depends on which magazine you read. >> no kidding. >> capricorn. >> i get to choose my own adventure. >> i'm going never going to remember this. just like this happened today. so, you're coming up, oh, it's going to be big. >> that does it for us today. happy birthday. >> thank you, thank you, thank you. >> right now, time for "squawk on the street." good monday morning on this first full trading week of 2014. jim cramer, david faber at the new york stock exchange. futures are higher on this very cold and big week for news. a possible janet yellin confirmation, fed minutes later in the week. ten-year yield still in that range. still some auctions of ten, threes and 30s and asian markets started their year with some

losses, but some encouraging pmis in europe, especially in spain. our map begins with twitter. being slapped with a big downgrade. >> sirius xm moving the other way. liberty offering to make the service a wholly owned s subsidia subsidiary. >> apple reportedly snapping up snappy labs. apple is close to breaking below its 50-day moving average. >> and to buy jose banks, 57.50 a share. >> twitter downgrade. by morgan stanley to underweight from equal. citing growinging competition from facebook and google. the call comes two months to the day that twitter priceded its ipo at $26 a share right here.

the stock is now at 140%. this is scott, the analyst at morgan stanley. well-known. helped take facebook public and now feels they have the advantage in this race. >> i think facebook, robert pack, sun trust, who was the first guy to say listen, twitter could be amazing. i criticized him, saying is he trying to get the jump? he was. he really pushes facebook today. he downgraded twitter before. i think people are struggling with how to value twitter. given the fact that i said something on friday, i never thought it was going to be continroversial controversial. i said twitter's much more expensive than facebook. how? by every metric. >> why would that be controversial? >> when people love a stock, they love a stock. i wasn't going to play solar city.

twitter says -- we're not going to let 1999, 2000, we're not going to be pushing stocks. facebook does have value and an article in the "wall street journal," hey, guys, we're a public company. let's get serious. don't mean to take away from your serious scoop, facebook is so much cheaper than that story in twitter. >> encapsulated that moment where he really transitioned. suddenly, they said mobile is is not only important, but they're going to figure it out. >> so rarely do you have executives saying listen, we were caught totally unawares. you see it in football. look, we just did not anticipate the pass. in this, we do not anticipate emotional, but we're going to win and then they win? that team at facebook is very

undervalued still. >> couple of other interesting calls embedded. google, price target goes to 11.72 from 10.75. calls youtube the most underappreciated asset of that company. >> this is the largest. ubs says the target is $1300. there's so much leverage here. so many things that google is doing. every time you turn around, google has evolved in something they haven't even started monotizing yet. i think that company has the most irons in the fire of any company i looked at right now. around the world. >> all right, we'll see. i think their target, ms is the target on twitter is at 33. you'd have to see some blood letting to get back to those levels. >> 14 times revenues. 84 times ebita. >> if you get on board here and start rationalizing, i remember

during 2000, you'd say, at this point, in 2010 numbers, the stock's cheap. i'm not seeing that rationalization for twitter. i applaud the analysts for being able to say this one, we can't figure out. wall street typically tries to figure out, if they can't, they come up with a rationale. >> doesn't mean the stock won't continue to go higher. >> got a soft float, got a lot of very sided investors. >> i find that twitter is thought of what look at all the things that could happen. first facebook that's happening. this is like amazon. amazon ever said you know what? we are doing so well we could offer dividend. the stock would be cut in half. you want to growth to be in the -- twitter does have unbridled growth, but we can't value it. >> finally, it does come on the heels of a lot of downgrades. cell gene. met life, going into the new

year with discipline? >> i've gone through the cell celgene downgrade. i wish they would have chosen the keystone name to not been celgene. there's a lawsuit involved. they're saying when it launches, it isn't that good. i think that the street is still fighting the upside. they just don't want it to happen. boeing has a contract announced this week. it was breathtaking. this was a monumental move. they just don't want to get behind this market and i think that's a shame because they could be very helpful in the stocks that could be undervalued. at least they're going after the stocks that are overvalued. >> let's talk about a stock that comes up on your show. >> number one.

it is going to be up nicely this morning. liberty media lake late friday made an offer to make the service a wholly owned subsidiary. the deal as offered i is .7 -- .076 of a liberty c share. now, these don't yet exist. they're going to change them for the as and bs, then issue as well that ratio of said c shares to sirius holders. you would end up with holders owning 39% of liberty media, which would be the 100% ownership and also, the stake in

charter and the live nations. but not quite a pure play. the argument being made, we're giving you a liquid security, a slight premium. of course, they control the company, but it will require a special committee to negotiate on behalf of this minority holders annual vote of the majority of the minority. to approve it. best guess is they go up a bit here in terms of what they're willing to offer on that rh owe, bump it a bitten, and then get the deal done and it will enhance their balance sheet to the ability to be able to borrow more or free for a run at time warner cable. >> if you own sirius, then you are going to own this new security. if you buy here, how do you know you're not overpaying? >> well, you're making a decision on not just the largely the prospects of sirius and to some extent, there are some other assets. shareholders say we've got a pretty liquid security to begin with, but liberty's argument,

100% ownership. even better perhaps or more than we are right now. they already run the management. there are a number of arguments they're going to make as to why it's your benefit, but you're right. you may be want to be careful here. it's running up in part above the price implied by where liberty's stock isctatioexpecta. >> now, the lmca that we're showing on our screen, what is the relationship between that and the potential new stuff? >> .076 of new share, which is just that, thep you get 2-1. they'll do a, essentially a stock -- >> okay, the two most popular. thank you for mentioning. i think that taking advantage of

the last quarter perceived to be weaker. saying listen, this acquisition, this is brilliant. i'm just going to tell you. this is approved. >> yes, it did. you like the management of this team. you like greg buffet, historically. i don't mean to put you on the spot. >> extraordinarily in depth when it comes to financial maneuvers, no doubt about it. and strategically. many believe they have a very strong and well -- what i think is is interesting here, jim, on the conference call, we'll talk more about this shortly, they said they're fully behind the strategy and they're not afraid of their competition and they are happy to get in their ownership stake because they believe and if any thought it would go the other way, which it

would be spun. >> pandora's going to get a 6% pop as well. wonder what that says about the radio market as much as liberty's own maneuvers. >> there's a renaissance here. we see a lot. so, renaissance in cable, tv. lots of areas of the market were written off going into the last six months of last year. the insurance stocks. doing a lot of chart work and seeing holy, cow, there were areas where people just said, this business is dead and i'm alive. i happen to think by the way that sirius is a great monopoly. >> i will throw one idea out at you, which is once they consolidate this, if that occurs, which is likely, nothing says that liberty won't try to buy. >> oh, man. >> right? >> oh, man. >> that's got to be something to

think about. >> you boy,s, you know the spot fi pandora universe. these are loved. >> you're talk iing about cult status as a user. once you're in that ecosystem,al la apple, it's very hard to get divorced. >> i was with with someone this weekend, is this coleman hawkins in jazz. no, it's whatever spotify is playing for jazz. my kids, i asked them, please buy me all mozart. >> so true. it's goin to be a fun space to watch. when we come back, men's warehouse, man, this story goes on and on. should you like the way it looks? and speaking of m&a, stay tuned for an exclusive interview with liberty's cfo. take one more look at futures as we kick off a busy week. jobs number on friday. yellin possibly confirmed today.

more sidewalk on the street from post nine in a moment.

and they eventually went away with the promise of getting higher. next thing we know, we get the pack man defense. men's warehouse is the bigger of the two in every way. it can also borrow more and has moved ahead to an offer of 57.50 and going after two board members. the window on those nominations is open. i think until january 17th.

two are more important. the two that are up,57.50, want to sell, that remains up to a question. it's not an insignificant multiple, jim, but there are those who say it could be higher. clearly, neither one of them wants to be the seller. both want to be buyer. >> you look at the hurst deal. in that deal, look at this fire. what happens is the acquirers keep winning. this would be a fabulous deal for men's warehouse because they would own this category of discount men's apparel and that, if they own it, that's a win. men's warehouse goes higher. >> today's not a win for cnbc.

did you see how many jos a. banks -- men's warehouse has their entire board of directors up. to want to come back with its own tinder offer, although financing for banks is more in question. the it's the smaller of the two questions. it had come in partnership, but raising the money for a tinder offer would be more tenuous, but the entire board of men's warehouse comes up not a staggered board, so just something to keep in mind. >> you are going to like the way you make money if you own men's warehouse. >> we do have ge buying a unit from thermo. a little spectrum for sale. i wonder if we're going to see the coffers open up a little bit. >> of course, monday. remember what we used to talk about. you come in, the bankers would be working. what did we call it? merger monday. maybe something's changed here, david. maybe we no longer shrink to

grow. maybe we grow to grow. >> we'll see. it does have a feeling that this year, i don't even want to go down that road. >> but ml has been the ceo, saying we do this charitable trust thing. gm said, don't you listen, the man is saying the company is being recon figured. you think that's a reason to not be in it? that's a reason to be in it. yield is 3.2%. this is not a bad piece of paper to own if you think the pmi ur ozone number which came out this morning is going to be good. ge is going to be related to energy and health care. >> well -- used to own our company and some of us be compensated to a certain extent, which didn't work out that well. >> people don't care about how we're compensated. >> no, they don't. they don't even care to have us

compensated. >> how do you get those two for one suits? my suit, it's like i got to mortgage my house to buy a suit. i had a -- from "meet the press." i got to tell you, i could live in it. it felt like butter. >> jim loves his clothes. >> i do. i love clothes. i love clothes. >> real quickly, i think i confused people on the liberty sir yous. take a third of liberty. you're going to be tripling the amount of shares, so that ratio, .076 is off of a third. so take the stock price, cut it by a third, then apply said ratio. get to what it's worth. >> an sat question. i got to go get my tutor. >> i apologize if i confused people. i'm sure that cleared that up. >> i'm going to defer you.

>> when we come back, making money on the first monday of the new year. get ready for cramer's mad dash as we count down to the opening bell. take one more lock at futures. the dow has not had two days down consecutively since december 11th and 12th. more in just a moment. hi, i'm terry and i have diabetic nerve pain.

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don't drive or use machinery until you know how lyrica affects you. those who have had a drug or alcohol problem may be more likely to misuse lyrica. ask your doctor about lyrica today. it's specific treatment for diabetic nerve pain. to hear more of terry's story, visit lyrica.com. about six plus minutes before the opening bell. some research moving stocks this morning. >> elon musks solar setting,

another one, that he owns. goldman sachs goes from whole to conviction buy capitalizing on fast rooftop growth. this is a hard to value stock, but i know that if you want to go to rooftop way and you can get your electric into the grid, this is a remarkable company. i know people who have used and loved it. at the same time, it is hard to figure out what is it is worth, but goldman says it is a terrific economic leverage play. >> don't worry about it. >> don't worry, be happy by solar city. >> conviction buy. >> didn't even go to buy first. >> now, what is the business model here? they've put the things on the roof? >> they finance it. and you know, david, there's a whole generation of people we often forget who just really believe, i put in on my roof. in some state, i can get a rebate. other states, it's so impossible.

you've got to look at state by state, but some give you a credit and a lot of people are going to criticize this, saying this is just another opportunity to capitalize on what the laws are that are pro solar, but boy, i wish the government did this. >> you've got to take a shot, i suppose. let's talk ebay. last year, this stock did not perform well in contrast to amazon, for example. >> been a stock my charity struggled with and basically gave up on. earnings are at risk. now, we often think about this company, paypal, got great growth, but visa and mastercard, particularly visa, because mastercard is going to be split because there's too much excitement. this was one of the winners come out of internet 2.0 and it just has no momentum and a great manager, you've got to be careful with this stock. when they say the numbers are at

risk, i think they mean it. i think it's going to be dangerous. >> morgan stanley again, the one with the downgrade this morning. >> goes back to that level, david. a lot of people have been saying reverse head and shoulders. i only mention this stuff because the charts have been so right from 2013. this is going to disturb the pattern. i think you need to trend or sale ebay based on this particular downgrade. >> all right. meaningful research. >> we're going to be watching it in the post market, which begins less than four minutes from now we'll be talking to greg maffei on his company's offer to buy the rest of sirius satellite. opening bell coming up after this. [ male announcer ] what if a small company

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i think it's up 2% in the premarket. >> what a remarkable 60-point run. some were unhappy with the way that business has been rub. can we please focus on underperformers? this is one of the great perf m performers of the particular era. >> no doubt. not a package delivery company, but again, this is the big theme from 2013. >> i know there will be people out there who say this is phony. it's all because of the fed. you know what? you can go sell a million shares of fedex right here. i don't know what's phony about that. >> gains last year are 50 plus percent. unbelievable run. there's a look at the s&p. nice breath at the hope and at the big board, the national committee on u.s. china relations here for the fifth annual forecast of china's economy forum. a lot of people taking pictures on the floor. at the nasdaq, sprouts, farmers market, celebrating one of the high profile ipos of last year.

>> i was buy the whole foods yesterday in brooklyn. there's a lot of competition in that seg m. i like the guys from sprouts very much. i still say whole foods because of mackie and we are seeing, when i talk about whole foods, i know i'm regarded as being worshipful, but i think that the problem with the idea of being worshipful is people don't understand the power of this thing. okay, the power of the theme is so incredible and let the walter rob, people regard this as the play on health. just like gmo. you go there because of good housekeeping seal of approval. that's why that stock is still buying. people are saying no. go watch what walter robin said on mad money. this stock isn't done. >> and the expansion

accelerating. >> and this cannibalization thing. wrong. this is not the donner party. you like their cook book, didn't you? >> thanks for going there. great. >> we've not touched on apple yet. this purchase of i think it's called snappy app, this app that allows you the take pictures at 20 to 30 frames per second. but the stock, jim, back below the 50-day. >> the chatter is there's something wrong at apple and i can tell you, look, you know what? so sh let it go below the 50 day and then buy it. it's just not an expensive stock. it doesn't have google's momentum. it does have things in the pipe that maybe blow away, but apple's not an expensive stock. it did have a straight line shot from 380. we're almost back to that level

to a ten-year over it. >> yeah, actually, we are. interestingly. we'll see. he greatly diminished going into the, we're aways from the meeting, but going into his proposal now. >> the fear here is so palpable. this is a firm standpoint research. but suddenly, they're on the map because they have -- this. i think tim cook is going to show people stop doubting us. >> really? >> yeah. >> why do you think that? >> because i think that the new products are fabulous. >> what new products? >> tell me. >> i love the phone. >> those aren't new. >> well, they're going to have new it ration coming out in a few months. >> itration. >> where's the new? >> begins today in vegas. lot of coverage about the internet of things. the internet enabled dog collar.

the camera that fits on your wrist. where's apple going to fit in the scheme of all that? >> i think apple is a consumer products company that develops. where's samsung? they were supposed to be the apple killer. they were killinging apple for a while. don't hear much about that lately. and i still think sprint is very close to apple and will be the place you go to buy things. they're going to keep apple front and center. i'm just saying that the stock's not expensive. >> which is something we could have said anytime over the last couple of years. >> true. i found myself defending a stock that i just think when you look at the valuation of twitter versus apple, apple's cheaper than any stock in the dow. how about that? is that right? 30 stocks that are more exp expensive than apple? which one of those would you like there? walmart? like walmart? minimum wage walmart? >> asking me to go walmart versus apple? >> i'm doing that because the age of walmart.

costco. book signing there. >> no. want to talk about sirius and liber liberty. late friday, we got the word from liberty that it had made a propa proposal to buy what it didn't own. a company that it already controls, owning 50% of it. wants to employ a tax free stock swap in which it would buy the rest. let's get more on why now and whether it will happen. joining me on the cnbc news line to discuss is the ceo, greg maffei. thanks for calling in. good morning. why do you dpguys want to do th? >> i think there are a couple of

reasons why this is attractive. simplify the capital structure. puts us on the same page and secondly, allows us to deploy capital across the liberty and sirius businesses, including potentially share purchases. and most intelligent fashion. >> and why now? >> well considering for a long time, ways to utilize the capital of sirius and came upon this as being the most attractive process. >> there's a majority and minority needed in terms of a vote. you've got a special committee you'll be dealing with. there seems to be an expectation, especially given sirius' stock price that you guys are going to have to pay more. is that your expectation as well? >> i think we put a very fair proposal on the table, but obviously, it's the job of that special community and subsequently, a vote of the minority to make a decision and

it would have been unknown people trying to negotiate for better numbers. >> now, why do you believe it's for better numbers? saying i got plenty of liquidity in this stock now. >> well, we think as i said already, it's going to offer them an attractive stock because it has more liquidity. but in addition, the opportunity for the sirius shareholders to participate not only in the sirius growth opportunities, but any other opportunities that liberty has, some of which might be attractive. we think should be b appealing to the sirius shareholders as well. >> well, one of those -- any, does this allow liberty should the deal close to borrow more, balance sheet through borrowing given the increased cash flow

that will be coming? >> i think you're right, david. there's no doubt this gives liberty more flexibility. many people do think you find that attractive. you own 27% of charter. those who have been following this closely know that the window of nominations for time warner's board opens up in the not too distant future. it closes in mid february. can we expect that liberty and charter will make a public proposal at some point to acquire time warner cable? >> i'm not going to subject that's going to happen today. what i've said all along, what john malone and the charter management have said, we believe there's a lot of reasons we think consolidation is attractive. there are other attractive combinations out there, too. >> they're saying it would be at

least 150 to 155 bucks a share. is that -- >> i'd be surprised if there's a buyer out there at that price, but you know, that's what -- >> if it is. you mentioned different things that might be done. we noted pandora's up today. some some would say competition has never been stronger. could go out and buy pandora or spot spotify. is that something you would consider? >> i think the team has done a great job growing the business while many of the streaming ad based services have grown as well and you know, we look all the time at what is the opportunity around a connected car and connecting with our subscribers and other potential listeners in new ways.

i don't need an acquisition, but we need different flexibility to do that in different ways if that's appealing. >> sirius has a large buy back. do we expect that, in other words, that same amount to transfer to liberty shares. you've bought back half the company over the last few years, haven't you? >> since we created the liberty media stock, we've bought back more than half of it, and liberty companies in general have been aggressive with purchasers of stock, so while we're not going to set forth the long-term capital plays, the only share we purchased, that's been one of the tools we've purchased often. >> and finally back to this idea, do you believe there needs to be consolidation? do you continue to believe that's something that that should happen and if so, why? >> look, we made the charter investment because we found the management team appealing an the position they had during the

world territories attractive. the fact they had an nol, the fact they were upgraded to all digital. we don't need ak wii sagss to make it a great investment. that having been said, horizontal consolidation in the cable industry seems very appealing. you're up against national competitors and the opportunity to consolidate, knock out costs, provide more in services because you're able to reinvest more, all of those are. >> reporter: very attractive. >> is there any product offering or offering at all that we could conceive of that would involve satellite radio as well as to the consumer? >> we have lots of ideas. none of them are ready to announce today. >> all right. greg, very much appreciate your willingness to come on. we'll be following your offer closely and whatever develops on time warning cable.

greg maffei. >> sounds like there's conversations to be had later on. didn't knock down essentially the notions you raised, david. >> it will be interesting. they bought back more than half of their stock. >> i thought that was amazing. >> no company has been more aggressive in many ways than deploying capital and borrowing through the various liberty entities over this last couple of years. they have been willing to take the risk and willing to use what have been extraordinarily generous capital markets when others didn't want to. >> people thought xm sirius was going to go under. these guys came to the rescue in a bold move. obviously brilliant. and you could have gotten in on it. malone, it's not, i know he's got all the shares, but he's never been selfish. you can coat tail this man and probably done better than if you coat tailed warren buffett during that period.

>> interesting to look at. >> malone versus buffett. >> sirius shareholders woul own 39% of liberty, but they would have no vote. no vote that comes along with that. it's all controlled by malone. >> dow has lost what gains it had. let's get to bob pisani on the floor. >> if you would have come to me five or six minutes ago, i would have said it was a good start. we were up on the dow and have just sort of lost it. just turned negative. not a good night in asia as well. just want to point out, a fairly weak start. japan has an excuse. this was their first trading day of the year. the nen a little stronger today. normally, that hurts japanese equities. china doesn't have as many excuses. we saw the services pmi numbers that everybody watches. weak. we saw the manufacturing pmis below expectations last week, so

hasn't been a great start. shanghai index, near the lowest level since august. shares that trade in china proper, but hong kong isn't doing much better. that is also not off to a good start for the year. also in europe, what i find interesting is so far the countries gaining the most. so, greece and portugal, they're having a great start to the year and the more stable companies are having a tougher start to the year. this is on top of what happened. greece and portugal had a great year last year. italy had a decent year, so it's not like they're buying the losers and selling the winners. portugal and italy were clear winners last year. here in the united states, lot of debate over the weekend about financials. i know you mentioned this, jim. i am not impressed with these arguments. there is an argument that financials are going to do great. the only sector of the ten that were up in the first two days of trading and for a simple reason.

the biggest tech names are moving up. bank of america, citi, i get the arguments. expectations of a steeper yield curve. maybe more m&a activity, but financials had a very good year and a lot of this is already priced in. if you look past these few names t regional banks are not up. the snrns names are not up. there's a small group of real investment trusts that are up. they are the largest out there, so avalon, boston bay, the equity residential. those are the biggest names of all. the rest of the reefs are mostly flat to down. there's a small group of people buying the big cap and i get the idea. interest rates rise. cap rates rise, increases the attractiveness, but again, most of these arguments have been made before. i think we're going to need more indication of the economy getting better before we have

big moves into these stocks that are justifiable. take a look at some of the stocks. a good point you're making about the downgrades. this is the season of downgrades. siri is on the upside. solar city on that goldman sachs upgrade. 3-2 systems is just about flat right now. first solar on that goldman sachs downgrade. twitter. also. to the downside as you can see. back to you. >> thanks a lot. >> i just keep thinking the reason why i like these banks is that the cd rates have not moved this year. for the two-year, five-year. banks are going to make a lot of money on those. i know that's kind of risk free money and that's part of the excitement. >> starting to get some -- >> when we come back, what amazon's founder and ceo had to say about those kidney stones. also, jon steinberg on bit coin mining. back in a moment. welcome back. how is everything?

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five star, kidney stones, zero stars. that's what the founder is saying after being evacuated from a vacation after a kidney stoeb attack on new year's day. he was evacuated by a cruise ship to his private jet then on to a u.s. hospital for emergency treatment. didn't need surgery. don't well, but obviously, an enormous amount of pain. >> i distinctly first world problem, i would tell you. but look, there must be many because i am told he is involved with the new "washington post" company in making decisions there. he has, i told you about it on friday.

this is his company. i know there's a conference call. some good people, but this man's remarkable. >> incredible. >> and not to mention his efforts for space and what he's doing there, which is a real significant effort and obviously, amazon and "the washington post." and you can go on and on. >> these are americans. where are the visionaries coming out of europe? other than somebody who developing really beautiful ties. the chinese. i mean, they're great mimickers. unbelievable business people. >> i was going to say -- okay. don't go there. >> but your point is taken. brings us to our squawk on the tweet question. other than kidney stones, what else would he give zero stars? tweet us. >> i take it back.

they make unbelievable suits. and cars. things i like. suits and cars. >> yes. >> here's what's coming up next on "squawk on the street." ♪ >> coming up, the weekend is over. it's time to get focused. there's no better way than six stocks in 60 seconds and cramer's got them when "squawk on the street" returns. she keeps you on your toes. you wouldn't have it any other way. but your erectile dysfunction -

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have been connected at home. it makes it so much better to do homework, when you're at home. welcome to what's next. comcastnbcuniversal. this is a stock in get rich carefully, should break itself up. it's been in a major, major uptrend. >> upgrade of win at city. >> win's been remarkable. i remember when everybody wrote it off in vegas. i like this. >> got some news on lynn energy today. >> the biggest bear in the world on this stock was jpmorgan. they're saying buy it now that the deal is done, but my trust has struggled with with the stock. maybe this is the relief we've been looking for. >> these refiners have been so strong. this isn't a negative refiner, but does say be careful there. >> nice buy to neutral for

wendy's. i am a huge believer in what nelson has done here. i don't want to sell this stock yet. >> a couple of firms have upgraded, but this was one of the best performing last year. it is a good company now. >> all right. what about tonight on mad? zwl the worst performing stocks are going the get a look. we were talking about it before. >> bill miller had every single best performer. congratulations to bill. a lot of people would have said, i had a good run. no, he came right back. when you look at the top performers of the s&p, which mutual fund had them. he did. which ones had the bottom? the ones that were going to underperform, but maybe there is something here. >> i'm thinking of what he said about jc penney posting a couple of good months. >> wasn't that -- immediately decided -- when you're hot and you have the hot hand like bill

miller, things come clear to you. maybe jc penney, hasn't looked yet. >> he is back. very nice man. >> see you tonight, jim. 6:00 and 11:00 eastern time. when we come back, breaking news on ism services. we'll get some factory orders, too, and the market reaction and then twitter two months after pricing that ipo. mark ma hainey and what he sees for the stock. do not go away. ment at 1406 35th street the old dining table at 25th and hoffman. ...and the little room above the strip mall off roble avenue. ♪ this magic moment it is the story of where every great idea begins. and of those who believed they had the power to do more. dell is honored to be part of some of the world's great stories. that began much the same way ours did. in a little dorm room -- 2713. ♪ this magic moment ♪

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welcome back to "squawk on the street." we'll start with breaking news. ism nonmanufacturing and factory orders. hey, jim. >> hey, carl. the market has gotten to a point where it was expecting good data. it came out of 53. we're expecting a 54.6. the employment index came out 55.8. i think the market cares more about employment than anything else. so stock market right now has lost a little bit. just a tick or so. the ten-year yields have gone down just a hair on this. i guess what they're saying here is that any bad data probably could be a little more chance of

a taper. factory orders, i still haven't seen factory orders out here yet and we're supposed to get that at 9:00 as well. now, the market's up a little bit, too. 1.8, a hair better than expected and on that, the stock market jumped about handle. >> thank you very much. so the markets are riding the flat line so far today, but don't forget for now, the two in a bit session of the year were still off the best part of 1%. let's bring in nick, chief market strategist with converge is group. nick, you've told one of our researchers is the time to worry is when no one else seems concerned. >> the first part of the year has been rocky, simon. we've seen that for sure. i think it is time to to have some caution here.

while money flow should be good this month of january, at the same time, valuations are getting full and fundamentals shows the economy still hasn't really hit that second year. >> mark, is he right? >> simon, actually, i concur with nick's opinion. i think that while we have a rather sanguine view of thousho economy is going to develop over 2014 as it holds within the context of expansion, certainly, the market is fully reflected that in valuations, at least dmesically and as a consequence, i think we're verging on overshoot territory, so i look for the market to continue to perform reasonably well, but we need more data points that are accumulating that are positive than some of setbacks we've had of recent like today's services data. >> but you're not talking about a correction from what you're saying. >> i think you'we're right for . we've gone an extended period of

time without one. i know necessarily what could be the catalyst for it. it could be that perhaps because of markets have advanced as much they have and valuations are all of certainly fairly valued at that juncture, perhaps a whiff of some less than good news could be the catalyst for why equities could sell off. >> nick, what is the bigger picture here for people who aren't trying to trade the tops and bottoms? they're just in it for their retirement? thep to put the money in the right place. where are we on that front? that long-term investor. >> for that medium or long-term investor, i think we're in a good spot. what i would tell those folks is that be prepared for some volatility. we've had a really fairly straightforward ride, especially in 2013, that took us to these levels and it was a great ride. be prepared for bottom market volatility. still expect 5 to 7% returns. >> on what part of the market do

you favor most? >> we're looking now, still early cycle mix. we like financials here. big banks have done well early into the year. we still like industrials. on the flip side, we'd be pretty cautious on bonds, particularly longer term, long duration bonds. >> mark, what's your strategy? >> very similar once again. i hate to be so consensus on the views being expressed here today, but the fact is, he do honor a procyclical stance. we do think again on the back of improving fundamentals, that's going to bode well for those more economically exposed areas of the market, like technology, even financials. but to overseas markets, the earnings growth profile is much better for 2014 than it is here in the united states. >> hey, nick, i don't know if you've read through this paper that i guess ryan heart presented, arguing that the crisis azrieltive to prior is

not as bad. inflation adjusted gdp down five as opposed to an average of nine. that kind of flies in the face of everything we've been told about long-term unemployment and things like that. does it feel better than it should? >> you know, it's so hard to measure historical crisis or periods of optimism. you can't put your hand in the river twice, according to an old buddhist sentiment. i would be cautious even though they have a great track record. >> guys, we'll leave it there. have a great week. thank you. meantime, the senate's voting later today on the fate of janet yellin. steve liesman joins us now. also, the former federal reserve governor and professor of economics at the university chicago booth school of business. steve, what should we know going into today?

>> well, i think the idea of yellin being nominated and confirmed will be the easy part. remember there was the yellin, summers over the summer thing. but i think yellin is going to be taking a fed that has in transition at a time when the economy is in transition. bernanke has been begun the taper, buttal something that's maybe more fundamental. the shift of guidance from being one that's a qe based to one that's based on forward rate guidance. dealing with some of the issues out there and the questions about how qe works, how the inflation numbers have been so low. this is not a transition of one regime to another. within the same regime. it's going to be a transition i think fundamentally over time to a different regime. >> randy, are you in line with steve's thinking? >> i think one of the key challenges that janet's going to be facing is is this communications challenge. try to explain what's happening. how the fed thinks about it and what it's going to do because

the so-called open mouth operations, talking about what you're going to do has become a full fledged tool of monetary policy and is just as important as any of the traditional tools, so the markets are going to have to get used to her words and voice and she's going to have to calibrate her message to convey what she wants and doesn't get an unexpected market reaction. >> although it's been said that she, to a large degree, has been an architect of the new policy. is that true? >> she headed the committee like giving us the press conference for better or worse. we did a restore on this a few months ago and dudley mentioned it over the weekend. the average fed statement has gotten quite a bit longer and longer during the bernanke era and there's a question out there, carl, are they, are they saying more and meaning less or communicating less? and i think that's a problem.

that's sort of a problem of how challenging the communications job has become and this transition from one that's qe based to one that's forward rate is going to put more emphasis on words that the fed uses to tell us how much lower they'll be forhow long or whether or not they pull back from that. >> i don't know if you have an expression hospital pass in this country, but we have it in the uk when you're playing rugby. it means you pass the ball back with the knowledge thai going to catch the ball and everybody else is going to pile on them. on the way out, bernanke's made it difficult for yellin because to sweeten the fact they were going to taper december 18th, he was super dubbish on the guidance. it's about as expansionary as you could be and if the committee is going to improve, yellin's going to have to do a u-turn on that, is she not in. >> i think they want to avoid what happened earlier in the year when the discussion of the

step down began. they want to try to dif wrennuate purchases and i think that's why you got that strong message that we're going to keep rates low for a long time, but start the step down now. i think janet is very much in sync with that and that actually makes the exit a bit easier because she can then do the stepdowns of the asset purchases without having rates rise. whether that will maintain credibility in the mashlrkets o the next few months, that's going to be the key challenge. >> i think simon, you make a really good point, that if the numbers fundamentally change, yellin is going to have to make a pivot and you're right about that. it's going to be difficult for her and difficult for the context that randy just said, which is in the contest of trying to keep at least the short end under control and some lid on the long end and the way that doesn't hurt the economy. >> another central banks around the world. the bank of england, notably with carney in charge is in a

very similar situation. >> i think that's right and it's worth watching by the way, the whole global situation and are we in a year this year 2014 and i think tightening is too strong a word. >> finally, steve, we're going to hear from rosengren this week, williams, lacquer, bullard. for so long, anyone who spoke, we were looking for any clues about the taper. what is every statement going to hinge on now? >> the new thing we need to know is the reaction function around the ten billion of taper. the conventional wisdom in the market right now is that it's ten billion a meeting and -- >> your question in the press room. >> right. and what it takes now to get somebody off of that is what we need to know. we had charlie over the weekend. are you on this track? how much in the way of growth, unemployment decline would it

take for you to accelerate in. so all of these guy, we need to know what the reaction function or the tolerance around the table. >> good stuff, guys. busy day, busy week. thanks a lot. see you later. another day, another find for jpmorgan. apparently, it's nearing a $2 billion settlement with federal authorities. this time in a case tied to bernie madoff's ponzi scheme. kayla is back at hq with more on that and what she's been able to dig up. good morning. >> his bank of record for two decades has been the subject of an investigation, questions whether it ignored warning signs he was a fraud. "the new york times" reports the deal could include a deferred prosecution agreement, which in itself, would rule out criminal charges. now, a joint deal would close two open cases. one, a justice, the other at the office of the comptroller of the

currency. one would cover general charges. madoff has claimed banks turned a blind eye at what he was up to, telling our scott cohn early last year, quote, i have little doubt that the information i could provide could clearly demonstrate the vital role the major banks played in carrying out my froud including the role of handling the accounts of my major customers. this is not the only issue for jpmorgan. it's paid some $20 billion to settle these lawsuits. the costliest relating to its mortgage products in the financial crisis, but also, faulty oversight, improper marketing on credit card products and nearly a dozen ongoing investigation from hiring in china to potential energy market manipulation. the list goes on and on. the bank would like to get this latest payment out of the way. that tabs place on tuesday, january 14th, so we have a line in the sand and we'll see if we get that in the next week.

>> thank you very much. >> well, it was a perfect storm. of winter weather this week and from feet of snow to freezing rain, frigid temperatures and i can tell you firsthand that somebody who went to and from south florida, it reeked havoc on the airlines. we'll have all the details next. mine was earned orbiting the moon in 1971.

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sleep number bed. the company is tanking in trading after the company issues a warning saying current warnings may fall short of forecasts. cited a slowdown in sales during the holiday shopping season and that it sees that trend continuing into this year. back over to you. >> thanks very much. from frigid weather to emergency landings, it was not a good weekend for air travel. phil lebeau is live at chicago's o'hare, where i think it's minus 15. phil, good morning. >> it is minus 15, carl, but as cold as it is outside, the temperature in here ised off. this line goes down another 50 feet. all of these people have been standing here, i'm not exaggerating, for at least 30, 40 minutes and this line goes all the way down here, at least another 200 feet.

people are bumping into each other. people have a phone in one hand, cell phone in another and are seeing the same thing. all flights are canceled. here are the latest numbers from flightaware.com in terms of cancellations today. you're looking at total cancellations coming in, just under 3400. delays, more than 4300. cancellations this weekend have now risen 5638 is the total cancellations. delays of more than 21,000 and in terms of the airports impacted, it starts here at o'hare. cleveland-hopkins is a mess. laguardia, jfk and napz has been become the fifth most impacted. indy is gettinging hammered with snow and that's the problem down there. jet blue, we talked about the east coast being hit. what we're seeing there, 48% of jet blue flights have been canceled today. and united airlines, it has canceled regional jet flights in the upper midwest. i've talked with a number of people out here at o'hare who

have said look, i was on a regional jet going somewhere in the midwest. that flight has been canceled. what we're seeing here when you look at united and jet blue, these stocks may not be reacting a lot today and that's because you need to see an extended delay or consolation. something of the magnitude of what happened with hurricane sandy, that's when you start to see the airline stocks take a big hit, but there's no doubt what we're seeing here, i think it's coming your way as this snowstorm moves east and the bitter cold, more and more people are frustrated they're not getting out, particularly into smaller cities and the east coast. >> thank you very much. up next, securing the cloud. cyber attacks are becoming more and more common. how do you protect your information? we're talking to one company that's changing the world of websites and securing them at the same time. the ceo of cloud flare will join us live to talk about what they're doing. right after this break. [ male announcer ] legalzoom has helped start over 1 million businesses.

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just had to show you minneapolis, st. paul. feels like minus 43 as this polar vortex makes its way south. weather affecting 20 million people. it's going to be the coldest weather we've seen in this country in about two decades. >> you were telling me during the break, it's colder than on mars. >> as of yesterday during the break, it is colder than on the surface of mars, which has a little more distance between the s sun and it. >> between target, snap chat and snowden and as more and more information is being moved to the cloud, it's fuelling new fears about data security. so what can customers do ab it? we're delighted to welcome to the program, matthew prince. the cofounder and ceo of cloudfare. a web security and performance company. it says your company basically sitti ins in front of one in ev0

sites when people visit the web today. are you paid to be there by the user or by the site? >> the websites are our cu customers and so, if you think about it, companies like google have whole operations teams with security and performance and availability. what cloudflare does is we make that same level of technology available to anyone else on the web. >> this is obviously very important. it's become very topical because we're realizing these entrepreneurs that are basically trying to rapidly as they can grow social media sites, are vulnerable at the back end. they don't have the sort of protection that you might expect at a time when presumably, the hackers are becoming better at what they do. >> that's right. it's not just new social media sites. anyone who has a web presence is increasingly targeted by any various types of attacks. i think we've been surprised over the last year to see the

wide range of sites that are attacked from social media sites an major financial institutions, but also individuals running flower stores or adoption agencies online. we've seen a 500% increase in the number of attacks just in the last year. >> how successful are you? you were targeted with a denial of service attack in the the spring. >> we stop hundreds of denial of service attacks every single day. in the spring, we saw the largest attack in history hit one of our customers. we were able to keep that site online even though we were seeing over 300 gigabytes of traff traffic, which is actually really amazing accomplishment for our team. >> you mentioned the traffic. i'm curious. so many high profiled attacks. at what point does it have an impact on traffic? at what point are people less willing to use the internet because they're afraid of this happening to them? >> we're seeing that increasingly, more and more websites are having to seek

shelter behind someone like cloudflare to protect them. it's very difficult as an individual company, again, unless you have the resources of google, to be able to stay onlip. so, we're seeing massive growth and again, even our small businesses, if you have the resources of a company like cloudflare, we can keep you online. >> you know, i'm just trying to get handle on where this is going. the consumer electronics show is going to kick off in vegas and it will be about wearable devices that connect to everything. the internet of everything is something they're talking about in the press today, where you've got dog collars that respond to wi-fi. ultimately, would it become too dangerous to go in this direction and have all that data in the cloud? do we have to, it's an approach from people like you with the

greatest of respect because you're small players in the private sector. do we need a big shield, for example? >> i don't think so. i think that what you'll see is that the network will consolidate behind a limited number of providers. i think amazon is showing, they're developing the resources and technologies to provide that. i think cloudflare, which sits in front of five 5% of web requests, is becoming a major player. we're building that giant shield and between all of these different companies, i think you'll be able to exist and run the internet in a very successful and productive way even as more people are getting online and trusting their data to a network. >> i see you just got another round of funding. do you seek to be acquired? what is your aim, your time horizon here?

>> well, i think that it's, we're seeing ourselves as extremely valuable and strategic resource on the web. over the next year, we're building into places like china, latin america. places we haven't had our network before and i don't think we're building this to be acqui acquired. we're billing this to be a stand alone company. i think you'll see us on the show in about two to four years ringing a bell somewhere. >> i hope we see you before that. you're welcome anytime. thank you. nice to meet you, matthew. the cofounder and ceo of cloudflare. >> straight ahead, twitter was having a good 2014 until today. the stock losing nearly all the gains for the year in today's session. what's ahead for the stock? we'll talk to mark about that. get his outlook on the internet sector for the new year in just a moment. who found a magic seas. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell.

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it's a place named one america's most veteran friendly employers. next is information and entertainment in ways you never thought possible. welcome to what's next. comcastnbcuniversal. here are some of the stoirs we're talking about. nonmanufacturing index for december coming in at 53 even. and down almost a full point from november's reading. the commerce department says factory orders rose 1.8% in november led by a surge in aircraft demand. disney shares hitting a new high. up more than 45% over the last 12 months. >> check out this one-year shot if you were lucky enough to get into some of these names like

facebook, look google, you would have ended the year a happy investor. well, it's a new year and if you're looking for ideas, let's bring in mark. good morning. we're looking at downgrades of some, price and target increases of others. among some of your colleagues today. what is your overall playbook when it comes to social? >> for social, social continues to be a multiyear trend. you've got facebook well-known. relatively well-known. twitter, i don't think is still understood by the advertisers or users or the investment community yet. we like them both. we have a preference for facebook, but we'll stick with our buy on twitter. >> even at these levels? >> we have a $60 price target. an upside range of $70. twitter solved two problems that caused that initial correction in facebook. they solved mobile from the get

go and came out with 70% of the revenue being mobile. that was facebook's big problem for the first year and secondly, they don't have that user disengagement concern that facebook has. my guess is we'll see that from twitter, but not for two or three years. for now, i think the fundamentals will grow stronger than probably any other company. >> you're saying you've got to have a long fuse. >> you've got to be patient. facebook, 60% margins. right now, twitter is at 5 to 7%. you should look at that and say, those margins are going to ram dramatically over the next five years. you put that together with very strong top line growth, this is 100% earnings grower for three years. the only stock that has that. it has a rich valuation. it deserves that. >> it deserves to be trading at

what is it, 16 times revenues? can't do a multiple on earnings, but on ebita that is very, very high. i've heard your downgrade stocks in the past. >> when facebook came out, all the hype that went into that, we didn't upgrade that stock. when that stock was down, it did not have the user disengagement issue and we allowed some high levels that were built up quickly on this name. that told me that twitter was a guy. this is an aggressive buy. it's not one of our top picks, but still, given that set up, we'll stay buyers of twitter until proven otherwise. >> good morning. i can understand of your large cap investment longs, quite easy to understand why google is there and amazon, but ebay? why ebay? >> ebay's a shift for us. overall, we're getting more cautious on the internet space. we had a great run last year.

we don't expect that to return this year. in that case, you want reasonable stocks premium to the market multiple stocks. google screens well. price line and ebay does, too. we had a buy on ebay this last year. our worst call of the year. the stock underperformed. we think it will have a reversion on the stock. valuation is more attractive now than it's been in two years and we think the fundamentals are just well in tact. payment business continues to be the leader in that segment and overturn cash to you. more than any of the large cap stocks. we like ebay. >> mark, the consumer electronics show in vegas is getting underway this week as you'll be aware. wearable technology, what a lot of the people are talking about and also, automotive. price line's done a deal it would appear with the automotive manufacturers, they are looking to put broad band in the cars.

why do you end up with pandora as the way to play that? >> simon, thanks for the set up. we have a term we're using now called grow stocks. green field revenue stocks. this is pandora. all of their revenue to date has come from emotional devices, laptops, desktops. 50% of all radio listening is done in the car, yet they sale 60% of their ad revenue comes from audio ads. those are what we would call native to the car experience. so they've got an opportunity that's going to start this year. that makes pandora our number one pick in the states. google is far and away the best internet pick. >> interesting. pandora just announced their december listening hours. i think up 13%. we'll see you next time. thanks again. >> as tech companies prepare to go public, some employees are looking to cash in. and the people looking to get some money for their pre ipo

shares, several companies are helping swap shares for cash. josh lipton is live in san jose with the details on that. >> good morning, simon. if you are working at a silicon valley company like square, drop box, then you could be a millionaire on paper, but you can't get your hands on that money unless your company goes public or sells out and maybe you want to buy that new house right now. these employees often go to a secondary market that buys or sales shares of private companies. lawyers say rising demand for the secondary market is due in part to the jobs act signed into law in april 2012. remember, the jobs act expanded from 500 to 2000, the number of shareholders a private company could have without also being forced to disclose financial information like a public company. so cottage industry was developed to meet that demand in a variety of ways. 137 ventures which makes loans

secured by private company shares an equity zen, which has raised some $14 million to purchase shared from employees. matthew, says the secondary market could be a good thing. they could encourage trade iing it suits their business needs and objectives, but the industry also has its critics. critics aren't always happy with the secondary market because they worry about losing control of their shareholder base. still, there are thousands of workers here in silicon valley worth big money on paper, but it is just paper unless their companies go public or they hit the secondary market. back to you. >> so true. thank you. up next, hear what liberty media's ceo had to say about the company's deal with sirius. and later, are you still wondering how someone gets hold

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take a look at the intraday price action in gold futures. takes a sharp dip in just the last hour. dropped from around 12.47 relatively quickly. experienced high selling volume during that time frame. traders are still keeping an eye to see what prompted the selling, whether it was erroneous or just legitimate. wak to back to you. >> thanks very much. let's talk about sirius satellite radio. late friday, liberty offering to buy what it doesn't already own of sirius, a company that controls 52% ownership in a stock swap.

that would be a series c that would be created, creating a great deal of liquidity. take a look at sirius shares. they were up over 7% this morning. >> a special committee. they needed a vote. may get a bump above the 3% premium implied in the ratio. not just about this deal, but of course continuing talk of consolidation in cable industry led by the belief that charter and liberty will together make a public proposal for time warner cable. the deal will in fact enhance the ability to borrow any for time warner cable. >> there's no doubt this gives

liberty more flexibility to make investments, including potentially investments into cable if that is what we find attractive. what i've said all along and what i think both john malone and the charter management have said, we believe there's a lot of reasons to think consolidation is attractive, that it could be an attractive combination, but there are other attractive combinations out there, too. >> it will be interesting to see what the strategy is. certainly a big endorsement. by the capital structure, create more liquidity for share hlders. 39% of liberty media have no votes. as for what's next in terms of this battle for time warning cable and whether there will be another foray, i asked mr. muff faye. >> can we expect that liberty and charter will make a public

p proposal at some point. >> what i said all along and what with john malone and charter management said, we believe there's a lot of reasons to think charter management was attractive, but there are other attractive combinations out there. . >> they're saying they would need at least 150, 155 bucks a share. is that a price guys could pay? >> i'd be surprised there's a buyer out there at that price, but that's why there are horse races. >> not quite sure what horse races he's referring to, but our parent company, comcast, has been examining the possibility of a time warner purchase should that opportunity arise. does not appear likely at this point, but is not something that can be ruled out despite what would be a number of regulatory hurdles potentially overcome, but difficult to mount. >> yeah, interesting to hear him say that. saying i don't see a buyer at

that price, but horse races does connote something that we haven't seen a lot of. >> it's been a frustration for them because they have been the only buyer, but with the idea that comcast is there, the stock price has stayed high at least from the perspective of liberty and charter to try to convince shareholders, who many believe this would be a good combination to really pressure time warner management to come to the table. >> chances are, if you were snowed in this weekend or just refused to leave the house because it was so cold, had some nice, hot food delivered. the ceo of delivery khat.com will join us with answers when we come right back. [ sniffles ] i have a big meeting when we land, but i am so stuffed up, i can't rest. [ male announcer ] truth is, nyquil cold and flu liquid gels don't unstuff your nose. they don't? [ male announcer ] nope. they don't have a decongestant.

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find a store at tempurpedic.com. it took a lot of juggling to keep it all together.k. for some low-income families, having broadband internet is a faraway dream. so we created internet essentials, america's largest low-cost internet adoption program. having the internet at home means she has to go no further than the kitchen table to do her homework. now, more than one million americans have been connected at home. it makes it so much better to do homework, when you're at home. welcome to what's next. comcastnbcuniversal. after getting 10 inches of snow on friday, new york city saw temperatures below 10 degrees and minneapolis saw thermometers drop to minus 20. that's minus 20 fahrenheit, so is all this frosty weather causing delivery companies to heat up? let's bring in delivery.com ceo.

good morning. good for business? >> yes, with temperatures i think swinging to the negative 40 degrees high to low relative to the same time, our business is up about 35, 40%. >> can you see it day by day? >> we were just actually talking during the baek. just in cities like chicago, we're up 300%, basically over the five-day stretch of last year year. so the volume goes up and the difficu difficulty goes up. with the case of temperature, there's still the ability to deliver between the merchant and consumer. in the case of obviously inclement conditions, it will depend. >> food service versus services. >> we're now also in categories like in addition to food, wine, liquor, which is up 100% over this period. also, dry cleaning and laundry.

>> and how about time of day? when do the servers really spike? >> generally at least related to food. food is a $75 billion industry for delivery. lunch and dinner. >> how is most of this stuff getting to people? i was out friday night in new york city walking to a neighborhood restaurant, the st bicycles delivering food. >> that's right. and hats off to the merchants and the folks that are doing that on their behalf. obviously we work with the merchant to the extent that temperatures get to a point that it is going to be in any case difficult if not obviously bad for somebody's health, obviously we'll take the merchants down on their suggestion. >> but it is supply and demand. if i was delivering for you, i would require a higher wage to deliver through these sort of conditions. do you give them bonuses? or do you just do the job, take it or leave it? >> so unlike kcosmo, we don't actually do delivery. we're an intermediary. so we're a technology platform. the merchant on the other hand obviously needs to make sure these people are paid well and suggest consumers to tip.

>> can you imagine ever going to dynamic pricing? like the airlines have. but if suddenly there's a spike in demand it's going to cost more if you want to get through the snow tonight? >> it's all in technology. we certainly have the ability to generate a dynamic based pricing model. so to the extent there's demand from the merchant to offer that to the consumer something we can do. >> look at the backlash that uber has gotten this week here in new york. >> yes. >> doubling, tripling their fare rate based on the weather, it's a tough balance. >> there's two pieces, the actual product and then the payment for convenience. obviously we want prices on the site to reflect what you have purchased in the store. there's no ability for merchant to upprice the actual product. it's up to the merchant to decide if they want to have you, the consumer, pay for the convenience of delivery. we prefer them to keep that at zero and pay for the product like you would in the store. >> are you being more aggressive this year in terms of expansion than you were last year? >> yes. i think the reflection of that is obviously mobile is having a big impact on our business in terms of growth where we're seeing primarily in mobile

versus desktop. >> really? >> yes. >> you're not at home perhaps but you want to order lunch somewhere. >> the convenience of a phone having the full basically capabilities of a computer prevents you from having to go into the computer room or wherever the computer is. >> in your apartment using your ipad or iphone. >> or you live in the city but you, you know, work in jersey, you can purchase one place and have it ready when you get home. >> what percentage is mobile? >> upwards of 30%. >> really? >> yes. >> getting interesting. >> yes. >> and plans for the longer term? >> we're looking to expand the verticals we're in. what has happened in food just as amazon started in books as an anchor product, we're looking to do the same things as well. >> right across the board. nice to see you, thank you for coming in. >> thank you. >> delivery.com. priceline.com striking a deal with general motors that literally puts you in the driver's seat when trying to

book a hotel room. the new partnership making the priceline.com inventory accessible by the chevrolet app shop. we'll talk to the ceo first on cnbc in the next hour. and a harsh review by amazon's jeff bezos, ga lap gos five stars, amazon founder of "the washington post" owner saying after being evacuated from the galapagos vacation he was on due to a kidney stone attack on new year's day, can you believe it? so today we're asking you other than kidney stones, what else would jeff bezos give zero stars? tweet us at squawkstreet. we'll be right back. she keeps you on your toes.

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[ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex. forbes is out with its third annual 30 under 30 issue highlighting 450 young innovators and entrepreneurs the magazine says are changing our world. on the cover is evan speeg el, co-founder of snapchat, the social media messaging service. here's what he had to say about the company during his appearance on "squawk on the street" last october. >> we're not making money right now, but i think we're really fortunate to have a role model in ten cent which has built a huge business around messaging in china. we've seen they've been able to do that without relying on brand

advertising, so that's exciting for us. in the near-term we're going to look at transactions and further down the road advertising as well. >> also on the 30 under 30 on the media portion bryan stelter of cnn formerly of the "new york times" and our own kelly evans. >> yeah! >> nice. >> we love kelly. >> she's on "closing bell," but we still like to say she's on "squawk on the street." >> still sometimes here. >> yes. >> she's a cameo. >> she does it all. >> she's with us in spirit all the time. >> she's joining us this week actually. >> is that true? >> they just told me in my ear. >> very nice. let's get to squawk on the tweet by the way. jeff bezos was evacuated from his galapagos vacation due to a kidney stone attack on new year's day. he was air lifted to his private jet onto a u.s. hospital for emergency treatment. how did the amazon founder and owner of "the washington post" review that experience? he said galapagos five stars, kidney stones zero stars. brings us to this morning's squawk on the street.

other than kidney stones what else would bezos give zero stars? foster writes, cloudy nights. is that a drone reference? noah writes fed ex and u.p.s. zero stars for missing christmas guarantee, # bring on the drones. and anything that starts with an i. very nice. funny how he's become associated with drones so heavily just in the course of one appearance on "60 minutes". >> yeah. it's not completely clear that is really going to become a strategy in the future. it may certainly, but may not and many pointing to it as a very effective marketing tool that appearance, but maybe not much more than that. >> controlling the message. and in fact there were a series of them talking about reconciles of the kindle, they had a good week and the offers they were doing during cyber monday and the rest. they had a good time. >> meanwhile the market continues to, i think cramer used the word soggy tweeting

early this morning as we sort of makeup for some of the big gains we had at the end of last year, but it will be interesting to see how the action sort of solidifies into the first couple of weeks because these first few days haven't been much to write home about. >> still up over half a percent. >> although if the s&p is down today, that would be the first time it starts the year down three straight since '05, which hasn't happened in a while. usually you get an up day usually in the first few days. see you guys later on. we'll talk europe which has had a lot of action today. if you're just joining us, here's what you missed earlier on. welcome to "squawk on the street." here's what's happened so far. >> what d you see for gdp this year? >> i think it's going to be closer to 3 than 2, which will be a big challenge. which would be very positive. >> if you think about what drove a lot of american corporate growth over the last decades, it's been the ability to expand around the world in countries that are actually quite interested in aligning the

standards with the united states. that's becoming more problematic. >> every time you turn around google is involved in something they haven't started monetizing yet. i think that company has the most in the fire -- irons in the fire of any company i looked at right now and around the world. twitter is a thought of, you know, look at all the things that could happen. facebook has already happened. this is like amazon. if amazon ever said, you know, we're doing so well we could offer dividend, i bet the stock would be cut in half. the opportunity for the sirius show to participate in not only the serious growth opportunities but serious investment opportunities but any other opportunities that liberty has some of which might be attractive we think is appealing -- should be appealing to sirius shareholders as well. >> you've got facebook relatively well-known. twitter i still don't think is well understood either by the advertisers or by users or the

investment community yet. so those are the two obvious plays. we like them both. we have a preference however for facebook. good monday morning. the dow is currently down about some 27 points. haven't had two consecutive days down on the dow since the middle of december. so we're watching that relatively closely. also want to check-in on two big movers this morning. take a look at twitter moving to the downside after morgan stanley downgrade to underweight. may lose online ad revenue to larger rivals like facebook and google. and sirius rallying this morning after liberty media proposed making the satellite radio operator a wholly owned subsidiary. changes in the air at fed ex. the fed, the senate expected to confirm janet yellen as the next head of the federal reserve. what will yellen's first move be when she takes over? more on that in a moment. for a lot of the country it is

extraordinarily cold outside. the midwest seeing lowest temperatures in about two decades. and that bitter cold is on its way east wreaking havoc along the way. we'll tell you what to expect. plus, we've been talking a lot about bitcoin over the past few months, who's using it, who's accepting it, that sort of thing. we rarely talk about how people actually get bitcoins in the first place. it's a process called mining. and we will show you the machinery to do it right here onset in a few moments. also, priceline announcing a major partnership with gm today. the ceo of priceline is here with all the details later this hour. but first joining us for the entire hour is john steinberg, buzz feed's president and coo on a day where ces is beginning in vegas. >> yeah. >> so much to talk about regarding tech, downgrades, twitter and the likes. >> lots of internet stocks and bitcoin, should be a fun hour. this is the mining rig. i don't want to give away too much but this is something i built last week that we'll talk about. >> can anyone see it? no camera will take the shot. good, that's a better tease for

later in the hour. >> there you go. >> meantime, markets are taking another dip lower today after a rough start to the year. want to bring in managing director principle with douglas c. lane and associates and dan morris with asset management. guys, good morning. >> good morning. >> why is this year starting out so unlike the end of last year? >> well, i think you've had two years of linear growth. investors have been able to ride unprecedent eed liquidity, marks have done really well, we are expecting and at some point you're going to get that pullback. we haven't had a 10-percenter, who knows if we'll get there. this is a good part of investing. you need the pillbacks otherwise it will go straight up. >> does it feel like the 10% comes in the early part of the year? is it happening now? >> i don't know if it's happening now, but i think in the next four to six weeks we should be able to see something because what will happen after earnings season you're going to reset expectations. you're going to say things are

getting better, maybe interest rates get higher and look at valuations and companys that are going to grow not just the overall market. >> dan, we did get services ism lowest since june, lowest contraction in new orders i think in 50 some odd months. we were looking at gdp that seem to be accelerating in the back half of last year. >> yeah, even if it is accelerating it's going to be at a relatively slow pace if we get to 3% by the end of the year, i think that will be quite good. i don't think anyone's expecting a big ramp up in terms of gdp growth. the key thing is that's slowly getting better, slow improvement dropping unemployment rate and so on, better consumer spending and that's what's going to drive corporate profits ultimately. >> speaking of corporate profits, earning season does start next week. i was looking at some of the names, the alcoas of the world, microns, people are going to want to see topline. they've been denied it several quarters. >> absolutely. i think one of the catalysts to look for is look at the consumer. the consumer has rebuilt their balance sheet. they've had again low interest rates. household prices have gone up. if they start spending, that could be the catalyst for

corporations to start saying, look, we've been cutting costs, we haven't really been spening, weave been focusing on productivity, how about going to cap x, growth capital instead of maintaining where we are. >> i've had two investors say to me in the past week investors are starved for growth. i heard the phrase twice. what other categories, or industries do you think we'll see top line growth beyond media and internet. >> other than technology i think industrials. i think that's an area given the low energy costs we have in this country now companies can put projects on the ground and say we're competitive globally now in terms of energy. in fact cheaper. and if we get better labor costs here and more productivity why not keep it local as opposed to exporting or importing it from other countries. >> although, i mean, to start investing in cap x, dan, when rates are rising, the sweet spot was in the last two years, right? >> i think there might not be as much upside as people think. if you look at what's been

disappointing about gdp growth over the past two years, normally during expansions u.s. gdp expands about 5%, this time a bit over two. >> why? >> the biggest gap in consumer demand and little bit in investment. yes, there's potential there, yes, with less uncertainty ceos should be more interested. but it's the pent-up demand that's still there. consumer demand the key thing for this year. >> it's funny we got fed ex today issuing $2 billion in unsecured notes, they're going to accelerate their buyback. what if 2014 turns into an echo of 2013? to the extent they have low rates and cash, they use it to minimize their flow. >> and then back out to the markets again and buy more airplanes. >> but aren't the investors pushing that? aren't the investors demanding the buybacks as opposed to the investment? do you think they will tolerate it in q-1 despite rates going up? >> i think what's going to happen to your point if companies can show top line growth, you're going to get margin expansion and multiple expansion. the only multiple expansion we've had on the teslas and netflix of the world. >> exactly. >> not on the other companies.

if you break out the s&p and say what companies have really done well? the cyclicals are not over market multiples. if they actually show consistent growth whether it's the auto parts, airlines or some industrials, you're going to get multiple expansion, you're going to get margin expansion and investors will be rewarded, fine, better use of capital. >> that's hardening, dan, on a final note. there's a sense i think out there that there are no more bargains in the market. >> it's harder to find in the u.s. i think if people want to look for bargains it is in emerging markets especially in parts of asia. not of places you can argue are really cheap. it's not really the story in the u.s. this year, it's going to be earnings growth. >> thanks for coming in. it is a big day in washington. janet yellen expected to be confirmed as the next fed chair. if she's confirmed she'll be the first woman ever to run the federal reserve starting february 1st. alfred former richmond federal reserve president and risk advisory chairman joining us

this morning with more. guys, good morning to both of you. >> good morning, carl. >> it's been said she's in, mark, essentially. the thing to watch will be no votes. i think bernanke got 30, which was one of the highest ever. what are you expecting? >> when you're going through the confirmation process, no news is good news, and that's what we're hearing about vice chair yellen at the moment. i suspect it will be a handful of votes but not many. now that you only need to reach the 50-vote threshold, that makes it a lot easier and a lot less reason to get excited. >> al, after today and after she is effectively given the gavel, how does she get through the first couple of weeks here? we're going to get a lot of fed speak. and now that we know the taper question is relatively answered, what are we looking for? >> well, i think with the taper now begun, carl, i think the message she's going to want to send is that the level of accommodation has not actually been reduced yet because the economy while things are looking

brighter and prospects are better, there's still reasons to keep a lot of accommodation in place. you have very low inflation. so i think one of the first things she's going to have to decide if she does decide to do it persuade the committee is whether or not to reduce the threshold. the threshold now is for tightening is 6.5% unemployment. i think a lot of people are recommending that it be dropped to 6%. i think it's likely she may come to this view unless she's going to have to get that approved by the committee if she does. >> do you think there's any t l telltale signs to look for? i kind of heart attaarken back briefcase, what do you think certain words to look for as she imparts herself? >> i think there's some contrast to chairman greenspan. she's very straightforward, she speaks very clearly. i can't think of anything in the way of a particular signal. i think you can listen to what she says, take it pretty

literally. obviously if she begins to say things that suggest she's less confident than a consensus about the outlook for the economy that her concerns about inflation being too low are rising, anything like that might be a signal that she's going to be even more reluctant than some people might now expect to raise rates at any point in the near future. >> mark, since we now know the taper is effectively in effect, people are now focusing on this $10 billion a month thing. and they'll be looking for changing reactions, what would push us to more than $10 billion. how are you approaching that uncertainty? how should the market look at it? >> well, i think al hit it just exactly right in terms of what the key issue is. we have always been told the 6.5% unemployment rate would be sort of a triggering incident or at least a threshold. and ben bernanke last week made quite a point of saying it isn't a threshold, not a trigger.

it will be the relationship of the unemployment rate to that tapering will be the key things to watch. and the key things that i think we will try to see more greater articulation of, remember there's one more meeting before janet takes office. and so her last opportunity to sort of sit and listen before she is the chair. >> finally, we will get jobs this friday, al, mark, you got picks as to what the number may be? and whether or not it will be significant in the narrative of the fed, al? >> it's hard always to predict this number, this one-month number, carl, with a lot of confidence. obviously the latest trend is upward so i would expect, you know, if i had to put a number on it something like 200 or maybe a little bit more. but there's a huge confidence around that. >> yeah. >> generally i expect a continuation of the better performance. >> my guess would be in the 150 range. >> oh, interesting. all right. a bit of an outliar on consensus. we'll see what friday brings.

al, mark, good to see you guys. thanks again. >> thank you, carl. they're back after a long vacation, congress and the president are back in d.c. today where the top item on the agenda is the renewal of those long-term unemployment benefits. is there any chance a deal on those benefits can actually get done? we'll talk about that political challenge in just a moment. [ male announcer ] here's a question for you: where does the united states get most of its energy? is it africa?

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off some 40 points. look at financials one big reason for it. one of the big winners on the s&p. at least it was. dominic chu is back at hk with that. >> look at financials they are by far the best performing sector. there's a decent size group of the regional banks helping to drive the action modestly to the upside for the financials. shares of region helped by an upgrade of deutsche bank to buy from hold. also price target increased from $12 to $10. barclays also -- many investors are looking at these regional banks as ways to play an improving economic outlook in the u.s. and these types of banks are the ones they may fare better as longer term interest rises. so those regional banks important rk also check out gen worth financials today. back over to you. >> dom which you happy about his 49ers today.

thanks. after a nice long vacation congress is back to work and top item on the agenda is renewal of the long-term unemployment benefits. what's the chance congress could come to some sort of deal on those? john harwood is at the white house with more on that. good morning, john. >> good morning, carl. it's a shock to everybody to find temperatures dropping. we're going to hit 9 degrees tomorrow according to the forecasters, especially rude for the president coming back from vacation in hawaii. they've got several items of -- on their agenda. the president's to-do list includes janet yellen's confirmation which will occur this afternoon. that is going to happen not really in doubt anymore. a vote will be early this evening. then you've got a procedural vote on extending unemployment benefits. that is not likely to succeed. it is possible that the debate will go forward and it will be killed down the road. but very few people on either side of the aisle expect those unemployment benefits to be extended. other items on the agenda

include the president's desire for minimum wage increase, which is also something that the odds are against it, not possible that it will happen. and for a republican perspective, they're going to have more votes targeting obamacare while the administration tries to make that program work. immigration is another item on the agenda, unclear whether or not the house is ultimately going to act on a bill that is comprehensive enough for the president to sign it and democrats to go along. but we're looking at a fairly icy winter in washington, not a lot of action expected early, carl. >> that's for sure, john. you said we took that turn on unemployment not too long ago. our john harwood in washington this morning. john mentions the weather, and it was a bad weekend for the airlines. nasty weather forced cancellations from chicago to new york. and things don't look too much better today. our phil lebeau is live at o'hare airport in chicago. phil, someone just tweeted a picture of the chicago river frozen over. it doesn't happen very often.

>> it doesn't. it's minus 15 outside right now, carl. and for the people who are in line here and believe me we're going to show you some video of these people waiting in line, they're in line 45 minutes, maybe an hour, only to be told that they're not going to be rebooked for a couple of days. they can't even go outside to smoke a cigarette. you're out there for maybe a minute or two, you really start to feel how cold it is here. as i mentioned long lines at o'hare. and we're seeing this at a number of airports in the upper midwest and east coast. thousands are trying to rebook travel plans after flights being canceled. most of the impact is in the upper midwest and east coast. they're getting hit hardest. the airports that we're seeing the biggest cancellations today, no surprise here at o'hare, cleveland hopkins, cleveland is just getting pounded by snow right now. la guard ya, boston logan, jfk. talk about that upper east coast you're talking about jetblue's home territory. jetblue has canceled 48% of its flights today. and the carrier not just jetblue but all of the carriers they're being hit by their flight crews not in place due to

cancellations. remember, the new work rest rules came into effect on january 1st according to the faa. so that also has a ripple effect as well. total cancellations, is this starting to approach a point where the airlines will feel an impact? probably. saturday through today 9,200 cancellations. compare that with superstorm sandy, we're talking about the three new york city airports when they were shut down, they had roughly 10,000 cancellations. so we're not too far away from matching that. but when you look at the total impact of sandy from october 29th through the 31st, you have more than 20,000 cancellations. all of that said why would shares of american and delta both be up fractionally today? that's because a lot of times investors look at these storms and they say, okay, if there's a 15 million, 20 million, $30 million hit in the grand scheme of things, we can live with that. and that's why the airline stocks have not felt an impact yet. but for the people who are here at o'hare trying to get home waiting for two or three days

for a flight to be rebooked, you can imagine they're feeling the impact of this storm. guys, back to you. >> i'll tell you one thing, phil, these models suggest because the cold air is freezing so much water in this country that it might actually extend cold temperatures in general maybe for the next several weeks. i wonder how that squares with the models at the airlines and what they had figured this winter would be like? >> an interesting question for the stocks too. >> i think this winter is starting to shape up rougher than they expected. >> it seems investors thought it was going to be much worse, right? and actually they were relieved to see the first few days. so if this continues on and gets worse, we could probably see impact in the stocks. >> yeah, a lot of stocks are higher mostly because oil has come in a bit. phil, thanks. good to see you. phil lebeau at o'hare. >> those still confused about bitcoin, this is something you have to see? it's part of a process called bitcoin mining and john is going to show you how it's done after

a short break. s&p's down almost 7. this is the low for the year on s&p. back in a minute. [ male announcer ] it's simple physics...

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when it comes to bitcoin, we often hear about who has started to accept or invest in the krip toe currency. but who's mining for it? and what exactly does that mean or even look like? our john steinberg of buzzfeed here to tell us about this. comes on a day where zynga says they are accepting. >> they are. they are already accepting bitcoin. >> so that's the acceptance part of it. >> yes. >> how do you mine it? >> so what's interesting is over the past week i decided i wanted to build a bitcoin mining rig. this is a very small hobby mining rig. what happens is this little computer here which is a raspberry pie which costs about $25 is in realtime performing computations with these little usb keys which have the bitcoin logo, to crack mathematical problems to free bitcoins from

kind of the computational universe. you can't make real money doing this, but struck me over the weekend this is quite a hobby. reminds me of the home brew computer club where steve jobs and steve wozniak first introduced the apple computer. i think there's an amazing universe going on around the software with bitcoin to do mining. >> have you imagined to unearth a bitcoin? >> i have not. do you feel how hot these are right now? >> yeah, that's warm to the touch. >> i was afraid to leave it running overnight in my office because i didn't want to burn buzzfeed down. i think i can get to a dollar a day. my friend who helped me build this thinks we can get to about a dollar a day if i leave it on continuously. >> you probably do better on your day job. >> absolutely. this is the point, bitcoin is staggering. there must be hundreds of thousands of people involved in creating software, mining applications, all these different platforms to run it on, hardware keys on amazon for $49. there's people selling mining shares in iceland right now if

you want to get into that market by basically buying a fractional mining share. it's a whole elaborate ecosystem. >> what makes you think this has staying power as a currency? why is this not going to be a fad we look back on in two years? >> i think we look back on everything that's big as a fad. and i think that this has all of the resemblances we saw to paypal except the fact the currency itself is self-sustained. something like this has captured the imagination. why does twitter have staying power? why does a network capture everybody and develop those externalities? >> obviously looking at the price was above 1,000 earlier today. still 988. doesn't that scare you that parabolic chart? >> early days. i think we'll get there over time. i'm bullish on bitcoin in general. if you say 10% of the worldwide gold market which is held 1.2 trillion, say 10% of that goes to bitcoin, get to a bitcoin

price of $6,000 a coin. i think that's basically the downside. there's lots of bulls saying bitcoin can go to $1 million a coin. right now what i'm focused on is how flourishing this ecosystem is. >> it's amazing. you've written a piece for our dot com. >> yeah, i went through how we built it and gave images of what the screen looks like. i'm running to show you how crazy things are i have my pebble watch i'm actually running the bitcoin price right now. there's a lot of people, carl, interested in this as hobbiests. >> you've educated me on things that are new. that's a great tip to those interested, john. >> cool. >> for more on bitcoin rigs and what john has done here, visit our website at sots.cnbc.com. when we come back, the consumer electronic show begins today. we'll get an inside look at some of the coolest things in tech in 2014. all the gadgets are always great, but where are tech investors actually spending their money? we'll ask one of the top vcs in silicon valley in a moment.

and europe had good action on the pmis. we'll get that in a second. doept go away. [ male announcer ] legalzoom has helped start over 1 million businesses.

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the european markets are closing now. >> and with that simon hobbs is here to talk about that mix of red and green and some italian banks too, simon. >> absolutely. don't forget there's an ecb meeting this week. look at the map carefully. you see what's rallying? the peripheral markets, portugal, italy, ireland and

spain. yes, there you go. the italian banks are doing well today. banks across europe in the peripheral countries seem to be doing quite well. there was a report over the weekend that the european virtually the vol kro rule. possibly the ceo will step down and possibly the foundation's 20% stake could be bought by some u.s. investors. but spanish banks have staged a really good late rally. check out how they're doing. look at this one bank popalare a good rally there. if you've just tuned in because the data in spain is really good today, look at the pmis, services pmis came through, 50 equals expansion, below that transaction. spain's service sector is expanding at the fastest pace for five and a half years. now, from a low base but my word 54.2 ain't bad. we still have a problem with italy and france. look at those below 50.

but let's leave that there for the moment. one more stock i wanted to mention to you was the ukin surer rsa which has been much troubled recently as you can see. there is a report that on thursday price waterhouse coopers will say the problems they've had in ireland are kind of a one-off deal. so they've rallied 6% after those recent losses. and proof positive that angela merkel is a woman of immense stamina. not only was she crosscountry skiing over christmas and new year, but when she injured herself and appears to have fractured her pelvis, she's carrying on. on wednesday she'll hold her first cabinet meeting of the new grand coalition though she has canceled her trip to warsaw. >> i thought -- i was afraid it was a downhill accident, but glad to hear it was cross country. >> i believe so. but they do go up and down. you know, you've got to push yourself. she is a woman of stamina. my word. >> in more ways than one. thanks, simon. simon hobbs. let's check in with pasani on the floor with the dow now

47, bob. >> what happened to our rally? we were up 100 points at the open and moved 100 points essentially to the downside. look at the s&p 500, we had some weakness but disappointing numbers at the top at 10:00. but it didn't react immediately and sort of delayed reaction to some of those disappointment on the ism services numbers. look at the economic news recently. it's been choppy so tar this year. ism services were so far disappointing, retail sales were a disappointment and factory orders and ism manufacturing were better than expected. this being reflected today in the way stocks are trading. economically sensitive names, so materials, consumer discretionary, industrials, technology stocks, those are the ones the economically sensitive ones that are the weakest today. china is also experiencing some weak economic data in the last few days. and that market has really been hurt and that's been hurting some of the emerging market names. here's some stocks to trade here that are chinese stocks that are notably weak today as you can see right across the board

including some of the auto stocks. the fxi, the etf for china, three down days for the fxi and the bogey for china portrayed near lowest levels since almost september. let's look at gold. i've been asked what happened with gold? around 10:15 we saw a $30 drop from about 12.45 to 12.15. i did a special on gold and got very close to gold traders a number of years ago so i know a lot of them. the consensus is there was a mistake, a fat-fingered mistake out there. there was an unusually large amount of contracts made at this time as many as 9,000 one trader said to me. do the math, one contract is 100 ounces. so 900,000 ounces times $1,200 that's a lot of money. meantime the problem is physical demand, it's been strong innin di and china and yet the etf demand has been weak. and that debate there playing out has been the real problem

for gold. guys, back to you. >> bob pisani on the floor. so wearable tech, high-tech cars, smart tv, cloud security, which start-ups will be grabbing venture start-ups this year? managing director joining us this morning from stanford. great to have you, good morning. >> nice to be here, carl. happy new year. >> happy new year to you. you've had a series of happy new years. you've had a hot hand for a very long time. walk us through some of the areas at least at first broadly that you like going into 2014. >> you know, the two areas i think we are very excited about is one of cyber security. the other is connected home. as you can imagine at ces everything's been connected to the internet, which, one, raises a lot of opportunity, but also a lot of risk around security. >> it's been said that's going to be one of the big broad themes of ces starting today. how soon are we going to see some of those flash points that build further credibility behind those space sns. >> i think it's going to happen sooner than people realize. i mean, you think of things like

snapchat and skype and see we're being connected to the internet in many ways. i hear about toothbrushes and electric razors being connected to the internet. god knows what happens when you get security issues over there. >> i feel like people are lumping in two security issues. one is hacking, which is what went on with snapchat. the other issue is denial of service attack prevention and thic things like that. how do you think about those two? which are you more interested? ? >> i'm concerned a lot about hacking because i think people don't quite understand how deep a supply chain hack sg and how people can come over. the other thing i'm worried about is all these things get connected to the internet. let's say the tvs, you have smart tvs all connected to the internet, someone can hack the tv and look into your living room. and that raises an interesting set of risks. >> what's the most interesting security company that sits between connected home and web-based security? >> you know, i don't want to keep talking about our portfolio, but we thing bit site

technologis technologists, the moodies of securities, will probably be the one to tell you what's going on in terms of security risk. >> are wearables being underappreciated, overappreciated? how would you characterize the faith people are putting into these products? >> there were a lot of conversation about watches and quantified self, but i think it's still early. i think, you know, the story of technology is always too early, too early, too late. i think we're still in the too early. >> funny how that sneaks up on you. >> i think this is the year of wearables. i think we go into holiday next year everybody's going to want something. >> really? you think it's a christmas 2014 story? >> i'll tell you why, i think from the reports i've been reading apple's going to go into it, i think the pebble is great, the samsung watch is great. we're going to see a lot at ces and i think people ultimately want easy connections and not pulling out their phone all the time. >> venky, is there a pushback on that? >> i'll tell you, associate of venture capital firm in 1998 and

1999 told me i think smartphones are going to be it. spend a lot of time researching wireless data, it took time until 2007 for the iphone to make it. we tend to overestimate how quickly these things happen. >> the back half of last year was about valuations grant it with a few specific players, but to what degree is that a concern in the valley? >> valuation is a concern. and you do have these isolated cases where valuations have gone really high. but look, i think the changes we are going through whether that's mobile, social, we try to think of this as the right-now economy. those are fundamental changes and they create incredible value. so i think that we are in for a great run in terms of fundamental paradigm shifting technologies that are going to impact humankind. >> certainly that's what we're all waiting for. be a fascinating year to get through. venki, thanks for your time. please come back. joining us this morning from menlo ventures. let's get to dominic chu

with the dow now down 54. >> shares of best buy taken a hit. the weakness is being attributed in large part to a disappointing sales reporting from fellow retailer hh gregg. $400 million in market value compared to $15.5 billion for best buy, but hh gregg said sales this holiday season negatively impacted by sales from other retailers. some worry it can be a concern that best buy's margins could take a hit because it did use that promotional pricing strategy this holiday season, watch the bby shares. >> one of the great performers of last year, dom, thanks. it is cold outside. nasty winter weather lingering in the midwest, some of the coldest temperatures we've seen in about 20 years. we're going to get a live look on the conditions on the ground in a moment. plus, bad weather why this past weekend's football games were almost blacked out on local television until some corporate sponsors stepped in. we're going to talk to one of them when we come right back. [ male announcer ] here's a question for you:

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three stock picks for this year. and as this brutal winter storm continues to race across the country, we're going to look at some stocks in your portfolio that could get a deep freeze. it's all straight ahead at the top of the hour. carl, see you in about 15. sounds good, scott, thanks. nasty winter weather plaguing much of the midwest bringing some of the coldest weather we've seen in decades. mike seidel is live with more. >> hi, carl. last night when we spoke it was about 30 degrees and right now windchills running 40 below zero here in indianapolis. yesterday was the second snowiest calendar day on the record with 15.2. and now in indianapolis they've had more snow than they typically see in an entire season. the mayor just lifted the code red that was issued yesterday to keep everybody off the streets except emergency vehicles and people trying to seek shelter. it goes to a code orange at lunchtime. so basically the downtown is almost deserted. got a few cars coming by.

the roads were snow packed and snow covered. they have plowed these streets, but again, we've got about an inch to two inches of what froze from that heavy wet snow yesterday. still about 50,000 customers in indiana without power. now over to chicago, another horrible day at o'hare, carl. we've got about two-thirds of the flight schedule canceled. arrivals, departures, following 50% of the flights yesterday. it's been like this almost every day for a week. and this morning they broke their record low for this morning of 15 below zero. flights today, again, just a few going in and out of there. back east the cold air is now moving into new york city. the cold front has just moved on through. just checked the temperatures at central park and newark airport, carl, they've already dropped ten degrees. 50s this morning, your highs tomorrow there in the new york city area will be in the teens. so it's on the way your way. back to you. >> we are bracing for it, mike. thanks so much. mike seidel from the weather channel in indy today.

meyer saves the day helping the indianapolis colts avoid a local blackout in the wild card contest with the kansas city chiefs by purchasing 1,200 tickets to the game. they were donated to local military families. the co-chairman and co-ceo joins us this morning with the colts hat on. hank, great to have you back. good morning. >> good morning, carl. great to be here. >> this is a great story on your part, but it's also a complicated story as to why the game didn't sell out in the first place. was it all about the cold? >> we've got a lot of customers in our part of the world as you just heard who not only can't get flights or don't dare drive but who can't get out of their homes. so when the colts with whom we've got a terrific relationship called us and said we don't know how to get this on the air unless we get some help, we couldn't resist. this was just a great opportunity to connect with our customers and with our friends in indiana. >> did the league, did the franchise, did anyone give you any kind of price concession on the tickets?

>> not that i'm aware of. the colts reached out to us, and we just responded. it wasn't a negotiated situation. >> and, hank, what did they say to you? they just wanted to make sure it was filmed so when the camera pans to the crowd there's people there? what were the rules around buying the tickets? >> they wanted to make sure that the colts were on tv so that their fans throughout indiana would be able to see the game who couldn't get there. >> wow. for them to call you, hank, that's a compliment. i'm assuming they didn't call anyone else first, that's a big deal and says a lot about your influence. we've had some debates on this show as to whether the blackout rule is antiquated. fcc has some thoughts on that, the league has different thoughts. where do you come down? >> we really haven't been part of that discussion. we really were responding in this case to a call that said we don't know how to get on the air without selling these tickets. would you be interested? and we just jumped at the chance. >> hank, how do military families go about getting the tickets? did they follow on twitter or

facebook? how did they reach out to you? >> we worked with the organizations that the colts had identified. indiana national guard plus several other indiana veterans groups. >> hank, how much good will do you think this buys you among the community? obviously not that it's about that, but certainly it must cross your mind. >> well, it felt great. it's hard to quantify that. i don't think you ever can. this is part of the relationship we want to have with our communities. and so when there's a chance to be a part of the game, we jumped at it, as i said. but beyond that the way it turned out, we couldn't be prouder of our colts and of the chance to present this to the community. >> just an unbelievable game. you got to hand it to luck and the team. what fortitude, what must have been said during that halftime chatter it definitely worked. >> no kidding. >> how has business been, hank, in the midst of the weather? i'm trying to think of my willingness to go to the grocery store if it's 20 below outside.

are you feeling it? >> we absolutely feel it. and it goes both ways. people are worried about a storm, they're stocking up. and that's great for business. but then sometimes the shelves get low and it's hard to get new trucks in. on balance it's been good and we're really pleased with our delivery schedules, but it's a challenge to operate stores under such conditions. >> finally, hank, facing the patriots, i'm not sure how you're feeling about going to boston and truly playing in the cold. >> well, we were spared that this time, but we know that the colts are used to it. and we're cheering for them. >> hank meijar who saved the day in indianapolis this past weekend. hank, good to see you. >> thank you, carl. bye-bye. this morning priceline.com announcing it's the first online travel company announcing to strike a partnership with automaker, in this case general motors. what does a gm-priceline.com partnership look like? we'll ask the ceo of priceline in just a moment. ou fifteen percent or more on car insurance.

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simon's back here at post 9 with a special guest. simon. >> karm, you mentioned before the break an unlikely duo partnering up through the chevy on star app. chevy customers will be able to book hotels right from their dashboard. chris sodder the ceo of priceline.com, welcome to the program. >> thank you for having me. >> how does this work? how physically will people book

now through the new system? >> okay. so through this partnership chevrolet customers will have two ways to locate and book priceline.com hotels while they're on the go. the first one is through chevrolet's onstar system. by pressing the blue button they'll be able to access onstar advisors who can then connect to priceline.com inventory, search for hotel options wherever they're going and help book and consummate the transaction so they have a hotel when they need it. and the second way is through an app that they'll be able to download from the new chevrolet app store. >> i think the app is still to come, but will they basically be speaking to an advisor? is that what you're saying? >> yes, the onstar piece will be just like a normal onstar interaction speaking with the advisor over the onstar. >> and why did chevy decide to team up with you? why did you decide to team up with chevy? and how exclusive is it? >> well, i can tell you that the -- we will be the sole

provider of hotel inventory for the onstar system. and for us we look at mobile as -- we look at ourselves really as a mobile first company. mobile is certainly the fastest growing part of the business. and we know that mobile means more than just your handset or your phone or tablet. so we look at what we call new emerging interfaces or new ways of people accessing the internet and make sure that we've got a great system available for those and certainly one of the most obvious one is cars. >> chris, rbc has you guys down as a long, and point one in why they have their long thesis is a global leisure, only 35% online penetrated. if we look at the past year we look at google's acquisition of ways for example, how much do you think of cars as being the third place? desktop, mobile, cars? how big could it be for you guys? >> it's hard to say for cars because nobody's really done anything like this before. we know from the folks at gm that one of the most asked

questions over the onstar system is information about hotels on people's route. so we believe, you know, millions of customers out there, chevrolet customers and again with the frequency of people needing information about hotels and our great hotel inventory we're very, very optimistic. >> it's still going to be chris, like the one out west, isn't it? until we settle down. ces over in vegas is full of talk of who's going to do deals and whether the operating systems for cars might in the future be android, i don't know possibly apple's operating system. how do you think the whole thing will shape down in the future? because there is a danger presumably that you guys could get squeezed out here. >> well, here's the way we look at it is it's unclear exactly how this will play out over time, but the one thing we know is we want to be wherever it is people are looking to book. so regardless of which platform ultimately becomes the operating system, we have apps that work on android as well as ios and

again now by working directly with chevrolet to offer it with their in-dash system, i think it provides, again, really great coverage of all the potential ways that this might evolve. >> mr. soder, thank you very much for sparing the time. the ceo of priceline.com. >> driving's going to be a lot different in the coming years, i'll tell you that. >> i just hope people keep their eyes on the road. >> i would have cut a deal with android or ios and get it across all them. >> i want to talk to siri and say find me a hotel. >> yeah. >> wow, tell you the prices. >> thank you, simon. thanks for bringing it to us. when we come back, a harsh review by amazon's jeff bezos, galapagos five stars, kidney stones zero stars. that's what the amazon founder and "the washington post" owner is saying after being evacuated from a galapagos vacation due to a kidney stone attack on new year's day. tweet us at squawk street, we'll get some of your answers next. she keeps you on your toes.

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his private jet and onto a u.s. hospital for emergency treatment. no surgery though. how did the amazon founder and owner of "the washington post" review his experience? galapagos five stars, kidney stones zero stars. i think we can all relate to that. that brings us to this morning's squawk on the street, other than kidney stones what else would bezos give zero stars, one writes the weather. jeff bezos would give lore -- and five stars to amazon revenue, no stars to profits which we all understand as well. speaking of twitter, john, it's off sharply today. basically given back all the gains so far for this year. you've long said it's a rich stock. why are analysts so late to the game? >> i don't know why we're finally seeing downgrades. and what's also frustrating everybody lumping together all of the social stocks with twitter. twilter is basically double the price. you and david were discussing this this morning. the morgan stanley report that came out today with the $33

price target would basically put it ev to sales in the same ratio as linkedin. if you look at facebook, facebook's going to grow about 30% this year. twitter's going to grow somewhere between 70% and 100%. i would give it a little premium. i think it should be in the 40s. >> john, great having you here. >> thanks for having me. >> let's get back to headquarters, scott wapner and the halftime. thanks so much. let's get straight to our game plan for the second half now. where is the love for twit sner a big downgrade for the stock today, so why is another wall street analyst bailing on the site? on a high note, lyrical's andrew wellington up 50% and now unveiling latest plays. we're trading the market with today's starting lineup, john, pete, steven weiss and anthony, certainly thinks a bit wiser, happy 50th. good to y