cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. our lineup today hits on several hot button topics, including health care with jonathan bush of athena health, oil billionaire harrell hamm will be joining us and we have the world of real estate with re/max ceo kelly. plus, jane wells and courtney reagan, we'll see who gets the best deals. in the meantime, check out the morning's top stories. another record for the dow. tin decks gabing just over 11 points while the s&p and the nasdaq both lost ground. right now, dow futures are up by 25 points. s&p up by 2 points and the nasdaq by 6.5 points. we have seen an increase in the yield, joseph. they shut off his microphone so as much as he's trying to talk back right now, he can't. but the betts are whether the

ten-year yield would rise or fall. i hear him yelling from across the room. fortunately, viewers, you can't. that bet was for something we would we looking at, something like 2.87%. where is it, joe? go ahead. turn on his microphone on. >> noumber one, it watts the en of the session today. >> how are you going to bow to me if we wait until tend of the session snm i am not here next week. >> and you're talking about less than two basis points. >> a win is a win, baby. >> that's a fifth of a point. >> i'll take it. >> my point was -- >> you've been practicing? >> listen, i looked up today, there's a curb your enthusiasm episode. and i thought, you know what? any curb your enthusiasm episode, you can probably get fired for even talking about it, but there is one where he wants to get a bow from someone and he see these guy give a 90 degree bow. >> the complete one, right? >> and he gets a 15% bow, which

he finds out is dismissive. >> it is. >> and you're getting a 15 -- >> you are a welcher. >> no, i'm not. >> here is your bow. >> you're a sore loser. >> it's not even a fifth of a point, beck. you want me to start saying that everything sorkin says is right for 20 basis -- >> okay. a point in the other direction, you would say don't worry about it, beck, you don't have to bow to me? >> i'm picking up my pen. this is not a bow. all right, all right, igy degre i digress. i thought it was tend of the session. >> okay. we can wait until the end of session and you can bow when we come back after january 1st. we'll talk about the important stories of the morning. the senate getting some business done after leaving for the holidays, including a deal surrounding some of the president obama's nominees. as part of the deal, the confirmation of janet yellen is now expected to happen on january 6th. there had been a take of -- a

talk of a rare saturday session where they would actually go ahead and put her through. but yellen is going to have to wait until the new year. one of the appointments expected to be approved today is john koskinan as the new leader of the irs. the other major piece of the senate agreement is to vote to pass the $620 pentagon bill or the national defense authorization act. lawmakers have been under pressure to get this done before december 31st. and this bill gives the defense department authority to issue combat and hazard pay as well as recruitment. right now, let's get over to appeared rue with more of today's top corporate stories. >> i think if joe wants to change the rules of the bet, we should also change the outcome, maybe even sitting on one knee. could you sit on one fooe for one week? >> congratulations. 20 basis points. fooel feel really good about that. not even a quarter point. the basic thus of what i was

saying, it's true. >> and i gave you credit for that on thursday morning. >> nothing happened. all you did was piggyback on bec becky's call, yesterday. >> sure. i'll take what i get. >> here is your bow. see if you can get it. >> i'm ready to bow. >> did you see it? >> that was like a 11% bow, not even. that was like you went backward. also, let's talk about -- >> yeah, i did. it was a reverse bow. >> we'll see whether these guys are going to bow today. blackberry is expected to report quarterly results about 7:00 a.m. eastern time. this will be the first time that they're reporting under the leadership of their interim chief, john chen. hard to believe they could do that much in a month or two here. he was expected to turn things around at that troubled smartphonemaker. chen will talk exclusively with our own jon fortt today. that's coming at 11:00 eastern time. don't miss that.

also, sycamore partners is expected to buy jones group at about $1$15 a share. do you wear any of this stuff? and get this one, citigroup reportedly getting ready to make a move. they're going to cheaper real estate in new york city. crane real estate saying the company is going to relocate their headquarters from lower manhattan from their current address. they already are down downtown in the big citigroup building with the red umbrella in front of it. do they still have the umbrella, guys? you guys aren't paying attention. i don't know. >> you're talking to yourself. >> i am. it's endearing to watch that. >> i'm looking over and -- >> telling me more about larry david. >> honestly. >> i saw the episode. >> but it involves a japanese restaurant.

there's no -- you can't -- i'm not going to even go there at all. there's not a single curb your enthusiasm episode you can talk about without -- >> and yet here we are. >> anyway, nike is a stock to watch today. the dow component reporting second quarter profit at 59 cents a share. revenue is in line at $6.43 billion. its futures orders were up better than expected 13%. and one comment i'd like to make, here we are, blackberry is such a social phenomenon that we don't care now that it's a $6 stock with a $3 billion market cap. we act like we're talking about like a dow component or something. it's because everyone has one. that's why we still care what they say, right? >> it's minor. >> it's the inflexion point of a kodak. everybody had a camera. they don't have it any more, but they have these romantic notions about it, becky quick. >> ste has one. >> and that's sort of what's going on. >> right here on set somewhere.

>> i drove around yesterday looking for a photo mat to drop some film. >> seriously? >> no. >> is there any place that develops photos any more. >> i have a place. >> oh, you do? >> a couple blocks from -- >> but they don't develop stuff that you've got in a camera that you hand over? >> you could if you would like to. >> you still can do that? >> yes. we don't do that, but you could do that if you'd like. you can also e-mail your photos. >> it is incredible the way music changes, too. someone just a couple of years ago someone on some tv show is getting a cd player for christmas or something. it's -- do they sell cd players any more? >> i believe you can still buy cd players. >> it's unbelievable how apple -- it's gone. the cd is basically -- >> do you remember having a 3.5 floppy disk drive? >> you have to be real careful with that one.

>> you have to be real careful with floppy disks. how about a 5.52 floppy disks. do you remember the big one? >> oh, i do. they were square. i more remember the 8-track tapes. those things, trying to carry them around in your car and -- >> what? >> you don't -- >> i never had an 8-track. i know what they are. >> and you know what people would -- if you had one that was in your dashboard that came with the car, it was like amazing. most of them were like these big clunky things hanging underneath and they would have a thing where you could remove it. >> my parents have one, too. >> we have one with metal records. >> really? >> yeah. the markets -- the big story yesterday and suddenly, i mean, it's weird. i guess 1200 was the number that people decided they were waiting for because -- did you see "the wall street journal" making a huge deal that the -- putting the brakes, gold tumbles, putting brakes on long rally. now, the brakes on that rally

were put on a long time ago. >> two years ago. >> but i did the same thing. yesterday was -- >> silver under 20. it is staggering. and that's one thing that if you want to look for a market, you know, unlike the ten-year, which barely reacted, the gold -- >> settled at a three-year low yesterday. >> unlike the ten-year, which showed really no reaction whatsoever. >> i can give you credit for that. >> yeah, i know, in the market, 300 points. anyway, the markets have more data to react to this morning. a final revision of the third quarter gdp will be at 8:30 a.m. eastern time. that's still a half hour before i actually have to pay off the -- you make it one -- >> you had a rough week. you had a flai flat tire. you have this bet that you're probably going do lose. >> i have a cold. >> you still have the cold. >> i do. but i have been, you know, a pretty good record for december. >> i know you have. >> economists looking for a 3.6% today, and one of the big issues

facing washington and wall street in the new year will be the debt ceiling. trer treasury secretary jack lew warning that the government could run out of money as soon as february to take care of its bills. >> paul ryan has said they want some concessions before they sign off. >> he said may keystone. i think harold has recently bought a bunch of railroad stocks. >> because he's given up on the pipeline deal? >> yeah. now i think -- no, i don't know what his motivation is. >> warren buffett, now it's rail because of what is happening? >> someone yesterday -- >> like the north haern huge lights around that area, too. >> but part of it is you have to bow to the president as -- >> my bow or a true 90-degree bow? >> i don't even know -- who does a 90-degree bow? >> if you're really serious about it? >> that's a downward facing dog

bow. >> no, i was thinking about -- i have seen some of those bows. usually -- that's like giving your -- >> no, i've seen the president in some foreign countries bow. >> in japan or some other parts of asia? >> that's what the larry david bow was -- >> with the card, with a business card? >> in a restaurant. >> i'm doing a 20 point basis bow. >> sore loser. >> no, i'm okay. >> this they courtesy over there with the queen, right? aren't you supposed to courtesy still? >> you don't courtesy to the queen. >> what is the etiquette, prince? >> if you're introduced to the

queen, i think ladies do do a small courtesy and men do a bow. >> a bow. a 90-degree bow? >> a 20 degree bow? >> yeah. you know, yeah, that would be fine. >> we will take it. i want a courtesy. >> and there's a lot of things if you meet the queen region schneider you should read up on it. >> right. i don't think you're allowed to turn your back on her. there's a bunch of different rules that go along with that. i think silvio berlusconi broke the rules when he met the queen. i think he might have touched her. >> i don't even want to -- >> here we are. two days -- yeah, two days after

the fed and it's a quiet session for european stocks today. we are still waiting for the upside, but we've come down for the session low. 6 to 4 advancers outpatsing decliners at the moment. and we've had options expire here, as well. quadruple witching in the united states. and it has actually taken these levels down. the ftse 100 earlier was up around 0.5%. take a look ate now. it's just up 3 points. what's been happening is plenty of traders have been offloading long ftse position because they've been having -- they've had a lot of put options on. the put options have expired and that's basically -- i meant the ftse has come back to the flat position, as well. the cac 40 is down 5 points and the ftse mib is up 5 points, as well. it's been expiring impact today here in the uk. looking at bae systems, down 4.75%. this is a defense contractor.

yesterday we talked about saab doing well because it won that brazilian contract at the expense of dassault. dassault may have picked up a contract and the bae may not be having great negotiations, either, in saudi arabia. so that is weighing on a little bit, as well. and we've had current accounts data, twin deficit problems for the uk. we've had the biggest current account deficit in decades for the uk. is that is the biggest since we've seen 1989. at the same time, government borrowing was more than we expected it to be in the uk at 16.5 billion of public sector and we thought it would be around 14 billion. that's where we stand. back to you. >> thank you very much. appreciate that, ross. a little courtesy? >> no.

>> don't you put one leg back a little bit? >> do you want a courtesy? there you go. >> that is nice. don't do that in your kilt, please. now that we know about kilts. >> we've got a couple of international stories to talk about this morning. a high profile pardon and a strip i stripping -- explain. >> as in taking off his clothes. >> it's a him? >> yes. >> it's not a her. >> the president of mexico is expected to sign the new oil reform law into law today, which is going to law foreign investment into oil for the first time in 70 years. we've had an exclusive view of one of the leaders. they needed to do this because i'm getting to the stripping

congressman. it's coming. >> how about that big guy in mexico? >> he's not -- we don't need -- all right. good. >> they yeed to be self-sufficient. they're not any more. they definitely need foreign investment. here is what they think the ramifications will be according to the undersecretary. >> in mexico, we have had for the last eight years a decrease in oil production. we have fell from 3.5 million barrels per day to 2.5. we have almost lost a million barrels a day. we believe we can increase production to 2.5 million barrels a day by 2025. sounds great,ite? some people aren't happy about

this. members of the opposition party in mexico, take a look at congressman keneho last week in front of parliament, he did not want this law to pass. and so he demonstrated to everyone what he thought was stapg, that they were stripping mexico and mexicans of their assets and their oil. >> all right, guys, he has his pants off. >> it gets better. >> he has sorkin underwear on, too. >> i don't have underwear like that, please. >> this is an underware inspired show. >> that guy has a lot more fabric than your underware. >> black tighties. we can't caught this tidy whiteys. >> stop. that's -- >> wow. i wouldn't strip with that body. or mine. i agree. >> yeah. so hot times in mexico over oil reform. >> so he thinks they're stripping them of their assets? >> in mexico, it's always been

deemed that the oil in the ground is owned by all the mexican people. it's very different in the united states. in mexico, it's communal. they've always felt if there was too much foreign investment, you would be stripping mexicans of what they own communally. >> so the plan to take it out and export it or is the plan to take it out and use it internally? >> no. the plan is simply to allow foreign investment, they need to do deep water drilling that they can't afford to do on their own. now they're going to have production sharing contracts which allow foreign companies to claim some of the reserves in a -- >> as part of the payment? >> right, exactly. there's a lot of semantics because they couldn't violate the spirit of the mexicans and at the same time. >> in your book, you know i'm ride, did you talk about property rights? prohibit rights -- >> like crazy. >> because that came about around the same time that adam smith. and you started -- and tragedy of the commons, which someone

doesn't own something, no one takes care of it or replenishes it after they use it. >> hence mexico. >> hence mexico. >> mikhail khodorkovsky has been in prison for more than ten years. he was one one of the richest men in rush ra. $15 billion he was worth. he ran the largest company in russia. putin dismantled it. what was his crime? supposedly it was tax evasion. many people believe it was simple live because khodorkovsky funded opposition against putin. >> so what happens to him now? >> that's a good question. justice in russia is capricious. the message we're getting from putin is putin is embarrassed that so many high level delegations are not coming to the sochi olympics. i think he finds it insulting. he's trying to look magnanimous

ahead of this. >> so is he going to be running around the olympics? no. >> khodorkovsky? >> yeah. >> i don't know. do you know when we heard about? yesterday. putin does a four-hour news conference yesterday. and then at the end, as he's walking out, he mentioned, oh, by the way, khodorkovsky is getting out of jail. they went on to his jet in the siberian air strip, arrested him and -- >> and putin's $100 billion net worth is -- how much is that -- >> they dismrajtsed the -- >> he probably moved over. >> unknown. they dismantled the company, right? >> that would be a testimony to why you want banking secrecy laws in the world, right? because everybody thinks these swiss bank accounts are evil and bad, but when you live in a country where they can take anything from you, that's why

you want to have a nice swiss bank account, right? a place where there is no justice. >> good argument. i agree with that. did you use your credit card at target? this is not the present that millions of customers were expecting this holiday, now the retailer is in full blown damage control with several critical shopping days left until christmas. the executive edge is next. >> announcer: before you hit the road, here is your traveler's check. the airline industry is expected to make nearly $13 billion globally this year. that is according to the international air transport association. so what's the outlook for 2015? that's next. (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.

right now, it's time for the executive edge. the fallout from the target credit card security breach, customers jammed up the phone lines, the websites, they left scores of angry posts on various

social media sites. that's because target warned that 40 million credit and debit card accounts may have been breached between november 27th and december 15th. anyone who shops at a target store in the united states during those dates could potentially have been left vulnerable in this situation. target is in full blown crisis mode and has hired the forensic unit at verizon. all of this happened within a handful of shopping days until christmas. guys, look, i don't know what they're supposed to do. i think it was a malware that got sent in, software at the credit card swiping areas. i think they're right to come forward and tell everybody to be on the lookout for this. but now you've got 40 million people who shopped there between those days thinking, oh, my gosh, am i vulnerable inspect. >> who is laibel in this? if credit card company protects you initially, but can they go after target later? >> i don't know. i was very concerned about this

whole story because i had shopped at target. i think he said, joe, penelope had once, too. but i think this is a much bigger story for retailers in general and just the idea of cyber security is an iffy situation. we are so reliant on these credit cards and debit cards. if somebody can get in and attack target like this, my guess is there are other retailsers who are equally vulnerable. >> the nightly news can quickly find someone who is affect by it. they had a lady on last night, the reason she knew about it, it was a debit card and she looked in her account and someone spent $1,200 in an apple -- or bought some microsoft something or other. >> i had my card stolen. i was trying to piece back. it recently canceled my card and got a new one. i was trying to figure out how long ago it was. >> oh, really? >> yeah. because it got stolen within the last four to five weeks. i thought it was from another

place that i visited. i caught charges from toys r us, american girl store, but i caught it immediately. i caught it on the day. >> the thief went to american girl? >> korea. >> that sounds like a real -- are you sure you just didn't forget? >> no. i went back through because then they said we shipped it to some address in miami. so i had the actual name of the guy. but they don't know if that's the guy who stole it or if he bought something on ebay. >> i think it's good that people have a heads up. >> now, it's scary if they get your debit card because i had my checking account wiped out completely once, ten years ago. every single day, they would take just enough money that you wouldn't notice. >> ten years ago, was that like 600 or 700 at the time? >> yeah. it was a couple thousand bucks from a checking account and they would take it out, they took it from israel is where they would take it. i had used an atm card at one of

those bodegas on eighth avenue in new york city and apparently it had a skimmer on it so every time anyone put their thing in, it would take the information and then they sent it off to israel and they took off the money out. >> and i will say that i give target props for this because the first inclination for a lot of place webs if you're a bank that's been breached, is to not tell anybody. this is a pr nightmare, but i think they're doing the right thing by coming forward and telling people so they can be on the lookout and watch their account. let's talk about the in, ti"new times." the s.e.c. considered financial companies, but backed after. and even warning those companies that enforcement actions were possible. they shelled those cases and at least to others because there was a lot of disagreement about whether or not they would be

successful. >> did you see they waited four years even to think about it then? so there was a lot of public pressure to look at it. unfortunately taking big betts, stupid, big betts and losing your [ expletive ] is not against the law. now what we need to do is hire capital requirements is number one, but you look at all the other -- no one knew how this was going to turn out. no one expected this to be the biggest housing bust in o'hahis. not anticipating that and betting too much is not against the law. >> but judge reykoff, and others think that maybe -- >> this is five years later when we've been hearing from the populist anger all along. >> i agree with you. >> but guys, listen -- >> in this piece, there was suggestion that the people would actually take these cases to court, certain cases wanted to bring them. >> well, no, i thought it in this case it was the trial lawyers who were concerned. it was the head of the trial lawyers there who said it was the investigators who were

pushing. he said wait a second. >> we can't make it -- >> but the guy who actually -- mike martin, who takes it and goes to court in some cases wanted to bring him. >> maybe i misread that. >> you should hire capital requirements and making sure that something can fail without bringing down the system. you know, let people -- if they want to do that, they're idiots, i guess you don't want depositors, obviously, losing the money. so you get higher capital requirements. but after that, people should have to be responsible for big, bad betts that they make, right? that's the way capitalism works. you can win big, lose big, you know what you're getting into when you get into it. you shouldn't take down the system. that's what you tried to do with dodd frank, right? correct. >> andrew, you made so much money on the term "too big to fail" with your book. is it -- >> thank you. it's about a buck o 05 for every time you mention it. >> out of your paycheck, joe. >> like every time a bell rings

an angel gets a fig. >> friday just started in hawaii. we have a ges guest who is staying up late there to talk about the economy. so aloha to all of you watching in the middle of the pacific this morning. good morning. plus, bitcoin mania is alive and well, but does the virtual currency have a real future in china? that story is coming up in the next half hour. "squawk box" will be right back. 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.

the energy in one gallon of gas is also enough to keep your smartphone running for how long? 30 days? 300 days? 3,000 days? the answer is... 3,000 days. because of gasoline's high energy density, your car doesn't have to carry as much fuel compared to other energy sources. take the energy quiz. energy lives here.

welcome back, everybody. it's here, it's already here. let's get a check on the markets of what will likely be a quiet trading week. joining us right now from honolulu hawaii is anthony chan. >> you dog. >> chief economist at chase wealth management. right here on set to join us, less lucky man, kevin giddes. anthony, wow, good for you. you're in hawaii and is you're joining us this morning. >> happy to be here. >> well, we're very happy to have you here. >> he means happy to be here, there, in hawaii. >> not there. >> what time is it there? >> five hours, i think, isn't it? >> i think it's even more, isn't it? >> might be six. >> yeah. so anthony, you've been there, you've been in hawaii trying to digest all of this. did the fed's move come as a surprise to you? >> well, i think the surprise was certainly in the timing of it. we certainly knew that it was going to take place over the next month or so.

the timing was a little bit early. but the truth of the matter is that it was gradual in nature and basically is consistent with what we expected them to do over the next 12 months. >> so does this change anything about your economic predictions for next year? and what are you looking for for gdp for the first quarter and is beyond? >> for the first quarter, we're looking for economic growth in the neighborhood of about 2.5%. for the year as a whole, we look for economic growth to be in the neighborhood of 2.5% to 3%. remember, the budget deal is probably going to add as much as 0.2% to real gdp growth. the fact that the federal reserve action has taken place will remove some of the uncertainty and allow businesses and consumers to move along and get along with their plan for the year. so i think the reduction in uncertainty is going to be a positive for economic growth in 2014. >> it certainly has seemed that way for the bond market, kevin. we were debating before the tamer took place as to how the

bond market might take all this, whether yields would drop or go up. they've gone up, but it's been a slow and steady process. nothing that should concern the fed, correct? >> no, correct. the hours before -- post the five-year auction before the fed acted, we said what are your positions, what are your hedges? what do you think is going to happen? if they taper, around if table, it was fairly mixed whether they thought they would taper and what the reaction would be. but at the end of the day, we didn't think it was going to be a whole lot either way. i thought it was brilliant by the fed to tie inflation in with the taper, which means the bond market is going to settle down if you talk about 1.5% inflation and the goal for 2.5% inflation. i'm not surprised by the fact that the market is not running to yield, even though i think it will test 3% in the near future. >> so what do you tell investors to do at this point? >> well, stay the course, right? so with inflation, somewhat subdued, you do have the ability

to stay a little bit longer in the market than you might have been if the economy was running away from you and inflation was following right behind. so the intermediate part of the curve is the safest part of the curb. it's kind of the cop out bet that if you want to be there. but still, 7 to 10 years, ten years and out, it's not going to be a sense of urgency to get out of that market yet. we're still in about the same forecast as we were six months ago. >> the same we were six months ago, you think things are chugging along smoothly and it's okay? >> yeah. the economy is obviously growing in a better state than it was in the beginning of the year. and as we go into the new year, it's going to continue to see the growth somewhere around what anthony talked about when he talked about 2%, 2.5% growth, you're going to talk about yields around, you know, 3.25% max for the first half of the year on the ten-year. >> anthony, we do feel like things are chugging along, and some of the news that we've gotten with the holiday shopping

period has been weaker than people had anticipated. how do you match up those two stories? >> well, becky, remember that the holiday sales season is challenged by the fact that there are less shopping days, 26 shopping days to be exact as compared to last year when there were 32 shopping days. obviously, consumer confidence is coming back after the government shutdown. so there have been a lot of challenges out there, but you have to start thinking about what is life going to be like in the next 12 months and the economic statistics are improving. the outlook is improving, confidence is picking up. so even if we see some stumble during the holiday sales season, the outlook for the next 12 months is very favorable. >> okay. anthony, thank you for joining us from all the way out there staying up late probably at this point .not getting up early. merry christmas to both of you. >> you, too. coming up next, bitcoin growing in one-sixth of the world. that one-sixth is china and despite warnings from the

government, virtual currency is booming. find out how big next. and remember when clark was counting on that bonus in christmas vacation? >> a little short with everyone lately. i've been waiting for this bonus. >> well, we're going to look at that time on wall street and it may be better than the jelly of the month club, but it may not be setting any records, even with the markets at all-time highs. we've got that story when "squawk box" returns. tdd# 1-800-345-2550 searching for trade ideas that spark your curiosity

tdd# 1-800-345-2550 can take you in many directions. 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.

hi honey, did you get the toaster cozy? yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.

welcome back to "squawk box." looking for some weekend reading? holiday reading, that is, you can try of course the latest

edition of sidewalking squawk. it's our blog. go to squawk.cnbc.com to read about when i thought i was cool as a kid. ooh, i'm worried about what that was. becky getting -- i never thought i was that cool. becky getting ready for rutgers in the pinstripe bowl. this all happened this week. and joe's tmi on his vitamin regiment. that i remember very well. and steve liesman talking as nostridamus. >> walking around, it was vitamins. it's a vitamin regiment that you have. me, i am a regiment. >> we both are on the same page with the vitamins, right? >> i'm a vitamin guy. >> you do the centrum silver.

>> i do. >> fiber con is much more important. but you don't have an aarp card. >> not yet. but i'm working on it. >> they keep sending it to me, but i won't join. i keep resisting. you should be 65 to get an aarp card. >> talking about regiments, we're going to china right now. getting tough on bitcoin trading and that's not discouraging some people from getting in on the action. eunice yoon joins us right now from bay zinger. good evening. >> hey, guys. trading in bitcoins has been wildly popular here, but the government just this week decided to stop all third-party payment systems dealing in a virtual currency. betting on bitcoins has paid off for li lynn. li opened an exchange with a virtual currency in beijing just months ago. he's minted souvenir bitcoins out of silver for his clients,

believing bitcoins are just as necessary as precious metal. he says it's virtual gold. chinese investors are driving the prices of bitcoin worldwide. the currency is a popular way to invest here as people have few investment options and see bitcoin as a coveted commodity. traders buy and sell bitcoins at this coffee shop. they hold seminars here and swap information about the virtual currency. chandler loe prefers the currency because it helps him transfer money worldwide fast, a luxury chinese have never had before due to the country's currency controls. bitcoin is actually a financial network, he says. if you're in the u.s. and i'm in china, if i ask you to send me two bitcoins, you can transfer

them right away. the authorities are weary of anything that could disrupt china's tightly controlled financial system and are unnerving bitcoin believers by cracking down on its trade here, most recently stopping schaks from yuan deposit, a key to driving prices higher. li isn't worried. he says his firm's trading volume is the equivalent of $50 million a day. bitcoin is more trustworthy because its credit is based in science, he says, not in an individual or a state. perhaps not exactly what the government would like to hear. and everyone in the bitcoin bit here in china is waiting for clarity from the government because they're warning if all these recent moves are a way for the government to try to dampen the euphoria or is it actually a warning that they're going to shut the currency down here? guys. >> eunice, thank you for that report. the bitcoin story is not going

to stop for quite a while. >> not -- well, we don't know, but probably not. is the jeanie out of the bottle? >> toothpaste is out of the tube. >> the horse has left the barn. >> actually, yes, but it may come back to the barn when all is said and done. >> fallen off the wall, humpty dumpty, can't put him back together. >> the potato head you can put back together. we've been doing that a lot at my house. >> you and pilar? >> pretty much. >> toy story is pretty cool because he can have an ear somewhere, have an eye somewhere and check under the door and see things. he could do a lot. coming up, the clock is ticking on the holiday shopping season. we are under a week now until christmas. and you may be forced to hit the -- to hit your -- you may be forced -- >> to leave your home. >> you may be forced to hit leave your home. >> hmmm.

>> to actually go shopping. >> you might. >> to hit the mall and leave your home with your vitamin regiment. we're going to check out last-minimal traffic next. and the backen discovery has been a major boom to the nation's energy sector, but is there a glut building in our own supply inspect billionaire oil man harold hamm will give us the real deal on production coming up at 8:00 a.m. eastern time. as we head to break, check out the price of crude. 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. ♪ that's how ameriprise puts more within reach. so when my moderate to severe chronic plaque psoriasis them. 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.

>> that's pretty good. >> yeah, i love that. >> it's good. it sounds like the beginning of one of the annual christmas shows. i don't know which one but, cartoon or something. we are entering the last shopping weekend before christmas. with the tale of two consumers and more shoppers using the internet this holiday season, how are the malls fairing? nate forbes is managing partner of the forbes company? areas where no luxury brands are offered. good morning, nate, and i figure malls are being affected by online but also by weather which is a bigger factor as far as a negative?

>> i can't hear. >> i can't hear, can you? >> different people. >> oh, there you go. start over. >> am i back? start over, nate. >> okay. yeah. i think the online's a great -- online is a great supplement to the luxury mall business and mall businesses in general. and it's really a flight to quality. i think the online business supplements what it can offer the online consumers. >> it's a good experience, too, at times. i try to think about my childhood and just growing. i don't want to be all online. i remember the decoration, i remember what happens at the mall. i think it's kind of like a lot of things where the demise is greatly exaggerated. do you there'll be malls? >> i think it's a great way, great part of our social fabric. i think there'll be a shuttering of some malls on the lower end. i think the better position malls that have a pointed difference in the merchandising

and store offerings will be the ones that succeed and are here long-term. >> if you wanted to write a survival guide for mall operators, there are some things you need to change, probably, and ways of ensuring your that you're a viable place to go. what malls -- there's a lot in my hometown that are ghost towns. what differentiates between a really successful mall and generating traffic in one where no one goes anymore? >> i think you really need to have a point of difference. a lot of our retail properties, 40% of our inline retailers are the only stores in that market. if you're a brand shopper, a designer shopper, you have to drive and make the decision to come to that asset and make the decision to drive there, you're going to stay longer and spend longer. really create a point of difference through your best of class merchandising strategy is a key element to being a successful operator of regional malls. >> you probably hope you don't

have jc penney as your anchor tenant, right? >> yeah. in our world, we try to stay with the top flight brands, neiman marcus, bloomingdales, macy's. >> need a big food court? >> not necessarily. food courts are a part of the business depending on which markets you're trying to serve. i think great sit-down restaurants with the complement of food course uses and other unique food offerings that really speak to different groups is very important to have as part of the offering of your shopping development. >> all right. just -- is there -- between now and the next five years, do you see more malls in the country? or will we will down 10%, 15%? >> i would say we'll be closer to being down 10% to 15% than being on the upswing. some of the older shopping centers, the ones that haven't kept current with the times don't have current stores that

are speaking to the shopping public today are the ones really going to suffer. >> all right. thank you. merry christmas, i hope you have a great season, happy new year, happy holiday. make sure i cover all my bases. thanks, see ya. >> thank you. >> when we come back, is the talk about taper starting to taper off? we'll get the read of the markets, right around the corner. then it's health care. oil and energy with herald hamm and the world of real estate with remax ceo margaret kelly. (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. [ 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.

it's bonus time for the financial industry. >> i've been waiting for this bonus. >> stocks trading at all-time

highs, will that translate into record bonus checks? or something less than spectacular? >> one-year membership in the jelly of the month club. >> the holiday hunger games. jane wells and courtney reagan go head to head in the battle for grocery delivery dominance. find out who makes it out alive. plus, oil billionaire herald hamm answers a big question, does the nation have an oil glut? >> no one can get at it except for me. >> "squawk box" is all pumped up for business and it starts right now. >> good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernan and andrew ross sorkin. we've been watching the futures.

and there are some green arrows even after the gains we've seen this week since the decision on wednesday from the fomc. the dow futures up by another 23 points above fair value. s&p futures up by 1 1/2 points. it's the ten-year we've been watching so closely all week long. that yield continues to tick higher. but it's been a very slow and steady progression and that's why stocks have behaved so well. take a look at the price of gold. this is a huge story, closing below 1,200, and the lowest level in three years for gold, $1,194.80 an ounce. >> i could think about that -- if we ever see that again. think we will? >> it's not -- it's not a stretch. i don't think it's a stretch. >> i know. >> we've been watching that price under pressure for quite a while. but this week in particular since we've heard from the fomc, massive pressure on gold prices. >> bitcoin went up, though.

>> since wednesday? >> yes, which makes no sense. >> what day was the day it was down? >> it was supposed to be -- >> what happened two days before that. >> i don't disagree, but i would think it would drop even more. i would thought it would drop even more. if it's supposed to be some kind of digital gold. >> no, but it was already down on that specific. once it got into the 400, it was going back up. that's 12%, since when is 12% a small move. $75 billion a month still buying that. >> knew it had to end at some point. >> really? did we? >> well, we did call it qe infinity. >> a lot of programs. there's a word for that. launch a program during a crisis. where is liesman? he's taking off a week because

he was right? >> he was working hard this week down in washington. >> he should be fishing, playing music. >> he should be gloating, taking a victory lap. >> because you would allow him. >> would you bow? can you do the show on one knee for three hours? >> to who? liesman? we took his side of things with that and made sense. >> it was the right call. it made sense to me. >> the senate finally getting things done before leaving for the holidays, including a deal regarding some of president obama's nominees. the combination of janet yellen as new federal reserve chairman is expected to happen on january 6th. there was expectation it could happen this saturday. but it was rand paul who said he wanted his vote to come up to make sure they would do the auditing of the fed. they didn't agree to that, so, instead, this will get pushed to january 6th. >> couple stocks to watch. first one being nike. it is the big stock to watch.

second quarter profits of 59 cents a share. revenues in line coming in at $6.43 billion. in the future orders. better than expected 13%. one of the big issues, of course coming up in the new year of 2014 is going to be the debt ceiling and the debate over that. treasury secretary jack lew warning congress that the government could run out of money to pay its bills as soon as february and, of course, debate becomes what's really going to happen. >> santa claus finally -- >> do you think there's going to be a debate? >> about what? >> the debt ceiling? >> no. >> you think it's just going to sail right through? >> i think it will. i hope so. yeah. >> so optimistic today. there was something, i saw it on something where it says paul line he actually did help.

it's the "wall street journal" editorial section and title of the piece is the lucky house credibility. i think that was you know, he was able to avoid criticism by the tea party in the far right. they respect him and deferential toward him. for hard-core conservatives, for the way they felt about this deal. passed in the house and senate after they said it wouldn't. it's like pavlovian. this is much better than what happened with the previous time. when the debt ceiling comes around this time, hopefully they have enough, you know, muscle memory to remember it's better to do it this way. >> we're getting news from blackberry. wall street was expecting very

little from blackberry's third quarter report and didn't disappoint. they came in worse than expected. revenue coming in about a quarter below the second quarter's results of just $1.2 billion. the company recognized revenue on just 1.9 million devices, just half of the second quarter's level. retail inventories were still well supplied. though, 4.3 million smartphones were sold to users in the third quarter. blackberry coming in with news that while we were expecting lousy news, this is even worse than had been anticipated. we'll continue to keep an eye on this. >> two things to note. they are getting into business with fox con to do their devices. foxcon makes apple devices. so that's worth noting. and one other thing if you think about these earnings this quarter. if you're -- the new ceo who is coming in, who is going to be on our air -- >> got to put everything bad in. >> the point is that you want a

honeymoon. you've got to put everything behind you and say that hall happened before i showed up. if you these numbers are worse than expected. to me, that almost. >> you've still got to sell people some blackberries next year. >> i'm just suggesting if you think there'll be extra write-downs or other things that aren't so pretty. >> why would anyone buy one next year versus a samsung or iphone? >> so here's what -- >> i can't answer that. >> the gamble has to be that you're going to somehow create devices on android or some other platform that has the keyboard, the stuff and people decide they're buying that. that's what i think is going to happen. >> i think motorola is going to win again with their flip phones. my bet's there. >> if you love the keyboard. >>. >> do you have a flip phone? they're coming back. they're coming back. am i holding on too long for this? maybe they don't come back.

i think it's sort of they're finished, someone wrote in. i don't know what they turn those little booths into at this point. >> let's find out whether the market's going up or down next year. santa claus arrived in a really weird way, i thought. we didn't know whether he was coming, a lot of people said it was too late. and the fed announces a taper. and we're up to new highs. here right now is phil orlando, chief equity market strategist at federated. what's your -- what's your gain next year you're forecasting, phil? >> we've got a 2,100 forecast on the s&p 500. so from where we are now it's about 15%, not a bad year. roughly half of where we are this year. >> so we get 2/3 of that with normal earnings growth and multiples don't contract. they continue to expand in a rising rate environment? >> no, absolutely. we're in the sweet spot of the

cycle in terms of multiple expansion and treasury yields. that multiples will continue to expand until treasury yields get up to that 5% level. that's the point where they start to contract. so we absolutely expect the multiple expansion to go from 1 11 -- >> rates are rising because the economy's improving. >> exactly. >> that takes away some of the -- >> absolutely. we've got an above consensus gdp forecast next year, consensus right now at 2.5. that suggests corporate earnings for us are going to be a little bit better. a little bit more earnings, more multiple expansion, market continues to do well. >> i think you have similar views? >> well, actually, no, phil's going to make me look pretty cautious. we're at 1,900. i don't disagree with the thesis. >> above where we are now. >> not by much. >> do you like consumer discretionary? >> yes, we've liked discretionary industrials. we think the taper validates the

cyclical focus for sectors. so i agree with all the points, it's just a matter of degree, we're not above consensus on gdp. we don't think earnings are -- we think we'd be lucky to get consensus, which is 11% growth. we're not looking for upside, looking for it to be weaker. >> what's the lowest earnings per share growth we'll see? >> this year we're at six. that's supposed to drive 10 or 11. we're expecting eight or nine. >> what's 1,900 from where we are right now? >> it's 5%. >> then why won't the gain in stocks at least match what you're looking for 8% or 9% for earnings growth. you think they might contract? well, they'd have to get to get their number. >> when we talk about targeting, most people are revising that more than they'd like. and have to think about what could be acting on the market within the year. and the next issue tapering, i think, manageable. but people are going to start to focus on when did they actually

tighten? and if the economy does as well as some people think, that'll come in the radar and the market's a leading indicator. actually raise interest rates. right now people are saying that's not until late 2015, but if it comes in a little, the market will be pricing that in the fall of, you know, in october of next year. >> gotten used to zero but is going to .5% or 1% the end of the world? >> no. >> these are not normalized interest rates historically. this is crazy. >> that's true. but you saw the tantrum we got over the taper. >> 300-point tantrum? >> we got 6%, you know, in may. >> the first time? >> you know, at least you could say tapering isn't tightening. you're not going to have that excuse. so we may overshoot our target. but we have a year-end target. that's where we think we finish -- that doesn't mean we can't go higher. i don't disagree with a lot of the points. >> do you have a forecast on the ten-year? >> yeah. so we thought we'd be roughly 3%

level by the end of this year. >> kind of there. >> so we think we grind up towards 5% over the next say four or five years. if i'm looking at 12 months, 3.5%, 3.25%, seems like a reasonable guess. >> inflation come back at all? >> i think it's tough to argue right now. and one of the reasons the street's so bullish on the taper is low inflation means it's going to be a while before they actually tighten. >> why would we go to 5% on the ten-year if inflation didn't come back? we'd have 5% normalized rates? >> sitting at 1.1% right now. over the next five years or so as we get continued economic improvement, we think inflation will double. but that means 2.5%. >> that'd be perfect for the fed -- >> that would be perfect. and that's the environment in which we see the funds rate move up. yellen's already told us, bernanke's told us, that's a couple years into the future. >> it's really great to know that the government and a big -- even more powerful than fiscal

authorities like the most powerful man in the world is going -- this is all going to play out perfectly? it's all going to work. he came in, we did qe 1, 2, and 3. we're going to exit perfectly. everything's going fine, the economy gets better. they did it right? what are the chances of that? >> probably zero. >> i can't believe it's going to work out. >> that's why we'll be on -- >> what about murphy's law? nothing bad. there's nothing dislocated anywhere? no bubbles built up anywhere that we have to -- the. >> my boss likes to say a box r boxer -- >> he's your boss. i knew his father when his father was barely a boss. >> i think his father robert's still working. >> i worked with him. >> i remember. he was at dean whither, he was a big wig. >> he was. >> who knows, there's always these exogenous unpredictable things that have an impact. >> all right.

all right. thank you, gentlemen. >> thank you. >> thanks. >> merry christmas. >> you, too. when we come back, more on our report from blackberry. some concerns that are out on this. also, we have a big show coming up on monday. jeffrey lacquer will be our special guest host. some of the first comments from the fed insider since the taper announcement. and did you know the central bank is celebrating the centennial. that's right 100 years of the fed coming up monday on the "squawk box." tdd#: 1-888-648-6021 there are trading opportunities tdd#: 1-888-648-6021 just waiting to be found.

tdd#: 1-888-648-6021 at schwab, we're here to help tdd#: 1-888-648-6021 bring what inspires you tdd#: 1-888-648-6021 out there... in here. tdd#: 1-888-648-6021 out there, tdd#: 1-888-648-6021 there are stocks on the move. tdd#: 1-888-648-6021 in here, streetsmart edge has tdd#: 1-888-648-6021 chart pattern recognition tdd#: 1-888-648-6021 which shows you which ones are bullish or bearish. tdd#: 1-888-648-6021 now, earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021 tdd#: 1-888-648-6021 or go to schwab.com/trading to learn how. tdd#: 1-888-648-6021 our trading specialists can tdd#: 1-888-648-6021 help you set up your platform. tdd#: 1-888-648-6021 because when your tools look the way you want tdd#: 1-888-648-6021 and work the way you think, you can trade at your best. tdd#: 1-888-648-6021 get it all with no trade minimum. tdd#: 1-888-648-6021 and only $8.95 a trade. tdd#: 1-888-648-6021 open an account and earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021 to learn more. tdd#: 1-888-648-6021 so you can take charge tdd#: 1-888-648-6021 of your trading.

welcome back to "squawk box." take a look at futures right now see how the market is setting itself up for this friday. dow jones looks like it would open up about 22 points higher. nasdaq up about 6 1/2 points. and the s&p 500 up about point and a half. coming up, what does the future hold for obamacare. jonathan bush is here and he's

coming to the set. you're wearing corduroys. very festive. >> absolutely. >> one of our favorites. we're back in a moment. thank you. ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 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. with investment information, risks, fees and expenses life's an adventure and it always has been. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical

conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial.

welcome back to "squawk box," the white house has tapped a former executive from

microsoft to help fix the troubled obamacare website. here to talk about new solutions, our guest host jonathan bush, chairman, president, ceo of athena health. >> good morning. >> just tell me on the website itself, measured, graded, how much better is it today than a month ago if you see a difference? >> the federal government will pull off the operation of a website. it will always be lame. it will never be a marketplace. they were able to get the guy who invented desk top who ran desk top microsoft office to create the amazon of federal purchasing. >> it was the guy who created control, alt, delete. >> yeah, the error is arriving with microsoft office think. to save the day and bring us to microsoft office performance. but anyway, that's what we asked for. we gave up on the market, overregulated the health plan, they couldn't make cheaper

products. we hit the panic button when obama got in there. now we're going to have this thing which is going to be lame. the thing to watch now is not whether the website. they'll get it to work. how many people are going to go through the registry of motor vehicles to, you know, do their oath of compliance. and how many are going to say, screw this -- i think about a third of people -- >> you say a third of the people and they'll be the younger, healthier people. >> and the people who don't like to sit for three hours. and the people who don't make so much money that the tax is more than the -- for me, i can't wait to pay the fine. >> does that mean that doesn't work? >> i'm saying the tax is not going to pay for the problem. >> the redistribution will need to be turned up. the president's already on that front now. and he's going to finish the

redistribution job as hard as he can until he leaves. >> wow, you're really speaking frankly today. i'll tell you what i'm worried about. >> the first two minutes here. >> i know, it was awesome. the people that choose the lowest premium products which is what they're going to do, cost -- i'm reading about deductibles that would knock your eyes out. do you know -- you must know actuarial stuff. >> when you work an employer, the employer can -- >> the average deductible is $1,100 right now. >> yeah. >> people with the lowest premium plans are seeing deductibles of much more. >> 25 i think is the rule. i don't think you can go over $2,500 if you get into bronze and pay 40%. >> it's going to have to be subsidized if the actual number is $6,000 or $ 7,000. >> we're going to get to the edge of the subdization.

you have to have all your can eat everything if you want to be in obama care. so the guys that just choose health insurance as insurance. hey, if it goes over $10,000 or if i get hit by a truck. >> appetizer, dessert, salad. >> you have to eat the dessert every time t. >> so assuming it's as screwed up as you think it is. and the president called you after the show at 9:00 and said, look, it's come up and come down to see me. tell me what can be done with what we've got, not that we're scrapping the whole thing. >> hi, your name is bush, i'd like to get advice from you. >> i need advice. >> this is president obama, can you help me your name is bush? >> have you noticed they're trying to come together. >> i would say, mr. president, thank you for returning my call from seven years ago. but all you've got to do is get the definition, the fundamental definition of the legally required minimum health plan to be about half as big. because most americans say, look, i'm ready to dump $200 to

$300 a month into this thing and i'm happy to do it. and if a tractor rolls over on me, i'll be covered. he left a window in, now you have another year of this. the poor health plan is like, do we create this product again for 12 more months and then shut it down? but if they said, look, we are going to allow the product that everyone has to have to be much smaller and much more affordable by more people and then the stuff which the market will have to sell to you will have to make attractive, make cost effective will be nonrequired. you'll have a very different total cost curve because the only way you get people in the market is if you make it sexy and attractive. >> catastrophic for $200 to $300? >> absolutely, you can do anything. depends on what you cover. if you cut out stage 4 cancer care, if you cut out a lot of the chronic care, you just said, look, this core stuff whatever

you can get for $300, whatever the customer's ready to pay, start with that, make everything else a market. you'll get all these people into the market, into the bottom floor and you'll start to see some product -- >> i hope the president is listening or calls at 9:00. >> sir, i am ready to go. i have an airplane, i'll be there in one hour. >> you do? >> well, it's 1%. it's a propeller plane. >> we love you. we're going to take a quick pause and come back to this conversation in a moment. >> great. up next, though, breaking down blackberry with jon fortt. plus, a race you don't want to miss jane wells versus courtney reagan in the battle for grocery delivery dominance. americans take care of business. 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. that's what they can do (voseeker of the sublime.ro. 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.

welcome back to "squawk box." in our headlines this morning, the russian tycoon has been released, he was pardoned by

president putin yesterday. no details about his latest whereabouts. he had been in jail for the past ten years and seen by the kremlin as a political prisoner. also new data shows that fees rising 5% in 2013 as companies hire banks to advise on all those share offerings. banking fees totaled $74.7 billion, that's with a "b." as of wednesday, that's up from $71.3 billion back in 2012. and jpmorgan chase, they were ranked the top-ranked bank in terms of fees breaking in a total of $5.8 billion. truck and engine maker navistar international, due to weak demand across businesses. failed engine redesign this year apparently affecting navistar's market share and hurting sales in the quarter. revenue dropping $2.75 billion in that fourth quarter. smartphone maker blackberry reporting a huge quarterly loss because of an inventory

write-down and asset impairment. a bigger loss than the street had been expecting. jon fortt joins us right now. and, jon, the question becomes how much more bad news can blackberry investors take? >> reporter: probably a bit more. it's interesting. there's also a revenue shortfall, the revenue for the third quarter was $1.2 billion. the street had been looking for something a little better than last quarter around 1.65 is what the street wanted. clearly john chen coming in here, new ceo, wanting to take the lumps early. said he's looking for a more profitable business model for the device business. talking about software in this release. the progress they're making on bbm, blackberry messaging service, wanting to really push blackberry enterprise server into its new incarnation with

bez 10, talking about games since september. pivoting the focus more toward enterprise, more toward software, clearly trying to figure out how to get the costs down in the devices business. i'll have lots of questions for them about that clearly when i talk to him exclusively here at around 11:30, guys. >> thank you very much. we'll be watching. still to come this morning, self-made oil billionaire harold hamm. why he has a major beef -- his name is hamm -- with the keystone pipeline. plus his 2013 outlook for oil demand and race for buying a holiday dinner online. jane wells faces off against courtney reagan as they compare their online shopping experiences when it comes to ordering food when it comes to the christmas feast. "squawk box" coming right back. coming up, it's bonus season on wall street. wall street head hunter elana winestein tells us what employees could be expecting

when the checks roll in. >> with this bonus check, i'm putting in a swimming pool. >> will it be swimming pools for all? or -- >> one year membership in the jelly of the month club. >> that's the gift that keeps on giving the whole year. >> we find out when "squawk box" returns. 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. uh 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, everybody. try the latest edition of "talking squawk" block. blog. you can find out things like this week when andrew thought he was cool as a kid or joe was razzing him about this. he was harassing you because of your smoking -- your views on the smoking the electric cigarette. >> oh, you thought it was cool when you were a kid to smoke? >> i didn't smoke -- >> but you thought it was cool. >> i thought the kids that did were cool. because i wasn't cool. >> they were cool. >> yeah. >> right? >> yeah. they were cool and i'm looking at them later in life and they're still cool. it's like the hedge funds, with the huge funds and they can to be the ones with the money. it's unbelievable. >> they're good. you can talk about that. or find out how steve liesman

play eed nostradamos. and the markets have been on a tare this year. breaking records after records. but will this year's bonuses on the street do the same? joining us now to talk about that onset and a lot more, wall street's top head hunter. founder and ceo. good morning. >> good morning. >> help us here. let's start -- actually, just go -- i want to talk about hedge funds, banks relative to hedge funds. so many years you wanted to work at a bank and now i assume you have to interest in working at a bank. you have to work at a hedge fund to make a lot of money. >> if you were in pre-'90s, early 2000s, that's where you wanted to work, a bank. that's where you followed the money and you'd be a big prop trader who could earn high seven figures, eight figures. that's not the case anymore.

regulators have regulated that out of the system. and yes, you want to work at a hedge fund or you want to start a tech company. >> so give me some numbers. if i am -- not if i'm running the firm. then i'm making hundreds of millions of dollars. but just if i'm 35-year-old guy, 40-year-old guy managing director at a hedge fund, i made how much this year? >> well, here's the way -- there's actually an interesting way to think about it. you can be younger than that. people don't care about age. >> that's true. >> they care about your ability to deploy capital. and the reality is, the two things that drive compensation are in this order, performance and assets under management. if you have good performance and you're doing it off of a high aum, the founder doesn't have that many investment professionals to pay. it's a very scaleable business. if you go from 1 billion to 10 billion, you don't necessarily have to grow your investing team

by 10x. >> give us some examples. >> it really depends. he has, that's a 2-20 fee stream on capital and good performance, it's in the millions. >> in the millions. >> the kid that comes out of wharton who goes straight to the hedge fund, he starts at what, you think? >> that's, you know, he starts much lower than that. he's starting at a couple hundred thousand dollars. so it's -- and more likely he's going to a bank in reality to get some training. that's why you want to go to a bank. you want to sit in the investment banking division of goldman for two years. >> fine then, i'm now at goldman, i go from goldman to the hedge fund. go from $300,000 at goldman to -- >> probably not that different. you haven't proven how good you are. it's a pay for performance culture. >> if you can get in to one of those tiny number of hedge funds, you'd do anything. >> i think if you're at a bank and you feel that you have the potential to be a greater investor and sitting in the

analyst program, you'd be silly not to take that call at any price. >> different question on the money. this is sort of on the bonus structure. currently at a bank, a lot of the money you have to invest over a long period of time. >> correct. >> at the hedge fund, how does it work? >> okay. so at a bank, not only does it invest for a long period of time, if you were at morgan stanley last year, okay, and you earned over $350,000, 100% of your bonus was deferred. and if you earned considerably more than that in absolute numbers, a huge percent of that came in the form of equity. let's call it 500, it was 50% equity, and 50% cash deferred. at a hedge fund at worst and i say at worst but with a wink. people elect to put even more. the reality is, 50% would maybe be reinvested in the fund. but that's -- the 50% -- >> the rest is in cash. >> the rest is in cash a big

number and you're reinvesting in the fund, you should be okay with that. you're one of the people pushing the -- moving the needle in terms of performance and you can impact that. so if you're not okay with that, you're working in a wrong place. >> new topic in the news, s.a.c. capital. >> i knew you were going to ask me about that. >> i want to know. so all of those -- what does that firm look like a year from now? i assume all those people are calling you saying i need a job elsewhere. >> you'd be surprised. i think a year from now, it'll look different. here's what's happened. there's been an 80/20 rule over there. steve has cared about the top 20%. and those are the people he has hung on to. and the rest have sort of if they leave, fine, or they've been let go, as well. >> right. >> the top people, actually, i think have been very sticky. part of it is, i think, they are tone deaf to what's going on out there and what the public perception is of s.a.c. they've been there a long time,

they have now a 23% payout and they also feel loyal. so for now, they're going to stick with them. >> is it -- how easy or hard is it for you to place somebody who worked at s.a.c.? meaning if i'm potentially hiring you and you worked at s.a.c., do i say i don't know if i want to hire this guy because i'm anxious? >> i understand. >> that i'm going to find out he was involved in something -- hopefully not. >> so it runs the gamut. some of our clients, it's do not touch, we don't want to see them. others, if you came out of tmt health care or consumer, we're not interested. >> because those were the sectors where people thought there were problems. >> where there were problems. right. and then others are willing to just examine it on a case-by-case basis and be opportunistic and vet it as best as they can in terms of whether the person they're bringing onboard, what the likelihood there would be an issue. >> and we were talking about a similar polarity, kind of a

bipolar nature of this market where you've got a very small number. forgot the number you gave me, but a small number of hedge funds that are all that, turning away money, that can have anyone they want and are making absurd amounts of money. and you've got this vast majority that are undifferentiated. >> i don't know how much people realize how concentrated an industry this is. so, you know, when you see those headline numbers, the average hedge fund's performance, they're tracking typically 8,000 hedge funds to come up with that percent. >> right. >> 80 -- and the hedge fund industry, another point, i'll pull it together, $2.3 trillion is in the hedge fund industry, 87% of that money is managed by less than 5% of the hedge funds tracked. so the money chases performance and that's the -- that's the universe you really need to look at in terms of how they have done. >> turns tout to be anchorman and the big top guys are terrifying. i thought that was amazing. >> thanks for coming in this

morning. >> sure. >> are you placing a lot of people? or does it happen after january? because everyone wants their bonus before they leave? >> well, work is going on now but the actual movement once people are paid. it's a little late in the year to be buying people out of bonuses. >> happy holidays. >> you, too. >> more on the fallout from the target credit card security breach. customers tied up the phone and jammed the website. left scores of angry posts, 40 million credit and debit card accounts may have been breached between november 27th and december 15th. target's in full blown crisis mode and hired the forensic unit at verizon. and all of this happened with just a handful of shopping days left until christmas. when we come back, though, a race to get dinner on the table. jane wells versus courtney reagan. >> we wanted to test two delivery services for christmas dinner on two coasts. >> find out which one of us would get our food first and at

what price. the ocean gets warmer. the peruvian anchovy harvest suffers. it raises the price of fishmeal, cattle feed and beef. bny mellon turns insights like these into powerful investment strategies. for a university endowment. it funds a marine biologist... who studies the peruvian anchovy. invested in the world. bny mellon.

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.

love that music, can't get enough of it. welcome back to "squawk box." same-day grocery delivery services are expanding rapidly promising to streamline the task of getting a dinner on the table. can they really save you time during the holidays? our own jane wells and courtney reagan set up a race to put whole foods and amazon fresh to the test. jane ordered a christmas dinner for four from amazon fresh and courtney ordered a whole foods, and let's see how it went. >> so we sent in our order to the personal shopper at whole foods and we have a four-hour delivery window. the clock is ticking. >> this race is all about convenience. i'm going to order from amazon fresh here at work and see how quickly i can get the food. >> i'm at the house and amazon said the groceries would be delivered between 3:00 and 6:00 p.m. i'll be right back.

let me see if we got everything. they certainly -- i could not get a single large pie so we have four individual ones. >> six hours after we placed our order with the personal shopper, whole foods, we have our holiday dinner. >> so i didn't have to go to the store, but i did have to pay $299 to join amazon fresh. >> so hopefully $63 plus a $10 tip is enough to beat my colleague jane wells on the west coast getting dinner ordered and to the table. >> and courtney and jane, they're both here onset with us. so, ladies, it seems to me, i think courtney won. >> i did. i won. take that, jane, and amazon. i won this round. >> what was the -- would you do it again?

>> what do you think? >> i would say, no. you guys on the east coast are used to getting food delivered. the only thing i ever get is a pizza delivered. and so i have tried food delivery services before, and i don't find it that convenient. and in the case of amazon fresh, it costs you $300 to join. and i couldn't get a turkey. i had to get a roast and i couldn't get a pie. >> i have to say, i actually test services myself. i use fresh direct and pea pod and i game it back and forth to find out when i'm going to get the best delivery time. it started when i was on maternity leave. and i started gaming the system. if you're organized and put things into advance. you've got to think ahead, think about your menu, think about what you need. if you do that, it is a lifesaver. >> and for me, i felt, i could go to the store and do this faster myself. it took six hours since i placed the e-mail order and i waited and got a couple phone calls,

well, we don't have this, we have this. if you don't have it, pull it off the website. >> the ones i've used. if you get into it and get into the rhythm, i can order food for a week no problem. >> they leave it on your porch. >> pea pod won't leave it on your porch. >> the drone may land on your front lawn. >> but in l.a., i can't imagine trying to do it over those highways. you -- >> well, it's -- >> i think it was it was a two-hour delivery window. >> well, if you're in pasadena and order something in malibu, it's a six-hour -- takes six hours. >> i know, you can walk there faster. >> also, the food quality, we want to say whole foods wins. >> i didn't taste janes, i did eat it. we had dinner that night. >> it was fine. >> it was fine? >> yeah. >> the idea you couldn't get a pie. >> amazon will get better at it.

whether they'll ever make any money on it like anything else. >> like all disruptive technologies start as these tou turds compared to the established approach. amazon itself, got the wrong book and it was packed in the wrong thing and gets worse. we looked at athena health at amazon web services five years ago, and it was like i would no sooner trust this protected health information to amazon than fly to the moon. today the cia is moving $600 million of business to the same cloud we looked at and rejected. i feel like you guys are the mid wives of the new thing. it will grow up and it will smoke the stores. >> i don't know. >> l.a.'s different. >> don't forget the drones. >> the drones. >> the drones is never happening. never. so far from never happening. i want to be on record. never. >> the liability is -- >> if one of those drones falls out of the sky, the game is over. >> falls out of the sky. how high is it going to be?

then drone crashes. >> no, i have a friend who owns a drone. >> one of those -- >> your friends wouldn't own drones. >> right? and it can go so high in the sky you can't actually see it. >> planes will hit them. the whole thing is a bad idea. i can't even get started. >> so on "squawk on the street," we're going to show we did the same thing but walmart versus amazon with free products. >> and we test out the amazon lockers at 7-eleven. >> very cool. very cool. >> that you like? >> yeah. >> very nice. thank you, guys. and we'll see you for the second round of "squawk on the street" in just a little bit. becky? >> i want to tell you. i was just talking with targets because there have been so many concerns about the 40 million debit and credit cards that had been unauthorized access had been granted to these things, just talking to them because obviously there have been thousands of people calling into them, trying to figure out what this means for them. if you shopped there any time between november 27th and december 15th, that was the

problem times. now, those cards while there was unauthorized access granted to that, they say that does not necessarily equal fraud. and that's what we should be paying attention to. make sure you are monitoring your account looking for things. they say the incidents of fraud, they've been speaking with visa and mastercard. typically it's low instance of fraud. they say in this case, it's been very low. how many transactions of fraud there have been for these things that have gone through. but a lot of times they've been getting calls saying i don't remember making that charge. >> did 40 million people shop at target? >> i did too. it was 4 million debit and credit accounts. 310 million people. that many people going through there. >> but three of us sitting here did it. >> ironically, if you had bought through the cloud, you wouldn't have the problem, right? because it was the -- >> it's funny because everyone worries about the security online. it's the in store. it's the problem this time. >> yeah.

point of service machines and not in the cloud. >> where was that? >> burbank. >> burbank. okay. >> yeah. little post world war ii bungalow. it doesn't deliver where i live. so it's the producer's house. >> she was in a bad neighborhood. >> i saw that, looked like -- in l.a., what was that $8 million house. >> yeah, 2006, it was $8 million. now we're $435 million. two big interviews you can't afford to miss. oil billionaire harold hamm. the keystone pipeline and much more later, mortgage rates and how they'll be affected by the taper. also the housing market, the ceo of remax is here. we'll be right back. 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. ♪ 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. it's the last trading day of the week. what investors need to watch heading into the holidays. plus, economic data that could move markets, real gdp for the third quarter will be out. >> hamm's beef with keystone. why the self-made oil billionaire is no longer backing the keystone pipeline project. >> and a housing outlook with

the ceo for remax. as the third hour of "squawk box" starts right now. welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernan along with becky quick and andrew ross sorkin. our guest host is still with us jonathan bush. should probably know his -- we should do some of your history. started in your basement? >> split level ranch, split laundry and world hq, up split, children, bathroom. >> how long ago? >> '97. graduated business school june 6th, started the company june 7th. from lincoln, mass. so we drove out --

>> $4.8 billion company now, athena company now. >> yeah. but who's counting. >> you don't own oil or texas rangers. >> i do own a retail mall. >> how do you own a retail mall? >> because it was not gorgeous and right next to our new campus and i thought we could make this sexy and our employees would not have to drive and commute and got into it. >> yeah? >> yeah. >> how is it going from the retail perspective? >> we're, you know, -- >> this is someone said the beauty of capitalism. all this happened and then you improved the mall and it was better for everyone, right? >> well, it's great because i have this totally aligned, supesuper ego where the town wants something less armpit like and my employees want to not drive an hour to work so we can put up apartments and the bowling alley, the doings and makings and replace the brandings you can buy over the internet. >> billy is your brother? >> billy is my brother, right.

>> so he thought, ten years ago, he was pretty cool happening -- >> he remains devastatingly cool. >> now you're like -- >> yeah. >> do you wave to him -- >> he looks down from his temple of coolness and says, no, really, you're very rich. don't worry down there, you not cool guy. here i am. >> andrew still, i think, is envious of billy. who's his co-anchor? >> who? >> it's not who you think. >> she's awesome. kate. >> i forgot. >> it's a different one. >> small world. >> we said that you were related to some really important famous people and that's who we were talking about billy bush. >> that's -- >> anybody else? >> no, never mind. >> george p. headlines this morning, the senate is expected to wrap up its work for the year by moving forward to clear the path for janet yellen to become the next

federal reserve chair. it's expected to be the final senate vote of the year. they would pick up on the actual confirmation in january. probably january 6th. also, russian tycoon has been released. he was pardoned yesterday. no details were given about the release or his current whereabouts. he'd been in jail for over ten years and was seen by the kremlin as a political prisoner. >> no details necessary. >> yeah. right. we talked about that earlier. i want to -- andrew, where are you on this? i talked to becky. you've got a russian prison? >> yeah. >> is that scarier than -- let's rank him. what about south american prison. >> i'm having a flash back to captain on the airplane. >> what are my other options? >> north korean prison. >> have you ever been in a turkish prison? >> what else? >> iranian prison, scary, probably. but russian, i would think russian is mid scary, you know.

>> i actually might go russia. >> at some point -- >> russia would be good at it by now with as many people as they've unjustly thrown in prison, they should know how to keep you safe. he looked okay coming out. didn't look any worse for wear. >> averted gaze, eyes down, spirit broken. >> i knew i brought it up. and i knew it's territory you don't necessarily want to delve into. but i couldn't help think about because i thought about the scariest prisons. >> feels like less. >> you don't know where it would be? >> for us. i would prefer just to avoid all of them. >> i think you're right. >> where do you think riker's stands. >> pain versus bureaucracy. what is the pain you feel of bureaucracy? they probably have the fair share of forms to fill out.

>> shawshank, i don't want to be in that prison. >> orange is the new black. that's the prison you want to be in. well, it's a woman's prison. >> it is. that's true. we have a business story to talk about this morning. smartphone maker blackberry reporting a huge quarterly loss due to an inventory write-down and asset impairment. company also announcing a five-year deal with foxcon. jon fortt joins us now. what does all this mean, jon? >> i don't know why i'm coming on when you guys are talking about prison. let's put that to rest. but blackberry -- i know, i know, it's eerie. blackberry clearly in the throes of a transition here. new ceo john chen shifting their focus, the initial blackberry 10 device rollout had been about taking on apple and samsung at the high end of the smartphone market. right now with some of the moves they're doing. this big write-down, clearly the focus is on enterprise and government services. a little bit more on some of the

stuff blackberry was initially known for. security and blackberry enterprise server. so at the top of this release before they get into the nitty-gritty about this results there touting the fact that they are getting more blackberry enterprise server installs that blackberry messenger that recently came out, has around 40 million users on those devices. a lot of questions about what happens with this device business. there's a five-year deal with foxcon, the company says we'll let them get devices out into markets like indonesia and mexico more quickly. seems like they're focusing more on the low end which is growing quite nicely. but john chen says in this release he's looking for ways to make the devices business more profitable. they've taken this big write-down, usually when they do that, the hope is they get a lot of the pain out of the way and can reposition the business. >> john, question for you, long-term, what do you think

happens to the blackberry operating system? meaning, i have a personal view which is that ultimately this is a device that runs android or runs some other operating system and they make the handset with the great tactile keyboard. >> yeah, you've got to think in john chen's back pocket right now is an option to go to android and give blackberry services and unique software on top of android. they've already started to do that with bbm. it would be cheaper because pushing your own operating system not only costs you in terms of engineering resources, but also you've got to court developers. that's expensive. i'm going to ask him if that's something they're looking to do. they can still do devices without doing their own os. i don't know if that's an option. maybe so. >> there's also, though, this idea of getting at some other larger addressable market. so what we've seen in the internet space and what we'll see everywhere is the way you use technology either o.s. or

hardware is to position yourself for a larger service to deliver. the world is about selling results, finished results. you know, amazon writes millions of lines of code, it's all free. they get a piece of what's delivered to your house blackberry's in a similar place. the hardware was a way of getting at the larger clouds. their focus on corporate. they're working hard but they're all in scale and someone's got to say throw out your outlook server. we'll run the whole thing in the cloud for you. seems like blackberry could get that. >> that's a hard sell. >> what are they going to do? have their stock go down? >> you're on the right track, i think a strategic perhaps error that blackberry has made over the past few years is tieing its

brand so much to growth in consumer markets, it turned out to not be a defensible position. it had quick growth when they started rolling out these keyboard text devices to consumers. but when the iphone came in and android came in cutting on price, they weren't able to defend that. now, obviously, we have concerns both in enterprise and in government about security, secured devices, if blackberry can reestablish itself there as a beachhead, cut costs and reestablish the brand in that area, maybe that's a direction that john chen would take, clearly that's where his background is. >> the security department and you can have the toys for free. >> can it control the security if it ends up having to use another operating system? meaning can they layer on security? this is sort of like good, right? is it good? is that the name of the e-mail service that's layered on top of other operating systems, but people think it's pretty safe? >> oh, absolutely. good is a competitor there. samsung has its own program

which it calls safe that it's trying to layer on top of android. some secure services. blackberry has a different and arguably better value proposition if it's able to bring to the fore its own network and say, hey, we'll run your data over our own network. it won't go over the public internet. you won't have to worry about that aspect. so, you know, if they're able to resurrect that value proposition that they sold so effectively a few years back layering on top of android would be a strategic option for them. we'll see if they go in that direction. >> thank you for that. appreciate it very much. >> that's the exact situation that allowed little athena health to get into that software space. we'll do the work for you. software's free here. but let us do the work. let us do your billing to the insurance company, connect your patients to the hospital, the laboratory, we'll do the work even if it's manual and unprofitable. and little by little we'll make it profitable. and these guys, ironically, by

being basically toast, they have the freedom to not lose anything by trying that larger, addressable market and getting out of the sort of enterprise sale position. >> they've already lost -- >> they're toast, yeah. >> you're starting from scratch, go ahead and do it. >> have fun swimming to the castle. >> the cloud. athena uses the cloud. >> it is the cloud. >> you're an expert, is that why? who wrote your code? >> ed park was the leader, but we had bob gate. a whole team of guys. but eddie came as a summer intern. we were running a women's center. the original business plan was a birth center. >> that's so weird. >> it was so weird. it's fabulous, if i could do that and make -- >> you know this guy. >> eddie comes, we can't deal with the insurance can companies. they're impossible. every day people's eligibility changes. it's like obamacare, he's like

scraping the medical website and building electronic formats that can convert our information to the right shape to fit into this ipa's claim system or that. >> he doesn't know how to do it, but the guy that does know how to do it, he is different. he's got a different brain than. i'm impressed by people who know how to write code. >> speak for yourself. >> it's not writing code anymore. in the future, you'll see with guys who can come up with a concept. write a little code with an idea in mind. half designing, half process engineer, half coder. sit back. >> i'm going to see who's playing. >> you see your result right away. >> you lost me. any bowl games this weekend? >> i don't know. >> we're going to take a quick break. because coming up, opportunity knocking, what areas of the market will work for your portfolio in 2014? hopefully our interview with the chief investment officer of wells fargo bank will give you

some ideas. what rising mortgage rates may do to the real estate. "squawk box" is coming back right after this. [ male announcer ] once, there was a man

who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade.

the discovery of the bakken oil field is one of the biggest game changers on foreign oil. will production ever spill over into a glut as some have reported. the largest bakken player joins us now with crude realities. it's great to see you. everything okay? you can hear us? we're ready to go? >> yes. i can hear you just fine, thanks. good morning. >> good morning. we're all -- one thing we all talk about and the real positive about our future. and we hear it every day from people all over the place and every different field that we cover is that we made be on the cusp of something really exciting for the united states in terms of manufacturing because of all the -- the shale, natural gas we have. the one thing i want to get from you is that as far as oil goes. and we still need oil, still use oil. we will never be able to produce enough oil here to satisfy our own demand domestically.

is that fair to say? >> no, i don't think so, joe. i think we're on the track as we've said. back in october of 2011, we predicted that we could be energy independent in this country. and i believe we're right on track to do it. we're not behind, we're not ahead. had a lot of skeptics then. i don't think there's any skeptics now that believe that we can be energy independents. >> i thought the thrust of your pre-interview was that as far as oil goes, we have a lot more natural gas than oil and we're consuming 19 billion barrels a day and producing 8 billion. we're going to get the point where we're producing another 11 billion barrels here? >> well, you have to add in natural gas, liquids and when you do that, we're close to 10 billion. so we've come from a long ways back behind. at one point, we started with about a 60% deficit. that's what we were importing.

everybody's comparing oil supply with natural gas. and oil supply was just about balanced in 2005. we've got to make that deficit up. and we're making it up quickly. you know, we're worried about 37% imports. now, oil is harder to find. you know, a lot of people don't understand in the generation process that the oil has to go through what we call the oil window of pressure and heat. and so it's not as readily available. and you look around the country and most of the huge fields been found is natural gas. but we have some awfully big oil fields, bakken as you said is a very good example of that. and the permian is coming on, eagle ford. >> but we're never going to be -- is the point that we'll never have a glut? does that mean we shouldn't export oil or where are you on that issue? will we ever have a glut? and will it ever make sense to

export oil? >> no, i don't think we'll see a glut. i think we'll be able to supply our demands. and i think we're on track to do that we said in the next decade and certainly that's the case. you know, i heard on the promotions this morning that continental hadn't supported -- wasn't in support of keystone xl. you know, we stepped up early on as the first supporter of keystone. but once they decided to haul bakken oil and we signed on for 35,000 barrels a day. what's killing us and we probably could be a lot better shape, you know, in the country if xl had been approved. but, you know, this delay five years now it'll take four more to build it if it were approved, those type of things just kill you on supplying in this country. >> then the media is kind of misconstrued what you said. you no longer support the -- you're just facing reality that

it's taken five years already, takes four more to build. so you've got other -- you've made other plans in terms of rail and stuff like that. we should've built it all along, obviously. >> well, obviously. you know, business goes on. we're in a competitive situation up there in the bakken and have to get oil to market and find other ways to do it. and we've done that with rail and other pipes and other parts are being built. so eventually, you know, when you cover the spectrum without the pipeline. so, you know, it's the uncertainty that kills you. you have to have certainty in this business. >> do we get another chance at the plate on that same concept, mr. hamm, with natural gas? do you feel we should start now so in five years we should export natural gas. feels like a huge differential between the price of natural gas and the price of oil because how much we got all of a sudden in natural gas. should we be exporti ining natu

gas -- >> becky, natural gas -- i can't do it. >> what do you think, mr. hamm? >> what do you think, harold? >> well, natural gas, we did glut the market a little bit. it's coming back into balance. we're getting there quickly. this winter helped a lot to balance supply and demand. and we're seeing price come into a range that you can afford to go out and drill for gas again. but we are going to always remain ahead on natural gas. i think we've got 100 year supply of natural gas in this country for sure. >> so export some? export some? >> excuse me, i didn't hear your question. >> should we export some? get better at sending it over to the chinese so they stop doing all that coal? >> if you're asking about import -- or exports of natural gas, sure, we should be

exporting natural gas. and, you know, there's a lot more supply here in this country to justify doing that. >> i'll be sure to tell becky you said so. >> harold, this is an overall question. the price of all this abundant natural gas we have, what does that say about the feasibility of renewables? and has it pushed out the technology on when it really will make sense to do some of these things where you know per btu it's going to be much more expensive. will it be much harder to develop, you know, solar or whatever renewable you want to talk about because the price for -- that we can pay for this cheap natural gas is going to make it less economically feasible for many years than we thought originally? >> well, you know, there's a lot of people, you know, early on that we should just go to wind or solar and, you know, the whole battle was about market share. i think today everybody's realizing that, you know, below

$6 an mcf, a lot of these things aren't economically viable. and i think we're going to see natural gas below that threshold for an awfully long time. >> that's what i mean. those hundred really smart people we have in d.c. that design everything and, you know, the -- can bring us all these great, this great life we're going to have. a lot of times the market comes along and says that may not be the way we're going to do things and then they're shocked. what solyndra's not going to work? harold hamm, we appreciate it. thanks for your time this morning. >> okay. thank you. good to be with you, joe. as we wind down the year, we're looking ahead to what opportunities 2014 could bring for investors. joining us right now with an exclusive on what his company is expecting is ron florence, executive vice president and deputy chief investment officer at wells fargo private bank. and i know you were just listening to the conversation we were having with harold hamm. that happens to be one of the themes you think is very important in 2014. just this supply of energy that we're finding right here in our

country. >> yeah. i think that energy story is important. but i think people need to look globally at it. it's not just a north dakota story. it's not just a united states story. it's really a global story. i just came back from a research trip to india two days ago. there's a little bit of jet lag. 80% of the oil in india is imported, most of it from iran. so they have an opportunity to diversify their energy resour s resources. but even when you go beyond emerging markets to frontier markets, most of the middle eastern countries have not diversified cash flow away from oil. as the world is able to have better supply the middle east is going to have challenges. when you look at frontier markets, look at countries with better commodity diversification be it africa or south america are more compelling that the countries dependent upon crude oil. >> for investing at large not just energy? >> absolutely. >> investing at large.

and the economic system of these countries. and this is a story that's going to go on for a long time. not just a story between now and june the energy revolution is going to change the way we consume energy. if you're in an emerging economy and you're looking to bring more power online, you're looking to build power plants that aren't just reliant on crude oil, but natural gas. fracking's happening all over the world and i think that's an important story. >> another important theme, what's happening with the central banks. we've had the activist central banks. a lot of them had been acting more in concert. you think that ends in 2014. >> well, as we go around the world, we see the different issues with inflation, interest rates and growth. in our country, we've been trying to create demand. so we forced interest rates very, very low to see if we can increase demand for borrowing money. we're trying to stoke inflation to try to increase demand that you buy the jeans today as

opposed to waiting for tomorrow when the price might be higher. they have ample demand but limited supply. in parts of india and other emerging markets, they have unlimited demand. so as much supply as we can bring, it's immediately absorbed. they have higher inflation rates, we'll see divergencdy ve divergence here. slowly letting interest rates rise for a long period of time is starting. and i think investors need to get ready for that. >> it's starting, the ten-year is picking up modestly. but i did have pointed out to me today the five-year is what we should be watching. that's risen much more sharply. does that concern you? it's 2.945%, look at the five-year picked up rapidly over the past couple of days. >> we've been talking about increase in interest rates for a long time.

and this has an important ramifications across your entire balance sheet. if you're a borrower and borrowing money, we know interest rates are going to go higher. lock in rates today. lock in as long of a rate as you can if you're borrowing money. on the other hand, if you're a lender, which is what you have when you're buying bonds, you're lending money, let's look at diversifying the credit risk, look at keeping those durations relatively short so we can increase our interest rates as the yield curves rise. >> is the stable equity the new bond -- >> say again. >> fat stable equity is the new bond? >> i don't know if i'd call it the new bond. bonds have nice diversification. >> ron, thank you so much for your time. >> good talking to you. 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. [ 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. at the lexus december to remember sales event. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account.

you stand behind what you say. there's a saying around here, 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. [ male announcer ] this december, experience the gift of unsurpassed craftsmanship and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection.

welcome back to "squawk on the street." and buckle up, four handle on our last look at gdp. 4.1, yes, 4.1, unbelievable. if it was only sustainable. listen, it's a good thing, but also in many ways an inventory thing and that'll turn into a great thing if we buy all those widgets we're making. of course, it was 3.6, now 4.1. if you look at the consumption number always important, that's pretty decent.

two, 2%, that is huge from 1.4 to 2%. now, if we look at the price index, which many like to look at, that's two across the board. that's what we were expecting, that was our last look, no change there. and if we consider the fact that we are pretty much putting the tombstone on, not only on the fourth quarter, of course, but for the year, that means at about four weeks, we're going to get our first look at fourth quarter gdp. and many believe there's going to be that same influence of inventory. we'll have to wait and see. when we have all the bearded givers, it's best to keep the stock market as high as possible. back to you. >> shouldn't the next -- i mean, is it purely inventory, rick, or do we start ratcheting up the pessimistic patience for the gdp. does that mean there's less for next quarter or keep our estimates up? >> you know, i think it's a

little bit of both. there's impact on how good this revision looks. i think there are good things going on. we're not fully in the banana republic yet, and we seem to be shedding the chains that may be holding us back as the great john taylor said on my spot about two days ago. in the end, many of these programs hold things back. and as we wind down even a hint of winding down, i think the good things are going to potentially clear the space. i mean, look at a two-year note, approaching 40 basis points. that is screaming loudly that the marketplace is squeezing its tightness all along the curve. it isn't only in the long end anymore, joe. >> well, that 300-point move, rick, you can say it as much as you want that it was because the fed knew that the economy was

getting better and that's why it was up so much. that's one take, you know, that somehow their forecasts are suddenly, suddenly that we believe what they're saying. so the other take is -- >> forget their forecast. >> yeah. >> the other take is it's the beginning of the end of this program that was actually holding things back. that's the other take. and i don't know which one's right. >> no, and i think it is a combination. but listen, joe. ben bernanke. you and i, see eye to eye on many issues. and i think there's a lot of people that wield a lot of power not only domestically but globally that i personally don't think have their hearts necessarily in the right spot in the sweet center. i don't think ben bernanke is one of those. i think he's a great american, i think he wants the country to do well, i just disagree with his programs. and not all of them. there was programs in the early stages, but come on, you know, the trap, there's always a trap when it comes to governments and b bureaucracy. i'm optimistic, things are

improving. the problem is i can't relate that to stocks. i don't know how much foam there is on the top of the stock market. >> how much really good stuff we need just to get to where we are to support where we are. speaking of great americans, john lonsky is here. do you know why the market -- was it relief or was it, wow, the fed is forecasting a stronger economy, it's good? >> i think it's relief we're finally getting out. i think the market finally has a chance to discover where the ten-year treasury yield belongs. this is going to be beneficial to investors, businesses, they'll have a better handle of what the long-term real cost of capital is. where were you for the fourth quarter? >> closer to consensus is about 1.5%, maybe 1.6%. what i want to point out, i was pleased by the fact we have the faster rate of growth for spending.

1.4% to 2%. we think in the fourth quarter real consumer spending goes up to 2.8%. it's going to grow more rapidly because in part because of the price discounting brought on by the huge increase in inventories. >> i see. you're not going up from 1.6% this next quarter based on 4.1? >> it's that inventory adjustment. if we take out inventories, we're close to 2.5%. >> will we get to 2 1/2 in 2014? >> definitely. i think so. i think that's right in the mid range of a number of estimates i'm looking at. that looks very achievable. we'll see faster growth by personal income, better showing by consumer spending, investment spending. the economy's not going to be gang busters, which is good. we're going to keep inflation in check. as a result, we're not going to see a ten-year treasury yield go through the roof. >> all washington had to do was get a budget. doesn't matter what the budget was, whether it goes up or goes -- a budget and the

shackles being released by the private sector. >> for now they are. but the budgetary problem is a long range issue. 2018, 2020, that's where the outlays start to surge. they take off and the budget deficit swells. we can live with this deficit today quite nicely. eventually, we're going to have to face the hard reality of how an aging population and a much more slowly growing workforce puts a lot of upward pressure on government outlays for retirees. >> we've got jonathan bush to deal with that, i think. hopefully people will be consulting with you. >> we've got to wrap, but i was going to ask, you know, instead of quarter to quarter, the biodiversity for multiple years looking out, doesn't look like we're starting as many new companies and that's what scares me more than inventory and jacking and interest rates to keep people sort of robot fragile buying instead of trying new things.

>> well, companies have to deal with things like health care reform, all of these different compliance issues. it's much more difficult, costly to get a business started compared to the past. and getting back to the demographic factor, very important, hugely important. next ten years retirees growing by 3.5% annually on average, working age population, .5%. that doesn't speak well for consumer spending. >> you just used my line. that's the biggest fear in the control room is when i say we're supposed to wrap, but -- yeah, you did. that's their biggest -- those are the ten worst words they hate. >> i'm sorry. >> it's okay. we've got to wrap but -- becky. when we come back, he was once considered vladimir putin's arch political rival. vladimir putin threw him in jail for ten years. now he is free on a presidential pardon. michelle caruso-cabrera will join us next with olympic sized theorys behind that decision.

still to come -- could rising interest rates kill economic growth? the ceo of remax sounds off on the state of housing. and why resales are slowing. "squawk box" on cnbc is coming right back. 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.

after spending ten years behind bars, khodorkovsky has been pardoned by vladimir putin. michelle caruso-cabrera is here and she's got thoughts on this. >> they say he was on a plane and headed to germany where his mother is, apparently. >> he'll never be going back to russia. >> i would assume not at this point. >> if people aren't familiar with khodorkovsky, he's been in prison for ten years, he might still be a billionaire, we don't know. he was worth $15 billion at one point when he was the ceo of the largest oil company in russia at the time. can we roll the video? we can show the prison where he's been for the last ten years. >> you want to see. >> this is khodorkovsky. this is not fresh today. so we don't have video of him getting out of prison at this point. >> we don't know --

>> we don't know what he looks like. >> we've had video of him the last couple of years, he's much thinner and less hair than he used to. that much we know. so, yes, he is out of prison. he was charged with corruption, with tax evasion, but many people believe it was simply because he was funding the opposition against putin and that he considered running for office against putin and, hence, why he was -- police went into his plane in 2003, arrested him and he's been in prison ever since. late yesterday, putin mentions that he's going to get out of prison because he's requested amnesty because his mother is very, very ill. and hence why he has to go to germany. very few people, investors, will say out loud with their name attached to it what they think is happening here. one of the few who will say it is a guy named bill browder. he used to be the largest private investor in russia. he says the last-minute

publicity stunt is to get world leaders to come to the olympic games because a number of world leaders have refused to go to sochi because of the issues related to gays and anti-gay laws in place there. bill browder once had the largest fund there, police went in, seized his assets, he lost a ton of money and his lawyer died in jail as due to lack of medical attention, kidney disease. and he says if he wants to impress the world, he ought to prosecute the people who let his lawyer die or killed his lawyer. >> wow. >> yes, we've had him on from davos and other places. >> he won't reveal where he lives because he lives under death threats from russians. >> wow. coming up next -- some holiday news. if you're thinking of selling your house, you might want to check out our interview with ceo of re/max. and make sure you join us on monday, "squawk" reserve is going to be in session.

jeff lacker will be our very special guest host. "squawk box" returns after this. ya know, with new fedex one rate 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.

you can fill that box and pay one flat rate. how naughty was he?

oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. beautiful shot of our

nationnatio nation's capitol. some of the top chief financial officers from public and private companies offering up 2014 predictions. and they're off to a good start. many accurately predict the fed's moves ahead of this fed meeting. well over 40% of our members said tapering would begin in january. when asked what is the top risk factor your firm faces heading into the new year, the council said the global economy neck and neck with weakening consumer demand. also, obama care is a worry for the group. but they seem to be feeling a little bit better about it. i don't know -- i look at you and think of you as billy. doesn't matter. anyway, in october, we asked them if they thought it would work at that time. only 36% said it would if there were some changes made. this time around, it's nearly 50%. for more on our global cfo council and all of the survey results, you can check it out, cfocouncil.cnbc.com.

u.s. housing starts surged to the highest level in nearly six years last month. how will yesterday's news from the federal reserve impact the bullish housing market trend? make that wednesday's news. joining us now to talk about the recovery and the housing market is margaret kelly, ceo of re/max. thank you so much for being with us. >> thank you. >> we know that things are getting better, but we've also been watching rates tick higher, steadily, but ticking higher, looking at the ten-year ticking at 3%. what does this mean in terms of mortgage rates? >> well, obviously mortgage rates will impact housing a bit. i think we have to keep it in perspective. we are still at 50-year lows. mortgage rates right now around 4%. i bought my first home in 1982 at 14.5% and i was thrilled to be able to get that. so the american people really adapt to the market that we're in. they'll be able to adapt to it.

>> i understand completely what you mean. but i also remember earlier this year when rates rose because of what the fed was talking about at that point. we did see a chilling effect on housing sales. what are you seeing this week? >> well, that was -- that was bernanke saying, we may start to taper. now we know that the taper is beginning, now we can deal with that. obviously the market didn't get impacted too badly. but what's happening right now in housing is -- >> the fed panicked because rates went up so quickly that they talked things back rather rapidly. now we're looking at rates higher than they were there. >> they are. but the fed also put in the caveat they can adjust the taper as they go forward, meaning they could increase it or they could decrease it also. so i think there's a little bit of leeway there. but the reality is we know the taper was going to start sooner or later, january makes sense. what it tells me the economy is recovering and there is

confidence in it. in fact the new home starts that went up 22% this week to me says builders are very confident and the housing recovery and in the economy, otherwise you wouldn't see starts that high. >> okay. what are you seeing just in terms of consumers and how positive. housing transactions went down about 4% this month but what that tells me is we're getting back into a normal seasonal market in the housing industry. we haven't seen that for quite some time. in fact, for 28 months in a row, year over year the number of transactions increased. this is the first time in 28 months that the transactions actually went down a bit. what that says is we're getting back into a normal seasonal market where we're slow in the winter and increase again in the spring. >> margaret, you're public now,

m mazaltov. there is actually a retail cloud, where all the listings are on the internet, you can see them and touch them yet broker rate seems to stay at 5% of the value of the house. do you see that keeping up or will it make it to the lady with the sign on the lawn or will it make it down to the market? >> we're thrilled with the ipo right-hand remax thrilled to be public now. what we see is that a lot of the internet web sites actually have replaced newspapers and classified ads and real estate ads. it is an opportunity for buyers and sellers to go out, search the web, see what properties are out there, but nobody's going to click paypal and say i'm going to buy this house off the internet. what they're going to do is go

to a real estate professional, who actually is that knowledge broker to be able to help them navigate what happens in the real estate transaction. you may see a beautiful home on a web site but you don't know that two miles away is a dump. and that's where a real estate professional really assists the buyer and the seller to get through this transaction. >> that settles it. >> there you go. >> margaret, thank you. >> it's going to stay 5% forever. fabulous. >> on the commercial side, you guys should have the ceo of co-star in here, who is really going to -- disrupt. we'll talk about it another day. >> sorry we got to run. >> it's a business, let's go. get some ads going. >> jim cramer coming up on post 9. "squawk box" will be right back. ♪

[ 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.

>> jim, we love this guy.

>> i was critical about the last quarter. i didn't like that guidance. i think jonathan knows that. >> jim, i love a good beating. >> that guidance was too -- you were too conservative. >> too conservative. >> that is the first time i've been accused of that. >> underpromise and overdelivers is -- >> that's true. i was hoping for the big bump because i know that you're doing well and i didn't get it. i started thinking should i be more concerned? maybe i'm too positive. >> he likes the earnings to go up right away. now, now, now, now, now. we want to invest in r & d, invest in amazon, be the health care cloud. >> to 116, i didn't freak out but i was concerned. i thought maybe jonathan is saying, listen, that great hyper growth we had with the cloud, i got to pull back from it. i'm used to you bumping numgs big. >> we're going to spend it on r & d, not on earnings for you, no offense. >> what's the next quarter of

gdp going to be? can't we stay above 2? >> no, consumption is great. what people don't realize is the retailers are selling like mad, they're just not making as much money. i don't want to be political about it. >> and the big game for philly -- big game, in fact, for a lot of different teams in the league. is there a network with enough guts to televise this game do you know on sunday? is there one out there? >> actually, if dallas beats washington, the game is inconsequential. >> it is on nbc, though. work with me. work with me. >> stop calling megatron megatron. >> when we come back to "squawk on the street," john chen and he is first live television interview since taking the helm of the troubled telephone maker.

we'll be back. 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.

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.

thanks to jonathan bush. have a great weekend, everybody. we'll see you on monday. right now it's time for "squawk on the street". >> good friday morning. welcome to