbc first in business word wide. i'm joe kernan along with becky quick and andrew ross sorkin. in studio for the remainder of the show. bob benmosche. chairman and ceo. and among corporate stories, aig is selling its aircraft leasing

business to air cap holding of the netherlands. the deal is worth about 5 billion in cash and stock. and we will get mr. benmosche's thoughts on that deal in a minute. first, though, andrew is going to bring us this morning's other top stories. better be good. >> i'm going to try. we've got a couple stories this morning. policy makers, they're going to be gathering for the first time to start that two-day meeting tomorrow an announcement due wednesday afternoon and chairman ben bernanke will hold a news conference. some economists -- looking for the fed to announce the start of a taper. others are not. i want to get bob's view on that one, as well. in washington news, the senate will convene this afternoon on the agenda, the budget deal. the chamber's number two democrat says the legislation is still short of the votes needed to pass. also, a hot ipo that promises to keep consumers warm.

shares of the luxury quilted jackets monclair. up 40% in europe after going public. i was admiring matt lauer's coat, he was wearing it on thanksgiving. >> he had one? >> it was a beautiful coat. >> that's all you need to say, then. >> watch shares of twitter, they're under pressure after downgrades by suntrust and wells fargo. now citing the valuation as being too high at $57.98. so there you have it. >> but you don't have one yet. >> i don't. but i will try to -- he's a very dapper gentleman. so if you try to keep up with him. >> just follow in his footsteps, that's all you need to do. once we know that somebody else, you know, thinks he's pretty cool, too, right? >> how's that? >> you ask, you know where he's going. let's get a check on markets this morning. >> your wife? >> yeah. my wife loves him. >> she's at home with your

children taking care -- >> my wife loves matt lauer. it's true. >> thank you, becky. >> we're going to run right through. the equity futures are looking higher this morning. this is coming after a rough start for the week, last week after the markets. dow futures up by 111 points above fair value. up by better than 10 points. anybody who is waiting for that big pullback to buy. well, you may have missed it already. looks like the markets are moving again. overseas in asia, things weren't as bright. the hang seng was also down by more than .5%. gains of better than 1.5% for germany with the dax. the france ca krrc is up by ove, and ftse by .9%. we have a very special hour ahead, it was exactly one year ago from saturday that insurance giant aig repaid the u.s.

government in full for its bailout back in 2008. . and he also brings us news this morning. did you hold this news just knowing you were coming on? >> i thought it would be good with ratings as they are, i want to help everybody out in the industry. >> a backhanded compliment. >> as good as they are to get them better. >> absolutely. >> tell us about this deal. the airline leasing deal. this is a transaction you tried to pull off a year ago. the chinese tried to buy this and somehow reneged and nobody understood why that happened and how that happened. give us the back story of how you got to hear. >> i don't know. some of that has to come from china. but it was very clear that keep in mind when we did it we were going through regime change in china. so old and new was occurring and, in fact, we signed a deal during the previous regime, the

new regime came in, i recall, around march. so as you have changes going on in any company, any country, people have different points of view. and so what may have been okay for one group of people may not have been okay for the next group of people. so new china trust was, in fact, the core of the negotiations. and that's where the money was coming from. once new china trust was no longer able to continue in this transaction and they withdrew, then it left the group in hong kong with a big hole and they began to attempt to fill that hole either through investors in hong kong or went on to taiwan with an effort to see if they couldn't raise the money in taiwan and had a great deal of difficulty doing it because it's a huge transaction. without the cash that was originally there, it became a bridge too far for them. they are pretty close, but they weren't able to get to the finish line. >> you satisfied with this price a year later? >> oh, i'm very satisfied with it because the fact is, we

negotiated a deal for about $5 billion, which included a fixed number of shares at the time we negotiated the transaction. i think it's about 96 million shares. if you look we negotiated it. we're probably up $4 a share. when you look at the announced price, we're up 400 million. i think you'll see retaining about 46% ownership of the new company. we worked really hard to get ioc. >> you continued on 46%. >> we sold all of the company, we sold all of the company to air cap. >> right. >> air cap then has to mark down the assets to market. >> okay. >> fair value accounting to our market values. so therefore they will own the property, they paid us in cash and in stock. in stock. so therefore we wound up owning 46%. what you actually accomplished

here was an ipo and a merger all at once. and you get the accounting treatment so we can right the assets down once to market which is very important. >> okay. i'm going to go big picture for a second. which is we keep talking all day about the taper. the taper, the nontaper, when's it happening? doesn't matter. what is the aig view on all this? >> well, we've been crawling around and nobody will tell us at the fed -- we see that the economy continues to be stronger than people think. we're not expanding as much as we should. that doesn't mean there's a weakness in it. i think there's a fear. i go around, my fellow ceos. people are frindened about how much -- based upon regulatory requirements. the other thing is banks are concerned about lending. anywhere near a risky loan and they get in trouble, why bother. with capital troubles, i'm not sure what the charges should be. we think it's a strong economy. and i think look at the jobs growth and employment.

our turnover for our employees is high. this year relative to last year and prior years. we're finding it difficult to find certain skilled employees. if we want to find high quality actuaries, for example, it's hard to recruit. >> so people are able to find jobs. and if you look at what i said three years ago, we had high turnover going on in this market. but people were finding jobs. it's a question whether they wanted those jobs or not. if you want to go to work and get started, you can find opportunity. >> what's that a function of? >> i think it's that much better. people are looking for work right now. and waiting for something else to open up. would you rather make nothing an hour or ten bucks an hour? i have somebody that i work with. his daughter is home for winter break and it's a wonderful story. she says she's working for a bread company today and tomorrow because they took her back part-time. she's trying to work for one of the trucking companies that

deliver packages and so she'll probably do that. what am i going to do? sit at home for three weeks? i'll have extra spending money. there's opportunity to do that if there's a will to do that. >> one of the conditions we hear over and over again is that ceos are concerned about reinvesting not only for the reasons you cited, but also because of the uncertainty in washington. when you saw a deal, obviously it has to pass the senate. when you saw this deal get done, does that give you any more faith than what's happening in washington? >> no, because of the rhetoric around coming together like -- we don't come together. and so it's when families feud and so on, we just don't make -- we're not going to be friendly with that part of the family. so, in fact the rhetoric and the leadership from top down says we're now going to do these things, some of them are harder than you'd like to hear, but we're going to get stuff done and all work together, i think it's great. when you take a couple of very

competent congress people and put them in a room and say let's really get this worked out, you came out with a work out, but that doesn't mean the rest of the government has the right leadership to really get the company optimistic and on the right track. >> can you name any names? >> i have trouble with names, joe. at my age -- >> you said from the top down, though. woodward was out over the weekend. he got mad at the president for some reason. he said the reason -- >> it wasn't involved. >> wasn't involved. >> well, i've heard several senior senators -- i won't mention names, say it's tough to negotiate when everybody doesn't come to the table. that means everybody has to be the leadership of the country as well as the leadership of the congress. has to come together and discuss. >> how much time do you spend in washington now? before i assume it was all the time because you were effectively an arm or they were a major investor in your company. >> actually, that's everybody's perception.

the only time i spent, i would say at most a day collectively. not at one time, but over several days when we were negotiating the compensation with ken feinberg. i would say i spend no more than 8 to 12 hours a year in washington. >> really? >> no more than 8 to 12 hours. what i say all along, no, you were the government and all these things were said. what i said was that the federal reserve was the bank. and as a result, they had to sign off on everything. they gave us over 1,000 waivers during this period of time because the issue was they gave money, they weren't supposed to give money. wanted to make sure they got that money back. once we paid the $85 billion and closed that out in terms of giving back the line and so on. we kept them informed. they attended board meetings, our manager meetings, which the fed does now as a regulator, and we didn't have any kind of an

issue other than the compensation period was intense. >> does that change in terms of the dynamic between you and the federal reserve and other government agencies in the u.s.? >> i think it improves it in my mind because now all of a sudden. look, we had -- we wanted to pay a dividend. >> right. >> we wanted to buy back shares. and we felt we were strong enough. we go through our own stress testing. and, you know, i think i shared with you. we consider the fact over the 2013 and '14, about 23 billion is the shortfall of our earnings. we don't earn 23 billion. the stock market goes down 50%. bonds, you know, fall out of bed because of credit issues. unemployment goes to 12.5%. therefore we felt it was prudent. we go to the rating agencies, they say, hey, it's great. it's okay. aig can do that. knowing that the federal reserve

is buzzing around, we have eight or nine full-time people watching everything we do. and while the federal reserve does not -- make it clear, federal reserve does not approve or disapprove what we do, they observe what we do. therefore it is the decision of management to recommends it to the board. we and do that capital management. if you're a regulator some place else in the world and see aig doing this, they would have to say, look, if this is going to be something around safety and soundness, the federal reserve would stop them. and to me, that's good. >> so prudential, for example. >> good housekeeping seal. >> of course. that's not what they want to do. but that's what they've accomplished. >> prudential said i don't want to be a sifi. is there a magnitude in terms of size where they should be? does it matter to you?

>> like it or not when you're big and you make promises and guarantees for people's lifetimes, you have to have somebody overseeing that. and if you as an insurance company make sure that you have very little resources at the holding company. and i think they don't need to be anything. the problem is what they say is, well, i need to have some flexibility as a public company bringing money out of the insurance companies into the holding company for limited capital management or whatever. once you're in the whatever category and it's outside the insurance companies and you're big enough, you could cause a destabilization. and i believe solvency accounting that's gone on at the insurance company level is great. but the fact is any company that has panic and the regulators can't stop the panic you have issues. now, look, we have examples of where the industry paid a big price. that's where even just recently

we had to cough up more money because of what happened where the money moved from stocks to bonds during the crisis. we have to contribute to make whole -- but you're not making a whole, but you're giving them more of the money they were promised before they went insolvent. there are examples insurance companies didn't do so well. and now, where the world is today, i think sifi is not a bad thing. run your company the right way and the chances are, you'll be fine. >> one other quick question. blackrock, apparently. may become a sifi, the government may designate them that. how do you think these should be made? >> look, blackrock, the overall business, i don't know if it's $4 trillion. >> it's amazing. >> larry's done a phenomenal job there. i think what is the money market industry. you got several trillion dollars of money market funds that are

basically guaranteed but not really at a dollar. you can actually break a buck. if one has -- had one happen, right? >> and the government guarantee is the only way to stop -- >> they stopped in right away. anybody who has a large amount of money market funds should be designated and thought through because you're now selling, you know, deposit accounts. >> right. >> principal guaranteed, which is not what the -- is really there. and so if you want to talk about run, that's a run where you can see several trillion dollars coming out of the market. >> like that. >> and going into a banking institution for safety and that i worry about more than people who invest in stocks and bonds who understand there's a risk. >> right. okay. bob, you're sticking around. thank you for being here. >> pleasure. >> it's great. appreciate it. >> a lot more to talk about today. when we come back, we'll talk about whether ikea is spying on

employees in france. and the last fomc meeting of the year. as we wind down 2013, find out what the market is predicting. first, though, a monday morning deal for you. avago is buying lsi corporation, this is an all-cash transaction, valued at $6.6 billion. "squawk box" will be right back. , you stand behind what you say. around here you don't make excuses. you make commitments. and when you can't live up to them, you own up, and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most. but i know you'll still find it when you know where to look.

welcome back to "squawk box." ikea is being accused of providing private investigators with personal info about employees in france. the review of court records by the "new york times" indicates investigations were conducted for various reasons, including the vetting of job applicants. efforts to build cases against employees for wrong doing and more. a former employee accuses the company of ordering personal investigations against hundreds of employees in the past decade and the case that caused public outrage in france. so far, no accusations such surveillance occurred in any of the other 42 countries in which ikea operates. very little of the surveillance yielded information. and ikea that they were able to use against the target. the court documents indicate that investigators suspected ikea may have used knowledge of

personal information to quell workplace grievances or to prompt a resignation. it's not something that you don't have an ikea. you've got to put them together. >> used to have some ikea stuff. >> when you were in college? >> after college. >> they've gone upscale. >> kind of austere, isn't it? >> used to be. it's not as austere. >> no, it's pretty -- i thought it was very -- anyway. coming up, we've got much more from our special guest bob benmosche. look at that thing -- unbelievable. "squawk" coming back right after this. [ male announcer ] once, there was a man

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welcome back, everybody. in our headlines this morning, the "wall street journal" reports that the u.s. exchanges are near a deal for an infrastructure upgrade. at issue is a central piece of trading infrastructure that critics say has been neglected and caused a serious market outage last august. the plan under consideration would establish faster backups for a key part of that market's plumbing known as a securities information processors or s.i.p.s., consolidate the quote and trade data before it is displayed to the public. when we return, a stern warning from senator john mccain in ukraine yesterday where he was speaking to protesters.

that story and other headlines after this. take a look at the u.s. equity futures. triple digit gains for the dow up by about 105 points above fair value. s&p up by 10 1/2 coming after a disappointing week last week. stick around, "squawk box" will be right back. clients are always learning more

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welcome back to "squawk box" here on cnbc. first in business worldwide. we've got morning headlines for you. avago is purchasing lsi corporate. all-cash transaction valued at $6.6 billion. how did she say it? >> you weren't paying attention. never mind. let's do them all. we'll get one of them right. she said avago. she said it very clearly. >> avago --

>> you want to make her look -- >> why not go with what you said, nobody at home nows. now you're enjoying to say lsi. leesi. the ipo -- >> the ipo story of the morning, moncler shares up -- >> is that how you say it? >> i think so. >> trading after going public on the italian stock exchange. the stock at this point you can see there is now up 41%. >> it has an italian coat maker? >> beautiful coats. >> but it's italian? >> it is. >> and you think they are warm? >> they look warm to me. >> i can't imagine they're as warm as canada. >> canada goose. >> which is what we're wearing. just purchased by bain, which is what we're going to wear in davos. yours is a black color mine is a gray color. >> yes. >> you going to leave the fur on

the -- >> i did last time and got in trouble for that. >> it wasn't real fur. >> no, it was fake fur. >> what did you get in trouble for? >> for having the fur on the coat. empire state and a revision to productivity hitting the wires, rick santelli standing by at the cme in chicago. the numbers? >> it's one of the early signs. so .98, close to one, it's not as good as the five, six that was expected. but if you think durable goods volatile, this is definitely volatile. right now, unit labor output down 1.4% if we look at the actual productivity, that was 3%. so the costs are down 1.4%, pretty close to expectations in the productivity at 3% is exactly what we were expecting. so no big surprises there. and there's a lot of data this week, especially if you're interested in housing. lots of housing numbers.

here we are at 2.85, no great shakes there, but it's a great shake we haven't shaken the tree to lower rates. hanging very tough, it's going to be interesting today look at the big opening in front of the fed meeting and consider that equities were one of the reasons rates were a bit calm last week because it wasn't a terrific week for equities. but obviously they must have fallen asleep and had that same fairy tale they always have before fed meetings because i don't think by looking at current numbers they're really taking to heart the notion of the taper. we'll have to wait and see, gentlemen. back to you. >> rick, thank you. right now, let's get over to cnbc's all america economic survey. what's most remarkable is that they are not more negative. steve liesman joins us to talk about that. steve? >> yeah, becky, thanks. last friday we've watched the retail numbers in the holiday spending plans in the economic attitudes. today, we're continuing what we began in september which is really detailed views of

america's views on obama care and the economic effects. and as you said, what's remarkable is, yeah, these numbers are terrible for obama care. but our pollsters, democratic republican team can't believe they're not much worse. so september, 29% had a positive attitude. over the three months, which you'll remember, there has been a drubing in the headlines of this program, fallen to 26%. those who are neutral has fallen down to about 9%. and a slight decline -- slight increase in those who have a negative opinion. but look at this, the don't knows are up quite a bit. you can see right there. that's where we've ended up in terms of people who have gone from positive, more into the don't know. who are these don't knows? an interesting group according to our pollsters. a third of the people don't own a home, don't know. don't have an opinion on the health care plan. 30% of latinos. what they say is this a group of people who would stand to benefit from the obama care plan. they don't know enough to have an opinion on it.

so that's something that's going to be ahead in terms of an educational program. how about the negative economic effects. we've asked people. have you had your hours reduced because of obama care, any others? you can see, gone up to 15%. when you look at the actual numbers, a 1 percentage point increase in those who say the hours are reduced because of the health care act. how about losing their insurance? again, very, very little change here in terms of losing insurance because of obamacare. look at this gain here, up one point. and as we look down on the demographics of this, very interesting development that shows maybe there are some people actually being helped by this program. take a look, now, by income group. and what you see is those in the $30,000 to $50,000 income range, the percentage who got it for the first time went down. but look at this, 19%, we don't know if this is a statistical problem, but a big jump in the under 30,000.

we don't know why they got it, it could have been for employment, any other reason. but right now, a big jump in those earning less than $30,000 who got health care for the first time in the past year, guys. >> okay. >> he's the president and ceo of aig. bob, we talked a little bit about changes in health care. we were just talking offcamera about it. your thoughts on what you think is happening whether or not this is a good thing. >> look, the fact is health care costs are going up. and having more access and thinking healthy people will come into the system to pay for the unhealthy is a failed strategy. think about tort reform, make sure doctors are not afraid to practice as they get older. doctors moving to states, for example, like texas because of tort reform. therefore they can practice having moving out of california and other states.

it should have started with how do we make the system where it's about medicine and not about the costs of protecting yourself if something goes wrong. doctors are afraid to be sued, they order way too many tests. might be necessary. then once we've thought that there at that level, how do we think about access and appropriate access so that you have the right balance. so my sense right now is employers are continuing to do okay. medicare is still there. but a lot of it is not going to be affordable. and my worry is -- and it's the worry of the medical profession is that you're going to see them cutting back on research. they're going to see you're cutting back oncoming up with things that will prevent disease and spend more money on treatment. and while treatment's important, i think part of the treatment cost goes to the cost of some other stuff. i think we're going to find ourselves in a hole over the next three to five years for ten years for sure.

look, we have 15 million or so people undocumented in america today. the fact is we know they're here, they're working here, they would love to get an i.d. card, pay taxes. and they go to the emergency room. and if you look at the costs of hospitals today, it's those people gaining access to the emergency rooms paid for by the insurance programs. >> argument not only for tort reform by immigration reform. >> it's essential as we begin to rationalize all of the people that have to deal with the medical system. look at what's happening in hospitals. they'll tell you. when you have people who are homeless on the streets, where do they go when they're in desperate need. they go to the emergency room. >> let me ask you a philosophical question. aig was kind of partnered up with the government for a while. you know how the government operates. and you were -- it was probably beneficial to aig to have the government partnership,

obviously. or else aig might not exist today. looking at the size and scope of the undertaking to try to bring more of the whole health care network under the federal government. is it eventually going to be worth it? is it going to be doable? do we want the government so intimately involved in such a large part of the economy? >> don't forget that the government didn't get involved in aig. they gave us money and gave us money to prevent the failure of the financial system. >> and you worked it out yourselves. >> and got it back to the government. i worry about national health programs. and if you look at examples whether they're europe or in canada and so on. an example i use for my friends, it's very simple. in the form of yugoslavia, one of my close friends, the former mayor. and somebody in slovenia called him several years ago and said i need your help, they won't treat

me because they said the treatment which is under national system is too dangerous for me at 92 years old. really feel if you can come here and help me, he went there and negotiated and got a doctor to see her. this past year, he just went to slovenia to celebrate her 100th birthday. she lived. but very few people have in that part of the world the former mayor and former member of parliament to negotiate on their behalf for medical care. even my own mother was put into a hospital on a friday night and my sister was told she'd be arrested if she got in the way so she was there during the weekend, had alzheimer's. and the expectation was that they needed to observe her. by monday, when the court ordered her to return home, her mother had contracted a serious staff infection and almost died. the point is my mother had such strong will, she said, she'll die on her terms not the people of massachusetts.

and so therefore, my mother lived for two more years. and then eventually died. but, that's what's going to start happening pretty soon here because the cost of the last two years is not affordable. and we're going to put people in the medical system in the position of who gets and who doesn't get. we're setting ourselves up as the baby boomers, i worry about that social issue and we've got to make sure we've got the right balance and prevention of treatment. if you want access, everyone will have access and you have to deal with the 15 million that aren't here. >> when you come to the conclusion you just had, which is the problem with emergency rooms, doesn't that lead you to maybe not exactly obama care but an obamacare-like solution that keeps them away from the emergency rooms? >> well, steve, the question's give. and right now what i think hillary had the idea a long time ago. and that is earn has to be in the system. and have to be in the system.

because like it or not, there are 15 to 20 million young people or healthy people in america that are fine and not willing to invest that kind of money. and if they do, they want catastrophic insurance. so you've got to figure out a way to get everyone in, everyone plays. but if you have 15 million, that's a big number that won't be in the system until they need help. and so right now, the affordable care act does not do anything for tort reform and does nothing to do for the people that are here, help support people that need the emergency room. we haven't solved it. >> and there's a rationale because private insurance companies have to consider shareholders and they have to pay their ceos and administrative costs are so much more expensive that it just -- just, you know, you use a magic wand and go from private to public. and it's like, oh, look, now it's a public entity.

now there's no accountability. now you've got it run like a dmv, a post office, now being run like amtrak. anything you save on the short side -- it's shareholder accountability. and ceo accountability on the way down to employees. that's what makes things run smoothly. and we're not going to have it in 20% of the economy right now. >> i think that's fair. but keep in mind. >> that's where liesman. you cover your emergency room workers, you could destroy the whole system in the meanwhile. nobody has decent health care or access to it anymore. now you've got people covered that were in the emergency room. >> he's on a roll. >> we throw away the whole system for your emergency room. >> no matter what we do, we have to keep -- we talk about the shareholders, ceo and the employees. the fact is when you say we're going to cover these preexisting conditions, it's not going to come out of profits. there aren't that many profits to cover all of the things. this is a question of saying, okay, we'll add it into the pool. you and i and everybody else.

>> why wouldn't administrative costs be cheaper everywhere? why even have private capitalism in a sector, steve, when it would work better without the profit incentive? >> i was just about to say steven -- and i don't mean to be offensive. >> you don't mean what? >> russia tried that experiment and it didn't work. >> a lot of places tried it and need to learn it over and over and over. >> and where is it better -- why do people -- >> it depends where you are, joe. on the income spectrum. where is it better? i don't think necessarily, it's great here if you've got money and you can go to see a park avenue specialist. >> there were ways -- there were ways of covering everybody as far as catastrophic goes that could have been done without -- and the entire political system. >> the question is more efficient at what? one of the things that's been documented, joe, is the number of people at these health care

insurance -- whose job it is to make sure they don't pay the bill. and that's a big infrastructure in there. >> after poisoning the entire political environment because of the way it was done in the partisan fashion that it was done, think if it does fall under its own weight after all of this if enough people don't sign up, everything we've gone through and go back to the drawing board and do it incrementally like other people wanted to do at the time? >> guys -- >> won't be happy then. >> we've got more from bob in a moment. but up next, china's luna rover lands on the moon. that story coming up when we return. ♪ i wanna spread a little love this year ♪ [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection.

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welcome back to "squawk box." chinese state television released video showing its space probe landing on the moon. the 300-pound rover on board separated from the landing vehicle early yesterday, marks the next stage in an ambitious space program which aims to eventually put the chinese astronaut on the moon. i mean, they know that we were there like 50 years ago, right? we've done this. they didn't miss that, right? >> who claimed ownership? >> of the cheese? >> we put the flag on. >> do we find any -- interesting? anything good up there?

>> one of them turns you into a werewolf, according to a comic book i read. >> some of it's cheese. we have jim cramer's reaction to our interview with bob benmosche. plus, a look at what's coming up on "squawk on the street." but first, congratulations to peyton manning, "sports illustrated" named the broncos' quarterback sportsman of the year. on pace for record of passing yards and passing touchdowns in the season. >> it's like a curse, right? >> it has been. [ female announcer ] there's one thing

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at the new york stock exchange, jim cramer joins us now. the exchange seems more comfortable. both of us, once we think our teams are good and they always let us know they are not good, don't they? >> the inconsistency is maddening. some of these outfits, we could be from dallas and be willing to hang ourselves. we are not able to generate our easy games. i want to live in seattle, for heaven's sake. >> i would take romo any day as a quarterback. he messes up once in a while but

he is good, isn't he? >> very good. i don't want romo. i also don't want to play call it. that was supposed to be a running play. >> i know. >> everybody is going to get fired. he works for the redskins. >> jerry jones looks like someone you don't want to do ta for. >> dan snyder and jerry jones ought to get in a claymation death match and hope nobody comes out. >> people are more worried about europe than we thought. the market reversed from the manufacturing pmi came out. there is also this undercurrent saying they may not do anything. . i think the people are getting concerned they may have to be longer going into that fed meeting do you think that ilsc was a nonessential asset for aig? do you think this was a good

move? >> a great move. that was more money than i expected. this is a win. at one point, it looked like it was going to be a loss. bob has done everything right with aig. it is not done going higher. i want to thank him for the american people for what an unbelievable job he has done with a company that should have folded. >> jim, you are a darling, thank you. >> no, problem. you have done it for share holders over and over. it is pretty incredible. >> thanks, jim. next week is another week. new orleans, how do you figure any of this? anybody can lose any time. >> new orleans going to carolina but brees does bounce back when we come back, we are going to wrap up our special who are with aig ceo, bob bim mo shay. dow futures up over 110. nasdaq up by 21.

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we do have some time. can you fix everything for the country in the last couple of minutes? we have to fix immigration. >> immigration reform is essential. we have to deal with people that are here and are undocumented. make sure we know who they are and have licenses and give them access to the health care system and have them pay for access to the health care and pay taxes for services. the government has to understand, we have to live within our means. we all have to do this. we have to do it as governments. you can't put off anymore tomorrow what you can do today. >> by doing this two-year budget deal, which couldn't do anything for entitlements but it might let us do immigration. at least it gets us out of the way of arguing about keeping the government open. >> i think that's right. we need to start doing something. >> and do something that's positive, that starts to take the trend, starts to get us to live within our means. show stability. so that companies here in this country can invest in this

country. look, i'm surprised and so many of my friends in europe are surprised that america isn't growing dramatically in manufacturing. our energy, our energy costs are a third of what you have in europe. so when you consider that advantage, our wage differentials, the low wages of asia, are not solo anymo low an. they are rising. there is some equilibriums. we make our own judgments at aig. we move a lot of jobs to texas from other areas. stevens point, wisconsin is a good place. they are all in america. we have all these advantages. we have to get businesses to feel optimistic about this country and what they can do. stop beating up on people who are the financial arm who are feeding the capital into the system and they are not feeding it so much. i would like to see more optimism and more government

decisions. >> you talk about beating up the financial system. you have a column for tomorrow. >> bob lived as the whipping boy in some respects for many years. i would argue jpmorgan has sort of become that. what do you make of that situation? >> the political climate for the major part of the population, major being more than 50% is they feel that their situation is not because of them, because of what they have done with their life and the opportunities of their life. it is because of what the banks did to them. we have used that whole sector as the problem. so, yeah, they want jpmorgan to be punished, because they are not doing as well as they thought they might be. i think that's a shame. that's where we have to get out of blaming everybody for what happened. what happened happened for a lot of reasons and i won't get into it, because it is a half hour to tell you that. we have to move forward to be positive. >> you also fault the government. if you were jamie dimon, would you fight or settle? >> i think you have to be

pragmatic. you don't want do be -- i learned one word years ago. i didn't know what puric meant. it is a pretty ugly word. it is an empty victory. what happens is, you can win. anderson decided, arthur anderson decided they are going to take them on and it's gone. you have to be careful about what you do and how you take it on. i had to make judgments when i was ceo of metlife where we had to settle with the u.s. attorney in missouri on a situation that was terribly unfair. if we proceeded, we would have won. you can't indict the subsidiary of a big insurance company and get away with it. >> you know the bobby fuller song, i fought the law and the law won. >> if you're jamie dimon, what do you tell him to do? >> i think jamie will do what he is doing, continue to perform well, keep his head down and

work hard. >> fair enough. thank you for being here. this is great. happy holidays. doing anything fun? >> i'm going to go south. i have my home in florida. we are going to spend time there. >> you have one there too. >> and new brof nick. >> who is using new brovnik. >> actually, my vineyard manager. >> we have to run. thank you for being here. >> "squawk on the street" begins right now. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. a big week is taking shape. a flurry of merger activity, potentially the final fed meeting of the bernanke era. if the fed tapers along with the supplies of