tv Squawk Box CNBC December 30, 2013 6:00am-9:01am EST
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good morning and welcome to "squawk box" right here on cnbc. i'm andrew sore kick along with joe kirn nin and kayla tausch shi who's sitting in for beck can i. >> did y >> good morning. >> why are you whispering? >> you don't have your microphone on? i'm sorry. let's get to our top story. a deadly bombing in russia. the second in less than 24 hours. at least 14 people were killed and nearly 30 injured when a bomb ripped through a trolley bus by suspected suicide bomber. that blast happened in the russian city of volgograd which is about 400 miles northeast of so sochi. on sunday a female suicide bomber attacked a rail station. 16 people killed. more violence leading up to the winter olympic games in february. we'll have more coming up. michelle cabrera who will be
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covering the games will be covering that. we'll go to kayla with some of the top stories. >> dangerous element six weeks before the winter games are set to begin. elsewhere in corporate america, apple is just saying no. the company urging shareholders to vote against carl icahn's $50 billion stock buy back proposal. no word yet from the billionaire investor. apple releasing details of tim can cook's pay. he took home 4.25 million which is on par with what he made a year ago. he gave up 7100 shares tied to an annual performance award. that was based on august 2012 to 2013. the stock in that time lost a quarter of its value. those options set to vest worth just about $4 million. so a drop in the bucket for tim cook but, nonetheless, there are some repercussions for the apple stock price. >> to anyone else that's money but chump change. he m us must have had a big payoff. >> 2004.
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>> two waves, five years and ten years. he actually asked the board himself, can these vest on an annual basis equally and that way every year you can actually re-evaluate whether i deserve these, which i thought was a pretty proactive way to go about this. obviously the board has decided that for that most recent years some of those should not vest. >> when you get to that point and you wonder, you know, you already have three or 400 million in the bank from the company that you didn't even found, then you wonder -- i guess at that point it's about almost pay for performance. you're going to give your mona way eventually anyway. at that point you're adding to what you already have. what is it about? i think it's about being paid for doing a job. >> here's the question though. if you remember steve jobs who did found the company when he came back, i think he took a dollar a year. he had some stock. that was it. most of his wealth was in pixar which was sold to disney. >> anything he did was
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gold-plated and oh, well, it's steve jobs. he had how much finally? what do you think he was worth? >> when it was all said and done? >> yeah. >> i at this it was about 7 to $10 billion. >> a lot of that was from pixar shares as well. >> most of it was from pixar. had he held on to his shares of apple from the beginning because he sold when he got booted, the number would have been -- >> he had a right to sell based on what the stock did in the '90ed. >>. >> if he held on, it was astronomical. >> done skully, down to where it looked like it was going to go the way of so many technology companies that didn't keep up the pace with the technology and then here we are. >> then there's a deal that almost happened and bought apple and got cold feet. we can't take this risk. it's too big of a risk. >> that was not when steve was there, was it? >> no. >> did you see this new thing,
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it's got more than a million -- the advertising is working on me. got more than 1 million pixels, got a better screen, it costs less. >> the kindle you're talking about? >> it weighs less. >> i don't know. i keep seeing it advertised. >> the advertising is working in that you want to buy one, you did buy one? >> no, is it really better than the latest ipad air? >> go forth air. go for the air. i was at the apple store yesterday. go for the air. >> clear picture. costs 379 -- $359 versus 4 $.59. >> it's 20% lighter. >> i can't believe that. >> that's what they're saying? >> you're not watching tv? >> not enough, clearly. i'm watching movies. oh, we have to have a conversation. >> you like zblsh we don't have to do it now. >> i'm the unfortunate move of seeing "the wolf of wall street" with my family. that was my fault for not bringing them to the movies. >> do you like seeing excess. did you see the guy is shopping
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a reality show. >> okay. so let me just say i want to make two comments. one is jordan belfort, terrible guy. he's the main character in the movie. what he's done in real life we can all sit here and condemn it. >> nothing to do with wall street. aluminum skies with aluminum siding. just another scammer. >> just another scammer i agree. the context in this case is that he's running a mutt ton shop. >> absolutely. >> we should note that jane wells did a profile on him in 2007, invited him to come back and didn't want to come back because of the way that we discussed him because we called him a crook. then again everything in that story is true. >> when he came in and the movie, you know, this was like a year and a half ago or so and it was "wolf of -- i didn't know -- stratton oakman was the most obvious bucket shop operation. >> i'm trying to separate two things. >> you want to watch "first jersey securities" watch a movie
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about robert brennan. >> how many mob movies do you watch? >> i think you know what you're getting. parents don't go and say, i'm so proud of my son. >> hold it. >> for the premiere. >> can you do me a favor? >> no. >> separate this guy from the movie. >> so you like those movies. >> it was an awesome, entertaining movie. did you not like it? >> i thought it was entertaining but i think i watched most of it like this? >> because? >> it was just so raunchy? that's why andrew loved it. >> i don't believe his life was that interesting either. >> pure entertainment. take it as entertainment. now i will say this on friday when we were on the show talking about this movie, someone e-mailed in and said he's giving the profits of the book and the movie to the victims. not true apparently. because i looked into this. there is a lawsuit ongoing where the government is trying to get 50% of the profits from him and he's not paying. shame on him. >> that's a question of
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enforcement though. >> and i'm not suggesting for a second he should get success with any of that unless, by the way, he can use the proceeds to pay the victims back. if he can, god bless him. >> that's a question of enforcement. he's supposed to pay $110 million in restitution. he's only paid 12 so far. >> right. >> who is going after him to get that difference that obviously has not been paid and did not get paid? >> did you see him -- >> i did not. >> i saw "catching fire." "hunger games, catching fire." >> and? >> i haven't seen "wolf of wall street." i don't know which movie you have to suspend more disbelief. i would think "wolf of wall street" you have to suspend more disbelief than "hunger games" which is ludicrously out there. >> some of us who think "hunger games" is a true story will be crushed. >> i would say it's about the same, the suspension of belief -- of disbelief that you
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need to operate on. let's talk about obamacare and a ceo. they already said they're totally against this. the administration is reportedly under pressure to name a chief executive to run the federal health insurance marketplace. according to rigeuters, they wa him to appoint a ceo. that's not -- we need editorial at the bottom. especially after the rocky rollout of healthcare.gov. the ceo would set rules and coordinate with insurers and state regulators. white house officials, however, say the idea is not being considered by the white house. we're going to keep this running as a government program. they don't want any type of private sector operation that would perhaps need to come in under budget and in line with estimates and things like that. >> regardless of the way that you think about this politically, it's been a disastrous cooperation with the
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private sector. the deadline got extended by a day last week. they didn't tell the insurance companies. the insurance brokers that were going to take off for the holidays all of a sudden had to race to get some of these accounts set up. you think about the fact that they're letting some of those insurance programs that were not going to be grandfathered in, they're letting them keep them. the insurance companies are saying, wait, that creates red tape. >> i saw the mainstream media covered the medicare advantage story one way. >> uh-huh. >> you look at the way everything is set up. it was designed to put these medicare advantage programs out of business anyway. then so the company's offering the medicare advantage do what they needed to do because reimbursement went down so much. they said, okay, we are to get rid of the doctors. then they get blamed for it when all along democrats wanted the private -- it's sort of a private sector -- it's an outsourcing of medicare advantage. >> right. >> very popular. people want it. it will go away. that's what they want it to do. it's going to fall by the way
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side. part of the whole intention of obamacare. >> veer off on a tangent. do you have a view, we didn't talk about this on friday, unemployment insurance. >> unemployment insurance. >> where do you stand? the reason i ask is most of the economists who have estimated what's going to happen as a result will argue that 200 to 300,000 new jobs ultimately will be lost in the private sector. >> i was reading about the -- sort of the -- you have to connect a lot of dots to understand what people argue on both sides of that. now i'm hearing that what is it, if you -- you can wait around for -- okay. if you get the insurance -- >> if you're in a state -- >> now i'm hearing if you get the insurance you're able to wait for a better job. >> job, yes. >> so that you don't go into a crappy job where you end up leaving the work force anyway. so in some kind of perverse way the side that wants the unemployment is arguing that you actually -- it's actually better. then there's a whole site that will cite studies -- >> right.
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>> -- that more people, the longer you're away from the job force, the less likely you're ever going to get back into it, the less likely you'll be hired. almost like minimum wage studies. >> what's your side? >> what's your side of this? >> i don't think about unemployment insurance. i'd rather give people a job than unemployment insurance. i don't see a lot of -- a lot of the things that the democrats at this point, you see what they're -- the wedge issue is going to be to try to -- >> right. >> do you see what it's going to be to take back 2014 will be minimum wage. obama care. they'll work on populus income. all i know is for five years, one side, maybe both sides have been trying to be divisive. for five years i feel like one side is governing for 50% of the country. it's been the most divisive person. >> one side is governing for 50% of the country. >> i don't think obama is governing for the haves at all at this point. >> yeah. >> okay.
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>> and you heard it here first. as we mentioned at the top of the show, the second suicide bombing attack in two days is leaving dozens dead and injured in russia. let's get to jim aceda in moscow for the latest. good morning, jim. >> reporter: good morning, joe. investigators in -- sorry. i've got you in my ear. i'll keep going. investigators in volgograd which is a major rail and bus hub for southern russia, it's a city, by the way, which you can pass through to or on your way from sochi, it's really a major railroad hub, investigators have issued a statement saying that this morning's bus bomb was carried out, in fact, by a male suicide bomber. now no one, joe, has yet claimed responsibility for either today's or sunday's attacks which have now killed at least 30 and wounded more than 60, but the strong suspicion, of course, is that this is the work of
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islamist insurgents from the very rest of north caucus's area. people in volgograd are terrified. it's a city of 1 million people. residents are afraid to go outside and go about their daily lives. police are calling it an act of terror. they're connecting the two attacks, yesterday's and today's, and they're connecting both of those to the publica peel by the chechnyian warlord. you'll recall his appeal to his men to kill civilians and disrupt the upcoming winter games in sochi. of course, president putin has staked his reputation on these games. the wave of bombings is getting closer and closer to sochi. volgograd just 400 miles from that olympic venue. joe, to sum up, russian people are afraid today. putin and russian security forces are certainly worried as well. back to you. >> it's more than coincidence that it's only a little -- you
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know, it's weeks away to the olympics, jim, and you would have to think that that was totally in the thinking of some of the people that were perpetrating this act. how far is sochi from where you are? >> reporter: you're right. we're about 550 miles from sochi but the actual -- volgogard, which is where all of this is happening, is only about 400 miles. on friday there was an attack in a town only 170 miles from sochi also committed by jihadists. so, yes, there's no coincidence. we're 38 days away from those olympic games. putin has invested already a fortune, we know. from a security point of view, some 40,000 special forces, police, agents have created a fort knox, if you will, around sochi to make it safe but the
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militants are showing that it can strike. they can strike at will, they can strike anywhere in russia. people worry. back to you. >> okay. all right. jim aceda, thank you for that report this morning. we're going to stay global and go to the global market report with ross westgate is standing by in london. that was a tough story, ross. we are in football just like on -- we are so juiced after this weekend and then it's just the beginning of what's going to happen in terms of all of our bowl games over here. are you watching that other football over there instead of the real football here? let me see. i'm not sure what he said. are you? did you hear that? >> i'm trying to read lips unsuccessful unsuccessfully. >> i think he was saying -- what i hope he was saying was of course not, joe, we are now deferring to you on what the real football is and i think he brought up last night's game.
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cramer is going to be sky high this morning. you know why? no. anyway, u.s. stocks -- any idea why? any idea why cramer would be sky high today? >> did the eagles play? >> i think the eagles must have won. >> did you see it? >> there you go, i'm a packers fan. >> wasn't that unbelievable. >> the way we eked out the win against the bears. >> he got away. there were 40 seconds. he got away and that guy was so wide open. did you see that the cornerback stayed -- >> cutler had a couple of hail marys with a few seconds left on the clock. could have turned it around. >> but the play that -- the cornerbacks were staying at the first down. they had no idea he was going. that was amazing. u.s. stocks are wrapping up their best year from the '90s. joining us, mark vittner, wells fargo. james lee, there's the braces looking good, mark. and tom, next year, you're one
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of the few people -- how long have you been bullish, three, four years? >> yes, four years. >> are you going to make it five? are you still bullish? >> yeah, we're still bullish. i think a lot of things that were still supporting stocks this year are going to support equities next year. we don't see any reason why we won't have double digit gains. >> double digit gains? >> yes. >> what about equal gains? what would you put the probability of that at at this point? >> you know, we've looked at some classic bull markets, which this is really tracking closely in the sixth year. there are maybe 1/3 of the time you actually match the gains of the fifth year. so i think there's a one in three chance we're up 30%. >> from your lips. that's been my dream, the mid '90s once again, which would -- you know, if you went back and -- it would get us way above the mean again for the long-term average that stocks are supposed to give us, but it's not impossible given that we haven't seen sort of the euphoric part of this bull market yet.
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>> that's exactly right. i mean, i think one thing the viewers have to keep in mind, equities may be one of your best real return vehicles in 2014 and, you know, it's possible for markets to post big two-year gains. look at what happened with japan in the past 12 months. >> yeah, over 50 points -- three straight years in the '90s. vittner, is the economy going to cooperate in terms of is that all we need is to just get the government sort of out of sight, out of mind and get a two-year budget deal and the economy can do what it wants to do and throw off the shackles of what we've seen in the past couple of years? >> well, that would help. i don't know that the government would get out of the way if we just get the budget deal as we still have the debt ceiling -- >> let's assume that they don't do -- that the debt ceiling goes through. is that enough without any -- just not being negative versus doing something positive with tax reform or something?
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>> i think that helps a lot. we don't have to have the tax reform if there's just not the negative pull from government. >> right. >> the economy is getting better. we're a lot more optimistic about the economy than any point since the recession ended and the last few years haven't been great. for the first time i think the risks are to the up side and that should be very helpful for the stock market. the valuations aren't -- it's not like we're going into 2014 over valued. we're kind of appropriately valued. you get a little bit stronger economy and maybe some expansion from there. >> what is the bond market going to trade? you're saying the economy can be much better. will it trade off that or do we need to see inflation before there's a problem with interest rates starting to actually be negative? >> well, when i said the economy is going to be better next year, we have 2.5% gdp. >> on the low end. >> we're on the low end but we've been on the low end. we're closer to the middle now. on a fourth quarter to fourth quarter basis it's probably closer to 2.7.
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it looks a little bit better that way. if you get 2.5% real economic growth, you get 2% inflation, that's 4.5. that's revenues up 5 and earnings probably up 6 or 7. so, i mean, that -- that's a pretty good environment. i think that -- and that's our base case. if things fall into place and we get a little better behavior out of washington, housing comes back a little bit stronger. in the last few data points, they've been encouraging, then we might be closer to 3% so that we can be a little bit higher than that. >> mark, do you think earnings and profits are going to rise because of cost cutting or do you think they will be plugging more money into the economy, hiring, expanding capex, the like? >> the quality of job growth should be better. housing will be stronger so you can get more construction jobs. could be even stronger than we're expecting. the manufacturing sector seems to be coming back. international trade is going to go from being a slight drag last
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year to being a positive so we should see more expansion in the manufacturing sector and transportation distribution. i think the quality of job growth would be better so we get stronger income growth. we get a little bit -- even though the numbers are modestly higher in 2014 than they were in 2013, i think the quality of growth will be better. >> tom, you said about a year ago on "squawk box" when the dow was near 14,000 that you thought 20,000 on the dow, 2400 on the s&p was the levels to watch within the next four years. do you still hold that? we're at 16.4 now. 18.37. do you think we have three more years to get to that point or do you think we'll get there quicker? >> you know, i still feel comfortable that we've got a couple years -- at least a couple years of very good markets and it's going to be driven by, you know, profit growth and economic surprise. i think it's possible for the s&p and the dow to really peak at much higher levels than what i may have said a year ago but it really depends on -- it
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really depends on the quality and the type of growth we're expecting. we're hoping it's going to be quite good. >> okay, gentlemen. time will tell. we're in that weird period between -- it's like i feel like 2013 is finished with all the markets but it's really not. we're not really talking about january yet. the first week of january, so goes the month, so goes the month, so goes the year and we're sort of right in this nether world. there's a lot of people, they're not in saint bartz. >> they're in moscow. >> they're in switzerland. >> aspen. >> aspen. what happened to saint bartz? i'm finally getting to where i think maybe i'll go there to try to be with all of these people. >> squawk should probably do an investigative report from saint bartz. >> aspen? >> aspen? >> yeah. >> snow coming down. who did i see -- >> you're going skiing out there. >> i saw a couple of people walk along shopping. i can't remember who it was. they were out there. jack's probably there.
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whole crew is out there. gold leaf, right? >> jack? >> welch. no, nicholson. >> that's what i thought. anyway, coming up, we're going to talk about this. very interesting story. the way you tip about to change in 2014. joe, are you a good tipper by the way? >> yes. >> you are? okay. but first let's get the national forecast from the weather -- >> you write little notes about lifestyle. >> reynolds? >> reporter: hey, guys. let's give you a weather tip for today. we're going to see some scattered snow showers across parts of the northern plains and moving into the northeast. temperatures in the 30s in both boston and new york. in terms of travel today, you'll have possibly some delays in the twin cities. backups there. new york city looks good. denver. no major issues to report. hey, folks, sit tight. got more coming up on "squawk box" in just a few moments.
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how about the eagles? they managed to beat the cowboys to win the nfc east title. i think this might be the fourth straight year the cowboys had a setback in the most important game. 2010, the eagles are there. they're going to host the saints next saturday. they hired the coach from the ducks. their coach went out and did well with k.c. then the bengals did all that they could do for the four star cross steelers. that kills me with our director
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and everything what happened when that guy missed that field goal from k.c. paul, i'm sorry. i'm -- yeah, i'm just really sorry. yeah, yeah, yeah. bengals clinched their own title a couple weeks ago. it's worth mentioning they are hosting the san diego chargers who they already beat a couple of weeks ago. i was worried about the steelers because we just lost to the steelers. if the steelers had been coming into town, that was the one you should have seen, andrew, because kansas city had none of their first string in because they were sort of saving them. this is where the guy from philadelphia went. he's out there now and he has one of the best records. they had a chance to win it with what was not a long field goal. it missed literally by this much. >> can we go out there next sunday? >> out to cincinnati? >> yeah. you could show me around. >> i hear it's great this time of year. >> yeah. the whole midwest -- >> you could show me around. >> you're supposed to pay off harwood that way and you welched. >> i have not welched.
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i'm waiting for the invitation. i've been sitting next to the phone on friday evenings waiting for him to call. >> not easy to get playoff tickets. not like we can walk in there. >> joe, you know people in cincinnati. you don't know people in cincinnati? >> no, very closed. cincinnati, if you leave, they don't have anything to do with you anymore. >> okay. >> it's like, why would you leave all of this. >> do you have tickets? >> no. >> paul, what about the steelers? were you watching that? >> is this broadcasting. >> fratto is a huge steelers fan. >> is nbc broadcasting. >> i don't know if they were broadcasting. if they were, maybe they could help us. coming up, we'll talk about predictions for 2014. from the debt ceiling to what we can expect in the new year. you know who has the answer, john harwood has the answer. >> good. >> as we head to the break, take a look at last week's winners and holiday losers. ♪ the winner takes it all until
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>> she didn't sleep all night because she was excited to be here. >> in anticipation. >> i flew back from atlanta so i took a nap but it was probably all i could do to contain my excitement. >> you were down there for christmas? >> advice thing my families. and the weather was a little better. >> little better. mid to high 50s. lot of rain. it's monsoon season. it was wonderful. >> it was monsoon season up here. what did we get, about two inches of rain. miserable. 38 degrees and rain. >> it was gross. >> at least we had 55 and rainey. if i had to choose one of those, i'd rather choose the higher end of that. >> yeah. do people, were they hoping for the falcons to win or they didn't care at this point? it's been a rough year? >> well, i think they were really hoping for the falcons to win. it's a funny city because the falcons were bad for so long that no one really claimed them. >> they were good last year. >> but as of last year all of a sudden all these former fair weather falcons fans -- >> that happens. >> -- are huge fans.
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#riseup. people who would never have known what a football was were dye ha die hard fans. >> it was everybody in the south, either florida or carolina. >> right. anyway, a rough one in russia today. in the headlines, at least 14 people killed, not the rail bomb. this was a trolly bomb. yeah, two. another blast that was in the russian city of volgograd this morning. the second deadly attack in that city in the past two days. on sunday, which is what's the headline of most of the papers are still on the sunday attack, the late edition, at least 17 died in a blast at a railway station and all of this is raising fears about the upcoming winter olympics which are going to begin in sochi in less than six weeks and our michelle cabrera will be covering the olympics for us. she'll have more on the story later in the show. >> will that impact the number of people who go? >> not at this point. we'll see.
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two in two days. suicide bombings are scary because those bombers obviously are really committed, right? >> they're really hard to thwart because since they are so submitted, just get on a bus, get on a trolly. >> yeah, exactly. >> volgograd i read somewhere is in contention for the 2018 world cup of all places. >> really? >> even though it might not have an impact on the sochi olympics -- people who have already bought their tickets and plan to go, they're in t but for some of these others, other prestige pursuits of vladimir putin, you know, it actually piet have a pretty big effect on whether russia can claim their spot. >> they're not expecting a huge turnout. they're expecting a huge turnout in sochi but relative to other olympics, not so much from what i'm told. sponsors, others are not going in droves that they've gone to other games. >> interesting. >> that's the word. >> complicated.
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volgograd. that's like st. petersberg used to be leningrad. volgograd used to be stalingrad. i don't know if i'd leave a city named after stalin at this point, either, but now it's -- if you're wondering because you haven't heard of that city, the former stalingrad. >> jim maceda said it was 450 miles northeast. >> 500 northeast from moscow. bad weather delaying the rescue of a russian research ship. it's summer down there. yes, it is a ship studying global warming. several ice breaker ships have been deployed to the area. some of them have gotten stuck because there's so much ice. they've been unable to complete the rescue. snow, showers, poor visibility. the stranded ship was chartered by a team of scientists with 74 people aboard. they have a couple of weeks of fresh food and a lot of freeze dried food. this 84 years ago a guy got in
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there easily, malfsin they're talking about, not easily, had similar problems. made it all the way there 84 years ago when, in fact, there was less ice than there is today. in corporate news, apple is recommending that shareholders vote against carl icahn's proposal that the company buy back $50 billion in stock. apple says it's already returned 43 billion in dividends and buy backs during the first six months of $100 billion capital return program. that's just a part of how much they have. do you know? do you remember? >> what's the total number? >> i don't know. >> over 150 billion. >> i would imagine. >> even the $50 billion figure that icahn was pushing for was still less than half of what he had originally been pushing them to do. >> right. >> so even that was, you know, seating some of that victory there. apple saying don't vote for this. >> we should go buy some stuff. i don't think they're going to do that. let's talk a little politics. 2013 a challenging year for the
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white house, from the health care glitches to the national security agency. the president ends 2013 with his approval rating at record lows. john harwood has predictions for 2014. before we do that, let's check in on his predictions from last year. first, john predicted that tax reform was unlikely to happen. >> whew. >> bingo. that was correct. >> really went out on a limb on that one. >> did hasn't moved in either house or senate. prediction number two, immigration reform likely to pass. now we're saying this is incomplete. it's passed the senate but hasn't been addressed by the house. i won't say it's -- can we say wrong? >> yes. >> let's just go with wrong. and finally john predicted modest gun control steps likely to past post newtown. neither laws were passed in either chamber. let's take a look at what john has to say about 2014.
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>> think of 2014 as a year of diminished expectations and then you'll see the pattern in my predictions for the next 12 months. start with the budget where republicans and democrats have struck a deal replacing parts of the budget sequester with savings they like better. look for them in early 2014 to follow up with spending bills that throw scraps to defense and domestic priorities congress has neglected but make little fundamental change. lawmakers will avoid both a government shutdown and another debt crisis. been there, already burned by that. while that happens, the obama administration will grind along to the end next spring of signups for those troubled new health care exchanges that americans without insurance must buy from. even if enrollment comes up short of their 7 million person goal, white house allies will sign up enough young people to keep the exchanges financially viable for 2015. obamacare will still have health problems but will get the chance
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to survive and grow. by the fall the voters will go to the polls for another round of mid-term elections. with little faith in either party, they'll start no revolutions this time. republicans will hold their majority in the house, democrats will hold theirs in the senate and then the status quo will start limping along to 2016. john joins us now from washington this morning. good morning, john. >> good morning. >> so, i just want to go back. can we go back to 2013 for a second because on the second question we had written that it was incomplete and i thought it was -- >> we gave him an x. >> we gave him an x. okay. where do you stand on that issue? i mean, what could actually bring that back? >> fear by republicans that they're going to hurt themselves not just in 2014 but in 2016. so i think there's a real chance that they decide to do something large enough that democrats think it's worth passing. you know, they've taken a piece
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ma meal approach. there's a very, very powerful self-interest within the republican party to do something and, you know, it doesn't always translate because the concern is greater at the national level for presidential candidates and house members, of course, they're only elected to a single constituency. i think there's still a chance. >> when does the 2016 campaign really begin? we were talking about that during the break here about the benghazi story in "the times" over the weekend and whether hillary -- when does all of that happen in earnest and do we actually see some of that in 2014? >> sure, you'll see some of it. you're already seeing some. i think if you're talking about going in a serious way, you know, look at november 2014 once we get through the mid terms and everybody's then going to, in terms of the candidates, whether it's hillary clinton or chris christie or scott walker, they're going to lay their -- jeb bush, they're going to lay their cards on the table and let us know if they're going to go.
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the field will really become -- i think when we get to january 1, 2015, the field will be known and they'll be off and, you know, they'll be a winnowing process through 2015 when people figure out whether they're viable and ka raise tcan raise . >> i'm happy that hillary has stepped up. the whole benghazi, at least she's -- >> that's resolved. >> that's resolved now. thank god. that block is off her record and now we can maybe just focus on her record in the senate. do you have anything there, john, for me? >> her record in the senate? >> yeah. any legislation or -- i mean, give me something. have you got -- what have we got? >> she voted for the iraq war. >> let me ask you this. was it a rougher year for a fan of the president or for a fan of the redskins? >> for the redskins. >> rougher for the redskins?
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>> yes. >> i mean, all the promise of rg3 and suddenly that -- that -- and he was -- he did come back from the injury. did they say anything on shanahan zblyet? is it ton? let's expect it? >> puts it this way, president obama got 4% growth in the year. we didn't even get 4 wins in a 16-game season. >> painful. i like morris, i like rg3. i like a lot of teams, but that was very -- a very frustrating year. very close games that went the wrong way. >> i'd like to have marvin lewis back as our coach. >> did you have him for a while? he's been at the bengs -- >> he was our defensive coordinator. >> he's been there for 12 years. >> sorry. >> bill clinton, i don't know if you saw this, is going to be swearing in bill de blasio on wednesday on new year's. >> i forgot he was impeached.
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>> what do you think that's about? >> i think that's, one, about bill clinton's relevance. he likes the spotlight. you might have noticed that. secondly, it's not a bad thing for hillary clinton to have her husband be standing alongside swearing in somebody who is a leading urban liberal politician in the country when so much of the democratic party is urban and liberal. >> i heard two things. one is this is a suggestion that the party is moving even more left and then another suggestion that actually by putting bill in there with de blasio, this will give a little bit of cover to push back on that. >> i mean, that sounds like somebody's overthinking it. party moving left? you know, to some degree if you look at the president's focus on income inequality, you could say that's moving left. bill clinton was concerned about that issue when he was the
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president as well so i wouldn't read a whole lot of high nuance into this. he's a big liberal politician and this is a good thing for the clintons to be associated with. >> someone told me -- >> as long as he's popular. >> someone told me last night he let people go to the opening of an nfl. i -- envelope. >> he likes positive reinforcement. >> he likes to be liked. >> we'll have more politics. >> i'd go to the opening of any envelope, manila envelope. what? >> i'm not going to say it. >> coming up on "squawk box" -- are you still going? >> no. >> no? surpris surprises, predictions and the market outlook and a peek into what will drive the tech sector. here's jim sharing his wish for 2014. my economic wish for 2014 is that the financial prosperity of
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2013 turns into economic prosperity for everyone in 2014. that and that my stocks go down. [ male announcer ] this store knows how to handle a saturday crowd. ♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy. [ female announcer ] but with less energy, moodiness, theand a low sex drive,ing. i had to do something. 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 two 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,
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welcome back. u.s. equities futures so far this morning, you never know because without everybody there, it gets a little bit thin and things can happen. some big moves. >> it's unbelievable. >> up again. up another 28 points. we have other things coming before. we're going to go back to break, i think. >> we are. >> i will take you there. still to come this morning. you don't want to mix it, stock picks from david darst.
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according to the nikkei business daily, talks to sell the unit stalled and sony believes it can turn that business around because of the weak yen. as well as increasing demand from smartphone makers. and blackstone is investing $200 million in crocks in shoe maker crocks. it'll get two board seats as well as preferred stock. don't do it? it's a 6% dividend, yeah? >> i told you this. i own crocs, my wife won't bet let outside of the building wearing them. >> cargo pants and crocs. >> doctors love to wear crocs, and this is early to be saying this, but because they're operating, et cetera, they can wipe the blood off them. >> and mario batali, he's got those orange crocs. >> i wear these gray canvas with a white bottom. they look like gilligan's island
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kind of shoes. >> are they crocs? >> yeah. they're slip-on sneakers, basically. not the conventional ones. look them up. >> i'm going to. >> you got me nothing for christmas, i guess. >> u.p.s., it's still somewhere. >> my birthday's coming up, too. >> i know. i've got it on the calendar. it's ready to go. i've also put in the for birthday, already. i've got to depend on u.p.s. to get it here. >> my birthday's another -- a lot of people buying a lot of stuff for that. >> you can borrow my car and drive to the store and get something for joe. >> it's not a stick, obviously. separately crocs says the ceo is retiring in april and stepping down from the board. the company will recruit a new ceo between now and then. coming up, this morning's top stories. plus, we're going to welcome
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guest host david darst, the morgan stanley wealth management chief strategist. you've got five themes? i can't wait, david darst is here. i really wish that there are more opportunities for people to get work. >> less income inequality. >> my wish that people would be employed and poverty, you know, would diminish. >> my wish would be that wall street would turn into main street and start spreading money around to little stores. crohn's, and it feels like your life revolves around your symptoms, ask your gastroenterologist about humira adalimumab. humira has been proven to work for adults who have tried other medications but still experience
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the symptoms of moderate to severe crohn's disease. in clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. you should not start humira if you have any kind of infection. ask your gastroenterologist about humira today. remission is possible. welcome back. how is everything?
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another deadly bombing in russia, we're going to get the latest details from moscow. just two more days before 2013 is in the books. predictions for the new year for wall street and washington. and megamillion dollar homes, this battle for real estate supremacy, "squawk box" begins right now. good morning, and welcome to "squawk box" on cnbc. i'm joe kernan along with andrew ross sorkin. and kayla touche, i think should be your name. because whenever i've tried to get the better of you, you always get the better of me. >> i like that. >> it's like touche. because you're young and very with it. you are. >> a lot of my friends thought that was how my name was
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pronounced when they first met me. and i let them think that. >> it's like -- when you say touche, that means someone got you much better than you just got them. and you're a social media expert and use it very well. >> i thought you were going to say junkie, addict. >> no, the way you use it is the way it'll be properly used by business people trying to -- >> wow, joe. >> the synergies involved. >> a compliment. is it happy hour yet? can i hang it up, drop the mike and walk off? >> look how important it is to media assets right now. and if you don't know, like a dinosaur, i'm not going to mention any names, but you're actually at a disadvantage with your younger peers in terms of the media world. >> but you have a good -- you have a good way to interact with your viewer on twitter. >> yeah. don't i? the way i make them feel so special? >> it's really couth.
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>> i don't even use block, i report them for spam for the slightest insult. becky quick is off today, kayla's here. and the futures are indicated higher. check out the ten-year, which i'm okay with three. it stays at three for a while, it's fine. remember, before we knew it was official, the beginning of the taper, it was at 2.87%. so we're up, what is that? 13 basis points or something. which is pretty orderly if you look at the right side of that. we moved a little bit higher, but we can deal with that. in world news, there was another deadly bombing in the russian city, the second in two days. let's get an update. another one from jim mesada of nbc news who is in moscow. jim? >> reporter: good morning. well, investigators in a major rail and bus hub for southern russia, a city you'd normally pass through on your way to or from sochi, investigators have
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issued a statement now saying that this morning's bus bomb was carried out by a male suicide bomber. no one or a group has yet claimed responsibility for either today's or sunday's attacks which have now killed at least 30 and wounded more than 60 according to russian investigators. but the strong suspicion, of course, is that this is the work of islamist insurgents from that very restive area in southern russia. and people are extremely upset. they're terrified in the city of over 1 million. today there are reports that residents are staying inside. they're too afraid to go out now and go about their daily lives. police are calling these two attacks acts of terror and connecting them to a public appeal. several months ago, this was made by the war lord on the list of terrorists. his appeal to men to kill
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civilians and disrupt the sochi olympics. that's an event that vladimir putin has staked his prestige and reputation on. this latest wave of bombings, though, is getting very close to sochi, volgograd only miles away. and another car bombing on friday, only 170 miles from sochi. so russian people are worried, vladimir putin and his security forces are extremely worried, as well. he's employed some 40,000 special agents and police around sochi to make it as safe as possible. but the militants have shown they can strike elsewhere, they can strike often, and at will. back to you. >> thanks for that report. we should also say a russian research ship remains stranded in arctic ice. it's still there. the ship has been stuck since christmas day with several ice breaking rescue ships -- >> not arctic ice, it's
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antarctic ice. >> we should say the rescue efforts hampered by snow showers and poor visibility. the 74 passengers are said, however, to be doing well and continuing their research while they wait to be rescued. >> and the lead researcher is actually attributing all this summer ice to global warming even though it's the most ice. and there's been no warming since 1979, zero. but global warming -- >> it's not called global warming, can we -- >> call it climate change. >> but that's -- >> unlikely that -- >> this is one of the things i have a problem with. they have also changed, they don't call co-2, they call it carbon because of the connotation of -- but carbon is an element, carbon is the -- >> would you be more comfortable if it was called climate change? >> no. i'm not more comfortable it's called carbon either because it conjures up black soot.
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>> it just becomes such a long phrase. carbon footprint, you've got to keep it -- >> a very intellectual, a feminist said technician religious dogma at this point. i'm quoting her. >> you sent me the e-mail. >> i'm quoting her, she sent the e-mail. i thought that was a great piece in the weekend "wall street journal." >> i've got it bookmarked on my laptop, but i haven't gotten to it yet. next commercial break. >> one of our guys said, i don't see what prince charles saw in her, actually. no, camilla, this is camille. they're totally different. different people. i'm told. anyway. meanwhile, apple is urging shareholders to vote against carl icahn's buyback proposal. icahn wants the company to buy back $50 billion in shares. apple says it's already returned $43 billion to shareholders in
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buybacks and dividends over the first six months of a $100 billion capital return program. you can see apple shares in the premarket down by .5% on that news. and separately, the company revealed tim cook earned $4.25 million this year. it's about the same as it was in 2012. tied to the company's annual performance. that's because apple shares lost about a quarter of their value between august and 2012 and august of this year. we were talking about this last hour, this is your classic pay for performance. these restricted stock units so they vest on a schedule where your board can reevaluate. >> what irritates me a little bit, this is a very politically correct number for him. you would think that everybody knows about, it's been knocking the cover off the ball. so he makes 4.25, and bob iger
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makes 40. and he watches. and i'm just -- you know, if you want to, okay, he just made 400 million a couple of years ago. don't lull us into thinking you're one of the people that -- >> is he a european ceo? is that what he is? >> what do you think he should've done? >> i would think you'd make more than $4 million as a ceo of apple. unless you're trying to pretend -- unless you're trying to pretend you don't. >> right? >> i know. >> and he -- >> given how well the company is performing. >> it's the largest corporate buyback in history, and this year total buybacks will be $420 billion. >> how much did he make a couple of years ago? looks like he makes $4 million a year. if you analyze what he makes in
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stock, it's probably closer to $50 million a year based on his term of service. but doesn't look like that for people so it doesn't raise the -- the "new york times" is not going to do an article. >> they're starting to calculate realized pay versus the salary. >> we're not doing the math. we're using a silly number when the silly number's not the real number. >> but you have made the point, too. and you don't like what media ceos have paid. why do they make so much more than everybody else, right? >> no, i've suggested at the moment media ceos seem to be more on the eyes out liers than other industries. that seems to be the case. and is that the right number or not? and i don't know what the right answer is. >> well, you have a feeling what the answer is, i think. >> they don't get paid -- >> they're horrific. totally over -- >> i'm looking right now for this. and if any of our viewers have this number handy and could send it in, i would welcome that. so they calculate realized pay, which is what an executive takes
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home, including stock, including options, including everything in a 12-month period. >> there it is. >> in general -- i would think the ceo of apple would be commensurate with other ceos. isn't the average ceo $10 million? >> his 2011 compensation according to our good friends at ecolar, that was the number. >> okay. good. i'm fine with it. i'm fine with it. i just don't want to make it look like -- like i said, 4.5 -- anyway, let's get to our guest host this morning. and i'm interested, david darst at morgan stanley wealth management, he's going to do an imitation of me imitating hill with his five investment themes. will you do that? >> david, give it to me now,
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david, five, four, three, two, one. give it to me now. >> don't you have five? >> that's you. >> don't you have five? >> i do. >> what is it? five reasons -- >> five transitions that need to take place this year. >> for what? >> for the financial markets. >> to do what? >> for them to continue. >> let's go. number one. don't conflate. do it one through five. >> number one, the united states needs to be able to wean itself off of the quantitative easing and go to forward guidance is the main prop to the market. >> that looks good so far. >> japan needs to switch from deflation to inflation. the most shocking number of our economists, joe, we have .3% for the total of the year in japan for this year. next year, 2.4%. if that happens, that's a big victory for the people at the bank of japan. >> this is what your economists are predicting? >> that's right. robert feldman in tokyo. >> okay. >> number three, europe needs to
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transition from a fragmented financial system into a credible banking union. and part one is a unified bank supervisor, which the germans have signed off for. it'll be 130 banks. 6,000 banks will still be regulated locally within each country. number four, okay, you need china to switch from leverage driven growth to reform driven growth. china five years ago china's total credit market debt was 9 trillion. tod today it's 23 trillion. every year, every two years china grows another india. china grows a trillion a year, india is 2 trillion. >> well, when we grow, we almost grow -- >> we grow 4% times 16 is 640 billion. okay. 17, we grow almost a new india every two years. >> all right. >> and the last one is the emerging markets need to transition from the traditional
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export driven and foreign investment driven to a new model. that focuses on internal markets and -- >> they need to -- >> and reform. >> all this needs to happen in 2014? >> for each one of those areas, for japan to do well, that's got to happen. for the u.s. to do well, that's got to happen. and for china and the emerging markets, that's got to happen. >> also, the emerging markets also need to deal with the taper, as well. one of the things, the problems in turkey, they mentioned all these internal things and also the country had to deal with the taper. are you kidding me? >> it was expected to be one of the hardest hit -- >> the 10 billion bernanke cut off a couple of weeks ago, that's part of the turbulence in turkey. >> it's down 21% this year. it's one of the fragiles. south africa's down 24, brazil's down 17, against the dollar. it's been very, very -- another
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factor that's caused this upset in turkey. no question about it. >> yeah. >> i think that's one you've got to keep on your radar screen geopolitically is the situation in the ukraine, the situation in turkey and thailand. that's different than syria, lebanon -- >> do you have other things you have five of that we can do? i know you do. do you -- >> yes, i do. >> get them ready, i want you to go through it the same way. one, two three. >> my favorite is doing you imitating doing me. >> he knows. >> it's very clear -- >> this is the power point. >> he gives us stuff. give it to your sales force, too, at morgan -- >> oh, yes. >> because i couldn't be there this morning, monday morning as usual, i taped it on friday and hoped nothing crazy went on during the weekend. >> see, it's good to give a sales force things you can easily understand and easily tell your clients, and that's what he does.
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>> all right. coming up next, the new year in technology, which companies will lead the way in 2014? and we've been debating this this morning. are you a good tipper? there are changes coming up in the new year. that's next. check out the price of gold hovering just at $1,200. "squawk box" coming right back.
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shares of cooper tire today. a deal it struck, cooper says it became clear that the deal will not be consummated by apollo and financing apparently no longer available. apollo agreed to pay $35 per share for cooper but subsequently demanded the price be cut because of union demands. restaurants may stop adding automatic tips for larger parties because of a new i.r.s. rule that will require such tips to be classified as taxable wages. that means the servers won't be able to take the tips directly home with them. and payroll taxes for restaurants that keep such tips in place may increase. early indications are that many restaurants will simply drop the practice of adding those automatic tips for large parties. darden, which, of course, is the parent of red lobster has already dropped the practice in some market. you know, it's interesting because we've all gone to a group dinner where you have 10 or 20 people.
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and you automatically have to pay 20%. you don't get your own discretion over the tip. but then again, in a lot of these markets, restaurant servers and people in the hospitality industry don't make even minimum wage federally because there's, you know, the adding of their tips built in. >> well, if it's part of payroll, you figure it's weird that it wasn't subject to payroll taxes, wasn't it? if you know it's going to be -- it's almost the price of the meal. it's not a tip anymore. >> i don't believe that this is going to result in restaurants hiring fewer people, though. as more people start going out to eat and the business gets better. >> the issue, i think, is that the cost of compliance becomes much higher because you have this variable cost that's going to keep changing. >> you don't take the tips directly home, but aren't they supposed to declare the tips anyway? >> they are. cash and credit cards, of course. >> but nobody does. >> but i don't believe they put it in the wages category.
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anyway, we've got a lot more to talk about. it was quite a year from the tech sector. what can we expect in 2014? or could investors be let in for a little bit of a letdown next on "squawk box" as we head to a break. check out the performance in the nasdaq. welcome back. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.
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welcome back to "squawk box." it's time to talk tech. joining us to talk about what was hot in 2013 and which stocks are poised to benefit in the new year. thank you for coming in this morning. >> i have one question before we even get to any of this, which is we've been talking around the table this morning about tim cook's compensation. i don't know if you saw the new number, $4.25 million. does that make sense to you as an analyst? do you have views on compensation? >> it's a question well above my pay grade as they say. apple is a tech stock, and at the end of the day, the only thing people care about whether he's compensated 40 million, $4.2 million, is whether the company is growing.
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and in 2012, apple's earnings grew 60% year-over-year. that's a tiny little company, right? >> but in 2013, earnings declined 7%. so you're in a car going 60 miles an hour, all of a sudden going reverse seven, and that is why, nothing else mattered really for tech stocks and that's why apple stock went from 700 to 400. but as we're seeing signs of life and the company seeing growth again coming back, i think this quarter might be the first time they've had positive year-over-year earnings in five quarters. that is -- that kind of reacceleration is very positive for stocks. so, actually, apple is probably among certainly the large cap tech companies in our world. probably the best positioned in 2014 because really just for that simple fact. going from negative 7% we think probably positive 10%, maybe 15%. >> other big story of the year was twitter. it was worth $40 billion on thursday and came down, what, $5
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billion on friday? is that the number? >> yeah. >> where does this thing stand for you next year? >> whether we're in a hash tag bubble or not, twitter definitely is. twitter decoupled from fundamentals the moment they priced the shares. it is even after friday's rise, trading at 860 times current year's ebitda, facebook is 30 times. this is not p/e ratio, this is ebitda, google at 15 times ebitda. so there is no growth rate that twitter can post. and by the way, the consensus estimates are far too low. and they've set it up very nicely. it was the anti-ipo which played better than the hype ipo. it was very well played. >> i'm looking at the "new york times" in front of the business day section today and there's a story about a high school junior in scarsdale, reminiscent of a
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young andrew sorkin, doubled his money and if you doubted the twitter was in bubble territory before, i think this story probably firmly plants it there. but the underwriters say it won't be profitable until 2015. what happens to twitter stock between now and then? >> this is when you have bubbles, is when the valuation of a company decouples from fundamentals. and you have sentiment driving stock. what you have is a stock that has 8% of its total shares outstanding available to trade. so really the stock itself is a very limited resource that people want. and so it has nothing to do with how well the company's doing. >> what is the morgan stanley view on twitter? and by the way, you guys were not -- you did not underwrite twitter. >> we would not involve -- no. our view on twitter right now is the entire sector, okay, this is
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not twitter specific. the entire sector is showing certain of these characteristics of the old 1999 where you're trading in multiples of sales. i saw over the weekend 200 times sales for revenues for this company. so to me, it's disconnected from any reality. on that topic, can you give us your thoughts on apple's introduction in china, with the china mobile. what are we supposed to make of this? >> before we go back to am, i'm actually relatively bearish on tech and media going into 2014. the top tech stocks in hardware, software in the internet. and those stocks, about 12 of them up 43% this year. but their earnings growth is only up 6% because you have a 36% rise in multiples. so you take facebook, they went from 51 times current year to
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71. google went from 18 to 26 times. the rise in the stocks came from multiple expansion. unless you have growth back filling that in 2014, i think you're going to see a lot of these stocks fade. >> daniel, thank you for coming in. sounds like we should sell this stuff. but we'll see in the new year. appreciate it. >> thanks. coming up, politics for 2014. what's ahead for capitol hill in the new year. and cnbc's million dollar home series is going supersized. we're upping the ante from $1 million to $25 million homes. "squawk box" coming right back. just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too.
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the weekend may have a significant impact on the watch industry. the fire destroyed one workshop and damaged another at a factory that's operated by swatch. that makes watch mechanisms. now swatch makes those mechanisms for nearly every watch maker in the world. the company plans to full assess the impact later on today. the latest hobt movie topped the weekend box office for the third straight week. disney's "frozen" was second at $28.8 million. the budget crisis, government shutdown and the rollout of obamacare dominated the headlines in 2013. what will be the political landscape look like in 2014? joe watkins, a republican strategist and former aide to president george h.w. bush. and howard dean is the former chairman of the democratic national committee, and the pinnacle of his career a cnbc contributor. governor dean, i don't know, you're on -- you go on some
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other networks and the slightest thing you say becomes almost gospel. you were bashing obamacare, you said it's going to get worse? what happened? why did you say that? what did you mean? >> well, it was actually fox. so it wasn't exactly accurate. it was a sunday show. >> by definition he's saying. >> yeah. that's right. no, look, i think there are going to be some more bumps. and i do think ultimately this is going to get better, not worse. we're now in the phase where the website is reasonably in good shape. they need more work, but it's getting there. and now we've got to deal with the back end insurance problem. and the confusion that happens when people switch insurance programs, all of which, of course, is going to get blamed on obamacare, which is not accurate. we're not out of the woods. and i think by march we will be and people have have more insurance. >> for people who love medicare advantage, you saw the news over the weekend. your party has tried, basically, to put that whole sector out of
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business. and now, you're blaming it on the insurance companies themselves, not on obamacare. that's not because of obamacare that medicare advantage is no longer probably going to be that feasible? >> well, no, the problem is when you switch systems, it's always rough. i'm not blaming the insurance industry. >> how they deliberately earmarked the medicare advantage for something that, i don't know, was it the plans were not government run or there were two private sector oriented that was earmarked to try to get rid of it in this law? >> i don't view obamacare that way, i think it was a plan written mostly by the insurance company for the insurance industries. >> not for medicare advantage. >> well, their insurance companies, united healthcare that run those programs. this is not an argument about whether the insurance companies are good or bad. this is a how it all works.
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a private insurance scheme. that's what it was. designed in the senate finance committee by others who worked for the insurance industry previously and still do now again. and that's where the decision that congress has made to do it through the private insurance sector. and they have. i'm not blaming the insurance companies. these are the kinds of things that happen. >> you call obamacare, a private insurance scheme? you're talking about obamacare? >> that's correct. >> wow. so you're even left -- you're supposed to -- that would be something watkins would say. >> i'm actually -- i'm actually, joe, i'm actually telling the truth. private insurance are the people who are -- that's right. one of these people -- it's a private insurance scheme. scheme in the british sense, plan. a plan. >> beauty's in the eye of the beholder, of course. i have the highest regard for governor dean, he's a smart guy. and he always -- he does know what he's talking about. i would say this from the
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standpoint of the affordable care act, you've got to consider the fact that politically it's going to be tough sledding for democrats. if republicans have our way in 2014, the affordable care act is going to end up being the gift that keeps on giving. it's a federal mandate, americans are not happy, we're going to continue to see gross dissatisfaction with it across the board. by average working americans who were promised they were able to keep their policies and finding out they're going to have to buy new policies that are more expensive and provide less coverage, less care, higher deductibles, all the things they fear. and it's going to have, i think, a huge backlash. you'll find the republicans will work with democrats on the debt reduction. i mean on the debt limit deal. although, they will -- republicans will exact something from democrats to get that done. but not enough to stop it from happening because republicans don't want anything to get in the way of what the affordable care act could mean for republicans, which is maybe a pick up of four to six house
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seats and maybe as many as 51 seats of the senate for republicans. >> yeah. >> that's how republicans are looking at it. >> howard, you're also expressing concern about -- i guess we know that young people, young healthy people, you're probably not getting enough of them at this point, right? >> it doesn't really matter that much. honestly, the actuarial data, that is going to hurt the democrats because people don't like to be told what to do by the government no matter what party they're in. but the truth is, that wasn't necessary, and the insurance companies like it because it does bring young, healthy people who aren't likely to get sick into the system. but in our experience here, although it's with young people under 18, not with everybody is that, individual mandate is really not that necessary. and the actual data is -- does not lead to the conclusion that you're going to have huge cost
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overruns for the insurance companies. >> howard, in general, the way that the party is sort of -- the wedge issues that we hear are going to be front and center. and, you know, you were from vermont. so a vermont democrat is different than a texas democrat. you've got the only socialist, that's your guy and the governor? >> bernie sanders. >> yeah, i understand it's a different type of place and i'm saying that in the nicest possible way. it's beautiful. >> i can tell you're working hard at that. >> beautiful. i love woodstock. i do, i love vermont, but your politics tend, you know, a little bit out of mainstream. do you like these wedge issues of, we're going to use minimum wage, we're going to use populism, income disparity, we're going to set one group of people against another and make them feel bad. i don't know, sometimes i think you'd even like to bring everybody else if we could meet at $70,000 a year, that would be
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the way to do it. who needs more than that? bring it down, bring it up. >> in defense of vermont, we have all of our children have health insurance in texas. that great republican free enterprise, 22% of children have no insurance. they have the lowest graduation rate in the country in terms of high school graduations. >> they're doing pretty well in texas in terms of wealth creation, aren't they? >> well, if you're not at that 22%, i suppose you are. that's true. so, i think the wedge issues are going to be -- and furthermore, look, i don't think we ought to necessarily set people against each other. but the other side sets people against each other, too. they do it based on sexual orientation and race and gender and things like that. so, you know, that's politics, it's bad politics. >> but it might be bad -- but all of this discussion about
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minimum wage and income disparity may not help us grow. at least, you know, it may be detrimental to help people we're trying to help. >> well, let's get serious about that for a second. i do think the gap between the top and the bottom is serious. not because i'm a left wing socialist. >> but the way to do it -- >> i agree, growing is great and the question is how you can grow. there is a debate between the parties about whether cutting tax rates and stimulating the top is enough -- will work in terms of trickle downs so the bottom will benefit, as well. and that hasn't actually been true under either democratic or republican presidents in the last 20 years. it didn't work under clinton, didn't work under bush and it hasn't worked under obama. >> what's the last word, joe? i'm right, aren't i? >> well, the last word is that this is going to be a very, very interesting year.
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this potentially could be a very strong year for republicans. they have a number of issues to talk about to americans where i think americans will agree with them. and on the issue of the minimum wage, obviously nobody wants to see the rate of employment go back up, the small business owners take a hit. and at the same time, you want to continue to encourage workers at the lowest end to get the most education they can get so they can have a skill to share with the marketplace. so we don't want people just running in there and saying i'm going to grab $15 an hour and i have no skills to offer the marketplace. that doesn't benefit the country going forward. i think these are going to be the debates held. i don't think there's any significant legislation, significant movement on any of the significant policies we talked about in 2013. we'll see a debt ceiling agreement. and we'll see affordable care act front and center. >> all right. good. all right, thank you. i don't know why you go on fox, howard. you said to me once i need to go
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to fox because -- i don't know, why did you say? >> you're too conservative for fox. >> all right. actually. just fiscally. >> it's hard to leave you speechless. >> no, i'm not speechless about that. it's really not true. on social issues it's not true at all. i think it's the ultimate big government versus small government. private enterprise versus -- it's earn success versus learned helplessness. >> you wear it on your sleeve. the latest on two deadly bombings in russia. we'll get a live report from moscow coming up next. stamps.com is the best.
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dad for the win. mm! mm! mm! ♪ honestly, i want to see you be brave ♪ a violent weekend in russia, the second suicide bombing attack in two days left dozens dead and injured in russia. jim? >> reporter: hi, good morning. well, the latest is that investigators in volgograd said this morning's bus bombing was carried out by a male suicide bomber. no one has claimed responsibility for today's or sunday's attacks, which according to our latest figures have killed at least 30 and
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wounded more than 60. but the strong suspicion, of course, is that this was the work of islamist insurgents from that very rest of north area. people going to work this morning when the bomb struck. and now the whole city of 1 million is terrified. there are reports that residents are afraid to go outside, to go about their daily lives. police are calling these latest attacks acts of terror. they're connecting them to each other and both of them to the public appeal by the war lord, an appeal to his men to kill civilians and disrupt the upcoming sochi winter olympics. the event, of course, that vladimir putin has staked his reputation on. back to you. >> thank you, jim, for that report. appreciate it. we'll see you very soon. and coming up on "squawk box," the super sized version of the million dollar home series.
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we'll also reveal the home with the biggest bang for your buck. my 2014 wish, is that investment in the united states picks up. in the private sector and the public sector whether it's infrastructure or investment in technology, it's investment that is lacking. we basically as an economy -- we don't save enough of our seed corn. don't save enough nuts in the wintertime. we need to invest money in order to grow on a long-term basis.
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cnbc's popular "million dollar home" competition is back all day today. but this time with a tiny twist. we raise the stakes and now showing you properties with a list price of at least $25 million. we've got six of these mega homes in different markets across the country. and here's how it works. two mansions go head to head and only one moves forward. but to make it more interesting, we don't tell you the location or the exact price. we'll reveal that after we get a look. in our first round here on "squawk box," we have island time going up against peak pleasure. take a look. >> luxury and privacy await on this island minutes from the neon glamor of a major city. this trilevel beach front mansion has ten bedrooms, ten bathrooms and more than 21,000
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square feet of living space including the chef's kitchen. located on more than 1.5 acres, this water front mega home includes an elevator, infinity pool and movie theater. >> live the ultimate mountain lifestyle. this ranch is set on 876 acres nestled in the rocky mountains. 18,000 square feet craftsman style mega home with seven bedrooms, six full baths and a true chef's kitchen complete with a custom stove valued at more than $250,000. with stunning views from every room, this feels more like a private resort, hike the 15 plus miles of trails, relax at your own private beach or enjoy the movie theater or indoor/outdoor pool. >> wow. joining us now to reveal where these mega homes are located and which is the better bang for
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your buck, we have the one and only real estate broker to the super rich. okay, i'm going to take a guess here. the first one, because there was a line that said it was close to the neon lights of a big city, i'm going to go with star island, miami. >> close. very good. what do you say? >> i say alan creek, miami. >> any other guesses? >> boca or something, i don't know, it's an island. we'll go with florida. >> and peak pleasure, should we say aspen? >> well, you're right on both counts. the first is coral gables, florida, close. and the second one is the rocky mountains right near aspen. both homes are amazing. okay, the rocky mountain is one of the most beautiful settings i've ever seen. 876 pristine acres, of course if you need that. >> and a $250,000 stove. >> exactly.
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exactly. of course for all of us who cook. and the coral gables home is equally beautiful. but almost a third of the price. we're talking about $25 million versus 65 million. >> more value in florida? >> more value in florida. and 25 million's getting to be a normal number in florida. they have quite a few sales between 20 and 45 where in aspen, we couldn't find any sales above 49 which was 2012 and 2013 only had one sale of 44 and one of 41. otherwise nothing in the 40s. it's going to be a tough go to get $65 million for that house. so i say all day long, island time. >> what is peak pleasure ultimately get? what do you think it goes for? >> it has to find that one person to come and buy it. and then it could get, i think, in the 40s, but i think 65's a really tough go. >> if he's watching, i bet his ears perked up. >> here's a different question. because you go to people and say
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to them, look, i want to sell your house for you and you have to give them a price. what agent suckered these people into believing their house was worth 65 -- what percentage of people come to you and say i want this price and you try to talk them down and they won't do it. then they say, oh, of course, we've got to -- i'm going to do business with you. >> it goes both ways. sometimes it's a seller who says, you know what, i know this house. i know what that sold for and i know what that sold for. i'm looking for that one needle in a haystack billionaire. my house has it all and you're not talking them down off that ledge. they're absolutely staying there. and only the market tells them when the market speaks through all the showings, that's not happening. >> you're saying the owners basically setting the price tag here and not backing down from that? >> i don't know that for a fact. i'm saying it's often the owner, i don't know in this particular situation. but it's often the owner feeling uuber confident about the market. >> there are situations -- so i have a friend trying to sell
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place right now. and they went with the broker who said, we can sell it for this price. and by the way, they're currently not getting this price. another broker said that's not a realistic price. how do you deal with that? >> well, as a broker, i try to give a realistic price. >> but as a customer. when three brokers come to you and give you three different prices. >> i would make them prove it to me. prove to me why this will sell for this price, right? it's a question of numbers. show me this is realistic and i will go with you. show me what you're going to do to get me there. >> so 25 million versus 65 million. safe to say the winner is? >> the winner is -- >> island time? >> yeah. island times. it's something where it's realistic between 20 and 50, you're going to be able to sell a property in miami more likely than a 65 in aspen. >> i like between 20 and 50 is what we're calling realistic. >> yeah.
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>> this is your business not ours. >> mega homes today. >> how do you bring it down to apples to apples? price per square foot, what do you look at? and what are the taxes on each of these properties? >> taxes in miami are based on the sales price, but taxes in florida are 2.25% more or less if it's water front of the sale price of the property. and aspen is about half that. so they're very different. but, of course, florida has no tax. now income tax. that makes that different. there's all kinds of things that go into the mix. in terms of price per square foot, they're both 1,000 square feet. we're not talking about huge differences. what could that be? a rec room? >> all right. so it's settled, dolly, island time wins round one. let us know if you agree. tweet using #milliondollarhomes. dolly will be back later on
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"squawk on the street" for the next round. and later, she'll crown the top home. thanks for being with us on that this morning. >> thank you. and coming up, predictions for 2014. what to expect in the markets and health care sector when we return. [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection. 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. that your mouth is under attack,
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predictions for the new year. >> for $20, i can tell you a lot of things, for $30, i can tell you more. >> we'll tell you what to expect from the markets and health care sector in 2014. violence in russia. a second deadly bombing attack in the last two days raises security questions about the winter olympics. we'll bring you the latest from russia. and a pay hike is set to kick in on january 1st. what will it mean for jobs and the economy. 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 andrew ross sorkin. becky quick's off today.
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our guest host david darst. more from david in a minute. but first, today's top stories. kayla? >> in our headlines today, at least 14 people were killed by a trolley bomb blast in the russian city of volgograd this morning. and on sunday, at least 17 died in another bomb blast at a railway station. the bombings are raising fears about security at the winter olympics scheduled to begin in sochi in less than six weeks. volgograd is 400 miles northeast of sochi a car bombing on friday was closer in proximity, about 170 miles from the olympic venues. more on that story at 8:30 a.m. eastern. in corporate news, meanwhile, apple is urging shareholders to vote against carl icahn's stock buyback proposal. the company has said it has already demonstrated the commitment to returning cash to shareholders, setting dividend hikes and an increase in the buyback program to $100 billion
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in 2013. icahn's proposal asks apple to repurchase about $50 billion of shares by september of next year. the company's annual shareholder meeting is currently scheduled for february 28th. that proxy came out after market hours on friday. and in it, apple also released details of tim cook's pay. the ceo took home $4.25 million. gave up 7,100 shares. that was based on apple stock performance from apple 2013. would have been worth about $4 million. andrew? >> what did we say? 2011 income was $377 million. was this salary or total comp? >> total comp. >> well, salary was the $4.25 million, but still has some restricted stock units that will vest this year worth far greater. >> right. >> but it's the 4 million he gave up. >> got it.
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we'll be looking at that. a takeover deal it struck with apollo tires. cooper says it became clear the deal will not be consummated by apol apollo. apollo agreed earlier this year to pay $35 a share for cooper, but subsequently demanded the price be cut because of union demands. let's take a quick check on the market to see how things will set up through the day. it has been sort of wild how up this market has been on what seemingly has been probably low volumes since nobody's around. nasdaq up about 2.75 and the s&p 500 up almost three points. >> stocks strong gains in 2013, not everyone is optimistic, though, about the prospects of the new year. and we've had peter on before, chief market analyst at the lindsey group and a cnbc contributor and david darst is
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chief investment strategist at morgan stanley investment. you were on a few weeks ago? >> yeah. >> moving totally against you again. >> yeah. i miscalculated the multiplier effect of the increase in the fed's balance sheet. they printed about a trillion. >> just in the last three weeks. >> well, it's december. anything's possible in december. i thought the market would respond negatively to -- well, 2013 was qe and 2014's going to be qe. qe on the upside in 2013. and according to the fed's plan, a reduction in qe. we saw 50% correction after qe 1 ended and same thing after qe-2 ended. and i don't think it'll be any different when qe-3 and qe-4 ends by year end. >> all right. surprising, we were right around 16,000. will you ever convert back to, wow, maybe i miscalculated on
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the positive effects of qe on the underlying market? >> qe has incredible temporary impacts on markets and i acknowledge that. when the fed started -- >> how long is temporary, then? >> well, as long as it's going. >> a day of reckoning is coming then? >> i guarantee this will not end well. >> in terms of the stock market? >> yes. >> now, does it get back to -- if it goes 10% and it comes down 10%, we're back to where you're already saying it's not going to end well. >> well, i'm not saying -- i'm not calling for a bear market, but we're going to be in our sixth year in a bull market and if the fed is going to end qe, i can't account for the possibility of the bear market. why aren't you calling for a bear market then? >> i would say maybe we get the beginnings of one. i'm calling for a 15% pullback, taking out a little bit of the qe fluff.
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if the fed wants to end qe in 2014, we have to look at the two previous qes and see the market response after they completed it. >> peter, they've got to great lengths to distinguish between tapering and tightening. and this whole forward guidance language well passed 6.5% unemployment. what part does the role of zero interest rate policy play in this whole thing? >> well, to me, the tapering versus tightening is semantics. the bond markets tighten policy. interest rates well above where they were in may. i don't care what the fed says, the question is how methodical that process continues into 2014. the rise in interest rates in 2013 was rather sharp. granted, they're still obviously historically low. but if the fed continues to lose control of the bond market, not only in the long end, but control on the short end because short rates have gone up since they started the tapering in december. i think that's a head wind for
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stocks. again, i'm not a believe that things are fine x the fed. to me, the fed has become the market, unfortunately. and i can't discount their role just as many others are. >> you've got a negative view on the economy. >> no, i still expect maybe 2%, 2.5%. i think that's okay. i'm more worried about earnings. low-quality earnings in 2013 driven by lowered interest expense. that's low-quality type earnings. almost about a third of the earnings increase off the trough in '09 is lowered interest expenses. companies can't pull that lever anymore. i think the earnings will slow more so than the economy. >> your whole vow is predicated on -- and also corporations not going well. that's a forecast you're making while a lot of other people are saying finally the economy's going to show signs of finally
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getting out of the malaise it's been in and corporations will start spending some cash and not sitting on the balance sheet or not letting the balance sheets grow and starting to hire people and expanding. you are in the camp that says that's not going to happen? >> well, i'm worried that the fed is going to stomp that out. the fed brought $1 trillion to the party in 2013 which made everyone ignore a mediocre economy and slow earnings growth. >> did the fed prime the pump to where the economy can stand on its own? >> it indicates that the patient is able to leave the hospital under his or her own power. no longer needs a walker or assistance. and to me, it's a sign that the economy is doing better. the ism numbers, the jobs numbers. the durable goods orders last week, the industrial production numbers, the consumers, retail sales numbers. the cylinders one by one are showing better signs. maybe that lets the fed step back. >> isn't that built into the market?
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that's the biggest issue, right? most people -- by the way, including myself and a lot of people around this table made with the exception of you think what you think. >> housing is another thing that's basically stabilized. it's up 13% year-over-year, the case shiller index. you've got all the things that were dragging down the economy that are starting to lift. and so that's why i think the fed's pulling back is actually a positive sign of health, peter. >> i understand the symbolism, but i don't believe in the free lunch that the fed can cut rates to zero and print a trillion a year and everything's going to be fine. >> when you look at the data and there's a litany of data that will come out this week and next week and you can get lost in it all. but to support your point, what piece of data are you most worried about? >> well, to me it's the fed. the fed has told us they want to end qe by the end of 2014. the stock market didn't respond
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well after qe one ended. same thing with qe-2. and i don't think the fed can immerse themselves to such an extent in the market and somehow walk away calmly and everything's going to be just fine. i don't believe that's going to happen. >> since 2009, let's go back to 666 on the s&p. you were bullish for which years? >> i was a bear in '06/'07, extremely early '06. >> how about 2009? >> valuations and printing money, i reflation trade bullish. i started -- >> and then -- >> into 2013, i was a muted bull. i was expecting 1,500-ish. >> at the beginning? >> this exceeded by far my expectations. i think i was right on the economy in earnings. >> you were at 1,500, now you were at -- it's 340 points so far. if it turns out the fed did orchestrate a better economy that justifies the rise in stock prices, you can never go bullish. >> if magic can happen --
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>> you'll never go -- >> and the fed can pull this off, which i don't think they will. and i'm very confident they won't. >> at this point, you're 340 points behind. >> yeah. so i expect some fluff pullback into the 1,500s again as the fed pulls back. and to me, this is a fed story. >> is it a short-term? we come down and go back up again? >> i want the fed out of the -- >> right. is it a 5% or 10% correction? >> no. >> just a correction and we bounce back? >> it'll be more like 15% plus. and if the fed mucks this up with the exit strategy, the coastlines potentially will be more. >> if we went back to 1,500, that's a much bigger decline. >> it's 15%. 15% is to me not a big deal considering the gains we had in 2013. and, again, if the fed's pulling back, why can't we see a 15% construction just as we did the two previous times qe ended? 1,550 is about 15%. give or take.
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so, again, to me this is a fed story and i don't want to fool myself. >> there are a lot of people with you on it's going to be a messy exit, but we may not -- >> i bet on a messy exit. >> you do or don't? >> we think they can manage the exit. markets have moved up. markets have moved up, peter. the interest rates have moved up, yes, 3%, but it's been gradual. that's the key in japan and in the u.s. japan interest rates began at .79% this year, they're .71%. they've managed to keep them under control. to me, if the markets unleash and get out of control, then all bets are off. >> the best laid plans don't work. >> and it's hard to believe they could be this skillful. >> they're not going to pull this off smoothly. >> all right. well, we've got -- this is a batt batt battle royale. >> you've got 63% employment
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ratio, okay, people up over 60 years. that's an abysmally low 35-year low. so this is not the p/e. the shiller p/e above 25. the only time led to the 1929 crash, 2000 crash and the 2009 crash. those are the things that you should be in here talking about. not with your one-note flute you're playing on the fed. >> i have another conversation about what you talked about. but the fed is what matters right now. >> wow. maybe you should stick around and keep this going. you guys want to get lunch today? >> i love you, peter. coming up, more of our top stories including rescue delays for the research ship stranded in the arctic ice. and we're going to talk to jpmorgan senior medical technology analyst about the impact of obamacare on the health care sector in the new year. ll about a bike accident, just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away.
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welcome back to "squawk box." a couple headlines for you, the administration is reportedly under pressure to name a chief executive to run the federal health insurance marketplace according to reiters, some of the president's closest allies are urging the appointment of a co, especially after the extremely rocky rollout of healthcare.gov. and the ceo would set rules and
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coordinate with insurers and state regulators. white house officials, however, say the idea, they say not being considered. also, new york's next mayor is going to be sworn in on january 1st. get this, by former president bill clinton. de blasio worked in clinton's administration in the department of housing and urban development. clinton will use a bible once owned by president franklin roosevelt. and also hillary clinton will also reportedly attend that. we should also tell you about bad weather delaying the rescue of a russian research ship. several ice breaker ships have been deployed to the area but unable to complete that rescue because of snow showers and poor visibility. the stranded ship was chartered by a team of scientists and has 76 people aboard. apparently so farther all okay. a look at health care in the new year. bertha coombs will give us her predictions. and then we'll speak to mike
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last year. bertha predicted an expansion in medicaid. this was correct. taking part in the medicaid expansion. up next, bertha predicted the health care exchanges would be on time for open enrollment but not without glitches. this is half right. glitches may be an understatement, though, from what we've seen so far. finally, she predicted a device tax reprieve. this one proved wrong. during the government shutdown this was raised as a bargaining chip. 2 for 3 for 2013. let's see what lies ahead for health care in the year ahead. >> reporter: the big obamacare number for 2014 is enrollment. 7 million is the congressional budget offices of how many would buy on the health exchanges. >> i think the obama administration will fall short. perhaps 4 million to 5 million by the end of next march.
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but problems with healthcare.gov's expansions will spill into the new year. the two key issues, will younger, healthy people enroll in large enough numbers? and did insurers price exchange plans correctly? margins could be hurt on new premium plans if newly insured and enrollees use more than expected. if they do, it will continue to fuel hospital gains. >> beyond the affordable care act, the economy will be a big factor for hospitals in 2014. if people feel more comfortable about their jobs and their insurance coverage, hospitals could see their patient volumes increase. >> not just from new patients, but those who have been putting off elective procedures like knee replacements. bertha coombs, cnbc business news. >> and make sure to tune in throughout the day today and tomorrow for more predictions. you can watch them all on the web at predictions.cnbc.com. well, for more on
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expectations for health care in the new year, we're joined by mike weinstein, managing director of health care research at jpmorgan. mike, thanks for being with us. i know you specialize on the med tech space. but you do have expertise in the overall health care sector. insurers will struggle. they won't have priced their plans appropriately and it could be a weak year ahead for them. that's much different than what the insurers saw this year. their stocks were booming, margins were booming. i'm interested in what you think about the insurance space specifically. >> well, i think the questions she raised were the right ones. i think the things we don't know at this point. if we look at what happened in december with the enrollment into the obamacare plan. we don't know what the components of that were. we don't know how many young people went to those plans and we don't know ultimately as she was saying on pricing. until we get a better view of those the plans price out, it's going to be hard to make that call on insurers. and let's talk about the
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short-term here, which is 2014. i think looking beyond that, i think all of this balances out and actually think the prospects are pretty strong. >> for investors in health care, specifically i'm looking at the xlv etf, that beat the market up 30% year-to-date. and the heaviest holdings in that etf are some of the big consumer pharmaceutical giants johnson & johnson, pfizer, merck, et cetera. do you think those gains will start to slow and we'll see some new gainers coming forward in the pack? >> no, it was an excellent year for health care. and if you looked across the landscape, pharmaceutical companies lagged a bit. biotech was exceptionally strong, drug distributors, drugstores, it was a whole group of health care stocks that really helped lead this market in 2013. the question for '14 is less, really, what happens to the major pharma companies who are still coming out of this period of challenge and really now focused on pipeline.
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but what happens to the stocks that had 50%, 60% gains in 2013. that's the biggest call that investors are struggling with going into next year with this revaluation of so many parts of the health care sector, where should they be rotating their money in this coming years? >> they're all across the map. some of them are -- you have, for instance, a heart assistance device, you have a hospital, you have a couple other device companies. where are you finding value? >> i'll give you a couple stocks. the hardest company mentioned is a small cap company, $2 billion market cap. they make a ventricular assist device for patients with end stage heart failure. they've been on the market for four plus years now. they've taken 54% of the european markets since they launched the product, smaller better product, existing product on the market. and they're going to continue to
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gain share over the next several years with the device they have today called the hvac. what makes people excited is the device they have going into humans in the next couple of months called the mvad which is another significant step forward in the technology reducing the size of the implant. and if those are successful, they have another breakthrough product behind it which could define the growth for the next five plus years. >> st. jude, striker and wright medical group. i think our guest host david darst has a quick question. >> johnson & johnson is a third consumer, it's a third conventional pharma and medical devices. what about the medical device part. what's going to be the driver of j & j? it, too, lagged a little bit, the health care index. up in the mid-30s with health care up 38%, 39%. how do you feel about j & j? >> well, the growth won't come from medical devices, unfortunately. it's going to come from the
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pharma business. pharma today is doing exceptionally well at j & j. the pharma business at 2013 will be up 10%, 11%. i think it's going to be up 9% to 10%, which is better than what the street thinks for 2014. they really have a very strong pipeline. they launched a couple very important products in this past 12 months here. so pharma's going to lead the way. and that's historically what's driven the stock. if pharma looks strong, j & j will do well. >> time will tell. we'll have you back to talk about this. but thanks for being with us. >> thank you. coming up more on the deadly bombings in russia, michelle caruso-cabrera will join us with more next. get most of its energ? is it africa? the middle east? canada? or the u.s.? the answer is... the u.s. ♪
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welcome back to "squawk box." let's take a look at a few stocks to watch in today's trading. cal maine foods trading 3 cents above estimates as the company benefitted from acquisitions from slightly higher egg prices. also, take a look at cooper tire, their shares falling after the company terminated the takeover agreement. agreeing to pay $35 per share for cooper back in june but has been subsequently trying to cut
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the price because of issues with cooper's unions. >> this is an interesting story because apollo's based in india. the emerging markets were seeing weakness. but i'm having people on twitter telling me they believe that cooper tire will be bought out by someone else who is in a more financially solid footing. >> i don't remember, but when that auction happened -- there was an auction for it. >> i believe there was. >> the question is why hasn't someone else shown up already? or can they? >> good point. all right. a bomb ripped a trolley bus apart in volgograd, killing at least ten people. it's the city's second deadly attack in two days, less than two weeks before the winter olympics in sochi where michelle caruso-cabrera joins us now. i hear it's a lot of security in sochi. >> in fact, the head of sochi said they're not increasing security, it's so maxed out already.
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let's give the update. gave a lot of it there. we are particularly interested in it and we've seen bombings in russia in the past, but we know olympics are six weeks away in sochi. think roughly boston to washington, d.c., san francisco to l.a., roughly, that's the kind of distance. certainly drivable, i guess, is one way to think about it. 14 dead today, 28 hospitalized, more than 30 dead in two days. putin has ordered tightened security. and as i said, the head of the sochi committee said security was already maxed out. we now have a statement coming out from the russian federation saying this was a male suicide bomber, the remains of whom have been collected. they're going to send it for genetic examination. there was an explosive device that was filled with shrapnel similar to the one that happened yesterday. they are suspicious it's the same group of people. and there is a militia leader out in what we call the restive caucuses, that'll be the phrase you'll hear every single
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reporter use which means they are not restive, they are turbulent. that has particularly told his followers to target sochi and the olympics. that's why everyone is worried. now, remember, we are sending hundreds if not thousands of employees. there are many, many companies that use the olympics as a sales thing, right? if you're one of our big buyers, we're going to take you there, et cetera, et cetera. so every time this happens, you can be sure there's fall away from tourism. and this is also a continuing embarrassment to putin who has already seen numerous world leaders say they're not coming because what they consider to be human rights issues. >> do you know the total numbers expected? >> in terms of visitors? >> in terms of other winter olympi olympics. >> i would not be surprised. i think of this in the way i think about the greek olympics which were the first olympics after september 11th. and people were nervous about them because clearly we had entered a whole new world when it comes to terrorism.
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>> but in this case, there was a video basically as you said taking aim at the sochi olympics saying we're aiming to thwart the games and that's got to cause a lot of worry. >> at the same time, you know that putin is a tough individual, right? i mean, what do you think has been done around sochi in the last year and in the caucuses in anticipation of this? i guarantee you, it wasn't pretty. >> u.s. security historically in many country where is the olympics has happened has worked hand in hand with -- >> i would assume yes. >> you would assume yes? that would be interesting. or if not, that would also be very, very interesting. >> remember, this question came up a little bit during the boston bombing of the marathon, right? just how much of a relationship did we have with russian security? and it was -- my reporting suggested inconclusive. others suggested it was questionable and we didn't necessarily trust them. >> and i wonder, you know, given
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the snub -- they're probably not really happy with us right now. >> who? the russians? >> yeah. who's leading our olympic -- >> billy jean king. >> no, but the first lady's not going. napolitano. >> the president hasn't historically gone to the olympics. >> but the highest level personal isn't usually a former -- what was napolitano? >> right. >> it mean, it's kind of a -- it was clear what he was -- >> yes. absolutely. absolutely. >> i wonder if we're working as closely together whether they feel it's kind of a snub from us. >> it has got to be in russia's interest for this to be a very safe olympics, right? i mean, is he going to shoot himself in the foot just -- i can't imagine. >> all right. >> this has got to go off well for him or he is going to be triply embarrassed. and he hates to be embarrassed. >> we've been talking a little bit this morning about turkey,
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their stock market losing more than 10% of the value. a lot of scandal at the top. three members resigning, and he is, among other things, blaming it on the fed's taper. walk us through what's happening in their market and what you think could stem that fallout. >> all right. so you've outlined a lot of the facts. those are good. >> that's usually how i operate. >> and then there's what's going on. and you have a battle between two islamist groups going on in turkey. there is one led by an exiled cleric who lives in pennsylvania, believe it or not, they used to be allies, now they're not. believed the guy in pennsylvania has instigated this, which this drama which started ten days ago with the arrest of 85 people. the sons of cabinet ministers, millions of dollars in boxes found in various apartments, et cetera, et cetera. this is an argument between what is called the deep state in turkey.
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now, you don't have to know the details. do know this, it's bringing on certainly a political crisis in turkey which has led to an economic crisis. capital flight is tremendous. they've just received investment grade status. and now they're at risk of losing it. they're also potentially facing a currency crisis. what i find when i talk with people in turkey right now, you see everything through geopolitical eyes and political eyes. what they don't seem to realize is that a currency crisis can go really bad, really fast and then you lose all control. we see it over and over again. they haven't had a good one in that part of asia in a really long time and i think they forget. the central banks in there with 500 million a day. the key to turkey, can they hold on to that currency? if they don't, they start having massive inflation, it's horrendous, demonstrations in
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the street, et cetera. >> and it's been slipping, as well. >> horrendous. >> throughout this whole process. thank you for keeping us up to speed on those. let's get a check on the markets. rick santelli from the cme group in chicago. do you get a feeling these last two weeks we shouldn't necessarily figure out what's going to happen next year based on it? or is this a good indication of what we're going to see? >> well, i think on one level it's a very poor indication. i think with the taper being small and not really beginning until january. to me, trying to see stocks get as high as possible, see investors somewhat kevlar coated makes sense. i think what i wouldn't draw huge conclusions from either way is some of the movement in interest rates. now, certainly we surpassed by a whisker a three handle on the close on friday. but it really was only by a whisker. if we look at other ten years like the uk, it's a couple basis
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points over 3%. the bund is three basis points below 2%. the fixed income markets most likely will come alive in a potentially different fashion when we get into 2014. depending on exactly how much higher they move, how quickly it occurs, but maybe more importantly is how it affects some of the credit spreads. i enjoyed the article today about how shorter duration junk bonds were more popular. what that tells me is that this great rotation that everybody hopes for and was many investors' christmas wish isn't happening the way they would have suspected. certainly we're seeing some of the duration risk come out of the fixed income market on the ownership of longer maturities. but it isn't necessarily recycling into the equity markets. there's a group of investors who want to keep that money out of the equity markets. so i continue to think you're going to see more of a yield curve change than a sector
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change when it comes to rates. >> david, we don't have all those little stocks with the -- that people -- remember, there's a bounce in the little ones -- >> the january effect. >> are any of the stocks down to take losses on? >> this year, the gold mining stocks are down, the coal stocks are down. they're down 14%. you can find a few groups here and there. >> what's the converse of the january effect when everyone's up. >> well, andrew and i were just talking, the first week, an 85% predictability for the year. >> for the year. >> and if it's down, it's down, if it's up, the year's up. and for the full month of january, it's 76% accuracy predictor. >> right. >> you want to watch very carefully how the stocks do coming out of the gate. >> there was another year where we had a great december going right into it and it fell off a cliff immediately. >> the worst january since 1950 is january of 2009 which we lost
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700,000 jobs, as you know, it was down 9%. that january was down 9%. that was in the midst of the turmoil of t.a.r.p. and all that. the best was january 1987 when it was up 13.5%. >> for january and didn't work out for the year. >> did not work out for the year. >> big crash on october 19th, fell 23% in one day, but it recovered up 14% for the year total. it did fight its way back. >> although, it gained, between january and october, it gained how much. gained a lot because then it gave back -- >> 23 to end up four. it was up 30% or so, joe. >> right. all right. rick, thanks, see you later. minimum wage workers in more than a dozen states will get a raise on january 1st. we'll talk about the impact of minimum wage hikes on jobs and on the economy with christian
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welcome back to "squawk box." in two days, minimum wage workers in more than a dozen states are set to increase their pay. and our next guest argues contrary to some political opinion, higher minimum wage will not hurt u.s. businesses. joining us now is christian weller, senior fellow at the center for american progress and a professor of public policy at the mccormick graduate school at the university of massachusetts in boston. good morning to you.
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>> good morning, thank you very much for having me. >> here's the question. are you okay with the current increase that's being proposed? or are you okay with some workers from walmart and mcdonald's and others who have been calling for the minimum wage to be raised to $15 an hour? >> well, the current proposal from senator harkin has been endorsed by president obama is to raise the minimum wage to $10.10 by 2016. which would bring the minimum wage roughly in inflation adjusted terms to where it was in the late 1960s. that seems at a good sort of bottom line -- there are arguments why the economy could easily sustain a possibly higher minimum wage. for instance, if the minimum wage had increased with productivity gains since the 1960s. we could have a minimum wage of over $18 at this point. so there's room here -- i think the proposal is a good floor, a good starting position to think
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about the minimum wage. >> in your dream scenario, what do you believe is the right number? both for -- >> i don't think there's a right number. i don't think there's a right number. >> why isn't there a right number? why isn't there a right number? why isn't there a right number? how about $50 an hour? it's got to be like a curve, right, you really don't have an idea? >> at some point you're getting too high. but -- >> what's that point? >> realistically, i think the $10.10 is in the cards. that is proposed by the senate. it's also possible, is very popular, has the endorsement from the president. there's other ways of raising wages, improving the standards of many other workers. you've got to remember we're talking about here is a relatively small share of the population that would benefit
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from this. talking about 28 million workers, roughly 15% of the workforce. those are the lowest wage workers. they're earning about 2% of the total. that's an easily absorbed cost, it's anticipated. you can adjust for that with slightly higher prices. >> we have david darst from morgan stanley. i prefer you to say it aloud if you could. >> the manufacturing wage is $2.60 an hour. it's come up from 20 cents an hour 20 years ago. it's 2.60 and mexico's 2.50. they're 10 cents below now, china. how does one -- how does one price minimum wages in a more increasingly globalized market for employees? >> well, that's a silly argument, i'm sorry. we're substantially more productive than china or mexico our workers. we have industrialized economies that pay in substantially higher wages, especially manufacturing
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and u.s. manufacturing and they're still competitive germany, for instance. productivity is the key factor that matters. and what we know from recent research or past research or minimum wage is that higher minimum wages, reduced labor turnover in some key industries can ultimately lead to higher productivity growth. it's over time -- >> the service industry -- >> a lot of the stuff -- let me finish, a lot of the stuff, a lot of the industries we're talking about fast food, health care, and others where a lot of minimum wage workers are working are nontradeables. we're not going to china for our hamburgers. >> well, that was my question. given that we're going to be trying to price control the private sector in some regard, would you ever do it by sector? meaning there are service strees, restaurastree industries where you need these people here. but other businesses may not be tradeable. and how you think about those and do you think about them separately? >> well, a, we have a separate
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minimum wage, for tip workers, especially in restaurants and for agriculture. but we -- i don't think it's different. i mean, like what pays for itself, we pay in manufacturing because it tends to be a sector. >> there's much better ways of doing this if you want to help -- >> well, one of the most effective ways -- >> why are you doing this way? it's a small group of people -- >> and that is not on the table politically. i think you've got to remember the minimum wage is something that's highly popular that has a lot of political support. >> it doesn't help that many people. and doesn't help that much and yet it's going to be what democrats focus on for 2014. why don't you urge them to do pro-growth strategies instead. something with a long-term lasting effect on everybody and might help everyone in the -- why a small group of people where it's not -- >> it's not an either/or, we can do both. >> they're only doing one.
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>> i mean, look, and the end -- it is about giving people a choice, an opportunity to have a real career. but the other thing is also you need to make sure that the people who are in the low-wage labor market can make a living while they're working . . more than a quarter are 40 years or older, who would benefit from this policy, the 10/10 minimum wage. i think that's one thing. >> it is a politically expedient thing to do. another wedge issue that doesn't help long-term. >> the vast majority of americans, even across party lines support a higher minimum wage. it is not a wedge issue. leaders in congress go against it but republican legislatures at the state level have endorsed it and have passed it in the past. this is not a wedge issue. this has incredible bipartisan
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support among voters. it tends to be a few that oppose it. in terms of economic growth and opportunity, it has to be parcel of a larger opportunity. if you want to give people an opportunity to join a union, it has to be part and parcel of a mobility agenda and opportunity agenda. >> i get in trouble quoting "the new york times." they say top democrats see it not only as a wedge issue that they hope will place republican candidates in a difficult position but also a tool with which to enlarge the electorate. i can tell "the new york times" to detract this. >> i may disagree with "the new york times" on this. i am not a political scientist and i don't think they are either. it has enormous bipartisan support across the island.
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>> thank you for joining us. happy new year. >> thank you very much for having me. >> i should have known better than to quote "the new york times." >> you tell me this is what i should do. the guy tells me i'm totally wrong. >> where is the ombudsman person. they detract something. >> will you tell them it is not a wedge issue for me. >> he with cwe can have him wri. fifteen minutes could save you fifteen percent or more on car insurance. everybody knows that parker. well, did you know auctioneers
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welcome back to "squawk box." let's take a look at the future. the dow would open about 25 points to the up side, the s&p, 2 points, the nasdaq by half of one point. the latest top movie topped the weekend box office for the thirs straight weekend ""the hobbit":the desolation of smog" took in $29.9 million. 28.8 for "frozen," american hustle was third and the wolf of wall street and the secret life of walter mitti. coming up, investment themes for the new year. adam shift weighs in on the amazon delivery drone controversy. stick around for that.
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the market with stocks. they have been selling the bonds or taking cash and putting it into stocks. our five themes for this year are, number one, to overweight europe and overweight japan. >> that one or two? >> that's one. >> why don't you make it six. number two is to be equal weight in the u.s. with a focus on health care, technology and materials. >> number three. >> number three is be underweight in emerging markets with the exception of mexico where you have that reform momentum going on. number four, joe -- >> so equal weight, mexico. >> you can be overweight in mexico. >> number four, is in the bond area, you want to basically be underweight tips, not yet time to buy inflation-protected securities, underweight emerging market debt and underweight corporate, treasury and municipal bonds of 7-15 years and over. last thing, overweight junk
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bonds and short duration bonds. >> just like they said? >> that's correct. >> david? >> happy new year. >> you packed that all in. >> ten more things to say. any resolutions? >> my new year's resolution is to spend more time with my kids and grandkids and follow your lead, you and andrew. >> thank you, david. >> we have to run. make sure you join us tomorrow, "squawk on the street" begins next. thank you. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with simon hox and david faber. cramer is off today. down to the final two trading sessions of the year. after a 4% move higher, futures are essentially flat, gaping a little momentum here at around 9:00 a.m. eastern. the ten-year note is just a touch below 3%. a lot of data coming in this week, including
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