♪ taking care of business ♪ every day ♪ taking care of business ♪ taking care of business ♪ taking care of business snoths working overtime ♪ ♪ happy monday. welcome to "squawk alley." joining us this morning, john steinberg, ceo of the daily mail north america with us post nine, jon fortt, back after a couple days off, kayla tausche is here. what a day it's turning into for facebook. going corporate. facebook secretly working apparently on a new office version of the social network called facebook at work. the new site will supposedly let users chat with colleagues, connect with professional contacts, and collaborate over documents competing with the likes of google drive, microsoft office and linkedin. facebook declined to comment on

that story so far this morning. we did reach out to linkedin and they tell us, quote, we don't comment op speculation about services that don't exist. jon, my question to cramer can facebook start picking off rivals at will? >> i don't think so. >> really? >> you take a look at location based services what facebook tried do didn't work so well. rumors about a facebook phone that didn't pan out. facebook has constantly to work on stuff and decide whether or not no launch it. because a team is working on it doesn't mean it will launch. there's inherent disadvantages facebook has based on the personal nature where people aren't necessarily going to want to work on work stuff alongside their facebook stuff even if the profile is different. yes, any time at platform as big as facebook is looking at pushing into your space, you need to be concerned. if you're linkedin, not too concerned. >> doesn't sound like it's a networking rival necessarily. it sounds like it's more about collaboration and the stock that's hurting from this today is service now.

now. which had been creating a rival to lotus notes. people don't think that people use lotus notes anymore, but they actually are picking off clients of lotus notes in large fashion and that stock taking a hit today. >> it would make more sense for salesforce to be down. it sounds like it's going after is the work news feed, where people are going to discuss all the things going on at work. salesforce has a product called chatter they integrated that has that as well. look to jon's point i agree, these things usually don't get killed off by the incumbent. remember facebook's competitor snapchat didn't do anything. linkedin always had an engagement issue. people don't go back to it enough. you are friends with all of your work peers on facebook as well. it's another hit on linkedin i think. >> down 4%. people are going to obviously maybe err on the side of the caution. hard to underestimate facebook's ability it to spend where they want to spend, right? >> that is true. usually the threat of this thing that impacts stocks more than

people looking too what is the real danger here. i mean companies like jive, certainly, need to be concerned about something like this. i think as jon mentioned, collaboration is an issue. it's not that easy to transfer the power of a network for a completely different purpose. and so i think people can overestimate the danger in a case like this. >> 4% down, heck had a note out when the stock was trading at $200 and saying that it's in line, ebitda to growth that's a little bit of a tenuous argument when you go to the third metric to do the valuation. it's an expensive stock, foking 4% off of it at $220 seems like a modestly cautious thing in the light of the fact that facebook wants to go into this. >> they seem to have a veritable test lab in their employees. many us of who cover or have covered facebook you send an e-mail to facebook they'll spend by facebook message. they're trying to use the platform as a work platform to see what works and what doesn't. >> facebook has a history of

launching things that get buried a little bit. the group functionality, the calendaring is buried. if they put smis out there off on the side in a subnavigation that you is to find it nobody is going to use it. if they feature it which facebook hasn't done with things like this a small shot of it takes away work engagement. >> salesforce weakening on your comments. uber and spotify announcing a partnership this morning. the deal will let uber customers listen to music from their spotify play lists after they order and get in the vehicle. here's travis talking ate the deal on the conference call this morning. take as listen. >> now i get in, and my music is playing. and for uber it's the first time we've personalized the experience inside the car. and for music lovers, that's nirvana. that's an awesome place to be. >> a parlor game on twitter on friday.

>> when i saw business insider put up the invite with a musical note. josh brown said they're going to do an integration with live nation. i gave in to that. i should have stuck with my guns. uber wants to prove themselves to be a platform. we saw facebook want to prove themselves to be a platform. netflix want to be a platform. twitter. when you're trying to raise at high valuations and trying it show that you're something bigger than what you are, you call yourself a platform and let other people integrate. >> yeah. i think that's true. the potential here is bigger for spotify because if you're an uber user you have your credit card in the system, you're not afraid to spend money through your mobile device. that's the kind of person that spotify needs. the competition with the headphones. if i'm by myself getting into uber and want to listen, i'm going to put on headphones not bother the driver. if it's a group of people on the weekend, taking my wife out for a nice -- >> which happens a lot. >> yeah, with kids, sure. maybe i want to put on romantic music or party music that kind of thing to set atmosphere that's the potential here for a

group of people to feel like it's a cool experience with spotify. >> those poor drivers not getting to choose their play lists. >> sounds a little awkward. >> somebody said on twitter, thousands of uber drivers rejoicing taylor swift is no longer on spotify. >> bohemian rhapsody. >> i have to say this is marketing 101. you think about the battle royale between uber and lift and the partnerships are what's going to sell the brand ultimately. brand recognition. uber now has facebook, google maps, american express and spotify, they are partnering with brands that consumers know and lift on the other hand met life. >> comes on the heels of a piece that argues the valuation is understated not overstated growth from a handful of citys. what happens if the other 45 or so take off? >> and we talked about this last week on the show and rumors when kind of people were analyzing the $1 billion raise that they did before this newer raise is coming out. ten times revenue is all the time what these companies trade

at. sometimes people try to argue that's expensive but that's what these guys are getting. 10 to 12 times on the $2 billion of gross revenue. >> here's what makes uber special right now, and goes to something you're found of saying, you don't like local. uber is the local play i think. you order a service in a specific place, uber's collecting data about what's happening in specific locales. if they can crack that open and become a local platform there's immense valuation. >> they have that with the messenger service built in as well. i'm sure the next thing we'll see is a fed ex integration or ups integration. the spotify things was to show what they can do. >> finally another day, another new all-time high for apple in the green this morning. it was at 115 a few moments ago. 113.89 now. shares of apple have been on a tear lately. the stock has gained almost 20%. from the low on october 15th. they've added $135 billion in market cap in that time. that's basically the entire market cap of a home depot and more good news, rbc with a report saying the apple watch

could be a $10 billion a year business. rbc, john, modeling 20 million units in year one at 520 price point above what apple suggested. >> who knows how this will play out over the next year. what i keep thinking is how wrong the market was to send apple down as far as it did a couple years back. when you think about the ranges of time that the market is supposed to think in that was so clearly wrong now, there was all this talk about apple is going get run over by android, by samsung. we see what's happening with samsung stock with commoditization hitting them at the low end. apple is selling lots of products at a profit. now the watch i think is key for the next year and how they can expand the ecosystem outside the phone, whether they go into tvs or something like that. >> i wonder is this deja vu with microsoft playing an instrumental role in apple's future? i wonder how much the office suite being so much more pronounced and readily available

on these devices is playing a role? the apps have been top of the app store, all the microsoft office apps. do you think that's doing anything to drive the company and purchase cycle and stock? >> it's vice versa, apple is happening microsoft. i think satya nadella was wise to realize people spending money on devices are spending it on ios so we need to get that piece of it, yes. they strengthen the case for apple. microsoft by having office there. only when we see an ipad up stick in sales can we see say -- >> we talk about hedge funds underperforming the market. we got a glimpse of a lot of hedge funds selling apple in the third quarter. george soros nearly liquidating his position, david tepper trimming as well. a look at their shares in alibaba in the next segment as well, but when you think about some of this smart money getting out of the stock right before such a huge rally, that's got to hurt. that's got to hurt. >> stocks climb a wall of worry. >> they're also looking for such giant moves. the competition in the hedge fund space it's not enough to

have 10 or 20% moves in stocks. they're looking for multiples at this point why so many of them are going private. for a lot of these people apple probably didn't seem aggressive enough for them to stay in. >> unbelievable. talk about being underestimated. good to see you, jon. congratulations on uber. >> i try. >> jon steinberg. >> a check on the markets which are hovering near the flatline despite the fact that earlier in the morning we were all talking about japan, the nikkei sinking on news that economy is in recession for the fifth time in the last three years. dow down by just about 1.5 points despite the fact that visa had been lifting at earlier in the session. s&p down by 3 points. nasdaq down by 27 points. we're seeing big moves in has borrow and dream works after reports that potential deal could have cooled. at least the talks may have cooled. dreamworks seeing a big decline. has grown rallying this morning which is not what you want to see if you're dreamworks.

that had been the opposite when the deal talks were reportedly still on that stock, doing the worse since it went public back in 2004 in terms of dreamworks there. meantime another big merger, actually going through, halliburton agreeing to buy baker hughes for a little over $34 billion. halliburton slipping, baker hughes in rally mode. baker hughes up 11.5% on that mega deal news. carl? >> all right. when we come back, google officially cutting the ribbon on its brand new youtube production studio in new york city. a top google executive will give us an inside look and cnbc exclusive in a moment. we told you about facebook challenging linkedin a few minutes ago. is the idea of facebook at work good for the shares of the social network. gene munster with us today. the top three m&a deals that should happen in tech this year. we will bring them to you later this hour when "squawk alley" continues in a moment. (vo) you are a business pro.

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welcome back. check out the s&p tech sector. the sixth straight session at a multiyear high up about 1%. yahoo! up 35% over the last month coinciding with alibaba going public. yahoo! trading down under 1%. back to you. >> kate, thank you very much. call it google's original content play. google youtube launching this

production facility for new york city based creators. three sound stages, post-production facilities, loner equipment will serve for high-end professional content and enhance collaboration between brands and youtube creators. the strategy that could yield big returns if ad revenue and here to talk about that and more at post nine, torrence boone, managing director head of global agency sales. good morning. >> good morning. >> 20,000 square feet. >> that's right. >> that's a big space for new york city. is it already up and running? you can go in and produce content now? >> that's correct. we opened up about a couple weeks ago and we've had a number of content creators joins us and it's this amazing facility that allows them to experiment, to innovate, come up with the next generation of content. >> where were the creators working before this was here? >> that's a great question. i think like all artists in new york, space is hard to come by. so my guess is that they were in a lot of small studio spaces in

their apartments, in studio spaces that they could rent for a discount or a cheap amount of funding, and this replaces all of that and gives them something state of the art. >> you've got spaces in southern california, in paris, i believe, that have done this sort of thing. >> yeah. >> what kind of impact has this had on the quality of conit tent created for youtube, what can you tell us about the monetization of that higher end content versus the other stuff that you get on youtube? >> yeah. it's a great question. we have seen tremendous advancement in terms of the quality of content that's come from the usage of these types of facilities. we also have one if london. the best evidence of that is a product that we launched recently called google preferred which is the top 5% of video content that is now competing with the cable market. so we've had a successful up front season and we're able to monetize that premium quality content and that's a function of

the great facilities and the capabilities that these new content creators are bringing to the table. >> walk us through to the extent you can, when you make an invest ment in a space like that, new york, city, it's not cheap either, what's the return on investment? how do you measure it? >> a number of ways of thinking about it. fundmently we are building a platform for the next generation. the higher quality of that content the easier to monetize. all this content or the vast majority is advertiser supported. high quality content, you have more advertisers that want to get in on the game who want to be soeshtsds with that content and that drives this fly wheel effect where now these content creators can actually make a living creating the next generation of content and then, again, it builds on itself and that's how the platform takes off. >> i'm thinking back, too, when disney buys a maker, for instance, when new stars are -- we were talking about this profile of grace in the times over the weekend, is the

dynamic now, you make it big on youtube and then you hope someone imports you to tell vis or cable or is the goal now to live on youtube and stay there? >> i think there are a number of goals that content creators have when they come to the platform. we are seeing a lot of crossover truant opportunities so look at a bethanie mow da, for example, who is popular, she has a clothing line at aeropostale, there are traditional television and off-line media that are interested in partnering with her. we're seger my nags on the youtube platform that goes to television and we'll see even television content that migrates to the youtube platform. >> where do we go from here? we've seen youtube stars that are looking for other ways to monetize, spotify, some of the top stars like taylor swift don't want to be on there because they think they can monetize better otherwise, is this a way to add value to being

on youtube and can content i create in your studios be sold elsewhere? >> absolutely. that's the whole point. we're really trying to enable the next generation of content creation and to unleash the full possibilities of the youtube platform and to drive higher quality and premium quality and that means more monetization, premium monetization, for everyone. >> i was going to -- it's probably an unfair question to ask you, do you think one day youtube lives as an independent company or more efficient to operate within the confines or within the castle of google? >> well, there are tremendous synergies to being a part of the google family and we have this thing called the brand lab which is also connected to the youtube creator space where we're actually bringing brands and creators together to collaborate and that collaboration extends even beyond youtube to all of our other products and platforms. so there's a huge amount of synergy that comes from being connected to the broader google product portfolio. >> fascinating.

i can't wait -- we should do the show from there, don't you think? >> that would be fun. >> they clearly got the -- thank you so much for coming in. >> when we come back, big names buying shares of alibaba. we'll have who's in and what it means for the stock. that's after this short break. "squawk alley" is back in a moment. [ inhales deeply ] [ sighs ] [ inhales ] [ male announcer ] at cvs health, we took a deep breath... [ inhales, exhales ] [ male announcer ] and made the decision to quit selling cigarettes in our cvs pharmacies. now we invite smokers to quit, too, with our comprehensive program. we just want to help everyone, everywhere, breathe a little easier. introducing cvs health. because health is everything. introducing cvs health. which means it's time for the volkswagen sign-then-drive event. for practically just your signature, you could drive home for the holidays in a german-engineered volkswagen. like the sporty, advanced new jetta... and the 2015 motor trend car of the year all-new golf.

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in case you missed it new filings showing hedge fund managers piled in shares of alibaba in the third quarter. dan loeb's third point disclosing the largest stake, 7.2 million shares, worth $670 million as of the stock's $92.70 open for trade. george soros' fund disclosed more than 4 million shares, as did de shaw, paulson and company 2 million shares, julia robertson, 1 million shares. the list goes on and on. steve cohen and druckenmiller's

offices got in on the action as did david tepper and leon cooperman. these filings as of september 30th. even though they did benefit from the first few weeks of alibaba trading it's unclear whether they were able to hold on past the weeks through the stock's 67% rise through the ipo. it goes to show you, jon, when leon cooperman, david tepper, when dan loeb asks for meetings with company management like jack ma, it's not just showmanship. >> makes me wonder given where we are in mid-november now how much of the window dressing effect now takes over. given that those names piled in early on. the stock did so well. is it more likely to hold up through the end of the year since it's one of those stocks alongside arguably apple everybody will want to see outside of the hedge funds, of course, but see in their portfolios at the end of the year. >> it would certainly seem that would out -- overshadow some of the benefit that they lost by selling some apple in the quarter. that being said, even holding on for a couple weeks is a

different strategy than what they normally do which is sell on day one. so certainly interesting to see how bullish carl, they all feel about alibaba. >> absolutely. meantime we got some -- we got the return of draghi in europe today. let's get the european close with simon hobbs. >> the map of europe looks different as a result of what mario draghi said today before the european parliament. every quarter he appears to talk to meps about what's going on there and today he was specific. the council remains unanimous in its commitment to using additional unconventional instruments within its mandate and went on to say that there are other unconventional measures that might entail the purchase of a variety of assets one of which is government bonds. the reaction was swift across european markets. he's kept the plate spinning the idea of sovereign debt purchases front and center for people. probably won't happen in december. people are talking about the possibility of the beginning of next year over the dead bodies of the germans to coin an

expression. you saw the markets in europe rally strongly on this. the yields pushed down. inevitably the banks of the periphery started shifting as well. the italian banks that gained, sitting on a lot of sovereign debt that will be bought by presumably the european bank which would only support its value. other banks across europe also particularly the stressed banks within spain or within portugal they rallied very strongly as you can see. that really is the big story coming out of europe today. if you're just tuning in i want to mention we did get an interesting call from jpmorgan. check out where we've traded over the past year or the year so far. you have this massive underperformance on europe. here the s&p is up over 10%. you barely got 3s% in europe. it's that underperformance which has got jpmorgan to suggest that actually now is the time to underweight u.s. equities and overweight european equities. in other words, to switch round, they say that we've now got a lower price relative -- in a

relative sense to the one you recorded at the peak stress? 2012 where the eurozone breakup was almost the base case. not that they think equity markets here will necessarily fall but there's much better value in europe. though whether that's in the dollar terms i'm not sure. >> that's the key distinction. >> really. if the euro will fall by 30 or 25% -- >> exactly. thanks. when we come back a lot more on the deal at uber ceo calls nirvana for music lovers. mike issac, the man who broke the story, will joins us next on "squawk alley." there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution. guaranteed. did you see it? in one second, he made a trade, we looked for the best price, and the trade went through. do the other guys guarantee that? didn't think so.

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kalanick. welcome back. let's get to kate rogers and a market flash here. >> hey, carl. check out tyson foods. the stock moving higher after the chicken and beef producer posted better than expected fourth quarter earnings including a second consecutive year of record sales and earnings. the stock currently trading up near 5%. kayla, back to you. >> all right. thanks so much, kate. facebook making a play for business versus telling our own julia boorstin that the social network is secretly working on a new website called facebook at work. it would allow users to keep their personal profiles separate from their work profile in an effort to compete with linkedin, google, microsoft and others. facebook has declined to comment publicly on the story.

joining us now piper jaffray managing director gene munster, senior research analyst covering the internet sector. i hear you have thoughts on why this may or may not work? >> yeah. our thoughts are this probably is not going to impact facebook's business and probably won't impact a broader work space communication. the reason is pretty simple. facebook has a ton on their plate focused on the consumer side. look at things like whatsapp and instagram and ok cues which rift and an ad network all that stuff their primary focus. this is something they've been putting a little bit of resources too and separately that space is already packed space with companies like linkedin and microsoft's yammer. i think that this probably is good to know what facebook's dabbling but unlikely to impact their business. >> well, the products that you mentioned, gene, are all separate than facebook's core news feed original product and it seems like they're trying to say look, people are already

spending so much time each day on facebook, that we want them to stay on the network and just do work tasks as well. do you not think that that's a reasonable thesis? >> it's definitely makes sense for them to try something here and they probably got a bunch of or a handful of really crack engineers trying to work on this. so perfect sense that they're going to launch something. i think that it's just unlikely going to have an impact on their business. part of the reason is, some of those other things i think are much bigger opportunities for them and the separate piece is the internet has really been verticalized over the last decade. companies get really some areas of power and strength and obviously linkedin is the brand in terms of the work environment. it's unclear exactly what this facebook at work will entertain. could have work flow products to compete with microsoft. the bottom line is since you have a product, doesn't necessarily mean you're going to be successful. i think that those other players are very strong. >> gene, where is the money to

be made in enterprise social in this next era? linkedin making money from hr, advanced classifieds platform. yammer has a slightly different model, bought up by microsoft. where do you think going forward the value is going to be? >> i think it's more in kind of linkedin's enterprise type of a model. part of the reason the enterprise market typically is not an advertising focus market. if you think about your work environment, you probably don't want to use applications that have advertisements built into it. that's the consumer side. i think that the work place side is still going to be a subscription based, enterprise licensing type of a deal. very different than a consumer facing advertising business. >> gene, while we have you, apple's blown through a lot of price targets. it's amazing the run it's had. almost 20% from the october 15th lows. where's your head on it right now? >> well, it's still really difficult to get those iphone in the u.s. we're monitorings this on a

weekly basis and most iphones, most apple stores start with iphones in the morning sold out in the afternoon. looks like the strength of this cycle will roll over into the march quarter which is longer than most investors think and that's probably going to keep moving the stock higher. >> and along those lines, apple's done a few things like increasing by one week of inventory what they're trying to hold. that's going to make comps difficult a year from now. so how important is it for them to get other products going in 2015 so that we don't see a dropoff? >> that's going to be the critical issue. i think the way this plays out, the iphone will do better than people think for longer. that's still probably gets us into the june time frame which is plenty of time for the stock to go up. what you're pointing to is, the critical question, which is after all of this powerful demand gets filled for the iphone 6, what does it look like and they need other things to face up to these tough comps. it could be things like the watch or other products. i'm sure apple is working on other products too and so i

think that is going to be the buzz in the middle of 2015. >> you're not hoping for a tv anymore? >> well, i am hoping for a tv. i still that that's well on their road map and ultimately that's the buzz that people will be talking about in the middle of next year, is anticipating of the tv, whether that's in 2016, i've been dead wrong on the timing so don't have a it ton of more to say on that. i think that as far as a product category, apple will have a tv. >> one thing is for sure, gene, it continues to be a busy year in your coverage universe. we appreciate your time this morning. >> thank you. >> gene munster from piper jaffray. >> when we come back a deal intended to make uber more popular for consumers. the man who broke that story, mike isaac of the "new york times" coming up. rick santelli what are where you watching today? >> we have to watch what's going on in japan. quantitative easing was taken to an extreme by the japanese and we see that it's coming to an end extremely rapidly in terms

of any types of short-term benefits. you can't control one side of the sausage factory in terms of where you want things like prices and price pressures to be, if you don't have the left side in terms of policy. we're going to talk about good policy, bad policy, and ends justifying the means, all right after the break. 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.

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u.s. trusts key banks thinks so and has your trades ahead. top health care analyst mark shownbound on what companies could be next in the wake of the allergan deal. eric jackson says yahoo! could soar to $80 a share in the next year. how it's going to get there. it's all straight ahead on the half. see you in 20 minutes. >> thanks. uber and spotify teaming up to create something ceo travis kalanick calls nirvana for lovers. uber will allow customers to play their personalized spotify stations while riding in uber cars. mark isaac a reporter for "the new york times" and first reported the deal. good to have you back. >> thanks for having me. >> you said in your piece, technically speaking not sure how this is going to work. do we have clarity on that now? >> a little bit more clarity. essentially you can go into the uber app and sort of choose which songs on your original spotify play list you want to

continue playing inside of the car. say you are walking along the street listening to spotify on your phone and you switch over to the uber app when the car arrives and you can have that song start to seamlessly play inside of the car. keep the music going throughout the entire journey whether on foot or in the car. >> mike, what do you see as the upside for uber and spotify and is any money changing hands as far as you know? >> yes. we thought about that. first of all on the call they had this morning, travis kalanick would not go into any sort of financial details, but it seems pretty unlikely that there would be any sort of revenue sharing agreement here because spotify's margins are already so low with the royalties they have to pay out on tracks to artists, a whole other story, and, you know, if anything, uber would be paying spotify for something. i think it's really as cross promotional thing. you can get in the car, you can listen to the music you want and it's sort of like a fun thing.

it's probably to the that difficult to do from a technical standpoint. >> we joked earlier in the show that drivers must not have had a say in this because can you imagine having to drive around with someone else's play list going, but do you imagine there will be any backlash, at least from a satisfaction standpoint in terms of all of the employees, all the drivers that uber already employs? >> yeah. making the same joke earlier if they had my play list on there they would probably kick me out of the car, but what travis kalanick said this morning is that the drivers have volume controls, so you can't like crank nir van fa in the car at least, but you can -- you still -- the passenger still has perview over what they want to play. it's sort of an interesting commoditization of the driver and the car, right. you don't really -- they sort of disappear into the background and the passenger has more say over what's going to happen. i don't think drivers are going

to like it that much, but we'll watch the stories come out. >> they'll live. mike, 30,000 feet after taylor swift was on the cover of "time" and "business week" future of streaming as we know it, what are your thoughts? >> i think that it's really a feshating tactic right now, at least for taylor. whether she can get better deals with, you know, paid versus free tracks being listened to. i think, you know, you see digital revenues going down as far as what you see buying in the itunes store a la carte. i think everyone will have to go streaming at some point. you will see these battles in negotiations tactics play out but it's going to go streaming. >> while we have you, we love to get your take on apple pay as well. you wrote over the weekend it might be creating a tail wind for rival mobile payment products. how so? >> yeah. it's really interesting. i thought, you know, google had announced google wallet a few years ago and that tanked. there's a thing called softcard,

and those have all sort of failed to really gain any traction. i've been talking to the ceos in carriage of these initiatives and they're actually seeings this sort of renewed use in all of these mobile wallets again. i think it's just like oh, apple came in, sort of raised awareness that mobile wallets are a thing and people were kind of dabbling in these other products. it's still like a very small percentage of overall payments at all, but you're going to see at least some lift across the board. >> yeah. talk about negotiating tactics, something apple knows well, as well. mike, it's great to have you back. come back soon. >> i will. thanks, man. >> mike isaac joinings us from "the new york times." hop over to the cme group. >> everybody on this trading floor and many cnbc guests and pieces are on the japanese issue

of two quarters of gdp in minus territory. the recessionary implications and the growth implications moving forward. it is no secret that quantitative easing has short-term gains. if you're looking for equities to be higher, of course, put on a chart of the nikkei. it's definitely accomplished that. even though it was down today we're still at lofty levels in the nikkei. we look at central banks in europe, mario draghi had more headlines today, going to do whatever it takes. the real issue i see it, especially on policy, where you don't have a direct linkage between good policy and good outcomes you're trying to get the outcomes with iffy policy thinking that policy issues will work out. the issue is time. time. now, the old notion that time heals all wounds has some significance and there's some truth to that. in the end when it comes to bad policy i think exactly the opposite is true. many central banks in particular

and mario draghi and janet yellen and ben bernanke understand this better than anybody, the more time that passes that things are in place, the harder it is, a, to reverse it and, b, to be honest about any type of true cost benefit analysis. look to obama care, for example. you know, what did nancy pelosi say about obama care. okay. she said, that we have to pass the bill so that we can find out what's in it. didn't make much sense to me. but after some of the revelations regarding jonathan gruber it makes perfect sense now. because in the end, get it on the books in any way you can because as time passes, as justice roberts may have demonstrated, and as cases start to examine up before the supreme court regarding subsidies and state exchanges, it gets very difficult to extract. and even the supremes get drawn too the issues they create by reversing something that's been on the books for several plus years. it doesn't end there.

really, the issue then becomes the end justifying the means. this doesn't necessarily apply to central banks in my opinion. i think the policy is bad. but i think crepe trol bankers like janet yellen, ben bernanke, mario draghi, i think their heart is in the right place but still policy that has some questionable potential outcome. when it comes to things like obama care as the great article in the "wall street journal" pointed out this morning, tevi troy's story, another obama care deception, when it comes to taxes, it seems as though the nonfiscally conservative never seem to get it right with taxes. but i think that they understand because one of the issues in this story that bugged me the most was, that if you have certain plans like cadillac plans, the way they're going to get at these issues isn't in a very transparent sort of way. it's through the notion that they understand that if you tax insurance companies, it gets passed along. it's the passed along part that we need to truly talk about. carl, back to you. >> i'll take it from there.

thanks so much, rick santelli. a good reminder especially in the wake of news we got out of japan this morning. the markets are taking a leg lower after the european close, despite $100 billion worth of m&a announced this morning. we'll tell you up next why you should watch the tech sector for a surge in deals. that's coming up next on "squawk alley." how do you beat the number one seed? you just have to win 70% of your points at net. and keep unforced errors under 10%. on the ibm cloud, the us open analyzes 41 million data points

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big day for mergers when it comes to the energy patch as well as the health care sector. tech deals have been middling but with stalwarts like oracle and ibm struggling for growth our next guest says the stage is set for a surge of m&a deals in tech. daniel is managing director. you came with a playbook for what the tech sector needs to do. set the stage for why we haven't seen so many deals and why you think that could change. >> it's a bipolar tech spending environment. a lot of the large tech oracle, cisco, ibm, thought they could do it themselves but as we've seen over the last three, four quarters they can't and i think some of those rose colored glasses will start to come out and they will be forced to do acquisitions in big data, cyber security and cloud to capitalize growth. >> example of where someone could go it alone and failed.

>> big data is an example. a lot of large companies looked and laughed and now going 40, 50% more caps $8 billion. i specifically view oracle, cisco and ibm as the ones that right now are on the white board trying to figure out where to acquire companies. >> given that a lot of these companies are pouring money into capital spending on cloud and some of them, microsoft and oracle in particular, have been hesitant to spend huge valuations on acquisition targets, weight going to change? are they going to shift their spending from cloud projects to do m&a or bite the bullet and start paying a premium? >> more bite the bullet. you saw sap do that a few months ago, but i think part of it, microsoft has done it the right way. they're one of the few stalwarts that built a good mice trap but they will have to bite the bullet you can't keep buying third tier assets which why is chamber, ellis and romney, i think at this point, six months from now, they will all do

acquisitions in the space. >> how much do you think valuations would need to come down to get them comfortable? because the valuations of their own stock is under voouled. they've been buying back stock at a record clip. i'm wondering if you think that pattern will change? >> it was a game of high stakes poker and we saw this six months ago and when valuations came down the guys didn't buy it. part of it from a growth perspective it, i do the not see valuations coming down much more significantly just given the 2% spending environment, big data cyber security cloud are growing 25, 30, 35%. i view they're going to have to pay up for these ackman sigses. >> does it matter what the rates do or do they have so much cash that's not an issue. >> they have more cash than some countries at this point. cash is free. and this is the golden opportunity for them to do acquisitions. otherwise chambers and ellison and romney look back -- >> a lot of cash is offshore,

right? >> hard to bring imhome. that was chambers comment to us last week. >> i think chambers, as someone that has really looked in the mirror realize they have to do acquisitions, bought source fire, but i view them when you look at a fireeye, where that would fit on the security side, would make sense for them to do those type of acquisitions. >> we saw microsoft pick up an israeli cloud security company at the end of last week, following with carl's question, do you expect to see more of those acquisitions happen overseas where the cash is? >> it's going to be partially that and in terms of the small strategic technologies, but i do see more of these larger acquisitions. you look at guys like splunk, tableau, obviously fireeye, and then like net, where they fit in that spectrum where you can see these acquisitions. >> i would argue, dan, it seems to be the golden opportunity to not be a conglomerate. we've seen hp break up, ebay break up. you don't think that's the strategy that a cisco or ibm --

>> i think some of the breakups make sense. i would see emc going down that, acquisition, but more breakup potential with vm where a part is these guys have horse and buggies where you have ferraris pass them in the left lane. they could come on and paint the picture the growth speaks for itself. 1, 2% spending environment. these are growing 30, 40%. they have to pay up and we will see that over the next three to six months. >> we'll see if any of the ceos take your suggestions. appreciate it. >> great to be here. >> russiaen president vladimir putin has one internet name on his sights after wrapping up the fairly contentious g-20 meeting. we'll explain when we return. 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,

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pen. hurry in and get zero due at signing, zero down, zero deposit, and zero first month's payment on select new volkswagen models. you can add wikipedia to the list of organizations vladimir putin is taking on. russia reportedly creating its own version of wikipedia to give people access to, quote, detailed and reliable information coming from an announcement out of russia's presidential library. vladimir putin has previously called the internet a cia special project. russian president wrapping up that difficult g-20 summit where he left earlier than had been scheduled he says to catch up on sleep. turning his attention to the web. >> i think he should team up

with kim jong-un. they could come up with interesting stuff. >> the axis of evil web kind of things. >> a whole new meaning to rewriting history, right? >> yes. >> all right. well certainly an interesting development out of the g-20 there from putin. meanwhile elon musk sounding the alarm on artificial intelligence yet again. the tesla ceo posting a comment on the site edge.org in which he warned of the, quote, risk of something seriously dangerous happening from robots in a five-year time frame. five-year time frame. that comment was deleted but does come after musk warned of the dangers of a.i. while at the "vanity fair" conference on the west coast. a five-year time frame, seems sooner than maybe we anticipated, even google said it would be something that wouldn't be around for nearly a decade. >> the comment was deleted. i would be afraid if a robot did that. the artificial intelligence. if they're trying to contain

elon musk. >> silenced. >> killer robots. his cars could be the killer robots, going down the road, getting some automated capabilities. >> yeah. >> he's kind of complicit in this and he invests in artificial intelligence. >> he does. along with a bunch of other things. just looking at the list of winners today, actually list of winners and losers, m&a seems to be coloring about every big move. baker hughes, allergan, the top gainers on the s&p. even hasbro is in there, kayla, as reports come out talks with dreamworks have cooled and questions remain who will interested in that business if anybody. >> interesting how much investors like hasbro without dreamworks. that stock up nearly 5% in the day. up 4.5% right now. that would only be about a $2.5 billion deal. they would like has bore without it and the shareholders voting with dollars today. >> make it sound like only $2.5 billion. we didn't have a billion dollar deal for a long time. >> it's incredible.

$100 billion deal day. >> s&p capital wrote this morning that tech, as a sector, is only ranked fifth in m&a behind consumer discretionary, energy, health care and financials which is amazing. let's get over to the judge as he takes over the half. all right. carl, thanks very much. welcome to the "halftime" show. starting lineup for today, josh brown is the ceo of ridholtz wealth management. joe ter nova, director at ver tis investment partners, stevewise managing partner of short hills capital and pete najarian of options munster. no better place to put your money than right here at home. the good old usa. latest proof, word japan slipped back into recession. a stunning turn of events for an economy juiced by central bank stimulus and one