>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. there are some disturbing new details today about a security breach at the white house earlier this fall. and the failures that let an armed intruder make his way into the front door of the family's residence. including an officer who was distracted talking on his cell phone at that point. we'll have that story in just a few minutes. the dow just coming off another record close. the s&p, as well. these are modest gains. but look, you're talking about the s&p over 2000 at this point. the nasdaq on a four-day winning streak, trading at levels we haven't seen in over 14 years. all the major averages are on pace for the fourth straight week of gains. on today's economic calendar, a few reports of note. at 8:30 eastern time, we'll get

retail sales and import/export prices. also worth watching today, november consumer sentiment and business inventories. andrew, over to you. >> corporate news this morning, oil field services provider baker hughes confirming it's now in talks with rival halliburton. this after "the wall street journal" reported on negotiations between the two. a merger would create a want korth $67 billion or possibly more. this year's drop in energy prices has hurt and sent stock prices in the nasdaq much lower. industry watchers note a deal would likely face anti-trust concerns. we'll talk to an analyst who covers the company in the next hour. there's a real bet that oil price res going lower and that they need to consolidate to compete with schlumberger and the rest of them. >> stock deal. they exchange cheaper stock for cheaper stock? >> cheaper stock for cheaper stock. i imagine there would be a lot of layoffs because part of the whole idea is you would be

trying to get your costs down. speaking of energy, the iea saying the dramatic drop in prices showing no signs of ending. the boards of both of those companies, the agency suggesting weak demand, a strong dollar and brewing u.s. oil production could signal a new chapter in the history of the oil markets. markets trading near a four-year low this morning. focus is in vienna later. >> i looked at who we have on today to talk about oil. we've almost run out of people. >> we don't know if they've been right on oil. >> right. well, definitely not wrong. >> steven shore pienlly through in the towel. he's been bullish on a daily basis on natural gas. he said after yesterday, forget it. >> it's human nature when you follow anything. it stayed at 90 for so long that

every -- well, whatever. we found someone that maybe quite quite as wrong. a couple times, you've actually made the point that they may not shut down wells they're already producing, but they certainly put in their efforts to find more. who do you think they buy all the stuff from to go in and do the -- >> it's just -- >> we knew this was going to happen. >> cheaper stocks for cheaper stocks. it makes sense to borrow money at zero percent interest rate. >> but either way, it's probably a good time for these. they will definitely rationalize. >> 24e8 they will rationalize. but schlumberger is so much larger. i'm always concerned about anti-trust issues. there are certain pieces of the baker hughes compensation where they might have to sell pieces off to go regulatory approval. but for the most part, they are

still far behind schlumberger, even at a combined group. >> and at times like this, obviously, they're not getting together. they could get a monopoly on the business. they're trying to survive. >> but it also means that those boards must be making a legitimate call on oil. >> right. >> mean it's not -- >> look, if anyone could have kept oil prices higher, they would. and who knows how long they did keep them higher? when it was at 90 and we were like, wow, it's stubbornly between $90 and $100. >> they must think it's on a steady slide. >> what's what i mean. >> but if you get to the point where these guys actually either cap wells or stop exploring, at some point, the lower supply -- i mean, this is like the constant supply/demand. >> we're not going to have any peak oil segments this week, probably. have we booked anyone on peak oil? >> we were almost out of oil about five years ago. >> i don't think we've talked peak oil since 2008. >> about five years ago, we were

at a couple of wells just at the very bottom where we were trying to -- the very last part we were getting up. something -- >> something changed. >> did we run out of stones? i don't mean that. did we run out of stones at the end of the stone age? >> there were still stones, right? there's still stones. >> there still are stones. >> so you don't necessarily run ott of things until something better comes along. you looked at me like i was cheeppy when i asked if there were no stones. >> why don't we check out the futures this morning. the dow was at a new high yesterday. the nasdaq was 14 1/2 year high. take a look at futures this morning, dow futures up by just over 9 points. nasdaq futures and s&p 500 futures higher, as well.

the ten-year is yielding 2.343%. the doorl, euro trading at 1.2458. there are a lot of arguments about whether gold has bottomed here or not. right now, $1,152760 an ounce. >> we have key data out of europe this morning. surprisingly, the eurozone economy dpru more than expected in the third quarter. seema mody now with the highlights. good day, seema. >> good day. good morning to you guys. joe, let's take a look at the data. the health of the european economy, of course, continues to be a focal point for investors. today's numbers, though, slightly a sigh of relief. taking a look at germany, the most robust economy in europe, it was able to avoid entering recession, which was the big fear. seeing growth of 0.1%.

france beat expect ages with growth of 0.3%. france, up 0.3%. but the bad news is italy. italy saw a contraction in its economy. so italy is still in recession. that is a big concern for investors. taking a look at how markets are responding to that european data, right now they're looking at the italian markets up about 78 points on the day. france, because they were able to beat expectations is the outperformer, up a couple points in today's trade. but germany continues to trade lower, the ftse 100 down just about 12. guys, deflation is still a big concern for investors. actually october cpi coming in at negative 0.1%. so that is probably one of the reasons you're seeing germany react negatively today. back to you. >> all right. seema, yeah, we were -- but we don't even want to go. daylight savings, we went off and -- >> what time is it there? >> it's six hours.

>> davos, six hours and -- >> it's 10:00 a.m. here. >> so five hours. >> we don't even want to know. >> five hours ahead of you guys. >> but daylight savings -- >> there's a period where did she. >> there's a period where we used to do morning -- because we had "worldwide exchange" and there would be times when we would put cramer's show in there on repeats because of a one-week period where -- >> you guys change at a different tooit time, right? >> there was that one-week period a couple weeks ago where we were six hours ahead instead of five. but now we're back to five. >> so it is good morning. >> good day solves everything, except you sound silly saying it. sounds like you're saying good-bye. good day. let's talk about what's going on. eu regulators say starbuck's dutch tax deal may be illegal state aid. the setup allows the coffee chain to pay on a lower corporate income tax base.

other companies have the same thing going, apple, so we will see whether it's allowed. >> we do have another record setter for the dow. it's his 25th record close this year. the nasdaq hitting a 14 1/2 year high yesterday. and it is interesting to note on this day back to 1972, that the dow closed above 1,000 for the first time ever on this day in 1972. joining us right now to tell us if this raging bull market will continue is darrel correct me if i am wrong, wells fargo's chief investment officer. jonathan gallo, chief u.s. market strategist.. guys, welcome to both of you. jonathan, this is something that feels like every day we're looking at new records. people used to laugh at jeremy siegel when he said 18,000. but with the dow at the enof the year, he might be right. >> october didn't quite make the --

>> almost. >> but all the people say we're due to have this correct. they need back to the early '90s where we sent 720 days without a construction. then we went 1600. i think we're going to see this in a 10 ers to 15% pro year, moving higher for the next three or four years. >> why? why are you looking at double digit gains for the next three or flower four years? >> if you look at where the bond yields are versus the cost in stocks, the cost of capital for a company, which is what the company is going to tell for, the gas is too wide. while people think that peak margin companies can't squeeze more out. ceos are doing a brilliant job of managing expenses and we think margin res going to continue to edge higher. and we think we'll get everybody

back. >> we've heard a lot of var ages on that. thinking there is no alternative, stocks are the only place to be. but you are looking at the fed probably raising rates next year. there are some questions about how that will go. >> yeah. i think that's right, becky. i mean, that's always the concern is that when you hit that inflexion part of monetary policy, that it becomes the end of the bull market for equities. if you look at bull markets, bull markets don't end with improving confidence, accelerating gdp, accelerating earnings and improving fundamentals. they just don't historically. so we're a little bit in jonathan's camp, not quite so optimistic. but we think next year you could see the s&p earn from around $128 on eps, which would put us somewhere at a median. so 8% from here with a 2% dividend so you're eking out double digit gains next year by

year-end 15. >> so the changes that we've seen, the weird things that have happened with the ten-year treasury that was confounding it, now we're looking at oil prices. obviously that has a lot to do with the stronger dollar. there are going to be unexpected consequences that come along the way. how do you guys think ahead of that? how do you get in and try and figure out what that all means? >> so actually, you know, there's a lot to be said about what effect the decline in oil prices and specifically the violent decline is on s&p eps numbers, earnings per share numbers. actually, it's interesting, if you look historically, the effect of oil on quick moves has a very asemestymmetrical effect. it hurts the markets more acutely at first. when oil prices go down and this discussion about this big tailwind and this tax relief for the consumer,s there's some of that, but it's not equal on those price limits.

the key for oil will be to the extent that it stays here and that this becomes kind of a structural move down and we stay somewhere around 7$75, $80 verss go back to $90, $95, $100. >> what does that mean, what happens if it goes back to $90, or $100? >> i don't think anything. >> but if it stays at these levels, you'll have to exchange your earnings outlooks for next year and as a result bring down your s&p estimates? >> i think some, but not as much as most people believe. energy is a big sector of the market. but again, you get tailwind of energy consumers and their expense and to jonathan's point, the s&p -- >> do you we're about that actual, jonathan? >> when you have oil falling from 105 to 75, as much as i'm really optimistic, it is a sign that something is broken with global growth. and this is not a u.s. growth story, but this is a global growth story. and the same thing, if you have

the year start with 3% treasury yields and end the year at 2.3%, it's a sign that you have a growth problem. and part of why this is -- money is flowing to where they think they can find growth in this world and that's the u.s. seema before was talking about how the strong european growth, we got ten days out of germany, i'm not sure what that means. ten basis points is still, from an earnings point, that's a recession. >> you're familiar with the term cartel, no? >> yeah. >> an agreement between competing firms to control prices or exclude entry of a new competitor. how do you know this was definitely a sign of global growth? how do you know the cartel is unable to keep prices where they want them? how can you possibly tell the difference, that it absolutely

means there's a problem with global growth? >> you're implying that -- >> i'm implying they have a caught called prices. >> yeah. >> listen, dooit be? i guess. >> where is the slowdown that you see that's going to be so evident? and when will it be evident to the rest of us? >> it's very evident. your business had been running at, what, 0.35% growth for the past two years. >> you throw in what we've done in this country in terms of supply, and you throw in the inability, really, of carpetel folks who -- sooner or later, the supply/demand fundamentals come home to roost. >> there's a ton more -- it's a lonely view of the world economy. here you are with a big bucket of water. >> i tell you that 10% -- >> you hate 18,000? you hate -- come on board, will

you? i'm sorry. >> i agree with joe. i think it is more of a supply story than a demand story. i will tell jonathan. >> on a friday. >> yes, that's right. >> no, i do -- i do think it's a supply side. when you get big, violent moves in oil historically -- >> there's just something so satisfying. something to satisfying about watching it happen that i can't take it as a negative. i want to take it a win-win for everybody. >> we just put out a report this week and looked at specifically on days oil goes up than when they do down. >> give it some time. >> but we did this for the last 12 months, the last ten years. the market likes oil higher mostly because the market views it as -- whether it's right or not. >> but near term, when the retailers all post better results, consumers have more money in their pocket -- >> i was just going to say, when you have big violent moves, it's

either the backside of a slowdown in demand, which we haven't seen yet. it's a precautionary demand concern, which you could maybe argue it is. i would argue it's more of a supply shock than it is demand. >> we'll see. i really don't have that strong of an opinion about it. >> just think about how optimistic he is on stocks, though. >> 10% or 15% for him -- >> no, too negative. he's lost on the whole global growth thing. >> gentlemen, thank you for coming in today. we have to talk about a serious story, but you just said backside. on the back side. and i'm looking at the daily news. we have to do the white house intruder story. but kim kardashian again. you wonder why she does these things. it's been four days. we're still talking about it. so now do you know how they've advanced the story? the daily news has identified the man that oiled up her --

they've oiled the man -- we don't know pktly the brand of the oil that was used because he can't remember, but there's an extended interview in the daily news talking about how it was -- >> who did the spray tan? >> there's another spray tan where it's just baby oil is all. and apparently kanye didn't really -- usually it's very controlling. he wasn't there. but they got an extended interview with the guy that actually did hsh wow, it's a tough name. d-e-d-i-v -- >> mario dedivanovich. she's sampling some butt boosters, it says here. there's some immigration stuff happening and, you know, i guess russ russia has bombers on our coast, but the daily news has its priorities straight on this one.

if that's not a head shaking story, another one out of washington, new details on a series of failures that let an armed introoug truder make his way into the white house. did you see that? running through the halls. we need dogs there. we do. dogs don't get on and talk to their girlfriends. the secret service had a prostitute problem a year or two ago, too. this is the same agency. not the one that clint eastwood used to run, right? they were a little more serious. anyway, homeland security issuing reports about what went wrong. peter has the details. >> everybody out wab right now. >> this is the home video of omar gonzalez running across the

white house north lawn in september. reviewed by the department of homeland security blames the secret service through a series of performance, organizational, tactical and other failures. the report found the skroot service alarm systems failed to work properly and many of the officers on duty didn't see gonzalez armed with a knife as he scaled the fence. among the failures are a secret service officer with an attack dog who was not listening to a twoo-way radio because his ear piece was out. instead, that officer was talking on a cell phone and only gonzalez after witnessing another officer running toward him. >> we can accept a couple human errors, but not as many as seemed to happen in this understand all at the same time. >> gonzalez was unaware he had broken the security because an alarm box had been muted at the request of the usher's office.

he barrelled past the guard, ran the entire length of the white house to the other end of the east room before he was talkeled by an assault agent near the doorway to the green room. cleaned up to get back to the organization that we all admired and respected so much. >> that was a report we saw on nightly last night. and our news out of washington, t"the wall street journal" reports the just department is using data, all part of the marshall's service program. it started in 20307 and the goal is to target criminals, but the journal said the government is thought to be grabbing info from a number number of citizens. we kind of know this, a lot of these programs collect a lot of

data. >> is it bad if you're not used it for some -- >> if you're keeping the story, they said they only fly these plane because of the expense of flying these planes when they know they're looking for specific targets and oftentimes more than one target. meerchk they only put the plane in the air if they have several targets that they can do this mickicing. in the old days, you have to go to the cell tower company and say please give us your data. the whole program took time. i don't know the legality of it. when they're up there, they're correcting because every phone will give the information automatically because there's no way to do it otherwise. but i don't think they're taking the information necessarily. in this case when they put the plane in the air, b they're looking for specific targets.

they're not flying around randomly every dayic thing up information. >> i have nothing to hide. >> i don't know where you draw the line and i don't know what you're willing to give up to make sure you're safe. obviously, things have changed a time since 2001. at this point, americans have to assume that they have very little privacy. >> don't you need a search warrant to get this type of data or some kind of court oregon something if you effect youly pretend you're a cell tower, that in itself preend tending you're a spying technique. when we come back this morning, the nba commissioner calling for legalized sports gammeling. we will have his argument right after this. plus, an argument quietly

settled. how amazon reached a deal and what it means for the publishing of book prices. stick around. op wealth management firms in the country... for a team of financial professionals who provide customized solutions... for all of your wealth management and retirement goals, discover how pnc wealth management can help you achieve. visit pnc.com/wealthsolutions to find out more.

welcome back to "squawk box." amazon hads over whether or not

amazon has been undercutting authors by cutting the book too cheap. joining us now, author of the ebook, the battle of $999. how am, amazon and the big six publishers changed the ebook business overnight. good morning to you. >> good morning to you. >> help us understand exactly how this deal works. none of the reporting indicates what the numbers really are. >> that is true. unfortunately i wish i had more information for you. but as public as the dispute has been, we always knew in the end that the deal itself would be private and confidential. who is the whipper of this? after all of this time. >> the simple answer would be amazon, to be perfectly honest. certainly hachette didn't gain anything by having their books filled promptly by amazon over

the debate. >> how about on terms? >> good question. both sides seem to be happy with the deal right now, which explains very little about why we have the dispute in the first place. >> hac had heette is going to be able to set its own prices. >> how amazon discounts prints is probably not going to change much. how it lets its prices for ee books is where the rubber hit the road here. i'm getting there is going to be some mechanism in the deal that mandates the digital price away certain percentage lower. >> there are incentives in this where if they were selling it at a certain price, maybe hachette gets a certain amount of revenue. >> there is an incentive in the

deal, but i don't know if it's a positive or a negative incentive here. i don't know if they get a bigger cut or if they get a penalty. >> if they wanted to take down the prices of books, he thinks the book are too expensive, long-term if his if his goal is to make books more affordable, did he get closer to that goal? >> that is a good question. we'll have to see how the deal plays out in practice. in theory, i would say yes. >> who is getting hurt more by this ongoing battle? >> it remain toes be seen how authors are going to be paid. since 2007 is when the commercial ebook market began. >> what do you think about the image hit for either company, but i would say specifically

amazon. there were questions about whether they have a monopoly now on books, whether people in washington look at that, whether the author and establisher community rebel against amazon in some way. how do you see the dynamics sorting themselves out.? >> i don't see amazon taking a long-term hit over there. thou it certainly has raised an issue. not a lot of cop assumers know the brand of hachette. they deal with the trades, they sell at the bookstores so you don't run in saying i want that new hatchet book. >> that was my question. both sides seem happy coming out of that. does that mean the consumer lost or the writers themselves lost and got handed over in this whole thing? >> i don't think anybody

necessarily has to lose here. as amazon makes the case, the lower prices are, the lower volume, you make more money. more than have a certain price flow charge book and get a certain cut. >> it sounds like if amazon and jeff besos were trying to disrupt the business, you're close rather than some sort of discorruption. >> what i would look at for amazon is innovation. they've brought a lot of innovation products to the market. they've launched the kindle. if there's a disruption that has taken place, a lot of it had to do with innovation. i wonder where the ebook market would be today if it was left to the publishers. i can amazon's goal of moving the ebook market more quickly in the future has happened. >> thank you, andrew. good name. coming up, congress one step

closer to approving the keystone pipeline. but as crude falls, the economic no longer make it viable. we'll take a look when we return. you, my friend are a master of diversification. who would have thought three cheese lasagna would go with chocolate cake and ceviche? the same guy who thought that small caps and bond funds would go with a merging markets. it's a masterpiece. thanks. clearly you are type e. you made it phil. welcome home. now what's our strategy with the fondue? diversifying your portfolio? e*trade gives you the tools and resources to get it right. are you type e*? ameriprise asked people a simple question: in retirement, will you have enough money to live life on your terms? i sure hope so. with healthcare costs, who knows. umm... everyone has retirement questions. so ameriprise created the exclusive confident retirement approach.

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cme group: how the world advances. is senate is set to take up the keystone pipeline bill next week. if you believe the president's press secretary, it will be vetoed by president obama. the great immigration debate, a form he w43 cnbc contributor and

my friend and my party -- >> did you just do air quotes when you said friend? >> no, i didn't. were we not hanging out together at cnbc's 25th anniversary? >> and sara, too, by the way. >> i don't remember opinion i wasn't really -- i was nice to sara, actually. >> you were nice to me. >> i was. we were talking about how you were rough on andrew. >>. >> yes. bernstein is a cnbc contributor. god all mighty. we're going to have to nd it here, guys. so, jared, you have al been, as far as i can remember, a backer of keystone. >> well, i always assumed that the oil was coming out of the ground. this is a particularly dirty form of crude partnership wasn't crazy about it environmentally. i thought as long as it's coming

outs of the ground, it might as well go south instead of west considering you would work out some of the issues being debated in nebraska. now being that the economics have shift shifted, it does seem like the in the money strike price for developing that is a battle of will because something north of the right side 90, maybe something between $90 and $100 a barrel, as long as oil remains below that and new forecasts suggest it will for a while, i think the economics here may have gotten ahead of the politics. >> you know, the thing about that, though, is if you think about where the world population is, you've got a billion plus people in india and china raising their standard of living. and i listen to people on this network every day talk about the price of oil. i don't think many people think it's going to stay low long-term until -- this is still good policy. and as we see in the senate race, which is driving this, the louisiana senate race which is driving this boat, good policy is good politics. and that is why this is going to

be voted on. >> i don't know whether you know where oil is going, sara, or anybody. but the most compelling part of this story and what we're not even talking about is harry reid finally bringing it to a vote now. oh, ghee, that's so -- it's down 16 points. it's fought going help. it's not going to help. it's a joke. >> listen, i happen to agree -- >> allowing her to get political cover for the runoff and -- for people that are watching this and already mad at washington, nothing is being done here should talk anyone out of being cynical about whooudz. >> i 100% degree with almost everything that you just said. the idea that someone is going to go to the polls and change their vote because of this strikes me as extremely fanciful. you might want the keystone pipeline to get a thumbs up from congress for all kinds of reasons, but you're right about the politics. it kind of takes me to

immigration. i think there, actually people would like to see the congress do something. they're not going to do anything because of the gridlock and the president is going to act. >> here is the challenge with him acting and the way that he does it. the republican leaders are saying all the right things heading into this next conference about corporation and working together. this is nothing more than a stick in the eye at the republican congress. it is going to poison the well. we're going to see nothing in the next two years based on the way the president is conducting himself. he seems to be tacking to the left, which is a curious strategy with me. >> i've talked about this with my colleagues today. and actually grudge picked up on it. the "new york times," obama resurgence, they've written that piece only ten days after the election. >> that didn't take long.

>> no, but my point is -- peter baker. he delayed immigration for political reasons to give his people cover so the election is over and now he's doing it and he's a hero, according to the "new york times." all he did was he delayed it. >> and he delayed the keystone pipeline. >> he delayed it to be political and now he follows through on it because he's a -- >> let me respond to that and ask sara a question. fi first of all, i really don't think on immigration he's tacking to the left. i think there's a lot more bipartisan support for comprehensive immigration reform than sara's comment would suggest. secondly, and here is a question for sara. so i take the point that he's putting a stick in somebody's eye here. that's correct. but given that these republican ves said we want to come back and work together, would it be in their interests -- i think it wouldn't be, but i want to hear what you say, to sht shut down the government over this? i think that would be kind of nuts. >> they want that. you're giving them the idea

right here. >> i think sara disagrees, go ahead, sara. >> yo, i don't disagree. i don't think it's in the interest of the government to shut down. mitch mcconnell said it's not happening. why not let the process play out in congress? >> because it won't play out in congress. that's the problem. if congress were going to do this, i would be completely with you. they're not, so he has to act. it's unfortunate, but it's true. >> sara, there will be all kinds of bait put forth like this to the republicans from the left to say, go ahead, do something that ruins your chances in 2016. jared loves this. >> we can't take the bait. >> it is an idea that they might be able to consider, might work, might be a good idea. >> the more republican house members, john boehner has more room to maneuver. >> yeah. look, this is good policy for the country. the bottom line, that's what matters. >> good policy, good politicking, too. if it causes them to -- anyway, thank you, both of you. and thank you for coming to the

party. although our bar bill went up a lot with both of you guys. >> not true. >> anyway -- >> not true? >> not true. >> how do you know? >> i was with them, too. >> okay. maybe it was from me after talking to jared. i had a couple of stiff ones. anyway, still to come on "squawk box" this morning, the power of taylor swift. how the top selling artist is revolutionizing the music business. plus, virgin america is set to take off as a public company today. we'll ask if richard branson's company can deliver. plus, tony robins will join us on set.

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taylor swift. her latest album selling more copies in its first week than any artist since 2002. there's one thing she's refusing to shake off, namely to pay for streaming. find out what she's doing about it when we return. .later, all the cool kids are doing it. icahn, ackman, loeb. why activist investors are more popular than ever. but first, take a look at cnbc.com's most clicked on story and how they performed yesterday. ading dock. ♪ there should be a truck leaving now. i got it. now jump off the bridge. what? in 3...2...1... are you kidding me? go. right on time. right now, over 20,000 trains are running reliably. we call that predictable. thrillingly predictable. e

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world and we are just living in it. she's plastered on the covers of two major magazines. business week's feature says taylor swift is the music industry. and they got an exclusive interview with the star. how is the 24-year-old music mogul changing the industry for the next crop? and is her music sustainable? joining us is the assisting manager of "time" magazine and the culture columnist for "the wall street journal." thank you for being here. help us with this. just put her in relative terms in terms of the music world overall versus the past. where is she compared to michael

jackson, madonna, all of those kinds of people? >> i think it's more instructive to talk about what she's doing presently. right now she's the biggest thing going in music. her first week sales were bigger than the sales of all the other albums in the top 100 combined. that's how many units she was moving. and that's amazing. that's why when her record kpaern and taylor swift decide to pull her music from spotify, people sent out a notice. >> one out of five albums that week were sold by taylor swift. >> all artists took their music off their spotify, would they be in the same position she is? no way. >> here's the difference. taylor swift can make a move like this because she's got a lot of corporate partners that are helping her to sell physical records. she did a deal with target, diet coke where she appears and they

say buy her album. she has people that have her back. other artists, if you're in your bedroom somewhere in new jersey and you're trying to move a few units, you don't have diet coke ads to sell your music. you need people like spotify to check out your music for free. >> there's a lot of anger and confusion out there among artists with spotify. one called it the last fart of a dying corporation. people are not happy with it. >> is she wrong or right about spotify? she says people should have values about what they created. that sha should feel like they're paying for something. and her problem with spotify is because spotify has a service where you don't have to pay. even for the paid service, i think to some extent she doesn't think that people really feel they're paying for her music. >> i think her problem with streaming music is she doesn't want it to be given away for free. she wants a gated community where people actually have to pay for entrance with a little

more exclusive. and it stands out in a sea of stuff out there. people for akwhiel thought that maybe digital music would save music. now downloading has gone down in the recent months. people thought that maybe streaming services would somehow save music. but now it seems as that model doesn't generate enough revenue. so taylor swift is saying maybe there's another way of doing it. her last three records, not just this one, the last three records have sold over 1 million copies in their debut weeks. >> i wonder what she is doing is replicatable by anybody else? >> it's not. one magazine said taylor swift is the music industry. we have had an exclusive interview. she's not. it's the opposite. she's not the music industry. it's hard to imagine anyone can do what she's doing. >> is she just a great example of somebody who has business front and center who looks at this and is going to knock this

out and doesn't get -- like you see so many of these younger stars who fall into the traps along the way. she hasn't. >> she's a phenom. think about how she launched this album. think of the other big albums this year whether it's beyonce or jay z. there are a lot of gimmicks in how they introduced them. whether it appeared on your phone or itunes or dropped that night. she recorded her fans having small concerts they felt like it was important to them. she made it clear to her fans it's important she sell albums. >> she won't be here any too many soon, i can tell you. and there's a reason. she is loyal to her 15, 14, and 16-year-old fans. and i don't think she wants everyone to think she's in this as a business. >> well, she talked to "time" magazine how she thinks of it as a business. >> but she's writing op-eds in "the wall street journal." >> i think it's important to send a signal -- >> she's not a sellout to younger fans either. >> she is in control of her

message and image. >> they identify with her as a young person. >> this generation, there is no selling out for this generation. they don't really care whether her song appears in a target commercial or a video. >> i think you will see her on cnbc soon enough. >> i've tried. i'm trying. i don't know. andrew's main problem is, you're worried she could some day eclipse the gloved one. >> she may. >> i saw you asking those questions. >> she may eclipse the gloved one. i used to wear the glove. i'm a fan. >> you're talking about michael jackson. the audience weren't here during the break. >> the gloved one? >> there was a point while taylor swift may be a business mogul, that there is a team behind her including a manager of hers who's trying to sell his company currently and one of the reasons they didn't want to put the music online on spotify was to effectively raise the value

of his company. is there anything -- >> we've talked to both parties. we spoke to her manager, record label, her. they're competing who will take credit for this move. swift says this was my decision. the record label says this was my decision. these are people trying to make a lot of money. >> i think one worth talking about, you were mentioning before maybe she's a representative of music industry. but i think the way taylor swift is being treated here perhaps can send a signal to other smaller artists that there's a problem with the industry. spotify is putting out for how much she's being compensated for her work. >> did you see the freddie mercury/michael jackson duet? >> of course. >> you did. you're serious, right? >> yeah. >> so freddie mercury got fed up because bubbles was sitting in between them and every take he

said was that good. should we do it again to him. then freddie said i'm out of here. bubbles was involved. >> thank you, guys. >> taylor swift is at least a good role model out there for girls. >> she is. >> michael jackson was a good role model for andrew. when we come back, virgin mobile is going public. we'll talk about that. ♪ for tapping into a wealth of experience... for access to one of the top wealth management firms in the country... for a team of financial professionals who provide customized solutions... for all of your wealth management and retirement goals, discover how pnc wealth management can help you achieve.

visit pnc.com/wealthsolutions to find out more.

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comcast business. built for business. more pressure on crude. are oil prices triggering a wave of consolidation? two giants are at the merger table. >> i drink your milk shake! i drink it up! ready for takeoff.

richard branson's virgin ipo about to make the move. or is the billionaire too late to the party? and the man who motivated 50 million people is turning his attention to the world of money. an interview with life coach tony robbins. the second hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. don't adjust your tv sets just yet. lloyd and harry are back. "dumb & dumber to" hits theaters this weekend for universal. this is cnbc, of course part of comcast just like universal. it's been 20 years since the original hit the big screen. the year was 1994 if you can

believe it was that long ago. stick around. in just a little bit we'll show you why it was such a great year at the movies and a kbig year for jim carrey himself. >> the plot he pretended to be in a catatonic state just to play a joke for 20 years or something. i don't know whether that's -- >> i don't know. but i think there's something -- >> that's the first joke of the movie. >> one of them has a daughter. just wakes up 20 years later? >> he did it on purpose to play a trick on everyone. but he did it for 20 years. >> jim carrey? >> yeah. and jeff daniels says that's a good one. got me. >> anyway, another flashback for you. this time on the markets. the date was 1972 and the dow actually closed above the 1,000 point level for the first time ever. today the dow is at 17,652. that's a new all-time high. it is the 25th record close for the year. also the nasdaq is at a 14.5 year high. that index closing at 4,680.

once again you're going to see some green arrows in the early trade this morning. oh, i take it back. they've turned around. at this point they're down by about 10 points for the dow. s&p futures off by two. the nasdaq by three. >> it went -- didn't get back above a thousand until 1982. so there was a 10-year period where it went down and was below. >> a precursor. >> to 1974 the end of the nifty 50 and the gut wrenching -- it was a bad period for financial assets in the '70s. the iea says the dramatic drop in oil prices shows no sign of ending. the agency suggests that weak demand, a strong dollar which i would put that in capital letters and booming production could signal a new chapter in the oil markets. prices are trading near a four-year low this morning. focus is now on an opec meeting in vienna later this month.

but 74 right now. can anyone with a straight face say 69? >> saying 69 is the bottom? >> no. will we see it at 69. >> i think you easily could. they move in $5 increments. we've had guys come on and say if it falls below 80, look out. if it falls below 75, look out. now you're on the next one. >> premium was $2.95 today. >> what was regular, did you see? >> i don't know. probably $2.60, $2.70. something like that. unbelievable. >> let's talk a little bit about some corporate news this morning. baker hughes confirming it's in talks with halliburton. a merger would create a company worth $67 billion. this all comes as the drop in energy prices has hurt demand

for drilling. it sends stock prices in that sector much lower. to deal with anti-trust concerns. going to talk about all the issues around this transaction who covers those companies. virgin america airline is going public today. phil lebeau has more on this new arrival for investors. and i don't know. do you buy airline stocks? we have a new one, phil. >> we've had a heck of a two-year run, joe. that's going to be a question of investors over the long-term. when you take a look at virgin america, keep this in mind. when it lists later this morning, it'll be 13 million shares priced at $23 a share. $360 million with this. valuation will be about a billion dollars. under the symbol v.a. the question a lot of investors have, should you be buying into an airline that just turned

profitable in 2013? there's no doubt there are challenges for virgin america that people will be focused on. the argument could be great there's plenty of room for growth here. but remember it's transcontinental that they made their mark. it's a lot of competition heating up there especially when it comes to luring the business travelers. virgin says 40% of its revenue last year came from business travelers. as we talked about a number of times, this is an ultra competitive segment. and take a look what we've seen from the airline stocks in the last year. when you see these kind of returns, it brings to question whether or not this is a sector and stocks that have really just run so far so quickly that the best days are behind them. spirit which was the last ipo. then you see delta and united. and the airline index over the last two years, up 131%. so there's no doubt that investors have realized the

gains here and certainly with falling jet fuel prices, this is a good time for airline stocks. coming up later on "squawk on the street" we'll talk to virgin america ceo david cush. we'll talk to him about the outlook. there are a lot of questions regarding the airline industry at the run they've had. these are things that investors need to keep in mind. >> have they marked it up? the current valuation. and do you buy it? stick around. let's continue the conversation with aviation expert and chairman of the boyd group to talk more about the virgin america ipo. what price would it demand two years ago and with that in mind, is the -- is it already reflected, all the good news about this whole industry is it going to be reflected in the price that the ipo comes at? >> i would think for virgin america, it would.

they've got solid management. they're not expanding capacity. i think they've got -- they don't have hallucinations like a lot of airlines have had in the past. i think it's going to be a stable airline, a small airline. it's not going to take over the world. but i think they understand their niche. so i think it would be a very solid $24, $25. >> so is a hallucination even grander? >> does that take it one step further? >> it probably does. the one thing with virgin america, they've done a solid job. they're in dallas/ft. worth. they're going to move to love field. when they're at dfw, they had 20% as a new entrant. that's pretty good. in terms of brand drilldown, they're doing well. going forward i think they're going to be a solid small carrier. >> sorkin, you've flown virgin

america. >> love it. >> why? >> it seems easy. the planes are all new. >> is there a front of the plane and a back? >> there is. and either is fine. they're all great. >> you've flown it too? >> yeah they fly out of jfk a lot. their staff is very service oriented too. >> you will pay top dollar for a first class seat and then there's also coach? there's a big difference in the seats. >> yes. they have great first class seats or business class seats. and the coach seats are great. they have electricity at every seat. because it's all new planes and because the people are actually interested in you and the service and it doesn't feel like -- >> from the legacy carries, they feel like they've been losing benefits over time. >> it's true, but keep in mind, becky, that because they have been so effective with these transcontinental routes, it has forced delta, american, and united to all raise their game

on these koss country routes. and they have been effective in their response to virgin america. doesn't mean they're going to take all of the business away. it's just become such a hyper competitive segment. people like andrew saying it's a wonderful flight experience. that the go the attention of the legacy flight carriers and they've responded. >> but they don't allow children. that's probably why you like them. >> no. there's children all over the planes. it's a wonderful thing. >> there are? and it's also -- the price point is lower on virgin america? they can do it with a low price point? >> they've got low costs. >> no legacy issues. >> there's no real legacy issues. with virgin, the only reason they're really doing well is they treat the customer well. that was the recipe for southwest originally. that's the recipe for jetblue. treat the customer well and you're going to have a niche in the market. >> again, it's easier to do that

with employees who don't feel they have lost benefits or are on the receiving end of getting dumped on when taking away benefits. i think that's part of the problem. >> it is. you have motivated employees. they say we've got a good product here. we don't make people line up 40 minutes from departure time. that's a big difference. and employees reflect that. >> michael, real quick. are you worried long-term that their cost will go up? you see jetblue started this way. and it's not the same anymore. >> well, the beauty of jetblue, they see the future and they know how to adapt. they're not going to become a volkswagen beetle and say where'd the japanese come from. they're going to see costs go up certainly but they're a well-focused airline and understand adding capacity doesn't make money. adding service does. >> michael, you know all about all kinds of aviation? >> i try to. that's the business we're in, sir. >> why does bono -- why did he

have a leer jet? why doesn't he have a nicer jet with hundreds of millions of dollars? >> i don't know. maybe he's economizing. i don't understand. >> you got to be cheap. you can't even fit in one, can you phil? >> whoa, whoa, joe. i spent a good chunk of time in wichita, kansas, where leer is based. i know you would consider a leer jet the lower end of the private jet market. not what you usually fly when you're going to st. andrews. but a trip from dublin to somewhere else in europe, it's fine. >> global express. or g-650 or something. i'll walk off the tarmac if i see a leer jet there. >> not surprised. >> very funny. but i had to question that. leer jets haven't been -- i don't know who owns those at this point. anyway, thank you. leer is going to be mad at me.

but even assess like a citation. and later this morning on "squawk on the street" a cnbc first interview as we said earlier with david cush. i see that. ceo david cush. this is the talker of the morning. we haven't had a chat about this yet. a potential game changer in the sports world. adam silver calling for the legalization of sports betting. he writes in part, sports betting should be brought out of the underground and into the sunlight. even cited the new jersey bill as an example of the growing appetite for online gambling. congress he says should adopt a federal framework that allows states to authorize betting on professional sports. silver's position is a complete reversal for the nba. i wonder what david stern and some of the other commissioners of different sports think about this. where do you stand? >> you know, i don't know.

i haven't thought it through. i don't really have an opinion on it. >> there's betting on sports? >> would you prefer it be legal or not? >> you know what? i'm like you, andrew. any vices, let's make them legal and tax them. and blow it on something. you know? let's tax it and blow it on something. why not? it's happening anyway. >> what's your serious view? >> why wouldn't that be my serious view? >> because you don't like to tax things. >> i don't mind taxing things. i just wish that they'd take care of it when they actually use the proceeds. >> anyway, i think i'm with adam silver on this. coming up, a possible merger. halliburton talking to baker hughes. we'll talk about it. and time to get motivated. tony robbins has consulted presidents and world leaders. now he's out with his first book in 20 years.

this time the focus is on financial freedom. he's going to join us in the studio during the next half hour of "squawk box." we're back in a moment. ? this guy could take down your entire company. stay with me. on thursday a hamster video goes online. on friday it goes viral - a network choking phenomenon. why do you care? he's on the same cloud as your business. the more hits he gets, the slower your business may get. do you want to share your cloud with a hamster? today there's a new way to work. and it's made with ibm.

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one massive merger proposal. oil services giant halliburton in talks to buy competitor baker hughes. joining us now is oil services analyst who covers both. are both boards effectively just even by having these conversations saying that oil prices are going to continue to decline? >> good morning. good morning, everyone. well, you know, it's an interesting time to try to put two of these companies together as you've mentioned. oil prices have been on the decline. i would have to imagine that halliburton is looking at this as an opportunity, potential to consolidate at a time when stock prices have declined 25% to 30%. maybe they're thinking they can get a better valuation here. >> you don't look at this -- do you look at this as a defensive transaction? >> i actually look at it as a very aggressive transaction from the halliburton standpoint.

it seems like they're needing extra help to get there and accelerate that process. and therefore looking at baker hughes. >> help us, though, with this piece of it. which is from an anti-trust perspective there are pieces of their business where they will own a significant part of the market. and there are pieces where they won't. there are things they're going to have to give up the approval. >> i think there will be a number of different businesses that the doj will have to look at given the market share concentration. we've identified about seven different product lines where the baker hughes, halliburton combination will have an excess of 35% market share. i understand that's a threshold where the doj takes a hard look at some of these transactions. what's even more interesting than that is when you take baker hughes and halliburton and combine that with the market position in these seven

different product designs. the market share will be anywhere from 60% to 90%. >> and when you think about this particular deal from a price perspective, is halliburton paying the right number? too high, too low? >> based on some of the math we've run, it looks like the base case that we think it'll be done at is between $25 and $27. halliburton will probably take that as high as maybe $90 a share before it becomes earnings diluted. i think what's important for halliburton right now is that they maintain the investment grade credit rating post any transaction. so we're assuming a 50/50 debt equity mix. so, you know, i'd say 70 to 75 is the sweet spot. maybe as high as 90. >> thank you for joining us this morning. >> thank you. >> appreciate it very much. we got to get cheney on to talk about this. >> i was thinking about that.

who bought something and had a lot of liability? i think cheney bought something -- was it dresser or something and there was liability they took on? where was that? halliburton? >> joe, you have a great memory. back in 1998, halliburton bought dresser industries. when they bought it, they bought asbestos liability to go along with it. >> is the whole bp thing -- halliburton's liabilities are all taken care of there? >> yeah. the situation is now in the rearview mirror. they're essentially going to be paying that out over time. >> the stigma on what it represents is not gone, though, is it? >> i think it's fading in time as you take a lot of elements of out of it. >> some people think we went to war in iraq for halliburton. i still hear that. anyway. >> all right. >> from you, from certain people. how do you say your name?

>> it's hallead. it's simpler than most people think. but i have fun with it. >> thank you. when we come back this morning, 1994 was a good year for jim carrey. it was a bad year for nancy kerrigan. even a worse year for tonya harding. a trip from the way back machine to 1994. we mark 20 years since the release of "dumb & dumber". >> you mean you have been faking for 20 years? >> uh-huh. >> and it was all for a gag? >> yep. >> that's awesome! >> right? take a deeeeep breath . and... exhale... aflac! and a gentle wavelike motion... ahhh-ahhhhhh. liberate your spine... ahhh-ahhhhhh...aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just four days. ahh!

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there's a place that is is right for your business. see if startup-ny can work for you. go to startup.ny.gov. you're right. it is the christmas tree at rockefeller center. i'm trying to figure out when the lights go on. >> we've got that date, didn't we? when's the debut? >> the star is on top. >> on the third of december. on nbc. >> who's the big musical person? do we know yet? >> i don't think they have revealed the musical act yet.

when they do, we will reveal it here on "squawk box." >> it takes them that long to decorate it? welcome back to "squawk box," everybody. >> i might know some people who know some people. when does al go to the bathroom? >> i was wondering. there is history in the making today. al roker is closing in on a guinness world record. he's been trying to do a weather forecast for 34 hours straight. there must be a five-minute break to go to the bathroom. >> i could just barely pull it off in five minutes. >> i'm just trying to listen to his voice. sounds scratchy. >> yeah. >> that is hard to talk for that long. he began just after 10:00 on wednesday night. he will continue until just after 8:00 this morning. so he's only got about 34 minutes to go before he breaks that record. that's a tough one. might be tired. >> lot of money he's raising.

we should also talk about the sequel to "dumb & dumber." it's been 20 years since that was released. if that doesn't make you feel old, here's a look back at 1994. in addition to "dumb & dumber" jim carrey had "ace ventura" and "the mask." >> do i have anything in my teeth? that was my favorite. he had asparagus from his mouth. do i have anything? >> you're good. crude oil trading at its lowest level in four years. wouldn't you know that washington is now set to green light the keystone pipeline? i don't know what we're saying there. perfect timing as usual. washington is not going to green light the pipeline, obviously, because it's going to get vetoed. the breakdown of the crude crumble when "squawk box" returns. t robot butler.

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welcome back to "squawk box"

this morning. among the stories front and center, a surgeon who's been working in sierra leone and has been diagnosed with ebola will be flied back to the united states tomorrow. he'll be treated in nebraska. also morgan stanley telling their brokers. they received their bonus totals this week. and the ftc wants more information from apple. it's going to be preventing sensitive data collected from its new smart watch and other devices from being used without consent. and hertz restating a 2012 to 2013 annual and quarterly financial statements. th it says it will need to make material adjustments. hertz had already announced it would restate its 2011 financial statements. of course i think they are still looking for a ceo after mark left that company.

also, oil and america's energy policy top in washington this week. debating the keystone pipeline extension. how much further is oil tumbling and does keystone still make sense at these levels? what do you think? does keystone still make sense? >> actually, at this price pipeline is probably the best deal for keystone. as you get lower and lower on crude, you have a bigger differential from transportation costs meaning more to the upstream producers. so at $90 a barrel, taking a train to the gulf of mexico, not such a big deal. $75 a barrel plus the quality differential for oil goes downward, suddenly you want that pipeline. it is still a big deal. >> what do you think has happened with oil prices? i know the stronger dollar. i know part of it is supply and demand picture. but what do you think has really happened? it's been quite a collapse.

>> yeah. i think we need to back up from all the minutia of financial differentials and ask, you know, what does the end user do after getting kicked in the head twice with high prices within a decade? the answer is demand changes. it becomes less responsive in the old days six or seven years ago you could unlock demand. a lot of the stuff we do with oil for fun. driving, flying, moving stuff around. you could unlock that demand in the developed world. it doesn't happen so much now. much more efficient. you have to rely on chinese demand to respond to low prices. yes, they can fill their reserves. but when they refine the oil, they're sending those back out into the market displacing crude somewhere else. >> was $100 a barrel. >> one is the expensive oil is all we've got left. and to some extent that's probably true.

but expensive is a relative thing. over the long haul, the price of oil tends to converge around 2.5 and 3.5 times of the cost of refining and development. right now about $25 per barrel. you're talking between 75 and 90 as real price of oil. what did a hundred mean? probably that we had libya offline. we had a lot of questions about the world. and demand was expected to be more ferocious than it was. >> the opec group seems to be acting the way a lot of other disrupted technologies, a lot of other disrupted industries have reacted. they try to hold on at any price. at this point they're willing to lose money on this practically to make sure they hold market share and not do what they've done in past years. this may be the same thing we've seen disrupted by every other situation out there. old industries are broken up. is that what's happening? >> opec has only been a well-functioning cartel at high

prices. defection happens because they need money when prices slide. opec broke entirely. usually they come here with a nice looking consensus about what they're going to do. june of 2011, they deadlocked 6-6. there's differences between the sunnis and shiites within. it has functioned very poorly. what the saudis hope to do is bring it back. they are trying to pull together a coalition to say yes let's cut. but let's have it be somebody else. >> so what do you think ends up has been with the keystone pipeline? >> well, right now we're at a point where president obama is going to improve the pipeline. he could still do it himself and take an early session victory away or extend an olive branch. it's been set up for awhile. what's in the way is nebraska.

the nebraska supreme court could rule as soon as today, but if they do the state department could say yes. otherwise if the congress tries to force it down the president's throat, it would look likely not to get vetoed. >> he won't let it go. if they send it to him today or whenever -- not today but next week or something, he won't -- he'll veto it. right, kevin? >> not necessarily. it depends on whether or not he truly thinks that there's some political gain to be had in helping. >> exactly. >> we don't think so. >> i know. it's going to be all -- right. all about political games. been five environmental studies completed. which one is this one that we're waiting for? do you know? >> we're done with the environmental work. what we're waiting for is the determination which is being held up by the nebraska supreme court decision. >> he's got to be nice to tom

styer. he has to, right? that's who he's appeasing and that's how it works. >> he's got more at stake here. the next two years he's going to be in a browal fight with congress. is he going to show he's going to buckle now or take a strong stand? >> i'm sure he's trying to make sure he considers all the things that help get hillary elected. i'm sure that's his priority now, helping hillary. >> well, we'll see about that. >> kevin, thank you for joining us today. >> thanks for having me. coming up next, the man that has motivated more than 50 million people in over a hundred countries. he's now turning his attention to the world of money. it's a first on cnbc interview. he's making his way to the table now. legendary life coach tony robbins is here. he's going to join us on the set right here. >> oh, my god, he's tall! look at this hand.

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one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement. welcome back to "squawk box." he's advised people like nelson mandela and margaret thatcher. bill clinton and that's just a couple of them.

tony robbins is here. he's got a new book out, his first in two decades. he's gracing this week's cover of "fortune" magazine. he remains a force to be reckoned with. tony robbins joins us to share tips on investing in his new book "money: master the game." he talks to many. also with us is the ceo of financial services at hightower. arguably partnered with tony early on to help you figure out the financial game a little bit. >> yes, he did. >> thanks for being here. before we get to the book i have a question. you've been working with jones. >> since he was 39. he's now 60. >> what is it you do for him? >> my job is he had a rough patch. he's one of the greatest traders

in history. going back to the biggest drop in history, he made 200% that year. but it's going to the moon. what do you do after going to the moon? he lost a bit of edge. figured out the model of what he used to do, brought it back. my job is to help him maximize his capability. i come see him quarterly. >> you're not telling him stocks to buy. you're talking about trying to get his mojo back. >> it's about maximizing your capacity. same thing to do with an athlete. everybody has certain strategies. it's really about making sure those are consistent. i make it simple enough to make him follow through consistently. i found complexity is the -- he's able to maximize his results. >> so you measure everything? >> i measure everything from the way he evaluates trades, to what he does before he makes a trade. before he makes every trade, years ago when he was better, he stopped doing is simple thing

which is saying this is a five to one. i interviewed 50 of the best in the world and said what is it that sets you apart. they all are obsessed with not losing money. but the biggest thing is they look for that risk reward. so paul's approach is if i'm going to invest the dollar, is it really a five to one. yet unlike talking heads on television, he knows he's going to be wrong. i may be wrong four out of five times and still do well. he's not wrong that much. i put systems in to maximize. i'm also there during the tough times to help him shift it around. as a trader, you don't want to take the hit. you have to do that if you're going to be effective. >> you marry your losers. >> that's exactly right. >> you rarely let the profits run -- instead of getting five to one you get 30%. then it goes up. >> and these guys they all make

it run. >> it's human nature. you have to go against human nature. >> the average person doesn't do that. if you look at the market, did research on the last 20 years. and they found the market was 9.2%, the s&p. but the average mutual investor made 2.5%. that's disastrous. that's for the reasons we all know. they sell at the wrong time, buy at the wrong time. my mission was i grew up in a rough environment. when 2008 happened, i suffered enough myself to not having that be statistics. they all got out of the system. i said what can i do? if i interview these 50 and brins principles that are real, that's a worthy mission. that's what brought this book out. >> so how did you find him or how did he find you? >> i got the phone call, i was driving to get my kids. they said tony robbins is on the phone. he wants to talk to you. my reaction was, you've got to be kidding me. >> so you did not know each

other? >> did not. >> had you read awaken the giant? >> i had listened to his material. i did not know him, but i was an admirer of him and what he stood for. and i got a phone call and we're on a three-hour phone call talking about the industry because that butcher and dietitian white board we put out a couple years ago that explained what a fiduciary is and what a fiduciary is not. somebody sent that to tony. and he said i'm going to talk to somebody who put the white board together. >> since you're here, what does he do for you? people think it's magic what you do. or they don't believe it or they're skeptical. it's hard to comprehend. can you articulate what it is? >> i can't. right now in the next 30 seconds. but i'm going to let tony describe what he does for people. >> i think what i do is i focus on how to create breakthroughs. i spent 37 years of my life looking for those strategies that make the difference. there's only a few areas that affect life. body, relationships, money,

finances, emotions. and when you obsess for 37 years and find people the best, they have strategies. i'm a hunter of excellence. i know the average person does not have a physically great body. the average person does not make money in the market. >> whoa whoa whoa. >> other than you, joe. but a few average people do well. i'm obsessed to find what they do and teach it to other people. >> have you ever been depressed? >> sure. >> you have? >> oh, yeah. without a doubt. >> in the last 27 years? >> do you know how to get out of it? >> i felt depressed 17, 18, 19 years old. i had times i got angry. i think i put a line in the sand. when i was depressed i didn't take action. i did. >> you could do wonders for -- because it's a real -- i think about people that get to that position where they might consider doing a drastic thing,

but today it's now attributed to physical chemical imbalances that can be treated with drugs and things. so i wonder how that works with your thinking on how you tell people that it can all be self-motivated and you can do it through thinking rather than some type of medication or something? >> medication is about changing biochemistry. >> endorphins work. i don't get depressed, but i don't think i've been in a bad period if i've run that day. >> because it wipes out depression. i show people who are on maximized -- they've done prosack and everything elsewhere i go who's suicidal? there's always half a dozen that are suicidal. i've not lost one, knock on wood, in 37 years. we follow up on them. and people do things for a reason. there are needs that we're trying to meet. if we think that living is more painful than dying, then we'll

make those shifts on people. you can also make that change. and investors do the same thing at a level. >> to what tony's done, when tony realized after the credit crisis in '08, i think that was a pivotal moment that i think you should tell people about. because that's when you realized all of the things you had been doing effectively became much more difficult if people couldn't pay their mortgage. and i think the '08 crisis was a catalyst for you. you went to work. you produced this book. you and i have partnered up. but that's an interesting catalyst moment that maybe you should share with people. i think that's powerful. >> just seeing that suffering again because i've been through it myself, i wanted to be part of the solution, not just pa rt of the problem. i thought i don't have those answers. if i go to 50 of the best and i can put that in a simple form, i can make a change. i came to elliot because i was looking at i'm going to teach people principles but they're going to go to somebody for advice. i want it to be somebody who's tied to make your best interest

in mind. not someone getting commission. not all fiduciaries are equal. some are not worth the money. they're not sophisticated enough. and i came to elliot. after intering with him i said i have a challenge for you. you're doing great work. you're in a place that's transparent. i said let's find a way to do this for the average person. and you're not going to make any money. but it's the right thing to do. he was open to it. >> so let's talk about chapter six. it's all about ray dalia who's been on this show many times. we've done all sorts of things together. he talks about in your book a way of thinking about investing that i actually haven't seen revealed. he's been on our show. he never wants to engage on that topic of what people out there should be investing in. >> yes.

well, i did 15 hours of research in advance. i was able to engage him. he gave an endorsement for the book. what i got him to talk to me about, i said listen. if you couldn't give your children any of your money but a set of principles, that's what i want for the ries of the world. what would it be? he said my all weather fund would be ideal. he walked through how to make money in every market. and i said explain it to me. e explained it. i'm good at taking complex things and making them simple. he's saying here's how people can make an incredible chocolate cake. get chocolate and sugar. i need amounts. he said i can't do that. hundred million dollars to start with me. i said you answered your own question. you're giving half your wealth away. you're not taking new clients. help the average investor out.

he said it won't be perfect. you're right. it will be better than anybody else's. we laid out the system. and in 75 years, the biggest loss was 3.95%. it's been right 85% of the time. and it has no leveraged. we call it all seasons. i put in the book, a bunch of friends make this an investment. you can go to the library for free and get his formula. 15 minutes a year, average 10% return. >> you got to tell people the formula. >> it's a little more complex than that. but i'll tell you last month when we saw the market give up all its gains, his formula went up. right now it's just at 13%. just above the market barely right now. even after the market had this huge return. it takes -- it's the smoothest ride i've ever seen or anybody who i've taken through it has seen over the long-term. this is not based on knowing the market. his whole theory about all weather is if you design this, you're going to do well in any

season. >> what do you invest in personally? >> i have a huge portfolio of all seasons. after i left him, i said i'm not idiot. i invest in a variety of real estate elements. i love senior housing because it's a demographic wave that's coming. >> are you actively trading every day? >> i don't trade. i'm an investor, not a trader. >> thank you for being here. >> thanks for having me. >> the book "money: master the game." appreciate it. >> thanks. up next, a new reason to make a run for the border. i don't need a new reason. taco bell has a new menu item. they put fritos on everything now. >> yeah. there was a shell made out of it. >> which is -- fritos or bacon. we're going to check it out when "squawk box" comes right back. then there's trusting your vehicle maintenance to ford service confidence. our expertise, technology, and high quality parts means your peace of mind.

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we have food to watch. how about a taco that you can dip? oh, man. yes. that's the sans for me. taco bell introducing the rolled chicken taco that's crunchy and designed for dipping. it there looks like one of those -- >> chimichanga things. >> no. yeah. taquito. rob, my man. yeah. there will be a choice of five sauces like spicy ranch -- i don't know if i can get through this. salsa, guacamole, nacho cheese,

and reduced fat sour cream. >> why bother with the reduced fat in sour cream? >> you'll be able too dip your own starting november 20th just in time for thanksgiving. brought to you by taco bell. i mean, what was the story? it was for me. there's no point to it. it will be ready at that point. andrew, have you -- >> but you did perk up. >> i totally did. >> i love this stuff. >> i admit it. >> taco bell is the best. >> it is. i've said it best, the worst mexican food is great. it's an old expression about that. that the worst mexican food -- >> i thought you made that up? >> i did. >> it's an old expression he made up. up next, we're going to talk about when activists attack. investors like ackman are the heads of the hedge fund world. we'll find out more after this.

and potpreneurs gathering for the business conference and expo. we're going to check out the growing trends at the industry's biggest trade show. "squawk box" will be right back. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets

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whale watching. the latest on the biggest activist investors. their holdings and whether or not they're hurting or helping companies. an eye in the sky. the government using small planes to track cell phones and collect data. is it an invasion of privacy or homeland security? plus candy is dandy but regulation is a killer. a look how edible marijuana is under serious scrutiny as the final hour of "squawk box" begins right now. ♪ all right. welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. check this out and listen closely. an unusual weather phenomenon hitting northeastern ohio. thunder snow.

wow. that's cool. >> you hear thunder occasionally. >> that's cool. this was the first snow of the season. a lake-effect snow advisory is in the area until 9:00 a.m. tomorrow. the rest of the nation dealing with serious cold temperatures as well. very early in the season. 20s and 30s in most of the country. take a look at that map. chill goes all the way down to florida and texas. >> okay. here's what's happening at this hour. good news out of europe. the economy will growing more than expected in the third quarter. most notably germany not falling into recession. also considering a proxy contest at that company after negotiations over board seats broke down yesterday. and nelson peltz trian upping its holdings. the beverage giant has rejected trian's attempts. activists are the rock stars

of the hedge fund world. take a look at the average returns on each activist move by some of the big names. bill ackman, nelson peltz, dan luke have all made serious money. the returns have been positive across the board. some times they doubled their investments. the question is does that strategy pay off for investors as well. whether or not the activists win or lose, you still pay. joining us with more in what has been a busy year, ken squire. thanks for being here today. >> thanks for having me. >> activists used to get a lot of attention. but now they get massive attention. why is that? the funds have gotten much bigger. >> they got a lot bigger and it's become a respected strategy in the investment world. the success of it in the returns has caused allocators to start putting more money in. now there's seven or eight guys with over 10 billion. and the institutional investors

are supporting them more, they're talking with them more. that's leading to them having a lot more power. >> more money means bigger targets too. so these guys are going after names that we know at this point. >> exactly. and look at your lead-in. you talked about pepsi. you talked about dow chemical. you talked about dupont. that was unheard of ten years ago. where you could go within 1% of the common stock and really affect change. you know, value got a seed at microsoft. that would have never happened ten years ago. >> is this for the good or for the bad of the investing world? or does it depend on a case-by-case basis? >> activism is like any other strategy. there's a lot that's good to it and other guys that aren't so good at it. especially now when everyone is trying to become an activist. the activists are given choices. they're giving shareholders choices as to, you know, ask the management's plan and what their plan is. activists don't have any power without the majority of shareholders supporting them. it's generally a good thing.

>> has it been a good thing to be an investor in these funds? >> these guys have been going great. their activist situations which we follow have been out-performing the markets especially these big guys for years. when you think about it, these are the most public, largest positions of some of the best investors. and, you know, so they're devoting a lot of resources to that. >> a decade from now, do you think that the business of activism would be so institutionalized that black rock would be considered an activist or even the activist label will disappear because everyone will finally start thinking on their own rather than necessarily just sort of voting with management which is sort of what most of the big institutions have done for a long time? >> i think a decade is not going to happen in ten years. i think these guys don't move that quickly. it's very difficult even today to get, you know, still a lot of

big portfolio managements for the big fupds feel they're going to lose access to management if they even support an activist. i think it's going to take longer than that. i think we will get there probably one day. >> i couldn't help notice bill at the top there, if you're able to partner up that helps to get to 106%. doesn't it? if you're able to sort of push the limits and raise eyebrows. i mean, you have basically the government looking at is this legal? do we need to do something here now? that's a pretty good strategy if you can get away with it. >> it's a great strategy. there was as people said well lawyered. and it looks to be legal. and to your point, will it be legal a year or two from now, we'll see. his 106% was the main factor and that was his general growth. he still has done very, very

well. >> what is that measure? he has a lot of funds. is that all the funds together? >> no. >> general growth was five years ago. >> this goes back to day one. every filing he's done. that's what that measures. >> okay. >> so are there situations -- we led into this that you're going to pay whether the activist does well or not. are there times this investor doesn't do well? >> there are situations that don't work out. you think of jcpenney. not everybody is going to be -- target. not everybody's going to -- you're not going to win 100% of the time. nobody has all winners, but act iivism because it's so high profile in public, your winners are high profile and your losers become high profile as well. >> is that a situation you should look for someone who has a fund that is continual. some of those are new funds he opens for every one. if you invest with him at all of those, you're okay.

if you're investing one at a time, you could be a winner or a loser. >> i wouldn't recommend investings one at a time. every one of his big positions have been fine. >> if there are people watching on tv who are not invested in these funds, how can you piggyback on the trade or should you even try? >> it's tough to piggyback on any individual trade. as you know, you're teeing this up nicely for me but i have a mutual fund that invests in all the best 13 ds. so you can get exposure to every activist and style and not piggyback on just one trade. >> although those filings come out, everybody finds out at the same time. >> yeah. there's a huge pop. and after the pop is when we get in. but a pop on average is 2.6%. 13-d has been beaten the s&p by

15%. >> what's the return on -- what's the rate of return on your fund? >> we've been around three years. this will be our third full year. our first year we were up 21% versus 16% for the s&p. last year we were up 36.5% net of our fees versus 32% for the s&p. right now we're up around 11.5%. so we've been out-performing since inception. >> how do you pick which ones are the best ones? just based on track records? >> it's based on track record, the sector, and what the track record is there. and most importantly it's based on what their chance of activist success are. who are the other shareholders. are they likely to support them. what are their chances of activist success? >> okay. you think that works in a down market too? >> i do. i think it works -- it doesn't work that great in a selloff market. you know, for that short period. that generally bounces back.

the dow markets, you know, i think it even works better because you can't rely on the markets to create value and create returns. you really need a catalyst to outperform in down markets. >> thanks for coming in today. >> ken squire. thank you. we're also watching oil this morning. the iea showing no signs of end bing suggesting that week demand in the strong dollar and booming oil production could signal a new era. touching its lowest price in more than four years. this morning we're now looking at this opec meeting in vienna that's going to be coming up later this month. and coming up here next, former council chair and harvard economics professor marty fe feldstein.

on the state of the economy. check it out. only two weeks until the unofficial start of the holiday shopping season. that's called black friday. we'll get the latest retail sales data point. the numbers are out at 8:30. so stay tuned. "squawk box" will be right back. o hidden fees on savings accounts? that's right. it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees, from the bank where no branches equals great rates.

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welcome back to "squawk box" this morning. let's take a look at stocks on the move. herbalife, a fraud case. he just found out about those charges in a comment to our own scott last night, saying it first became aware of the situation just two days ago. also nordstroms beating on both the top and bottom line. luxury retailer did cut its full year outlook. let's get to one of our very own squawk market masters for his take on a lot of things. the jobs, the economy. marty feldstein is former

council of economic ood visors chairman under president reagan. great to have you. we haven't talked to you since the qe exit was finalized. at this point i know you're watching things closely. so far, so good, is that how we should characterize it? and the next step is the first rate increase, i guess. >> certainly so far so good. the economy is, i think, finally broken out of the slow growth the last couple years. but now the fed's big challenge is to get interest rates back up to normal levels without upsetting the apple card. >> a lot of people and you to some extent -- and you don't have to be a student of history to understand that when you do something for as long as the fed did it and in such a grand fashion, that there may be some things happening you don't know about that could come back to harm you in the future.

how long do we have to wait before we know that we're definitely -- that it's all clear? and is it possible -- if we did this in a vacuum, just our central bank without the rest of the world doing it as well, i could see it might be a problem. but is it possible they can escape this extraordinary action and not have anything come back to bite us? >> well, i hope that we can escape it, but i worry that these exceptionally low interest rates are driving investors and lenders to take all kinds of risks to pick up some yield. and that's how we can get in trouble again. >> i do too. but i -- the way that we're looking for it to come back and hurt us is through inflation. and i'm not saying -- i don't know whether that's going to happen. it can come quickly. we know that. it can seem very worrying about deflation. maybe it can happen in a way we

don't know about. >> it's not inflation i'm most worried about. i'm more worried about this financial risk taking that's going on. if the economy slows down more than we expect, well, then a lot of these high-risk loans, these investments in low grade bonds and the like, they could get in serious trouble. and if the economy picks up speed and interest rates rise enough, well, then some of those borrowers are not going to be able to repay their loans. so it's a kind of risky balance that's the result of having this long period of very low interest rates. >> every time in the last four years or so that we thought the economy was moving into a higher gear, it seemed like we were disappointed to some extent. this time it seems like we're onto something in terms of being positive. what's different this time, do you think? what was the missing ingredient?

>> well, what happened the middle of last year was the head winds we were facing finally stopped. we were no longer raising taxes. no longer raising the payroll tax. we didn't have a worry about a government shutdown anymore. all of that was taken away. and at the same time the quantitative easing did what bernanke said it would do. that is push up equity. we saw a 13% increase in share prices. that raised household wealth by $10 trillion. so that's giving consumers the confidence to go out and spend. business says we can afford to hire. all those things have fallen into place starting with the middle of last year.

>> so if you were able to talk to the senate and house and president and they say you get one wish and we're going to sign off on it. we want more jobs, high-paying jobs. we want wages to go up. what's the one thing you would ask them to do to help us along? >> i think we're on the right track for most of that to happen. if i have one wish with the president and the congress, it's to look to the longer term fiscal problems with ef. the fact that we have doubled the size of the national debt relative to gdp in the last decade. and while it's stable for a little while, that is going to start rising. the debt is going to start rising and head towards 100% some time after the end of this

decade. it doesn't take heroic actions, but it takes slowing down the rise and sbielment spending. perhaps picking up some revenue by closing some tax loopholes. and that could be done by lowering marginal tax rates. >> seems like that's on the back burner. >> not all of a sudden on the back burner. i think it's on the back burner until after the next presidential election. >> all right. professor feldstein, appreciate you coming on today as a squawk market master. i was taking notes, writing things down. thank you. we'll see you. >> good being you. quick story before we go. jenny rometty has her short game looking down. she has been accepted as a

member of augusta masters. wait a minute. this year's member invites went out, apparently. >> didn't get one? >> you got to check your mail. >> again. i moved recently. i moved. maybe -- >> do you have a forwarding address? >> i don't know whether they have that? you know what? hope springs eternal. i'm going check with the post office. anyway, she's just the third female member of the prestigious club. remember people talked about when she went in for paul mesano. the masters has the three greatest sponsors. exxon, at&t, and ibm. and the ceo of ibm is almost always a member. so there was some talk that maybe she'll be the first female member. you know the way augusta national sort of does -- you know, the board will make its own decisions and they invited condi rice in first.

and now it has happened and ginni rometty, now she's a member. right. which i've said all along she's been good at trying to -- >> and she might be on the nominating committee next year at augusta. >> in a couple minutes the ceo of taylormade ben sharpe will be joining us. coming up, sears pulling out a secret weapon in canada this holiday season. mike myers teaming up with his brother for a funny ad. we'll show you after the break. and later, an eye and ear in the sky. the government tracking criminals and others in the secret program using small planes and fake cell phone signals. and the story, we've got it straight ahead. ♪

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sears canada has a new pitch man. pulling out a new secret weapon in a celebrity connection. pete myers has worked at sears canada for 32 years. turns out he has a brother who many people might know. yeah, mike myers is that who. comically refers to the retailer's problems. here it is. >> do you know anything about the retail business?

>> not a lot. just that sears canada has to alter the trajectory of its business model. but that would be a wild guess. >> more or less. are you going to do the tagline? >> to this commercial only been shown in canada, sure. ♪ come see the softer side of sears ♪ >> we don't use that anymore. >> boo. how about sears canada, my brother works there. >> you're an idiot. >> but that wasn't the brother. was the brother in the thing? am i an idiot? >> i assumed it was. >> that's the brother? they don't look alike. >> yeah, they don't look alike. >> at all. that was my only -- i kept looking at that guy thinking, is that the brother? apparently he is, i guess. >> where's mike? i mean, those are two iconic characters he created. actually three, really. wayne and garth obviously.

and then the -- you know -- who's the other guy? behave. >> austin powers. there you have it. >> he had a lot of remember the coffee class. like buttuh. >> huge movies where sequels were made. do we need another wayne's world or austin powers? >> austin powers, i think. >> see. they don't seem to look alike. >> they kind of do a little bit. i mean, the hair doesn't, obviously. i don't know. ♪ when we come back this morning, we'll be talking about october retail sales. we'll get those figures. also later, adidas missing the green due to a dropoff in business at taylormade. how the ceo plans to get golf growing again in 2015. right now as we head into break,

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welcome back, everybody.

the dow closing at a new high yesterday. if you check out this futures this morning, it looks mixed at this point. we'll have to see more about these numbers. right now the futures again as i said mixed. we are just a few seconds away from retail sales and import prices from october. rick santelli standing by with those numbers. >> breaking news. october retail news up a bit better than expected. no revision on last month's. down .3. let's take out all the important things and see which is really the dynamic moving. if we take out autos still up 3%. take out autos and gasoline, up .6. so that gives you some clues. they have this group that groups everything together. that number is .6. a full .2 better than we were anticipating. now, the only revision i see is autos and gas last time was down .1, now it's up .1.

so the retail sales data is better than expected. not bad at all. could be bigger, but everything can be bigger. let's look at import prices also from october. and one would suspect that there'd be a little pressure in that area. and if we look headline month over month, down 1.3. last month down .5. added a tenth. down .6. let's look at october and put prices year over year. they were down 1.8. and if you look at last month, they really added to it. originally down. let me get that again. it's down 1.8 year over year. i don't see any surprises. on the import side. most likely importing a lot less energy. i know everybody's saying it was the eia. in my book it was patty at cnbc who called me early at cnbc

saying we're now producing more than 9 million barrels a day, domestic crude production. hooray, america. it is the best pace since march of 1986. in my book that's 28.5 years. hopefully we'll keep coming back to the dawn of rockefeller time! back to you. >> yeah. and you got friends that trade oil, i'm sure, don't you? >> oh, absolutely. most of them have actually survived. but down here we have a saying. if it's good for america and not good for traders, too bad. >> right. that's what i've been saying for awhile too. >> did you see that op-ed by cochran at the university of chicago, the booth school? oh, my god. deflation really isn't as bad as some want you to think. >> i did see that. >> you know how long i've been on that soap box? since my hairline was down to here the first time i started talking about that. when powerful elite highly educated people have any

boogiemans at all, avoid anything that comes out of their mouths for the most part. you know what? a conversation is better than a fear factor. >> all right. thank you, rick. rick santelli. "the wall street journal" is reporting that the justice department is gathering data from thousands of cell phone using devices. on airplanes and it mimics cell towers. joining us now with more on the story. eamon? >> what they're reporting on is a heretofore unknown. what they're doing is flying cessna aircraft with what are called mz catchers. they are cell phone detecters that can fly over metropolitan areas and capture data on thousands of different cell phones at any one time. the idea being to look for criminals and people that are on their watch list. see if they can identify the cell phones of those people.

but they're flying these aircraft over metro areas. they can capture a lot of innocent american data as well. what "the wall street journal" is reporting is the department of justice told them that everything that they're doing here is completely legal and complies with federal law. but of course the concern amongst civil libertarians is that this is going to be a potential for vast abuse here. if somebody has the potential to catch that much cell phone data on average americans. the way this works is your cell phone at all times is out there trying to connect to a cell phone tower. if there's a device out there and mimics a cell phone tower, your phone will connect to it and transmit to that device without you being aware to it. that's what thaez mz catchers are. they capture data off the phone and they're sorting out the data of the people they don't need and tracking the ones they do need. everything on this story coming from the journal. we e-mailed the justice for

their comment of it and they have not gotten back to us. >> i need to write this stuff down. after the nsa stuff, i don't figure anything isn't being looked at at this point. >> that's probably a safe bet. and what's so interesting about this is that it's everything on your phone that can be extracted by these mz catchers. it's not just the metadata in the snowden revelations we were talking about, but your pictures, your gps, everything you're searching on the web. all the stuff on your phone can be sucked down. >> just to clarify two points. one is in the case of the nsa, they were collecting vast amounts of data and then trying to pinpoint specific targets. my understanding in this plr case is because the cost of putting these planes in the air, they're only putting them in the air if they know there's more than one specific target and they're looking just for those targets. does that change the dynamic of how we're supposed to think about this? >> it definitely does.

what you're going to hear from law enforcement on this is how valuable a technique this is in terms of tracking down bad guys they're looking for inside the united states. but i think the difference in the story here between the snowden revelations and this is that this would appear to be entirely domestic nap is, this is americans' cell phone data being captured. and the potential is here it's not just metadata, it's actually conversations. but, you know, the fbi would tell you they have to get a court order and a warrant. so that's the tradeoff here. how much privacy are people willing to give up in exchange for the effectiveness of some of these law enforcement programs. >> okay. all right. thank you. >> you bet. >> see you later. the golf equipment market in the rough a little bit. adidas latest results feeling a weakness. its taylormade line. dominic chu is with the

company's new ceo who's unveiling the 2015 product line. dom? >> that's right. so, joe, taylormade adidas golf is part of adidas, the apparel giant. they've been one of the underperformers and needs to right itself. the guy who's going to do it is my guest now. ben sharpe, the ceo of taylormade adidas golf. thank you so much for joining us here on "squawk box." can we talk a lit bit about equipment? because you guys are the big gorilla, if you will, in this business. what is it about this new equipment line that makes you think you can get golfers to go out and buy and spend their hard earning money? >> well, it's been a combination of a lot of hard work with our designers and our engineers. but also our marketing department to really understand what the golfer is asking for today. and bring them technology that can help them play the game. and message it in a way to make

them want to play. >> what exactly is new about these clubs that golfers need to get it? >> so the products we unveiled this week are three product irons. what that allows is a bigger sweeter spot on the face to allow you know the average golfer who does mis-hit it a fair amount to be able to get more distance off their mis-hits. and ultimately play a better game. >> one of the problems with the industry right now is there is an inventory glut. it's something that adidas ceo said they need to address. what exactly is wrong with the inventory levels in the market right now? and what is taylormade adidas golf doing? >> so what we've seen in the last 18 months is that participation in the sport has continued to decline. and decline for a number of reasons. the last two starts of the

season, weather has been a challenge and it's difficult to hit a white ball around a white field. and as a result the equipment business, a lot of people buy their equipment at the start of the year. the equipment business has struggled. but also we have to take responsibilities ourselves as well. we have to look at the products we brought to market over the last year. they haven't resonated with the golfer as much as previous products have. we're really excited about what we're bringing to the market in 2015. i think we can have a very strong year. >> there are many golf equipment executives out there who feel you're in a hot seat right now. you've got a precarious spot about trying to right a ship. what do you plan to do over the next year or two to make sure you return this unit to profitability? >> firstly i wouldn't want it any other way. i relish the challenge. and the company i represent is,

i believe, the best company in golf. i spent the last hundred days getting into the market and listening to what people want from our company. listening to the media, listening to our customers, but most importantly listening to the golfers. and through that period of time we've developed a business plan which we call the 3.0 playbook. where we're really looking at spom pillars about how we're going to build our business. and the most important is putting the golfer at the core of all the decisions we make. then we want to make sure we bring great innovative products. with great, strong story telling that resonates with that golfer. and then find a better way in how we sell those products. how we represent ourselves so we don't have the inventory glut. >> so if you talk about the way you're going to approach this, it sounds as though as a brand company you already have a large

presence in golf? . what are you looking for that company's overall feel to get people to get back into the game of golf? >> i think the whole industry has a responsibility to get people back into the sport. and certainly we will want to support a lot of those initiatives about how we can attract new golfers or retain golfers into the sport. the first thing i think we need to do is just start talking positively again. i mean, we're talking about challenges in the golf industry. and we've heard those challenges over the last 12 to 18 months. we have 20 million people playing golf in the united states. we have nearly 50 million people playing it around the world. it is a healthy sport. yes, can it get better? yes, of course it can. but what we want to do is make sure it's through our products and through our messaging that we're engaging people again. so when they see us, they want to go and pick up the game. >> what do you tell a company

like dick's sporting goods or the ceo of dick's sporting goods or any other large golf retailer out there? what do you tell those vendors who sell your products about what it is you will do with them to help manage their inventory levels? >> so that process has really started before i actually took the seat back in june. we were over inventoried. it's fot just a taylormade issue. it's a golf issue. one of the things we haven't done this year is launch another product. we've taken the responsible stance in trying to flush this product through. we're going to continue to do that through the balance of this year. so when the new products we have showcased this week come to market, they're doing it with the inventory in a better place than it was going into 2014. >> so a leadership position in inventory is how you're going to help the game of golf? they rely or us to have a great

year. thank you so much. back over to you guys. >> dom, i think i can help. i don't know whether you're listening closely, but you know where he said we're going to help make it so your mis-hits, you hit them much further. and i think that's one of the problems with me. i find myself much further into the woods at times. where -- before i'd be right on the edge of the woods or just barely out of bounds. no, i mean, i can't even -- it's gone. i don't want my mis-hits to go 400 yards. >> i see what you're saying. ben and i were talking before the segment here how many we hit. i don't know how many you hits. >> i'm lucky if i hit one in two

rounds. >> maybe this technology is going to work. >> like a two iron. i can hit every time. just flush. i don't think i've missed one. >> you're one of the few people who can hit a two iron, joe. >> yeah. read sarcasm there. thank you dom and ben. i've got an eight hybrid. anyway. >> i can't hit at all. coming up next, sex, drugs, and rock and roll. business stories in each of those categories. these are some crazy stories. "squawk box" coming back in just a moment. so ally bank really has no hidden fees on savings accounts? that's right. it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees, from the bank where no branches equals great rates.

so i can reach ally bank 24/7, but there are24/7branches? it's just i'm a little reluctant to try new things. what's wrong with trying new things? feel that in your muscles? yeah... i do... try a new way to bank, where no branches equals great rates.

with the marijuana business booming in colorado, there continues to be a segment of the business that's struggling from frequent regulatory changes. edibles. companies producing these are having a tough time. kate rogers joins us from the national marijuana business conference. that is the only conference for potpreneurs. what did you find so far? >> that's right. this year there's about 3,000 attendees. last year they only had about 1,000 at the conference. as you mentioned, these edibles companies struggling with regulatory changes. we chatted with this company. they make cannabis infused products. he says thanks to colorado's passing of leaguization in

january, in six hours they sold more product than they sold in the entire month of november the year prior. take a listen. >> the adult use consumers showed up in the state of colorado and clearly has a v voracious appetite for these products. >> but thanks to the changes, they're having to update their dosage information and packaging which is costly for a small business. >> these emergency rules are going to cost my company between $200,000 and $300,000 having to retool all the packages, redoing all the labeling and in some cases scrapping products that just are not going to survive. >> now, becky, that is a huge hit for a small company. and tripp says it's something they can't budget for. with that being said, the biggest struggle within the industry is access to normal banking relationships. it's oftentimes all cash business and they have a lot of product on hand. tripp walks around with a security guard. he's got him here at the

conference with him. we'll tell you more about the security concerns and how a cottage industry is helping these marijuana entrepreneurs. >> it's odd this would be in las vegas. are they even allowed to eat any of the edibles they show up with there? >> no. the conference has a really, really strict policy on any live product being here. they're not allowed to have it. that being said, we have heard of some 420 parties cropping up around the area. we haven't been to any, but there's talk of them. >> you'd think they'd have that in denver or something this time around. >> it would make more sense. maybe next year. >> everybody obeys all the laws in las vegas. >> you can't even put the product out where you're talking to people. >> the whole idea of edible pot, how do you monitor dosage? what if you leave some around and some kid sees it and thinks it's candy. or your dog. at least when you're smoking you got to roll it and light it up.

you know what you're doing. this sounds -- no wonder it's a regulatory nightmare. i can't imagine. right? >> it really is. i mean, so these for example, they have about 40 milligrams of thc in some of them. normal dosage is only 10 milligrams of thc. it's up to you to abide by those regulations so you don't have a situation on your hands. >> crazy. it's a new world. it really is. i thought i knew about things, but i don't. kate, thank you. in rock and roll news, kid rock scheduling a big summer 2015 tour. he's a friend of the show. totally slammed madonna when he was on. his album "first kiss" set for release december 24th. produced by mr. rock himself.

a single as well as accompanying video are scheduled the beginning of the year. the big summer tour with rock's twisted brown trucker brand is also in the works. new to me. rock said about writing and recording "first kiss" soon after returning home from his $20 best night ever tour was followed by a release of a 2012 lp. up next, jim cramer from the floor of the new york stock exchange. so ally bank really has no hidden fees on savings accounts? that's right. it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees, from the bank where no branches equals great rates.

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what's wrong with trying new things? feel that in your muscles? yeah... i do... try a new way to bank, where no branches equals great rates. i'm just looking over the company bills.up? is that what we pay for internet? yup. dsl is about 90 bucks a month. that's funny, for that price with comcast business, i think you get like 50 megabits. wow that's fast. personally, i prefer a slow internet. there is something about the sweet meditative glow of a loading website. don't listen to the naysayer. switch to comcast business today and get 50 megabits per second for $89.95. comcast business. built for business. what would help is simply being able to recognize a fair price.

that's never really been possible. but along comes a radically new way to buy a car, called truecar. now it is. truecar has pricing data on every make and model, so all you have to do is search for the car you want, there it is. now you're an expert in less than a minute. this is how car buying was always meant to be. this is truecar. ♪ >>. >> let's get down to the new york stock exchange. jim cramer joins us now. germany wasn't so bad and europe wasn't bad, yet oil is well below $80. i'd like to know for sure that it's just supply so we can really embrace it. we get data points that seem to indicate that. >> other than china, we have supply. there is a lot of pipe being put in now that is sending oil everywhere into the united states from canada. i know keystone looks like

that's the keystone of the whole issue, but it's not. there is plenty of work around. we are a big pressure point. we have excess supply everywhere. a lot of the big oil companies set up a big pack to send oil overseas. it's stuck here and we are bringing down the world price. >> will you put virgin america into your charitable trust? >> no. his record's too mixed. i heard what phil said. i happen to like the airlines. i hike spirit. i like what american has done. doug parker has done a great job. they are uniquely benefitting from this oil situation. they are putting up good numbers. >> all right, jim. thanks.

coming up, do you use lift for a ride home from the bar? maybe. now a new service is focusing on business travel. when change is in the air you see things in a whole new way.

it's in this spirit that ing u.s. is becoming a new kind of company. ing u.s. is now voya. changing the way you think of retirement. what if we finally had that would be amazing. hey, what if we took down this wall? what if this was my art studio? what if we were pre-approved? shut up! from finding to financing, how'd you do that? zillow.

for tapping into a wealth of experience... for access to one of the top wealth management firms in the country... for a team of financial professionals who provide customized solutions... for all of your wealth management and retirement goals, discover how pnc wealth management can help you achieve. visit pnc.com/wealthsolutions to find out more.

welcome back to "squawk box." in july, uber launched a business oriented version of its ride-carrying service. now lyft announcing a lyft for work program, designed to let companies purchase and give credits for commuting purposes. lyft brought on 29 partners including adobe and yelp. they can issue their companies a monthly credit balance and be applied exclusively to rides to and from the office. businesses can list specific company events for credit use. lyft will be announcing more partners in the very near future. there you get the pink mustache for november. >> there's a lot of excitement in a parisian suburb.

a tiger was spotted near disneyland paris. word is this is actually just a big cat. the animal was seen by a woman who snapped a couple of photos of the animal on the hill. after police warned people to stay indoors. parents pushed to pick their children up from school and it was just a cat. >> have a great weekend. see you monday. good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer. david faber is off. m&a the star of the show on news of this halliburton tie-up. retail sales did not disappoint. ten year up to 2.36. oil is falling again, $74 and change on west texas. even brent below $77. our road map begins with mov