good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with a version of joe kernen and andrew ross sorkin who is reporting from the yale ceo summit in new york. we have a stellar lineup this morning. erskin bowles will be joining us on set at 7:00 a.m. we have the ceos of pvh, pulitzer prize winning columnist tom freedman and steve swartzman. and yes, we are packaging all of this into the next three hours. it's hard to imagine. joe is going to be here very soon. a little bit of trouble with the tires today. yeah. pothole tied him up. right around new york. >> are you trying to generate some mail? >> andrew, you're standing by, correct? >> i am standing by and i have to admit that i am loving this

moment. >> payback, right? >> as somebody who has had trouble once or twice on the george washington bridge getting close to arriving. but arriving on time, i'm now -- well, now we're one for one, i guess, because i had my one incident a couple years ago, and then i got close a couple of times. >> joe looks good. very dapper and he's so quiet. >> what was that, joe? >> keep the camera on me, please. >> that's the joe we know and love. anyway, joe is on his way. again, he had trouble and hit a pothole just outside of new york. he'll be here in just a little bit. the global markets reacting to the fed's decision to begin tapering next month. the dow surging to a new all-time high adding nearly 300 points to close at 16,167. in asia, a mixed reaction. in japan, the nikkei closed at a six-year high gaining nearly 2% to close at 15,859. right now in europe, you'll see

at least with the early morning action that they are getting some pretty positive numbers there. in france, the cac is up by 1.4%. same story in germany with the dax. the ftse is up almost 1% in london. the fed is going to cut bond pur purchases by $10 million a month beginning in january. treasury purchases from $40 billion to 45 billion. the fed is keeping rates unchanged. while the labor markets have improved, they remain concerned about the unemployment rates and will keep rates at these levels well past the time when the jobless rate dips below 6.5%. now, the fomc voted 9 to 1 in favor of the tapering action. today, the senate will be likely approving janet yellen's decision to replace ben bernanke as the fed chairman. check out the futures right now. things have barely buzzed, but that was a massive rally yesterday, set things on a strong, upward trajectory. i think part of the reason for that was because of what happens

with the ten-year. it was incredibly bell behaved. the ten-year did not take off in terms of the yield taking off. this was not a huge surprise even though the markets thought this was more likely to happen in january. and we should point out, 2.891%. andrew, again, i was razzing joe even before he got a flat tire. he's had a rough morning partnership told him he needed to practice his bowing. >> i have to bow to you. i don't remember -- we didn't bet against each other on this one. >>, we were on the same side. >> so i can bow on behalf of joe. >> well -- >> but i was wrong. i thought -- i could claim i'm right because i did think it would happen in january, but you see where i'm going with this. >> oh, yeah, in terms of the bet. the only bet we made was the direction over or under. and i number was 2.87%. so we are winning, but only by the skin of our teeth at this

point. joe points out this bet isn't effective until end of the day tomorrow. i'm claiming beginning of the day tomorrow because i'm not here on monday. >> i would have never imagined it would have wallied the way it did. and i wonder whether it will hold up. >> that is pretty amazing. and this is something we're going to be watching closely. but that was incredible market action yesterday, both between the ten-year barely budge, that yield and the stock market taking off like it did. i will say that joe was right in his reason for bringing up this set, which was -- his point was that the market was well prepared for this and he was right on that fact. in fact, squawk likes to give credit when credit is due. >> one day does not -- all i was going to say is one day does not make a trend, so it looks like everybody is well behaved, but the question is actually how long they will be well behaved for. and i wonder whether over the next couple of days as people understand what this all means where things will really go. >> maybe. but it's usually the knee jerk reaction that is a little bit

more out of walk. but i'm impressed that the market took things in such stride. now, we are pretty busy handing out credit today. if you were watching "squawk box" back on december 10th, you heard steve liesman's call on the fed taper. >> i wish i flew someone who knew. >> well, we might have a guy who thinks he knows. >> it's impossible to know, isn't it? >> well, this guy is closer than others and his name is steve liesman. >> a taper by the federal reserve at its next meeting now in my opinion looks more likely than not. the economic taet, the market's reaction to it and statements by fed officials all point to a strong possibility the fed could move next week to reduce the amount of stimulus it provides the economy. >> steve joins us right now from washington and, steve, if we want to be honest about this, you are the one we need to be bowing to. you were totally right on this and i am glad i stuck with it because you are the one who led all of us here. >> thanks. i need one of those things like joe has with the big head,ite?

i thought that's why joe's head was so big because of his good call on the market. look, i think what's interesting here is you just pay attention to the data and what the fed says. and i was thinking that i made a bad call in september. and when i thought a lot about that, it's because i didn't pay attention to the data. i had a call in august about the fed tapering in september and then that jobs number came in weak september 6th and i didn't change. then this number came in and i was on the balance, it could happen, it may not, but then that jobs number came in and then i -- i think the important thing was what you talked about earlier, becky, which was the rates and how they reacted. the market was well prepared, the fed was concerned about the short end that the market believed in its promise to keep rates low. that's what we got yesterday when thinking about what the news was. there were three pieces of news this that statement. first, the $10 billion taper. that was split evenly between the treasuries and the mbs. the second was a measured wind

down. $10 billion is the burden of proof and then the economy plus or minus. and then that dovish rate guidance. i didn't think that was going to happen, becky. i thought the fed might hold that in their pocket. but, really, at the end of the take, i think bernanke took out a little insurance on this move to make sure that the markets understood that they were going to remain low for perhaps longer than the markets think. and i asked him about that question at the press conference yesterday. >> we couldn't put knit terms of another unemployment rate level specifically. so i expect it will be some time past the 6.5% before all of the other variables we'll be looking at will line up in a way that will give us confidence that the labor market is strong enough to with stand the beginning of increases in rates. >> so we had john riding on yesterday and he began talking about this idea of why didn't wall street see this coming more. and then i had an off-line conversation with him.

it's not whether or not the fed is communicating right, but whether or not the market is listening to them. and it's something to think about. we were in the lockup and i was talking to a reporter next to me while reading a statement. and the reporter said to me, you know what? it's easier to write the taper story than the no taper story. it made a lot more sense. i don't want to criticize what they were listening to or looking at, but it's interesting to see through the process of why you had the call right or the call wrong and the taper story to me was always the more logical one. >> steve, this is all coming at a time when janet yellen could be confirmed as early as today. if that's the case, does bernanke step down and let her step into that position sooner than january? >> i don't think so. i don't think there's any particular reason for it. bernanke was asked what yellen thinks about this and he said she's fully on board. i suspect that's retireight. the market is less inclined to think that yellen is way more dovish than bernanke. i think they think she's a bit

more dovish. but i think janet yellen as i said several times going back to her history in the federal reserve has had moments when she's been more hawkish than the board .moments when she's been more dovish. i think you look at the information coming in, we may do 3% growth in the second half, that big number in the third quarter, and now we keep revising up. so this inventory may be offset, it may not be that big, but second of all offset be better employment. and you know what starts looking good? the stock market looks like there's less air underneath and it more real foundation and then the jobs number we had looked more real if we're doing 3% growth. >> it would be stunning if this was an actual handoff, a smooth handoff, a smooth transition the way the fed had always hoped it would be. >> i think that -- i would be a little less surprised. i wouldn't say it's quite so stunning, becky.

>> there's so much things that could go wrong. if they actually pulled this off, that to me is pretty amazing. >> that's true. i guess what i bristle a little about is the idea of the fed not paying attention. we know they're paying attention. we know they're looking at all this information. and then guys come on our air and we think they're looking at stuff the fed is not looking at. the fed is loot looking at an awful lot of stuff. whether or not they come to the right conclusion, 17 people around the table, very interesting to me that they shifted from the hawkish esther george and now the dissent is eric rosengren from boston who we know to be more on the dovish side of things. he thought it was premature. so i think the idea is, okay, let's give it that the fed is paengz occupation attention to the things we're all looking at. what is the right conclusion here? >> andrew. >> here is the question that i have. i agree with all of the data and sort of policy mind-set that you're talking about, but i wonder how shakespearean this is given the fact that yellen is probably going to be confirmed today, given that better

23457bky wa23457b bernanke wanted to have a legacy. he's sort of tying the whole thing up with a bow and it's very neat. i just wonder whether there was a conversation about whether they do it in september or early 2014. you don't think it has anything to do with the sort of personalities involved in all of this and history? >> you know, i have always argued it does, andrew, in the sense that these are real people making decisions. it's not done according to a formula. if this were the ecb, i would say much less having to do with personalities in the sense that they follow almost religionly this 2% inflation target. the fed's monetary policy is, you know, a little bit of science and maybe a lot more art is probably the better way to put it. i think it has something to do with it, but look, at 735, 5, a said before, the fed would still be speeding on most roads in america. so it's still doinl doing $ 75 billion of qe.

it's still saying it's data dependant. he hands off the first move, which maybe is mormon ewemental, but look, they would still be doing 35 billion by june with $10 billion incremental stepdown fess they do that. so there's still quite a bit of stimulus. if the fed stopped buying, it would still be buying. because remember, there's another part of this program in which they're rolling over all the maturing debt. that's a whole other things they're going to have to deal with later on. there's quite a lot of stimulus and mow the better economic data is doing a little less stimulus. and i think maybe the up shot of this is maybe we're a little more dovish, a little mormon ewemental than it is at the end of the day. >> people around the table may be changing, but this is a developed plan.

there's less of a jarring transition going from one leader to the next. >> you know, becky, one more thing to andrew's question. it was really about personalities. it wouldn't have had qe3 to begin with. i'm pretty sure bernanke did not want to go out with another qe program in place at all. but what he did is he looked at the economy in september 2012 and said, you know what? it needs more of this stuff, so he does it. i think he's happier that he's leading with a bit of a stip stepdown. but at the end of the day, i don't think that's ultimately what drove policy. you have to get 16 other members or 11 other members to vote for this policy. so i think it was something that could have been driven by that, but ultimately it was driven by policy. >> steve, again, kudos to you for giving us all the heads up on this. i am very glad to have followed and to have lisped to you along the way. we're going to do this conversation again at 7:00. joe will be here and i know he has a lot of questions for you, too. but again, steve liesman, thank you. >> thanks, becky.

>> as we mentioned, the futures have barely budged. up by almost 300%. stocks again hitting new highs after that fed anoinouncemenann. take a look this morning at oil prices. you'll see right now that oil is down by about 16 cents, 97.64. and the ten-year, again, this is the major story because the ten-year note, the bond market has been very well behaved with all of this. the yield at this point, 278.89. the dollar was interesting, it did strengthen after the fed. you saw the dollar index rising to a two-week high. and this morning, the dollar is higher once again against the euro. 1.3679 against the euro. gold prices ended at a 5 1/2 month low yesterday in the evening trade. they've been pushing closer to

1200. in fact, right now, down about $30. that's a drop of over 2.5% or just over 275%. 1,204.60 an ounce. right now, it's time for the global markets report. ro ross, a lot of green arrows there, as well. >> a lot of green arrows this morning. good morning to you. not quite smaching the strength of the reaction we saw in the u.s. equities yesterday we we had 1.7%, 1.8%. a little less than that. but on the get-go this morning straight out of the gate, we were up only 30 stocks were down. a little bit more, around 45 stocks are now down, but heavily weighted to the upside. the ftse yesterday very flat at the close because we hadn't had the fed decision. it was up five points. this morning one 65. we are a percent higher. the rest of the gains across the market, 1.4%, the xetra dax, cac 40 and ftse mib, as well. we had retail sales numbers out of the uk today, as well. a bit of a tick up from the

previous month in october, up 0.3%. there was concerns about the u.s. retailers this christmas season, discount stores doing better than some of the big grocers. now, another stock to focus here, dassault up nearly 25% because they've got a big deal from brazil for their planes and dassault aviation down 3.2%. boeing lost out, as well. we were looking at treasury yields a moment ago. we had an auction out of spain today in both five and ten-year. this is going to be a test because in may, when we had tapering, we saw periphery yields rise, as well. today we had a key bond auction post the tapering decision and yield owes five to ten years in that auction came down from where they were just a few weeks ago. so on at the moment, it has been seen as a risk on event rather

than a risk off event, becky. back to you. >> ross, just curious, the taper may have come as a bit of a surprise to some economists who were watching. but the market seemed very well prepared for this. i guess the same can be said of our counterparts there in europe. >> yeah. i spoke to a lot of traders in the last week and they thought it was 50/50 whether they went in december. a lot of traders said this was 50/50 in their heads. that's where they were positioned. i had a number of guests, i had one guest that came on prethe jobs report and said the fed will taper in december. and that was before the jobs report. that was the day of the ecb decision. >> so the strok jobs number is solidifying what people had been anticipating and expecting. >> yeah. >> so, you know, and i am for one, becky, absolutely delighted

because you and i never again have to have this conversation that we've been having for serve months. >> that is a relief. >> i am very relieved. >> a little christmas present for all of us. ross, thank you. we will check in with ross again tomorrow morning and, again, that's ross westgate. when we come back we have much more on the market reaction to the fed's decision. next, management guru jeff sonnenfeld on the biggest stories. and the executives you need to watch in 2014. plus, we have a packed lineup of "squawk box" newsmakers this morning, including erskin bowles, judd gregg, tom freedman will be here on set and the ceos of tupperware, leonard, j. crew and steve swartzman from the private equity powerhouse blackstone. more "squawk box" right after this.

tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading.

welcome back to "squawk box." we're coming to you live from new york city, the yale ceo summit right here at the waldorf astoria. this is the 75th year -- >> 75th time. i'm only 94. >> you guys have been putting this together and all sort of

ceos come and we're going to have a number of them on the program today. steve swartzman will join us at 8:00. mixky drexler will be with us and lenar and several others. it's off the record and you don't get to hear what goes on inside the room. but to the extent that you can, tell us about the psychology you think about the manner day ceo and in the context, actually, given the news of the taper. what's going on inside the board room? >> well, you know, some of the issues have to do with the loneliliness of high office. right now, they're so overprotected, overguarded, it used to be that people in your line of work and my line of work would call the ceo on the phone in their office and probably get them. now it's impossible. even calling the crazy hours, tunes of pr people, the attorneys and the overly manicured statements make it har hard for them to learn. so everything is a runoff show presentation. they go off to investor relations pitches.

what do they learn? we try to create a forum where it's truly peer driven. it's off the record, as you know, and they can joust with each other. but they have some critical issues. one of them is a time frame issue. the large companies are very worried about activist investors. we're chipping away bone and muscle sometimes, noits just fat becau because of some short-term pressures. the biotechs are finding commercializing great inventions are not happening in this country. it's getting told off to chinese or others quickly. >> what is your feeling of confidence? we are talking about the taper today a lot. people say is that going to inspire confidence? you saw what happened in the markets. >> fannistic. >> but is there a larger issue about confidence? before we came on, you were talking about the fact that up in of these companies were spending any cash. >> we had been complaining about

budget morale in congress and we had been complaining about uncertainties in global ripple effects in urine and el nino and whatever else. that's not there now. what we see is a lot of cash hording and there are some issues with repatriation and taxes. but even so, there is a shell game going on with some taxes to talk about. but that still doesn't explain it all. are there some other intelligent pent up opportunities to go after? so there was a generation that passed through, that dennis kozlowsky and most of them were honest, but there was an acquisition fueled growth where the serial acquirerers, as they used to call themselves, a lot of that sorted out and some crazy things that were put together. now people are wondering, where do we put the capital, what do we invest in. and they're like prometheaus

unleashed. >> so help me with this. one of the other ideas is the idea of succession. everybody talks a good game, but nobody wants to really be succeeded, if you would. a, what do you think is going on? microsoft is obviously the biggie. what do you think is going on there? and longer term, or some of the bigger institutions, are they doing it right? >> it seems after a while, they like the job. they work almost as hard as you do. they feel a certain attachment to it. many of them are of a different constitution than most of the rest of us. they want the world to be different because they live. they're not doing it for the cash. there's a sense of legacy that matters to them. the more they're in there, the more they see tun finished business. they want to somehow know they're going to be remembered. there's going to be a sense of creation behind them and that is something that does fuel them.

at one event, we had warren buffett pushed rupert murdoch and jeff hazel to talk about succession. bezos was silent, didn't want to talk about it. murdoch said my mother is 97, she's doing fine. and buffett said i've heard of managing outside the box before, but people don't race to that conclusion. >> i've got two quickies i need you to help me with. amy shulman, pfizer. this woman was going to be one of the most high powered people in pharma. if not in industry period. she gets kicked out of her job after announcing that she was going the take the job on january 1st. do you have any insight so what happened there? >> pfizer is the world's largest farm suitan california. jeff kind ler was brilliant to put together the deal with them. the board room machinations are ridiculous. it's a shame. i think this is a company which has needed to calm down and wrestle through some of their

weird board dynamics with predecessors. >> and if you were on the board of ford, not microsoft, ford, would you let this whole alan mulally story play out the way it has? >> well, the real drama, it is a microsoft story. they're the ones who have to make a decision. whether or not it's a month here or there at ford, i don't think b it makes a decision. inside ford, the command issues are clear, the sense of strategic direction -- >> some say you can't have a ceo publicly campaigning for a job -- whatever is going on -- i don't understand as a board why you would let this happen. forget about what microsoft is doing. that i understand. >> well, you know, meg whitman felt undercut when she took a look at the disney job. and michael isner let that secret become a public secret. she was undercut back at ebay because she wasn't announced that she was leaving. so she became a lame duck. in this case, alan mulally

announced i'm a lake duck, i'll be leaving in 2014. it will be sometime this spring. i don't think there's any drama about that. bill ford will be the chairman. so there's not a lot of uncertainty. >> thank you. congratulation necessary advance on what is going to be a long day for you, but a great day. i'm going to send it back to becky right new. >> andrew, thank you. jeff, we are looking forward to everything today. when we come back, we have two of the features executives from today's yale ceo summit. rick goings and this isn't your mother's tupperware. you have to see how his company is expanding overseas and reinventing the storage business. then at 6:50 eastern time, the chairman and ceo of on home builder giant lennar, and guess who is on set with me now, too. >> i'm here. surviving. low profile tire. . >> yeah, i am here. the american dream is of a better future,

a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪

if yand you're talking toevere rheuyour rheumatologistike me, about trying or adding a biologic. this is humira, adalimumab. this is humira working to help relieve my pain. this is humira helping me through the twists and turns.

this is humira helping to protect my joints from further damage. doctors have been prescribing humira for over ten years. humira works by targeting and helping to block a specific source of inflammation that contributes to ra symptoms. for many adults, humira is proven to help relieve pain and stop further joint damage. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira , your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. you should not start humira if you have any kind of infection. ask your doctor if humira can work for you. this is humira at work.

good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen. along with becky quick. and i heard andrew got here on time. andrew, i drive 32 miles through newark every day. i drive myself through newark and i have brand new snow tires with a -- and i think they were

expensive and they have a low profile. low profile means that the side of the tire is only that -- this has happened to me before. i hit a pothole. it's not a flat from the bottom, it's a flat from the side. so the alarms go off and i'm immediately down 20 pounds and i'm trying to get to the local lane so i can get off of the highway. to get to an exit. and then it's down -- i mean, it's dropping fast. so i made it to where i could get to an exit and i'm in, you know, a part of newark and i'm in an empty lot in a park of newark. i made it. i rousted someone out of bed who saved me. who saved me, yes. and here we are. but my car has not been saved. it's a car. it's a car. it's somewhere between here and there. eem glad to be here. so you got that, sorkin.

you get here. >> i got it. >> you have someone driving you. it's ten minutes from where you live. you still don't make it. it's not 32 miles, so don't act like this -- this is not similar. this is not similar. today, did you walk? >> i'm going to enjoy this moment. i'm enjoying this moment. i did walk over here today. >> you could have. you're that close. >> four minutes, it was even better. >> i didn't know you work here. i forgot. and when i was walking in here about 6:00 -- 6:30, does it matter if i'm not here at 6:00? >> no, actually, we had a fun time. >> i've got seniority. why can't i come -- >> why can't you come in late? >> at 6:30. >> because we all have to show up. i guess we could take turns. everybody show up a half hour later some day. i've done it before. i overslept. >> here is my question -- >> there for but by the grace of god go i. i'm okay with it. >> but my question, i have two takes on yesterday. number one, i hope we're saying

santa claus is here because he is here in a big way. but he is here and i would never weigh in on that part of it. >> the man is in the house. >> yeah. but the man is here. is he here? wow. oh, ben bernanke. now, my question was did it go up? i had two takes on it. number one, there are people that would say it went up because of all the people that wanted it to get started are finally relieved that it's getting started. >> i don't think that's it. >> number two, it's still 75 billion, isn't it? >> and they said they're going to keep interest rates at zero essentially forever now, too. so you've got an extended period of time that that's going out. the taper put is back on because the fed is still going to be here doing all of these things. we can say we're ratchetinged it down slowly. >> the ten-year was so well behaved. >> we said that, too. we did. but you know where it is. it's 2.89%. >> between now and -- >> and we made a big deal about

the idea. >> but my point was -- >> and i did give you credit. even though at this point andrew and i would be on the winning side of that bet, you were right in that did market was prepared and it was going be -- >> and i wouldn't have been surprised with 1100 points or 150 points. but 300 was surprising. >> that's a move. >> that's a move. and it's a -- but what's not surprising is that so many people probably didn't think that you were going to make that much more money between now and the end of the year. >> right. >> what the heck happened? >> everybody cashed in their chips, wanted to -- >> i did see someone the other day, i'm not going to mention any names. used to be an anchor on cnbc. he is now a -- like supposedly a seesayer about markets and he was very negative, rally is over, definitely going to have a correction. it was on our network. it was definitely -- and this is definitely not what his

prediction was. but -- what? >> nothing. >> anyway, andrew, he's listening, but he's -- >> he's here. >> oh, he is listening. >> yes. >> and he gets to wear his jacket today. notice which suit it is. that's that new suit you like, that light colored one. >> yeah, but you know why, because mickey drexler is gomg coming on today. >> this is a mickey drexler special suit right here. >> the tie -- it really does look good. is their lighting better than ours down there, too? >> i don't know. andrew just -- >> they did a very nice job. >> andrew looks good. >> i'm just glowing this morning and i'm gloating this morning due to your car troubles. >> what are you gloating about? >> i'm not gloating about anything. >> the open on friday.

>> no, i made that clear. i said we had to do it friday because i'm not here on monday. >> i'm drinking coffee. i always stop and get it on the way in. >> you'll change all your habits because this is good coffee. anyway, you made it and we're glad to have you here. andrew has a lot of special guests retiring today. right now, he has one of those very special guests. andrew. >> that you can, becky. it is a bit of a christmas party. i have the ceo and chairman of tupperware here, rick goings. i didn't even know -- what are we calling you? a french -- like a member of the french -- the french legion debonaire. >> that's what this is. you're like a sir, if you would have been in the uk, you would have been nighte knighted effec? so you're a knight. >> but i'm not treated any differently. >> we'll try to treat you differently this morning. help us about a couple of things. i want to talk about the

consumer and international markets given that 80% of your business is outside the united states. but i want to talk about the taper and to the extent you think this is going to have an impact on the consumer at all and over petroleum prices that is a meaningful to you. >> i think anything can help the consumer and in this country particularly is is going to be a stimulus. i hear and i spend so much of my time outside the u.s. talking with a lot of world leaders, i have never seen a time as we've seen this last four years as there's so much pessimism with regard to the u.s. abdicating its role of leadership in the world. not only on political affairs, but nominal affairs. >> to the extent that you see it, over the summer, there was a real issue when we thought about tapering. when the conversation was happening, emerging markets took

a nose dive. do you think this taper is going to do anything like that? >> i don't think it's going to have a major effect. i think the big effect is going to be in europe and the u.s. and where the established markets of the world. the emerging markets of the world, they're being driven mostly by an emerging middle class. in asia, 600 million middle class now, it will be 1.7 billion in six years. so i think that is what is really going to counter this. >> does it matter, the taper? >> it matters to some if you're selling modties. it doesn't matter much to us. if you're selling it 65% to 75% gross margin, it doesn't matter much. >> explain that, though. during the commercial break, i said to you before you came on, i said i don't think you're going to like what's going on in

my household. because i think we use ziploc. i shouldn't use tupperware as the phrase. and you said, that's a lousy business. that's a small piece of the business. >> yeah. it's very much like laptops and computers and tain tabletops. that business got commoditized. i often use the example of what happens when jobs came back. he moved the bit from laptops and tabletops to ipod, itunes, iphone, the rest of the story. we moved our company. we used to be 85% food storage. we're 25%. if you went to a party in paris, it would be busy working women and the average of our better products, it would be 140 u$140. and they're microgourmet products that you're a busy working woman, you don't have time and you don't want to cook. so our -- that's the responsibility of leadership. more the product line, selling method, etcetera. >> and the customer, of course, is always a she. we talk about that on the set.

one final question, your stock now has 1100 bu 100 bucks. up 45% this year. i know you can't talk about your stock. do you think the market is going to grow the same way it has over the past year next year? >> globally, no. but we've been happy for it now. we think we're going to continue in our 5%, 6%, 7% top line, double digit bottom line. i think where people have started investing in us, they understand our business model better and they see how much he threw off. >> appreciate you coming in. >> we're going to continue the tupperware party right here. >> i love tupperware and i love tupperware parties. i like that guy. he's been on before. >> do you know how to burp your tupperware? >> i do. >> and is there a better way to spend a saturday when nothing

else is going on than invite everyone over and have a tupperware party? seriously. and leftovers, they're better, a lot of times, right? >> the second day. >> meat loaf. >> barbecue pork. i had some some weekend that i saved. >> not the pork roast? >> no, no, the pork that i made in the crock pot. >> it's fun. i may have one. and you guys are invitesed. coming up, fed watcher greg ip. did we talk about liesman, the man? >> we talked to liesman. he's coming back in 20 minutes and i told him it would be a whole new conversation because you'd talk with him, too. >> we bought fully into what -- >> i know. and i said thank you. >> that's why i knew with all these -- remember all the people that came in and said it wasn't going to happen? >> and a bit of news on facebook, ceo mark zuckerberg is going to sell 41.1 million shares worth about 2.3 billion, all part of an offering of xhob

shares of the social network. that has the stock down a little bit right now. the stock above 50, as you can see, 52.75. "squawk box" coming right back. (announcer) at scottrade, our clients trade and invest

exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade-proud to be ranked "best overall client experience." afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families

is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.

the fed announcing a first step, calling it major, but i think people turned around and said, 85, now 75, it's 10 billion, but it is the beginning. a step towards winding down quantitative easing. it will be 10 billion starting in january. joining us now from washington is greg ip, the economist u.s. economic senator, he's a cnbc contributor. don't remember the last time you were on, greg.

i don't know whether you gave us a 50/50 or what you said about a december taper. do you remember? >> i don't remember. i think i was pretty split. then when steve went with december, i went with december. what else could i do? >> same with us. and then it started -- when steve went out on a limb and did it, it seemed like an outline call. but for some reason, by the time it came about to yesterday, the people that we had early in the day that were saying they weren't sure, i'm like, how can you not know at this point when we got the budget deal? that's done. we got a couple of good numbers and employment what they were talking about they needed. that's done. and they were so close last time, it's bernanke's last chance to do it and if he didn't do it this time, he'd really look like he was either sending a signal or just didn't have the -- >> yeah. that's exactly right, joe. i mean, in september, when everybody was surprised and shocked and saying does your communication matter at all, he

bent over backwards to say, look, there is the fiscal situation, there was the labor market data that looked weaker, we were concerned about the market reaction. it was a close call. we heard that from quite a few people afterwards, close call, that they really meant that. then the concerns that the chairman raised in september had more or less been met. what i was surprised by was that it was actually to my view a somewhat hawkish statement in press conference. not only did they begin to taper, but they put it on a more or less conditional glide path to zero by november of next year. and even though bernanke left open the door to sort of adjusting the path if the data turned out to be weak, there was no talk about ramping it back up. given all that, it's pretty impressive that the market rallied as much as it did. >> that's good, though, instead of the idea that if things aren't good we can go back up. i think saying we can slow down how quickly we -- set ago thing for november and saying we could slow that down, that was pretty smart. >> and don't you think the fact that the market rallied as much

as it did, it might be saying if we thought we needed qe before, we don't need illustrate any longer. it's like, thank you very much, mr. bernanke. now the economy will take things from here. they still want the although interest rates, but right now, the view seems to be that qe has outlived its usefulness. >> the way you look at it, if it looks like it is better than the know and we still get still get 75, i can live with that. and santa claus. >> there's a bit of a risk here. twice before, they started to wind down qe. we know not out of the woods. this is still very much a job that janet yellen has to finish. >> thank you. when we come back, the ceo of home building giant lenar,

will rising rates stop the industry's building phase before it gets off the ground? not based on what we've seen so far in this action in the bond market. first, we're going to check out the squawk green room. we have two power players in washington and wall street watching up this morning. erskin bowles and judd gregg. coming up at the top of the hour. stick around, "squawk box" will be right back. (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. you can even take a full-size or above, and still pay the mid-size price. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we. go national. go like a pro. but with less energy, moodiness, and a low sex drive,y first. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron. the only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes

in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting and increase in psa. ask your doctor about axiron.

it's picture perfect. >> i have an offer for you. >> hold on, it's a group deal. you're all in. >> i don't want to do business with kevin. >> doesn't matter what you want. it's not your business. >> shark fight. shark fight. >> shark tank tuesdays, back-to-back episodes on cnbc.

welcome back to "squawk box." we're coming to you live from the yale ceo summit in midtown manhattan and i'm joined with the ceo from lennar, stewart miller joins us. and thank you for being here. >> good morning. >> a lot to talk about. housing market's been like, seems like back and slightly on fire, at least in your world. but given the taper, i have to ask you, have you -- i assume. have you been watching this carefully, waiting to figure out what's going to happen? >> i think you can't help but watch. it's been at the top of the news for the past months. you p can't help but have it at the top of your mind. >> and so, a, what was your expectation going into yesterday? and, were you surprised by the reaction? >> look, i think going into yesterday, everybody kind of felt what the fed would do was a toss-up. you've had as many people saying it was going to begin as it wasn't going to begin. i was going to take the news as

it came. >> in terms of the housing market and what it'll mean to interest rates and mortgages, your thoughts. >> well, you know, there's a lot of discussion around the housing market right now. interest rates have been trending up, the talk of taper has spurred interest rates to start moving up. and that, of course, is a central factor in our business. but at the end of the day, the reason for the beginning of the taper is as much an important component is the fact that interest rates go up. the fact that the taper is being put into place is an indication that confidence is back, that the economy is generally improving, that jobs are generally coming back to the economy. and these are positive factors for the housing market. one factor of many. >> there's a lot of pessimism out there. and we talk about coming back to the market. but the idea is in much better

shape. prices -- you've been able to raise prices 18% just in the past quarter. >> look, at the end of the day, the housing market is better than it was, but it hasn't come back. >> right. >> come back is 1 million, 1 1/2 million per year, single family and multifamily. and this year census has it just about under 1 million homes, 1 million starts this year. >> how much of it is location based? your biggest competitor was not able to raise prices at all in the last quarter? >> well, the price increases are a question of averaging across broad geographies. so if you're skewed more toward california, you're going to have higher prices, maybe more price increasing. if you're skewed more towards texas or some of the lower price states, it's probably going to be less in the way of price increases. but at the end of the day, the market is healing across the

geographies and has been coming back slowly but surely. >> what's your sense on the banks in terms of opening up, making credit available? >> well, at the end of the day, the banks have been constrained. they are overseen by a regulator that keeps tight reins on how they're going and how they're thinking about their business. the banks have been slowly coming back to the market and providing capital and providing credit for people who are qualified. and basically we're seeing a gradual healing going on as it relates to the banks, as it relates to the mortgage business. and that's what's bringing housing back. >> stuart, thank you for joining us. i'm glad you're as positive as you are. becky, i'm going to throw it back to you. >> andrew, thank you. we will check back in with you in a few minutes. when we come back, we also have new details from target on the credit card breach that affected 40 million credit cards and debit cards. more about that in a minute.

also mark zuckerberg's facebook stock sale. we've got additional details you need to hear before you decide to sell. in the next hour, we'll also be talking retail with j. crew's mickey drexler and manny chirico. first, though, don't be fooled by this week's budget deal in washington. and while politicians inside the beltway are squabbling, our news makers knows what needs to get done. look who's here onset with us. erskine bowles and judd gregg. "squawk box" will be right back. i don't just make things for a living i take pride in them. so when my moderate to severe chronic plaque psoriasis was also on display, i'd had it.

i finally had a serious talk with my dermatologist. this time, he prescribed humira-adalimumab. humira helps to clear the surface of my skin by actually working inside my body. in clinical trials, most adults with moderate to severe plaque psoriasis saw 75% skin clearance. and the majority of people were clear or almost clear in just 4 months. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. you should not start humira if you have any kind of infection. make the most of every moment. ask your dermatologist about humira, today.

clearer skin is possible.

"squawk" ceo calls of the day. >> anything that can help give the consumer in this country

particularly some confidence is going to be a stimulus. >> still to come on "squawk box," retail legend mickey drexler, ceo of j. crew. the name behind tommy, calvin, izod. >> you want to know what comes between me and my calvins? nothing. >> the never-ending battle against the deficit. >> do not think i won't kill a dwarf. >> erskine bowles, judd gregg, with their expectations from capitol hill. and later, as the world turns, pulitzer prize winning columnist thomas friedman of the "new york times." his list of global risks for 2013. "squawk box" spanning the globe, in your home, at your office and in your car, it begins right now.

>> welcome back, everybody. let's get to our top stories this morning. the global market's getting their first chance to react to the fed's decision to begin tapering in january, cutting $10 billion from the $85 billion bond buying program. that announcement yesterday sparking an incredibly strong rally. the dow adding almost 300 points to close at 16,167. this is a big, big rally all the way across the board. the futures this morning are decidedly less optimistic. you wouldn't be surprised by that after a 300-point gain. the s&p futures up by less than half a point. in asia, there was a mixed reaction. in japan, the nikkei closed at a six-year high, gaining nearly 2% to close at 15,859. right now in europe, the picture has been decidedly more optimistic. it's been following some of what we've seen here. in germany, the dax is up by

1.35%, the cac in france, better than 1.1%, the ftse by 1%. and the ten-year has been the story. this is what we've been talking about the whole way through. all right, 2.9%, but still, that has been a steady and gradual advance for the yield. market reacting incredibly well because you had to imagine people were expecting this was a very likely scenario. >> don't want to lose, though. >> you're going to lose. >> we don't know yet. it got down to -- >> 2.64. >> 2.64 yesterday. 2.6 to 2.9 is still small. >> would you take the over or under whether the ten-year yield would push higher or lower if they went ahead and tapered. the number we made that bet at was 2.87%. >> no, 2.7-something. >> you're right -- >> i think it might be 2.78. >> you said 2.76. >> i can find out.

>> i'm thinking it was 2.73. >> it might come down to that. >> you took the under? >> i thought the ten-year was ready for taper. >> i do have to say, he was right. even if it turns out that he loses the bet, he was right the market -- >> the last time, the reason they got scared the fed was because it went up to -- it went up 30 or 40 basis points and was headed toward 3% and they were worried they were losing control. this time, they managed it much better last time for the taper they were ready. i think it was acting well then, too. >> you know what the best part of it is, the loser has to do. >> you're right about everything. even though -- >> based on what happens. >> we're not getting credit for making the bet, which was dependent on the fed tapering. >> right. >> we were assuming the fed was going to taper and only half the people in the world thought the fed was going to taper. target is reacting to a major breach of credit card data. and you're out next week. >> i am. just tomorrow. >> yeah. it's about --

>> it's about an and or two. he went along with her. >> what was the time frame for this? the under could come back. >> i think it will tomorrow. >> tomorrow. >> not in your lifetime. >> no, it has gone down a few times. and eventually, it will be based on economic prospects, not on the perceived manipulation of the fed. >> you could take the senate position, too, which is you're right whichever way it went. >> i'm sort of doing that. and that's a skill you have that i think would be valued somewhere. but you can't seem to find a home where you can last at this point other than your cnbc gig. seems to be -- >> always welcome here. >> you might need, if that's all you're doing, you might need to downgrade a couple of things in terms of how you live. we don't pay very much. >> target, the retail giant says it's working closely with law enforcement and financial

institutions. they say they've identified this issue of about $40 million credit/debit card accounts. >> 40 million accounts. 40 million people who shop there. >> between 27th and december 15th. target is partnering with forensics firms to investigate the incident. >> i spoke with them this morning. this is pretty complicated. you think 40 million cards, there's only 310 million people in the united states. all for people shopping at target stores in the united states not in canada and not online. something that had to do with the information where you swipe the card. i spoke with them this morning and asked, what is this? it's got to be somebody who was responsible for that swiping technology, they said they can't talk about it because it's still an active investigation, but they did say it was a sophisticated crime. they can't narrow down which stores, they basically any store. if you are someone who shopped there during that time period, you should also be taking a look, just monitoring your

account, making sure there's no fraudulent activity that comes in. if there is, you call the number on the back of the card or call target and they'll resolve it. >> i don't -- you know -- >> i did. i shopped there. that's why i was calling this morning. what's going on? because i definitely have shopped there. shopped online. >> i may have indirectly shopped there. >> that's a big wide swath of time and 40 million cards, tells you how many people shop there. >> it does not apply people who shop -- not if you've shopped online or in canada. but if you've shopped at any store in the united states, then you should be on the lookout and make sure you're watching your account. we also told you about the news earlier this morning, the news on facebook, the ceo mark zuckerberg's going to be selling 41.4 million shares, 2.3 billion. it's part of an offer of 70 million class "a" common shares of the social network. the stock has been trading down by about 4.25 percentage points. you should know, though, this is the majority of this that

zuckerberg is selling. 31.5 million shares were sold to pay taxes on 60 million options being exercised, which means more stock coming into this. not lowering his stake or trying to get out of this. 9.9 million shares being sold for profit. and 18 million shares are being gifted to charity. he continues to own about 18.8% of the company and has about 62% of the voting rights as the controlling stockholder. he's also selling some, about 1.6 million shares he's selling and facebook itself is issuing 27.05 million newly issued shares. also, a victory for congress yesterday as the budget deal was finally passed. but it does go -- does it go far enough? and how will it play into the debt ceiling? joining right now to talk about this morning, who we've been talking to this morning, erskine bowles, the co-founder of the campaign to fix the debt. judd gregg is former united states senator and the co-chair of the campaign to fix the debt.

he also served on that deficit commission. welcome to both of you. >> thank you. >> this is the mini budget deal. >> mini grand bargain. >> you didn't make fun of me. but some other members of the team. >> then you took credit for it. you want credit for mini grand bargain? it did sum it up exactly. >> well, it's a nothing burger without any ketch-up and the pickle. at a practical matter, it was progress in the sense it was bipartisan. erskine, obviously -- he is the force behind getting something constructive done in this area. and he and i both look at this as reasonably positive. >> it's positive and great to see people working from both sides of the aisle and coming together on this. the thing that concerns me, does this take the impetus off the larger problems that exist? can you still get to these big

issues like tax reform and make sure that there's still momentum behind that? what do you think? >> we have to at some point in time. i don't think either one of us think anything significant done next year, unfortunately. as i think joe said, i'm not in the hallelujah chorus on this deal. this is a teeny, small deal, but it's a step in the right direction. it doesn't do anything to reform a tax code so we'll be more globally competitive and reduce the deficit. doesn't do a darn thing to reform the entitlements that in a manner where we can actually bend the health care cost curve and slow the rate of growth of health care. nor does it do anything to make social security sustainably solvent. we have the same big challenges that the congress has been unable to deal with. we've got the default out there that will lead to great uncertainty again. >> what's depressing is we're told -- and i love paul ryan and

he said, look, this is all we can do. we've got the house, 2/3 of government we don't have. and then i'm thinking, okay, we have to wait for an election till we can do these big things. but then i think, do we need all three branches of government under one party to do something? and then if it was under republican or democrat majority, the democrats would do it completely differently. probably be all -- i don't know how they do it. but the republicans might just cut everything. the only way to do it is bipartisan. we want to do it bipartisan but we can't do it because it is bipartisan. >> it's so hard with the way the congress is microdivided. and it's represented -- >> within each party. >> yeah, extreme left and extreme right. it's much harder when we did the balanced budget agreement in 1996 between president clinton and speaker gingrich. >> who should we hope for to do it? you would hope for republicans to do it. but erskine, you'd hope for the democrats to do it their way. >> i hope, whether republicans

or democrats to come together and do it. >> right. you're not doing anything now, are you? >> no, i'm not. erskine, he's a national treasure, he should run. you're right, joe, you hit the nail on the head. you cannot for a lot of reasons. and the number one reason is the american people will not buy product that comes out of the congress on big issues like medicare, medicaid and social security. and tax reform unless it's bipartisan. >> you didn't say aca in there, did you? >> well, that was the problem of aca. >> that's what i mean. >> and you have to have a bipartisan product. and the problem is the momentum for that isn't there. and there isn't a pressure point to force it again and the leadership isn't there. so we got to have a congress that recognizes that if they don't want to pass on to our kids a country where the standard of living drops. and it will drop. the simple fact is, our standard of living is going to drop unless we get this under control.

then you're not going to get it done. >> when you left the senate, you left, several people left and said there wasn't really the center there anymore. and that concerned you. you liked being in the center that erskine's talking about. do you think it's gotten better or worse since you left? >> well, in the sense the folks who worked together gave up the ideological ambition. i was chairman and ted kennedy was ranking and i was ranking and ted kennedy was chairman. we work together. we both knew in order to accomplish anything, you had to govern. and you had to do something. so you had to reach an agreement. today, unfortunately, there isn't a willingness to come across the aisles because as erskine alluded to, the extremes in both parties are controlling the megaphones. and they control it on the national scale and they control it regrettably within the parties. and they don't allow constructive forces to govern. and unless you govern, you can't accomplish anything and you

can't govern from the sidelines. >> it's like pal al simpson says, you should never go into business and never get married. >> erskine, how big are the problems? when you look at social security, i mean, i don't want to bring everybody down this morning, but what do you see looming? >> oh, look, first of all, i think we ought to say something good about what paul ryan and patty murray did. a couple of good things in that bill that i really like. one, they got rid of the worst cuts in the sequester, in my opinion, both stupid across the board cuts which no business would ever think about doing. but they got rid of those that had the most adverse effect on military readiness and economic growth. and that's a good thing. it also got rid of the threat that we're going to go through another one of these government shutdowns. and for the first time in four

years, we have a budget. we've been operating on a month-to-month basis. they say, what in the world is going on in the u.s. if we don't change as judd says, we'll end up, my generation which i think, you know, as the one that messed this whole thing, we'll be the first generation to leave the country worse off than we found it. and that's got to be unacceptable to us. >> should be. that's why we've got to keep working at it. >> we have budgets here, i mean, and we need to do a commercial. then we're going to come back. much more with erskine bowles and judd gregg. plus, the dow surging to record highs, what should the investors do now that the fed has made its move? that discussion on the way. there's a saying around here, 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, everybody. take a look at the futures. barely budging, but of course, this is coming after that big santa claus rally started by ben bernanke. market was okay with all of that. bond market was, too, and the dow up almost 300 points. >> even that shot of bernanke.

if there were $85 billion in there carrying that big bag. >> there's still $75 billion. >> you wouldn't even be able to tell the difference between the bag, would you? i mean, that sums it up right there. >> took a while to realize that. they were saying for a long time that tapering isn't tightening. >> could you tell if there w was -- if there was, you know, what's 10% of 85? you couldn't tell if that was a little bit less. >> no. >> one less hess truck or something. erskine bowles is the co-founder of the campaign to fix the debt. served on the deficit commission. and judd gregg, can't seem to hold down a job. as a former united states senator and the co-chair. no, i'm kidding. commerce secretary. i knew you were not going to make a good lobbyist. would you? >> well, i actually enjoyed the factor i was out there promoting -- i enjoyed that.

>> you're still. >> i didn't actually do much. my view was -- they asked me to do this because they wanted engaged in the issue in how we reconnect with the american people, the importance of their every day life of markets. if you had to work in the morning, the job is probably tied in some way to the capital market supporting the job. it's all tied into the capital markets. and we are having this major disconnect in america today, from the private sectors importance in the creation of economic activity. >> 100%. >> and the public sector's dominant role. >> in talking about the private sector and free markets and all those things, but you sort of have to knee jerk whatever the industry in terms of regulation, you've got to be against every regulation, right? you can't do that. you're not really like that. you're going to look at things on a case-by-case basis and decide. and they would probably want you

to hate everything about dodd/frank. >> there wasn't much about dodd/frank i didn't feel was incorrect. >> i'm the one that recommended judd for this job. but i would have for the same reasons. there are very few people that have respect this guy has for both sides. people are willing to listen to him. he's got good judgment and that's why he would've done a good job at this if he liked it. i don't think he would like it. but he gave it a try. >> there was basically a personal situation. >> going back to talking about -- >> let's get erskine to run for president. >> how about a bowles/simpson ticket? >> it is the most -- i look at where our priorities are and i

really do think it is. and here's what scares me most is that let's say that the fed's right and the economy has made it up to a new level of, you know, above stall speed where we're not quite as worried. we've already made progress on the deficit. we're going to get lulled into -- if the economy improves, we're going to make more progress and we're not going to think it's as important. it's not going to be staring us in the face anymore. we may not touch it for another five, ten years. >> i don't think so. look, i don't think the markets will allow that. some day the market's going to wake up and it's going to look at us and say you've got a dysfunctional government, you're addicted to debt, but clearly the fiscal path that we're on is not sustainable over the long-term. you have no plan whatsoever to deal with this like every other business in the world or organization does. and every couple of months, you're putting the full faith and credit of your country in jeopardy. we see more risk, we think this is a riskier investment.

we want more money for our money. >> does it take a crisis to get people to act in washington? >> a lot of people think it takes a crisis or a lot of people like judd and myself working to give them the support they know. but if they make these tough political decisions to reform a tax code, to reform the entitlement programs, that we'll have their back -- >> we pivoted. some people saw political reasons for. we pivoted from obama care to income inequality in a big way. we didn't pivot to this. we didn't pivot -- an income equali equality. nobody wants a society from the bottom up starts to rupture because of that. people have far different ways of how to address it. this is probably a much better way to address how to fix it because it would open up the job creators to a more certain future than raising the minimum

wage. giving strength to unions so they can unionize better. why is your party approaching it from that side of things, erskine, i'm not blaming you. >> let's talk about health care for a minute. you can't have a subject where the scabs are any rawer than that. if you think back before obamacare, things weren't that great. we spend twice as much in this country on health care than any other developed country in the world. that's true whether you talk about it on the per capita basis and gdp. and those 30 million people who didn't have health care insurance, they were getting health care, but in the emergency room. >> creating a huge government bureaucracy doesn't seem to make it less expensive. >> let's think about it. in 1981, we spent 10% of the federal government on health care. last year before obamacare, we spent 25% of it on health care.

that's not sustainable. we had to do something. and what we've done done in this report that judd now worked on, we've taken $625 billion out of the cost of health care. we have provided everybody health care insurance, but we have real programs to reduce the cost of the first ten years and another 2.8 trillion in the second ten years. that's what you do to slow the rate of health care. those are all tough choices. >> do either of you think that the government can do things directly to try to just redistribution? >> no, i don't. the government cannot grow an economy. in my opinion. >> can -- you divide it up more evenly. can it be divided up more evenly? >> when the government tries to divide it up more evenly, it becomes less even. if you look at history, the only forces that have actually

created prosperity are market forces. that's the fact. and when you start to dampen with excessive taxation, you reduce the force generating the prosperity. >> the perception is that the market is what leaves people behind because it's heartless and it's driven by greed. >> well, compared to socialism. >> where do -- you're preaching to the choir here. >> it's easy for me to explain. i'm very proudly saying i am a capitalist. i believe in market forces. i'm living proof that market forces actually work and can change the future of a country. >> that's why they don't take your calls anymore at the white house. we want to thank erskine bowles and thank him for coming in today. >> thank you, erskine. >> you're leaving? >> yeah. >> that terrible last shot, i made you laugh, at least. >> i'm going to a mortgage board meeting.

when we come back, we also have the retail legend behind j. crew, mickey drexler live from the yale ceo summit. by the way, check out darden restaurants. looking to boost shareholder value. something an activist investor has been pushing for for a while. you can see the stock is down on this news. drop of about 2.6%. "squawk" will be right back. [ 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. [ male announcer ] how can power consumption in china,

impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. [ 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.

if you were watching back on december 10th, you heard steve liesman's call on the fed taper. he joins us now from washington. one thing you need to concede. we did not waver in backing you. you spoke and i was fully onboard with you even if it hadn't worked out. >> yeah. telling him you were going to blame him entirely. >> yeah, i would have blamed you entirely. >> the people saying it wasn't going to taper, i was just dumb struck they couldn't see it was going to happen.

you also know, when you went out on a limb, looked like 10%. by the time it happened yesterday, most people were at 50%. some higher. >> yeah, i thought you guys were a little reckless in backing me. i was confused by that. >> likewise. >> i'm by myself out here i'm good at taking you out with me, i suppose. let's move on, what we've done, create a little chart here, $10 billion reductions every month, here's what it looks like, 75 in january, you're down in june, $5 billion, if you take bernanke at his word, here's what he said about how the fed will step down on qe during the year. >> the steps we take will be data dependent if we're making progress in terms of inflation and continued job gains. i'll imagine continue to do at each meeting a measured reduction.

that would take us late in the year not by the middle of the year. if the economy slows, or we are disappointed in the outcomes, we could skip a meeting or two. on the other side, if things really pick up, we could go a bit faster. >> all right. so here's the base case. $320 billion, if you add all that up. $10 billion reduction in the meeting. a little bit lower, quite a bit lower, actually, than the cnbc fed survey. the street's going to have to kind of adjust that qe outlook, more like where they were before the september meeting. look at interest rates here, here's the fed's forecast, september forecast compared to december. you can see cut off a quarter and then cut off about a quarter in 2016. couple quick comments here. forward guidance in our view, basically saying that the fed won this run. i'm going to give you one more comment. ian shepardson says investors will become increasely nervous

about the risk of being on the wrong side of a change of heart by the fed, especially if wage growth picks up. guys, i think we don't relax, we go on quickly, the new thing for the market, i think, is going to be watching inflation, growth and inflation and whether or not that fed forward guidance is something that they stick to. believing the fed and the promise for '15 is the big theme for '14. >> can we get the sponsor of the all america survey and sponsor you? we'll see what you think they will do. they were wrong again, right? >> well, that's a serious issue, joe. >> all we need is one person. >> i think what you're saying is serious. i don't understand why the street wasn't there. interesting comments about that yesterday about that. why wasn't the street on board with this change? you've got to go back and look. follow the data, the statements. >> i think the street was, it was the economists who weren't. >> well, it's interesting, it locks in janet yellen.

the new chairman has not been confirmed yet. she's locked in now. >> this plan. >> thanks, steve, we've got to go. big stuff coming up. we never have this guy on. >> right now, we're headed to the waldorf in new york city. andrew is joined by a special guest. andrew? >> hey, becky, thank you. we have the entrepreneurs, the reason i'm dressed in these clothes. mickey drexler is here from j. crew. you've done all sorts of things with the gap. i don't need to talk about your history. you know the consumer better than just about anybody. one of the things we're trying to gauge is the state of the consumer. what's really going on? >> if you think you know the consumer better than anyone, you're in trouble.

we keep a close watch, you spend time in stores. i think the consumer is -- the most difficult part of our job is getting the product right and figuring out when the consumer's going to like it or not like it. >> but it just, in terms of this holiday season, are you surprised? more confident, less confident than before? >> i've lived through a lot of holiday seasons, and you can predict that 2014 would be more promotional than 2013 if that's possible. i've lived through it. starting on black friday through christmas day, it's sale after sale after sale. and for us, it's product after service after product after service. but the environment is if i can't be creative, if i can't be inventive, i'm just going to lower my prices. >> do you think there's a race to the bottom that's going on right now? >> i think it's a very long-term slow race to the bottom with a sector of retail, yes.

>> where does that leave you? >> interesting question. where does it leave all of us? i think when stores depend upon low margins or promotions, they train their customers. leaves us as it's leaving a lot of retailers today with a battle on margin. because we have to remain competitive, you have to remain perception wise competitive. and when everyone including the media all day long is saying it's black friday, get goods on sale, and they show a small-ish percentage of the population lined up for sale. it leaves us looking how to be more creative and continue to balance our margins. >> 30% of your sales are done online. >> yep. >> what does that do to the margin? is it improving your margin? or is it the fact that people go return half the product at the store? >> it's a very long answer. what does it do to the margin? most profitable vehicle we have is our online business. it's one location, one cost center, and it's leveraged like crazy around the world today.

now, on the other hand, it's given everyone an opportunity to check prices instantly in their hands. so for us, you can only buy j. crew at j. crew. it's positive for us and also a growth vehicle for us and i think most people today. >> 30% people online and growing. what does that look like in five years from now? >> i'm going to guess. we are international online and over 100 countries today. i'm going to guess and don't hold me to it, 35 to 37% if the retail continues to grow. you've got ha lot of shopping malls out there not growing today. >> does that mean you create more stores while this is going on or less long-term? >> you make every investment in stores where you think you get a return on investment. we've expanded to the uk. we've only had 65 made well stores, which in my view is not a lot. you open stores where the returns are appropriate and you can make money. >> you open the store in london. opening some stores in asia.

big issue in hong kong, asia, writ large is they love branded merchandise. and the j. crew esthetic is no log logos. >> right. branded is -- we have a trend-o-meter. the trend-o-meter says they're going this way and this way. and if you read about it, the competitors who have logo say there's less desirability on logos because logos has made it very democratic and very commodity. anyone can carry a logo unlike ten years ago because you couldn't afford it, maybe. >> other online. amazon is getting into fashion. what does that mean to you? >> well, it doesn't mean anything new other than you have a huge, fantastic competitor who doesn't make a profit. what does that do to everyone else? i'm more comfortable because amazon doesn't sell our products and not competing with us. you look at goods sold on amazon

and 50 other places. and oh, by the way, you can pay full price in certain stores, too. go to your device and check the price. >> you're on the board of apple. we've got to run. you look at what's going on with apple and the google fight. where do you see this going? >> well, thank god it's not my full-time job. i don't have to worry that much. >> okay. thank you for joining us. i am wearing the suit -- you told me -- we have a scoop for the fashion people. you're going to be changing how this looks? >> no, we're not changing that. we are doing a little wider lapel and a slightly different cut as another concept suit. >> okay. i will take it. mickey drexler, happy holidays. >> thank you, you too. >> joe, back to you guys. >> when you leave the shirt out, does it have to be any shirt you leave untucked to look cool? or is it a shirt with less tails than a normal shirt? >> well -- >> good question. >> well, the key -- and i'm not

an expert on this. i've been doing it for years -- >> yes, you are. >> it has to fit, of course, and it has to be the correct length. that's the most important thing. and there's a tail issue to this. >> so he has his -- can you see? he has the tail out a little bit. >> well, it's more comfortable. >> right. >> well, i don't know. so you've got to -- >> you always do that. >> i've done it since -- i've done it for many years and i don't do it because, oh, it's in fashion. it was always more comfortable. and i think today comfort's critical and feeling who you are and natural about dressing. but there are rules and regulations we can go over that after hours. >> thank you. >> i'm going to unbuckle my pants then. >> please, don't. >> just to be comfortable. >> please don't. >> you said -- >> oh, hold on, i've got to ask. joe will help -- i think -- we've got to run. thank you, mickey. >> thank you.

>> i'm uncomfortable again. target targeted in a credit card breach. we have the details after this. and then the ceo of pvh will join us. the owner of brands, we're going to talk retail right after the break. stick around. ♪ 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. ♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy. you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.

open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com.

welcome back to "squawk box," everybody. we want to talk about an important story. retail giant target says the payment card data was stolen from 40 million customers, 40 million credit cards or debit cards. started back on that busy black friday weekend. went all the way through, i believe, december 19th, december 15th. if you shopped anywhere at any target store in the united states between november 27th and december 15th, you should be aware. they're telling you you should check out your account, make sure you don't see any fraudulent activity. investigators believe the data was obtained from software installed on machines that customers used to swipe magnetic strips on their cards when they pay for the merchandise. this does not affect the stores in canada, does not affect the online target store. it's not clear how the attackers were able to compromise at so many target stores across the country. but, again, this is a growing issue as we worry about cyber security around the globe.

>> and only six days -- shopping days left until christmas. so where? where? where are consumers spending their money? joining us now is manny chirico, ceo of pvh. only six days left and there were six fewer days. it's harder to start with and sales are by definition be later? >> sales are coming in later, more compressed. and the entire promotional environment is much more promotional than it was this time last year. so it's just a very hard situation to read, very choppy. the weather this last weekend in the united states really didn't help throughout the northeast. but the last few days, we've really seen a pick up in business as we've gone forward. >> all in all, it's about traffic. about who was able to get there, right? >> exactly. it's about traffic and it's about price point. and, you know, two stories, really, going on. i think this year successful retailers are going to be the ones that can manage their gross

margin, manage their markdowns and the challenge, i think, we're seeing is that the environment has got much more sales and price promotional. but at the same time, inventories, the high-risk areas we were dealing with last year, much warmer season, we don't seem to have the issues in cold weather apparel, outerwear, and those tended to have a big exposure post christmas. i think the silver lining in this might be gross margins postchristmas might be stronger. >> the good news is, the weather's been happening out. the bad news, the calendar hurt. if you add it all up, what will we be looking at? >> i think when the score card's all done, you'll see sales up 1% to 2% overall on a comp store basis. i think profits will be a mixed bag. i think, again, you're going to see winners and losers across the board. i think department stores are going to be winners. they've really driven the online. macy's in particular, dillard's, i think they've driven the

online portion of that business. at the same time, and they've had the loudest voice right now. you see the kind of promotions and advertising that's going on to really drive the consumer in. >> and even jc penney you think it's happening. >> it's happening. it's a turn around. that's like turning around a battleship. the story on pennney's. everyone has to watch the gross margin. >> i was talking to people who say they get great discounts for coming in. maybe that's what they need to do. >> and the other thing, they're really changing the mix of business. really refocusing back on some of their national brands and private brands. and i think really what you're going to have to watch. i think the apparel business has come back. their home business has always been one of their most profitable areas and productive areas. if that business can get back on track, that went through a lot of for lack of a better word, damage under the old regime and getting that business

repositioned and re -- getting it back to being the kind of profitable business it was, it drives the consumer into the store where she purchases that and she's buying apparel. >> another she -- and specialty not so good. >> how could it be? i walk the mall and i'm not going to name names, but the competitor said is everything is 50 to 70% off. and here it is december 15th. >> calvin and tommy are good for you. >> they're driving the business. internationally in particular and also here in the states, those are the two engines. >> you own speedo. you knew i was going to go here. do you own a speedo? >> no, and i don't wear my shirt sleeves out. >> you don't -- >> does speedo make a long? if i get a speedo, i don't need to do a tiny thing. >> 50% of the business is hard goods, goggles.

>> speedo goggles. >> very high-margin business. then there's the performance component that you see in the olympics on the pool. and michael phelps. and that's been a big component of the business. people historically think about -- >> i do. faber shaving his entire body, putting this oil all over himself. >> that's no longer the case. shaving the body and doing all that with the racing suits that no go from your -- >> yeah, just got one. >> now go from your knees to your shoulders. >> thank you. >> green. lime green. >> merry christmas, everyone. coming up jim paulson gives his assessment of the fed move, what it means for the markets. he was kind of right. "squawk box" will be right back. still to come, pulitzer prize winning author tom friedman from the economic recovery to global challenges facing business, we cover it all. plus, former wells fargo

chief dick kovacevich. how naughty was he? oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. [ttdd# 1-800-345-2550 can take you in many directions. searching for trade ideas that spark your curiosity tdd# 1-800-345-2550 you read this. watch that. tdd# 1-800-345-2550 you look for what's next. tdd# 1-800-345-2550 at schwab, we can help turn inspiration into action tdd# 1-800-345-2550 boost your trading iq with the help of tdd# 1-800-345-2550 our live online workshops tdd# 1-800-345-2550 like identifying market trends. tdd# 1-800-345-2550 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how. tdd# 1-800-345-2550 sharpen your instincts with market insight from schwab tdd# 1-800-345-2550 experts like liz ann sonders and randy frederick. tdd# 1-800-345-2550 get support and talk through your ideas with our tdd# 1-800-345-2550 trading specialists.

tdd# 1-800-345-2550 all with no trade minimum. and only $8.95 a trade. tdd# 1-800-345-2550 open an account and earn 300 commission-free online trades. call 1-888-628-2419 to learn more. so you can take charge of your trading. [ 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.

the dow staging a huge rally yesterday after the fed decision to end -- or to start with an end in sight. and begin tapering with 10 billion. james paulson joining us. is this a way you would have

wished it went? you're ready to go to zero. at least we've got a game plan, right? >> i'm just happy we're finally down this path. i think finally we've got the fed to give a vote of confidence to the recovery. i think the market's reacted accordingly. they've reacted positively to it. i think they'll continue to it. i think one of the things hanging in the way of confidence is if the fed can drain the qe excess reserves, that'll be another risk that's off the table for the future that would help, i think, the economic outlook. it's a good thing. >> so there are a lot of reasons why it happened yesterday. one, there's still 75 billion, right? number two, you think it indicates the fed is comfortable ratcheting up the expectations for the economy. you think this was sort of a, you know, giving a nod to things -- an endorsement, if you

will, of maybe a little bit better growth. and you think they have any idea? should we listen to them in their forecast? >> well, their forecast about as good as anybody's, i guess. we all miss some and make some. they're no better or worse than that. >> you also think it was -- you think it is an uncertainty how this plays out as this gets out. and it removes some of the uncertainty to start getting out? >> we're starting down that path. that's going to continue to be an unknown. what does it mean to get $3 trillion that could come through the lending windows? and that's going to continue to be on investors' minds until they get it drained. but, joe, i think the big thing in the room at the moment that caused the fed to do what they did is just the economic momentum that exists. it is really on fire here. you know, jobs are up and they revised up the previous months. retail sales were revised up. you've got housing hitting 1 million annual rate, industrial

productions booming. i mean, i think that's the elephant in the room. that's what's driving these markets higher is the momentum to the upside pushing stocks higher and pushing bond yields higher. >> jim, we've got to go. sentiment improved pretty quickly. i heard a lot of people saying no santa claus rally, the correction is here. a lot of people saying that. and we built it up quickly. thanks, jim. by the way, we want to thank judd gregg for being here on this big day for the markets. thank you so much for joining us. >> pleasure. thank you for having me. >> we'll see you again soon. pulitzer prize winning author tom friedman is going to be joining us onset. the american dream is of a better future, a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one.

that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪ ♪

[ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds

beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. thomas friedman joins us for a special one hour event. from the state of the economy, the fed's decision on interest rates and the taper to global issues facing business, we cover it all. plus, the state of financials, and what we can expect in 2014 from former wells fargo ceo dick kovacevich as the third hour of "squawk box" begins right now.

welcome back to "squawk box," everybody, i'm becky quick. well, you know our top story today, of course it is yesterday's taper story and the ensuing rally after the fed made that announcement. listen in. >> starting in january, we will be purchasing $75 billion of securities a month, reducing purchases of treasuries and mortgage back securities by $5 billion each. it's important to note, though, even after this reduction, we will be still expanding our holdings of longer term securities at a rapid pace. >> with those words from ben bernanke, stocks took off. we saw the dow surge closing at a record high after gaining almost 300 points. a lot of this because of the ten-year and the action there, it was a very steady and slow increase for the yield. dow futures down by less than 2 points. we're going to talk about all

these issues. we do have to get out to andrew. attending the yale ceo summit and he just grabbed a special guest. andrew? >> thank you, becky. the special guest we grabbed is steve schwartzman, the chairman and ceo of the blackstone group. and we can continue that taper talk conversation because you perhaps more than anybody have to have views and it's going to have an impact on your business. are you surprised? >> actually, i'm not very surprised. baa uz the market overreacted when he said what he thought is going to happen with the taper in june. and it ran interest rates over 100 basis points for actually no reason. he gave a series of criteria they were not met and people were surprised in september. this is pretty gradual. it's a good thing to happen. >> we have a bet going on at the

table that joe is on one side and becky and i are on the other side about what's going to happen to the ten-year. your expectation in the short-term, you think the nonmove yesterday, if you will is just going to -- we're going to stick around where we are? >> well, over time the ten-year will go up. that's not a bad thing if the economy is going up. and these things were normalize. you can't figure it out. in terms of how thin to slice the baloney. but over time, if the economy improves, rates will go up. >> and you think it's improving at a good clip? >> it's improving pretty modestly. i think there's a lot of bullishness, which feeds on itself. the real world is moving ahead. it's not barrelling ahead. >> now hold on, it sounds to me you're more pessimistic than at least the way the market is today?

>> well, when you actually, andrew, have an economy that grows at 2.5% 2.75% and a stock market that goes up 27%, seems somewhat disconnected. >> therefore you think we're in for a correction come 2014? >> well, no one's smart enough to know that. but it seems low probability that markets continue going up at 17%. >> okay. if that's the case, what do you do? both from private equity standpoint, from a housing standpoint. you're in just about every business these days. >> right. well, we like housing. housing is a terrific thing. and one of the facts most people don't know is in the last 40 to 50 years. when interest rates have gone up. 26 years out of 26, housing values have continued to go up. just the opposite of what most people think. and with the largest owner of

homes in the united states and so we've seen housing in this last year go up in the cities we're in. somewhere between 20 and 22%. that will slow down. but it'll continue to go up. >> joe's got a question for you. >> steve, when history books are written a couple of years from now, will we look back on qe-3? specifically qe-3 as something that was helpful or counterproductive to getting the economy going, do you think? >> i think we'll look at it as modestly helpful. you know, each of the qes have had less impact. the first one had the most. i think that the fed was basically trying to fight the dysfunction of washington by just keeping the economy on an even kiel. and they've had enough of it. and the inflation that everybody said was going to be there, of course, hasn't happened at least

yet. so i think it's time to slowly bring this to a close. and i think most people would agree with that. >> steve, i've got a different question for you, in a post volcker world. we talk about the big banks all the time. but i actually think of you as possibly way more powerful than any ceo of a big bank these days given all the businesses you're in and the fact that in many respects, you are becoming the bank. you're getting into auto loans, all sorts of other businesses. what does blackstone and all of your brethren ultimately look like? and how does that -- do you think you'll ultimately compete, if you will, with jpmorgan? >> well, nobody can really compete with jpmorgan. they're a huge-sized institution and we are not a bank. we do not take deposits. we do not look for guarantees from federal governments. but what we do do and we have done for almost 30 years is look at interesting opportunities

where the credit risk to the extent that we're talking about credit as opposed to equities. >> you're going to be providing more and more capital, lending more and more money through different avenues and vehicles. >> we'll be raising money from institutional markets, some from retail. and we'll be putting it into things where regular people need the money or companies need the money. and in that regard, we're finding a lot of areas where now for a variety of reasons like volcker, other institutions aren't able to do that. i must say that through the financial crisis and its aftermath, we've grown three times. >> right. >> these other institutions have shrunk. and we haven't had credit issues. so perhaps our regulatory structure which exists, regulated by the sec is efficacious for us. >> i should note before we go, we are in the waldorf astoria.

you had the ipo, which was a success. you have about $8 billion profit on paper. how long does it stay on paper before it gets realized? >> well, i think it's over 10 billion. >> over ten now? and it gets realized, as they say, in due course. the company appears to be doing very well. i'm under a quiet period restriction. so i can't really talk about it. last week was a good week. >> okay. we'll leave it there. happy holidays. thank you for joining us this morning. >> thanks, andrew. >> appreciate it, steve. >> guys, back to you. >> thank you, both. what's $2 billion here or there? >> not following that closely. >> nor would i be. joining us for the next hour to talk global risks and the strength of the economy is pulitzer prize winning author thomas friedman. he's also the author of "from beirut to jerusalem" out in paperback right now. we'll be talking a lot about things. but tom, we know the economy

here has stabilized a little bit. there do seem to be tectonic shifts when it comes to other areas of the world. you can think about a lot of places, whether that be iran, whether that's be what's happening in the middle east at large. one thing we've been talking about this week is ukraine, the decision they have to make between west and east and putin pushing them very hard to choose east. he's making big grabs. >> yeah, there's no question that putin's feeling more and more isolated. and worried about being surrounded by the west as it were. and dangling gas to the ukraine and also twisting their arm. i don't think that's the one, though, that is the one that would really roil markets per se, some impact in europe. the big enchilada will be china and the south asia situation. and they do have to worry a little bit. i think the big debate thing i'm

wrestling with, are we seeing the end of china's peaceful rise? that's one thing, to really throw their muscle around, or are we just seeing a frightened china. which in some ways could be -- >> frightened by what? >> frightened by -- >> themselves? >> yeah, the huge task they face having all of these state-owned industries, knowing they have to make this transition to more market-based economy. knowing they better get rich before they get old because they've got to go from two maternal grandparents and two parents all saving for the mac laptop of one kid to one kid paying the nursing home bills or two parents and maybe one grandparent. >> they're starting to recognize that, but maybe a little late. >> well, it's not just the one child policy. what they have to use up is how do you go from an assembly economy to a knowledge economy and censor google and bloomberg. we've had our own at the "new york times". how do you loosen up to have a

true knowledge economy and not have the whole thing come unstuck? i mean, i don't know how xi shing ping sleeps at night. i prefer to use the term 1/6 of humanity. how 1/6 of humanity makes this transition to a more market-based economy to something more consensual, that's going to affect everything to the cost of the value of our currency. >> by definition, there are a majority of the public in china still thinks that -- i think they have an idea that they're not quite as free as the rest of the world, but they also understand that it's not possible right at this moment for that to happen. they're behind the way things are being done right now. i don't know how long that lasts, really. >> yeah. it's a good point that, you know, what you see when you go there. there is a real nationalist streak there. there is a strong sentiment that

we are a country coming back. and we're going to find our rightful place in the world. and that does give the government some extra leeway in administering pain. the danger of that, though, that can really flip to some aggressive nationalism if you get into one of these fights with the japanese -- >> we couldn't imagine not reading something that was true, for example, or not more than one person gathering in a place. we can't imagine. they haven't had it, they don't miss it as much. >> there are about 300 million bloggers in china. so xi jing ping has to make a two-way conversation. and we've never seen this before. my own view is, we're seeing more of a frightened china. >> i wonder when it turns in

into -- you know, when you pass that point of no return. two years, five years? >> you've had the debate on this show. i've seen it, two schools, one that says this place is going to blow. it can't go on like this. it's a screaming short. and then there's another view which says they have big problems but big tools. and i think there's a real tussle in the market. and both in the market and in the academic analytical community, which is going to be. one school does say, hey, you look at the empty buildings, the place is going to obviously implode. but another school is to say -- what if they're just getting started? what if we're just about to see the payoff of 30 years of building amazing infrastructure. that is another possibility, too. >> i guess it's weird to try and figure out how we deal with them. do you try to contain or appease them? and if you're scared. i never thought of them being scared. >> right. i think the bush administration

and the obama administration, which have really had a continuous policy, done pretty well. draw red lines where necessary, build bridges where possible and it's got to be subtle. you hope two of our planes don't run into each other again off the coast of the china or two ships off some god forsaken rock in the south china sea. >> we'll have more with tom friedman after our short break. series had nothing to do with tapering, but i saw some disturbing stuff on the news lately and i want to ask you about that. i know it's not chemicals anymore, but it's horrible. anyway, we'll talk about that later this morning, breaking economic news, jobless claims, data's going to be released. we'll have that reaction to the numbers right ahead. ig business? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not?

what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. [ male announcer ] my client gloria has a lot going on in her life. wife, mother, marathoner. but one day it's just gonna be james and her. so as their financial advisor, i'm helping them look at their complete financial picture -- even the money they've invested elsewhere -- to create a plan that can help weather all kinds of markets.

because that's how they're getting ready, for all the things they want to do. [ female announcer ] when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you. wells fargo advisors. together we'll go far.

we're talking about a lot of different things with our guest host tom friedman this morning. and i guess i -- i kind of like to keep it here to some extent. off camera, we talked about how we fix these political issues and entitlements. and we agree on this. it's a problem we can't do it in a bipartisan way. but if we elect three branches of government that are the same and they do it their way, that's

not going to work either. we can't do it bipartisan, can't do it partisan. it's not going to get fixed. >> well, it's the definition of stuck, joe. and what sort of depressing about any of these recent political upheavals we've had, what you sense is no one gets punished for bad behavior, you know, and that's the real definition. >> they were elected by people -- >> right. exactly. >> what some people view as bad behavior. >> i don't know who can break us out of this, but we definitely need to. i hope somebody throws a hail mary here. >> there was a glimmer with paul ryan and patty murray, wasn't there? >> yeah, and i think what you see -- >> put him on top in wisconsin right away or in iowa. >> and that tells you a lot. where the center of the country is and where it wants to go. i continue to believe that part of what happened in the market, 90% of it's bernanke. but could we argue that 10% was actually they did this mini bipartisan deal. >> yeah. >> i feel the country for a long

time felt like we're children of permanently divorcing parents. and if that isn't a downer in terms of long-range thinking, long-range planning, i don't know what is. how much of that factors into the market, i can't say. i do believe a huge stimulus would be if the parties did get together and still did some kind of grand bargain that would allow for short-term investment and infrastructure. every time i come up here to do your show or visit my own newspaper, you know, you go through penn station and come up that escalator. they were invented before suitcases. you know, just like, who invented those escalators? >> that's true, you can't get a bag -- >> it's flying from the jetsons to the flintstones. and more and more everywhere you go you feel the sense of crumbling. a slow decline. >> you know what allows us to do that, 3.5% gdp. >> yeah.

>> and it solves a lot of our entitlement issues. and it solves a lot of income disparity issues. it solves so many things. if we would have a single-minded focus on how to get the 3.5%. not from government, from the way it's done. the way we did it in the past. and i don't -- i wanted to ask your opinion on the latest discussion that the president introduced with income disparity and how to do it. i think the way to do it is by growing at 3.5%. and that sounds like a trickle down 2.0, but you need to generate wealth and prosperity in the private sector that hopefully -- i don't see it, the minimum wages and unions are not going to do it, are they? >> i think we need to be discussing both but in a really intelligent way. on the first side, i think we're in the middle of a huge inflexion point. we talked about this in the show. underneath is a subprime crisis

in post 9/11, the wiring and plumbing has changed in the last decade. a lot of the walls were blown away. and the central socioeconomic fact of that and wed talked about this last time i was on the show, average is over. and the thing that sustained the american middle class for 50 years, the high-wage middle skill job is gone ksh i'm a big believer. i want a net, but be able to afford that net. it's all focused on what government can and cannot do. rather than stimulating, nurturing and inspiring people to go out and start stuff. you feel underneath all this bad stuff. there's still like 2% growth whatever. what is it?

that's all the people out of washington who didn't get the word. they didn't get the word that china's going to eat our breakfast and germany's going to eat our lunch. and they clap rate on stuff. if we unleash more of that. >> are you on the editorial board? >> no, i don't -- >> there are -- we have people come in that talk about the energy revolution possible in this country and you talk about middle level good-paying jobs. there are people who think it won't just happen in energy but because our input costs will be so much lower we'll narrow, you know, the advantage of labor being cheap abroad. we'll narrow that because our energy could be so cheap from this revolution. >> not only that, it's also the time you need to get goods from the floor to the shelves -- >> totally against shale, totally against fracking. >> joe, i'll let them talk about the editorials. i'm all for shale and fracking. >> there's no one that wants to

do it in a way that's not -- that's redundant to say. >> i'm not sure about that. >> really. >> actually, there are. but -- >> matt damon made a movie about that. >> i think there's a lot of small, you know, wildcatters in this field. but to your bigger point, i think we're actually -- we are so close to greatness. >> i think you're right. we could do it again. >> a few big things. if you look at all the trends going our way, we are so close. >> i really believe that. and what's holding us back are our politics. >> we're going to continue this conversation plus jobless claims when we come back. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity.

now get 200 free trades when you open an account. [ male announcer ] the new new york is open.

open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com.

when we return, much more with tom friedman, plus the jobless claim numbers. we'll head to chicago and the trading pits and get the numbers after the break. when we return, former wells fargo ceo dick kovacevich on the fomc meeting and what it means for 2014. "squawk box" is back after a quick break. my mantra? family first.

but with less energy, moodiness, and a low sex drive, i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron. the only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting and increase in psa.

ask your doctor about axiron.

welcome back to "squawk box," everybody. we're a few seconds away from the jobless claims numbers. we've been watching the futures ahead of that. the futures are down, but barely. dow futures down by about two points below fair value. this comes after the day of a major rally. dow up almost 300 points after the announcement it will begin a taper in january we've also been keeping a close eye on the ten-year. the yield is creeping higher. 2.922%. it's behaved very well and that's why you saw the big rally

in stocks yesterday. 2.922. we're getting closer to 3%. still, you have to say this is a well-behaved bond market. claims data is going to be important. rick santelli is standing by at the cme in chicago. go ahead with those numbers. >> initial jobless claims popping on the screen at 379,000. so it's up exactly 10,000 from a very slightly revised 369. continuing claims moving from just under 2.8 to just under 2.9 million. you know, i guess one could call the ten-year behaved. but i guess that would be like calling a lion behave that was in a very tight cage. i'm not sure i'm buying it. but remember, they will be able to widen those bars on their own. the long end of the marketplace is not under the thumb of the fed's program/manipulations. but we'll have to see over time.

as far as the equity rally, you know, who doesn't like santa claus, right? one beard to another, anyway. back to you. >> rick, thank you. what would it take to get the lion to push through some of those bars? >> well, i -- i couldn't tell you precisely one. but i would think that the biggest thing in my opinion that all the world central bankers fear any kind of decorum of actual success. once the velocity of money and the economy picks up, my guess is you're going to see a very large normalization of rates. but where i think many went wrong five years ago when they looked for these dynamics is they never thought it would take so long to right the economy. and for all those that think the economy is cooking in grease, i'll say the same thing i did yesterday, we basically zerped out at the end of 2008. if you listen to smart people like bill gross or ben bernanke

2015, 2016 before implementation. eight years of zerp for an economy if it was a textbook case in economics would probably not be graded as a stellar economy. >> yeah. that's true. >> that's my view. >> what do you think of the gold move? down another $30 today sitting at 1,200. >> you know, there's so many factors. i remember trading gold 79, 80, anybody who tries to peg gold is one or another. it has multipersonalities, it's a schizophrenic commodity. sometimes it's an economic indicator, sometimes it's an interest rate scenario where a sterile commodity and a rising rate environment loses its luster. maybe it just has all the wrong types of investors holding it. in the end, i think the original gold moving high was an end of the world trade when you're better with a bag of beans than a bag of gold. >> we'll see you later.

>> great. joe asked you a little bit about syria earlier, we never got a chance to address it on air, though. how big of a problem? look, we're out of the situation but you're right, you watch it every night on nightly news. >> is it good we did that? >> let's talk first of all about syria geographically. >> okay. >> before all this happened, one of the points i tried to make was that when libya has the resolution, it implodes. when tunisia has the revolution, it implodes, syria explodes, goes out. because all the communities are connected to communities around it. there's one way to fix syria and i think only one way to fix syria. an international peace force has to go in, take over the country, take down the bad guys. and create a political transition that will allow citizenship to emerge, probably a 20 to 0-year project.

and because everyone knows that, no one wants to take it on alone. ultimately the community will have to do it, i believe, because syria's such a keystone for the whole region. you'll have a little afghanistan now with crazy really out of control jihadists coming in and out of syria going back to their home countries. right on israel's border. ultimately, i think that's probably where we'll have to go. but right now, nobody wants to step up to the challenge. >> with the way it played out, we felt like, you know, we had accomplished something in terms of, you know, like maybe we do, maybe we don't get neutralized all those chemical weapons. but in the process, the misery didn't change. at the time people said is it different to die from a horrible bomb or from chemical weapons? and now we're seeing stuff on the nightly news where the situation -- and saudi arabia's totally mad. >> they're freaked out.

the core problem, though, there's no country in the world that can be a democracy with the level of sort of tribal and sectarian issues with a country like syria has. i was in syria in june, late may working on a documentary on a climate environmental issues that led to the arab spring. and we interviewed the syrian army commander in the north. and at one point, he introduced his leadership team to us and it went like this. you couldn't make this up. my cousin, my brother, my brother, my cousin, my nephew, my son. how do you build a democratic politics only with a long transition. >> we don't know who those guys are in this case. we haven't determined if these are people we want to be working with or helping. >> yeah, it turned out with the arab spring, people wanted to be free for different things. some wanted to be free to be more sectarian. some wanted to be more islamists, and some wanted to be

democrats. but there was no real consensus. and without an army of the center that can really -- think about what's going on in the middle east. basically what's been happening is we're seeing an entire region go from vertical to horizontal where it can be governed by the different communities reaching a social contract. how do we live together as equal citizens? now, when you go from vertical to horizontal from britain, france, dictators and kings to horizontal, you either better have a military that can make that transition, that's egypt, you better have a midwife to help you through it. or you better have a mandela. if you don't have a mandela and don't have a midwife and don't have a military, you've got syria. >> i think about the progress we've made around the globe, the last five years were rough from an economic point of view. europe's looking better, america's looking better, things have gotten better on an

economic perspective, but are we safer or less safe just from geopolitical standpoint? >> well, a couple of things. one is we are in a world where let's go back to the middle east for a second. a region that is incredibly pluralistic region with no pluralism. all these minorities, sects, we forget what freaks we are. we forget that we have twice elected a black man whose middle name was hussein who defeated a woman to run against a mormon. we are freaks compared to the rest of the world. and what we do is really hard. and we are working on it. a work in progress. look at the middle east and a syria and you think how far -- they've had no great founding fathers who wrote an amazing constitution. they've had no great civil rights leaders. they've not been through that process.

that's an incredible source of strength, to be a pluralistic society that can manage immigration if we ever get an immigration bill through, to be able to take advantage of the world's greatest talent. it goes back to what joe and i were talking about before, which is we're just a few big decisions away from greatness. we have energy going our way, pluralism going our way. we have an innovative culture going our way. it's washington, d.c. and a politics of hyper partisanship that's holding the whole thing back in my view. >> and all this is happening -- as that's happening. >> they go out and start new companies, you know. >> and we always when we look back, democracy's messy, right? and it is. but -- >> there's messy and there's messy. >> we're prodding along slowly, aren't we? >> it's so suboptimal and gets to your point, with our generation retiring, the baby

boomers, we know what erskine and judd gregg were talking about earlier this morning. we just can't keep going along riding on our reputation. >> right. >> it's the whole question of are we exceptional? you know, being exceptional is not like an honorary doctorate you get and get to have it for the rest of your life. it's something to earn and reearn every year. and we're sitting back with our feet up. exactly when the rest of the world is putting on their shoes and wants to run faster than ever. >> well, up next, what the taper means for financials. i have a guy who knows a little bit about financials and that is former wells fargo ceo dick kovacevich will join us after the break. we're watching target this morning. the retail giant says payment card data was stolen from 40 million customers. no the to worry, that's -- don't worry about 13 million people losing their insurance. we don't worry about 40 million.

starting ining on a busy black . investigators believe the data was obtained from software. not a big number. not a fake -- software installed on machines that customers use to swipe the cards. ♪ [ male announcer ] they are a glowing example of what it means to be the best. and at this special time of year, they shine even brighter. come to the winter event and get the mercedes-benz you've always wished for, now for an exceptional price. [ santa ] ho, ho, ho, ho! [ male announcer ] lease the 2014 e350 for $579 a month at your local mercedes-benz dealer.

they always have. they always will. that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one.

to help you retire your way... with confidence. that's what ameriprise financial does. that's what they can do with you. ameriprise financial. more within reach. federal reserve chairman ben

bernanke giving his last news conference on the fed's decision to start tapering in january. >> the steps we take will be data-dependent. if we're making progress in terms of inflation and continue job gains, i imagine we'll continue to do probably at each meeting, a measured reduction, that would take us to late in the year. not -- certainly not by the middle of the year. if the economy slows for some reason or we are disappointed in the outcomes, we could -- we could skip a meeting or two. on the other side, if things really pick up, we could go a bit faster. >> dick kovacevich is the former chairman and ceo of wells fargo joining us now with reaction. was it a little bit of relief that we at least are getting started, dick? >> absolutely, joe. i think it's a very important step. i think if you look at what's happened in our economy, it's been, as you know, joe, it's been growing at about 2%. that's far below the 3% that

we've been growing for the last 50 years and even further behind the 4% that we grow after a recession. and people are confused about why that happens. and i think it's pretty obvious why it's happening. and that is because the private sector decision makers have had little confidence. little confidence in our government, little confidence in our monetary policy, and the reason i'm sure of that is because there's trillions of dollars on corporate balance sheets and quite frankly individual balance sheets, as well that is earning zero interest rates. so you have record high liquidity at the highest opportunity cost we've ever had. and the fed says it's going to keep interest rates at zero for a couple more years and still that money sits there. and the fed comes out, has been coming out every other month saying the economy's not very good. we -- what we're going to do qe-1 and that'll improve things

and we're at 2% and they said, that didn't work, we'll do qe-2, and that didn't work and qe-3 and we're still at 2%. and that doesn't increase confidence, it decreases confidence. so the fed now saying that the economy is doing better and we can taper, increases the confidence level of people. and i think we saw that in the stock market. >> the litany of uncertainties for ceos, we've gone over them a lot over five years and we're talking regulatory issues, the looming entitlement issues, tax policy, all those things we think of, you can sort of call some of that activist government to some extent. but do you include the federal reserve and qe-3 as actually counterproductive to the economy recovering more quickly? i asked swarzman that question earlier. he said it'll be a mild positive qe-3. do you actually think it's one of the things holding people

back from investing in the private sector? >> yes, because it was being justified by the fact that the fed was saying that the economy isn't doing well and is -- and implying that it's not going to do well. so we need the continuous boost. >> do you believe the fed, dick? they're forecasts have been no better than anyone else. but you say because people believe the fed thought the economy was weak, weak enough to need qe-3, that's why people weren't investing. >> exactly. and because they don't notice the fed's forecast have always been wrong. but it's not just the fed, though, joe. we've let other confidence building going on. as you know, we've had a government shutdown, haven't had a budget for four years. and not only a budget, but for two years. i think the debt ceiling is going to get passed. and let's look at our economy, it is true that our economy is still only growing at about 2%.

not much better than it has in the past. but i believe the base, the base of this economy is much more solid than the 2% indicates. and, in fact, i think the probability of the economy improving from where we are here is much greater than the economy going down. and that was not the case a couple years ago. and the reason is that the -- there are very important industries that were actually declining by double digits a couple years ago. like housing, like automobiles industry, like residential and commercial real estate that are actually increasing today. japan, that's been stagnant for 20 years is actually growing. europe appears to be stabilized. mergers and acquisitions are starting to occur. the ipo market is actually red hot. none of those conditions existed before. i think we now have an environment that if we can keep

the confidence moving. and there are things we need to do to keep that going. but all three of the important ingredients, the economy itself, the federal reserve and our government have moved dramatically from where they've been. and that is confidence building. so what do we need to do? i think that we need to immediately act to bring the trillion dollars that is on corporate balance sheets overseas today, bring it back home and get it to work. and you do that by charging a 15% surtax. and that 15% on $1 trillion, $150 billion can be used to reduce the deficit or in combination might be used to fund an infrastructure investment which some democrats have been wanting to do. and secondly, we should recognize what's happening on the energy front. and it's very, very important. i think we should approve the keystone pipeline, not just

because it improves employment. but we have the opportunity -- it's about national defense. we have canadian energy increasing. the united states will now be the largest producer of energy in the world. which hasn't been the case for 50 years mexico just passed a law allowing private sector, probably some u.s. energy companies to extract the reserves we know that already exist in the gulf of mexico. and we will no longer be subject to the blackmail of rogue states like the venezuela and iran -- and we don't have to incur trillions of dollars of expenses in taxpayers' money to be able to be involved in civil wars in the middle east. so there's a lot of things we need to do to keep this confidence building. >> wow. those are some pretty good

guidelines, though. we're all feeling pretty good at the dow, 300 points will do that to you. we appreciate your time this morning. >> thank you, joe. coming up, a chicken breast super bug. becky's favorite stories. a result of a test by consumer reports could have you changing your order.

a few headlines for you this morning. facebook ceo mark zuckerberg is going to sell shares worth about $2.3 billion. the sale will reduce his voting power from 56 -- to 56.1% from 58.8%. he still has about 62% of the voting rights as the controlling stockholder here. part of this is being done to pay taxes on 60 million options that are being exercised. part of it is being sold for profit. you have index funds that are

going to have to be buying this stock. also, darden restaurants are looking to sell off the red lobster units. >> from lobster to ducks. we both -- the golden goose, the networks may have been slightly cooked. phil robertson has been put on indefinite hiatus into reaction to some anti-gay comments he made. >> from ducks to chickens. about half of the raw chicken breasts carried anti-resistant super bug bacteria. the group said it tested for sex types of bacteria in 316 raw chicken breasts. almost all sampples contained

bacteria. use the lesson don't eat raw chicken. cook it. cook it well. >> cook it so it's almost not juicy. >> wash your hands. >> we're going to finish things up with tom freeman and i'm going to come to you out of left field, i think. "squawk box" will be right back. stick around to "squawk on the street" to see at carnival joins the gang at post 9. "squawk box" will be right back. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com.

to help secure retirements and protect financial futures. to help communities recover and rebuild. for companies going from garage to global. on the ground, in the air, even into space. we repaid every dollar america lent us. and gave america back a profit. we're here to keep our promises. to help you realize a better tomorrow. from the families of aig, happy holidays. ttdd# 1-800-345-2550 can take you in many directions. searching for trade ideas that spark your curiosity tdd# 1-800-345-2550 you read this. watch that. tdd# 1-800-345-2550 you look for what's next. tdd# 1-800-345-2550 at schwab, we can help turn inspiration into action tdd# 1-800-345-2550 boost your trading iq with the help of tdd# 1-800-345-2550 our live online workshops tdd# 1-800-345-2550 like identifying market trends. tdd# 1-800-345-2550 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how.

tdd# 1-800-345-2550 sharpen your instincts with market insight from schwab tdd# 1-800-345-2550 experts like liz ann sonders and randy frederick. tdd# 1-800-345-2550 get support and talk through your ideas with our tdd# 1-800-345-2550 trading specialists. tdd# 1-800-345-2550 all with no trade minimum. and only $8.95 a trade. tdd# 1-800-345-2550 open an account and earn 300 commission-free online trades. call 1-888-628-2419 to learn more. so you can take charge of your trading.

let's get back to our special guest tom friedman of the "new york times." you already said that russia, while not as important as china and we talked middle east, but russia and putin are still on the front burner. last night i saw our olympic delegation is not going to include the president or first lady or the vice president and it's the first time in a long time that it's been like that. janet napolitano is going to lead our delegation over there with some of our openly gay athletes to almost send a message but almost to tweak, to some extent on what's happening

there. one of our columnists said it might have been better if the president went with these athletes to even emphasize it even more that sending a -- this is almost just like a, you know, poking someone in the eye rather than engaging with them on the policy directly. what do you think? >> joe, this is a long story. it goes back to nato expansion, which i was an opponent of for some of these reasons. let's go back to syria. there's no big problem in the world today that we can address without russia. the problem is post-nato expansion, hey, running against america is really good policy here, these people want to keep us down, et cetera. it's just not a healthy situation. >> we don't have time but do you think the president should be going? is this the right way to -- it's hard to say. >> i haven't thought that one

through. all i know is we need to find a way to work with russia. >> it's just going to make him mad, i think. i don't know. we're tweaking -- >> we need russia on every big problem to resolve it. >> tom, i want to thank you so much for spending the time with us, it's been great. that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with simon hobbs and kayla tausche. cramer and david are off today. the dow surges nearly 300 years. futures indicate we are going to give some of that back this morning. the 10-year note near the highs this morning. gold is being absolutely punished. a six-month low down more than $30, did briefly trade below