"squawk alley" is live. ♪ welcome to "squawk alley." markets not quite back in black but progress after being down 80 points. roger mcame and john steinberg is here at post 9. jon fortt, cale kai la, of course, as always. first up, cyber monday. fewer people shopping in stores while more and more continue to spend online for the holidays. according to adobe, both thanksgiving day and black friday saw double digit growth

with digitals twice. meantime, the national retail federation says tote a retail sales for the weekend fell a little over 5% year on year. that's been a topic of much c consternation this morning. you're watching a lot of this, jon, from an online standpoint. was it as bad as they say? >> when you look at the online numbers they were very good. channel adviser which tends to be reliable shows amazon up for three days a year over year sales. 25%, 24%, 45% on saturday, which they call cyber saturday now i guess as well. we saw the basket size of what was purchased in stores drop from 407 to something that was in the $380 range. peep went to the stores, looked up some stuff and looked up the price on other stuff and said i'm going to buy it at home. >> one story is the proportion of sales from smartphones. that doubling year over year is big. the other thing is that apple, ios, was over android 4-1 in

terms of purchase volume according to adobe. that's just a mind boggling figure. it gis you some insight into apple pay's potential in 2015. it also shows you that some brands like facebook that have mobile traffic and mobile possibility in their growth also have legs into 2015. probably going to make more money than people expect. >> in the recap over the weekend they cited one reason the sales were down is the shopper believes that maybe over cyber weekend, thanksgiving thursday, black friday, and now cyber monday, the consumer believes there might be better deals in the weeks ahead and, roger, even though we think we might be at tipping point in terms of e-commerce, do you think these days really don't matter in terms of the over all holiday season? >> kayla, i think i'm going to go one steb further. i think none of this matters. the holiday season is a function of employment.

when when you're as close as you are to full employment, you're going have a perfectly good holiday season. people will whine and mope until the last season. then squeeze out a percent gain year over year and people will go back to whatever it was they were doing beforehand. this is much ado about nothing. i do think consumers are smart. they see that deep discounting is available. they will take advantage of it when they feel like it. they've got a month until christmas and, you know, it's just not that big a deal. >> i strongly disagree with that. i strongly disagree with that just because it's a question of who is getting a bigger slice of the pie. the size of slices are shifting dramatically. look at apple share versus android share. digital versus physical retail. >> on all economic issues apple is going to be roughly between two and four times as good as android. they simply have much better

demographics. the observation of stuff going on online, that is not new. there is nothing incremental going on here. >> ios 6's larger screen driving increasing sales. adobe specifically pointing to larger screen sizes yielding higher engagement and higher cart sizes. so the retailer are going to be able to take advantage of that. >> look at this data to see that going. you don't need to see that data to see it to agree with jon you more purchase completion on tablets than you saw on phones which it does stand to reason that a larger phone would make it transaction. one of the knocks on mobile has been easy to browse, hard to complete transaction. when you look at going from 3 1/2 inches to 6 inches i think it no doubt has gotten easier. >> fair enough. when you look at it from an economic or market investing point of view, the things that are going on this past weekend are no different than things that have been going on for four or five years. we just going down this path where more and more commerce is going online. there's nothing new going on

here. there's no reason either to panic or to get too excited. it's just another day at the office. >> if you're best bayou panic because mobile took down your site on the biggest shopping day of the year. >> if you're best bayou also -- >> amazon did great. >> fair enough. but the incompetence of best buy in running their site is a core business failing. and i think if you look around, if you cannot run your site these days, and you're an online retailer, you're going to be cooked. and they do have a huge problem here. >> next up, let's look at the nasdaq, by the way. falling a bit since the open. right now the comp is down 60 points thanks to a sudden drop in apple. stock quickly fell by 6.4%. that's the largest intraday drop in ten months before recovering. some of the other no home tum, of course, names also getting hit today, gopro among them. it does raise questions, guys, as to. whether or not apple, jon, was a victim which anecdotally would run counter to all kinds of evidence. >> i doubt it. you look in here. you've got gopro as you

mentioned down 4%. facebook is also down considerably a little over 2 1/2% while apple is down, too. you wonder if the overall concern about holiday sales is hitting some of these stocks that have momentum but maybe they're not looking closely enough into the counter trends, shifts toward mobile. this might be noise. we'll see how it turns out. >> roger, it's had a nice run and we got more target increases today. barclays goes to 140. any idea what might be going on specifically with apple stock? >> i think it's really simple, which is to say the market is deeply -- it's very extended. we haven't had serious correction in 2350five years. to me the market is going to find an excuse one of these days to correct these stocks. maybe it's happening today. maybe it doesn't happen for another few months. eventually we're going to have a correction. we should. the fundamentals underneath this economy has a lot of fragility.

things are still very weak in europe. and you know, in our own economy we have a lot of issues. so i look around and i think to myself that the level of uncertainty in the world is -- it's just too high to support rising asset prices. so at some point we're going of have a correction and i want to be a buyer of that correction and i want to be a buyer of apple and i want to be a buyer of, you know, alibaba and google and other people who are exceptionally well positioned for what's going on right now. >> if you've been a buyer of apple and alibaba, rom ger, throughout the year, like institutional investors getting in at many points you probably want to take some profits going into the first trading day of december. there has to be a fair amount of not only window dressing but also profit taking as some of these funds want to take profits on these positions that have been so handsomely profitable throughout the year. >> yeah. well, i do think that -- that's right. if you own apple, by definition you have a gain in the stock. and you know, again, the reason

why people may choose to take profits i think is anybody's guess. but eventually, you know, we're going tv correction. i think the smart thing to do now is not be as aggressively positioned as you would have been, you know, six months or a year ago when things were a lot k450e7er. for myself, i'm much loss aggressively positioned. >> the nasdaq names down right now. cridio down, twitter down, facebook down 2.7%. i think what a lot of investors are saying now are the holiday's bad despite the data is modeled and online did good. therefore we're going to see a pull back in advertising. therefore all the companies are going to suffer in the final four of the year. >> i think that is backwards. advertising has to go up. when sales are bad, people have to advertise more. so to me they cannot possibly be correcting facebook because they're worried about retail. i mean, that to me doesn't make any sense at all. they're correcting facebook as a stock is relatively expensive in a market that is relatively

expen expensive. as investors i think our job is to buy low and sell high. anybody who is going to a more cautious position today i think has a lot of evidence on their side. >> roger, i don't agree with that. if five years of selling advertising every time these companies get into pain they cancel campaigns, cancel insertioners. you never want to see your advertisers be weak because the first thing they do is cut digital campaigns. >> you know, interesting i think the thing they're going to do going forward is not cut digital but cut television and the other. >> i agree. >> i agree. obviously from my seat i hope that is the change. >> speak for yourself. >> i think these stocks are getting hit because that's what a lot of these investors are worried about. >> finally guys, several sony films including brad pitt's "fury" have made their way online following a massive hack last week. fbi is looking into the attack that took down all of sony's computer systems for most of the week. re/code is looking into a north korean link because sony is

about to release the interview of the seth roggin movie about the would be assassination leader kim jong-un it's fascinating story. it's hard to tell whether it's beit is mu bemusing or not. >> when we had a sewn sony hackw ice ago, this felt more concerning and immediate. now there are so many different ways to get content, streaming has become such a big thing, i doubt there's a huge cultural impact in having these things out there because if there's another way for people to get them, i think we've been conditioned as consumers to actually pay the ones who are going to pay. >> this makes sense to me because it's not a consumer hack. sony doesn't have a lot of online consumer products you would naturally see have the service and think went on the all desk tom computers for sony employees and posted a message. it seems like it stands to reason it's in response to this movie. >> in june when the trailer came

out a spokesperson in north korea called this an act of war. you have to wonder, roger, we've been paying attention to hacks at the banks and at the retailers and largely the subject of the hacks have been financial in nature but do you think that content companies will need to do more to safeguard the content that they're creating as well after seeing this? >> it's a great question. i don't know the answer to that. i mean, the realify is we live in an increasing online world. so competence at protecting your online infrastructure is going to turn out to be a critical success factor for any company. i sat there looking at the numbers of downloads and they must be disappointed that there weren't more downloads of the movies because if the movies were popular i think they would have been in the millions in the first day. and they weren't. and on the north korean thing, i mean, again, those guys can't even feed a third of their population. the chances they can hack sony's i.t. system i find unlikely but who knows.

>> roger, you will be glaed to know the tweets are coming in. one says these guys are nuts. roger is the only one with the brain. >> oh, no, that's unkind. >> it's good having you as always. roger mcame. jon as well. let's move to oil. the price of crude in the green right now after touching a low. it hadn't seen since july of 2009, below $68 a barrel. that happened earlier this morning. but it has since bounced back. michelle caruso cabrera is back at hk to tell us what's going on in this reversal, mcc. >> citi's technical research team has called a bottom in the near term and possibly in the medium term when it comes to the price of oil. they have a note out this morning saying are we there yet? we suspect yes. it's a technical note. i can't possibly do justice to it on cable tv at this int po. but suffice it to say they've gone back and looked at the big sell-offs from 1998nd 2009. they say the key level is $62.91

per barrel if you compare the sell-offs back then and assume it's going to be roughly the same now and they say, look, we got to $63.72 this morning. so they think we're pretty much there. they also say that monthly momentum is completely oversold just as it was back in those two key time periods as well. when you look at the crude curve it also suggests that traders fwlooef the price xwoes higheri like stocks. you buy it for delivery. when would you like your oil, january of 2015 or august of 2015 or february of 2016 because these are real commodities that companies need in order to power shift, plane, et cetera, et cetera. price goes higher up to $69 per barrel. if you look at the long term crude curve, if you wanted oil for delivery in 2023, yes, you can do that, the price is near $80 per barrel. so where do we go from here? it's anybody's guess but right

now there's some who believe we have bottomed. back to you. >> thanks so much, michelle back at hq. amazon is gearing up for a busy cyber monday. last year the company posted the busiest day ever, selling more than 400 items per second. but humans can't do all that work alone so this year the company is turning to robots. nbc's hallie jackson is live in tracey, california. over to you. >> hi. we are here where these new robots are in action. here they are. check it out. orange things, is a,000 of them have been placed in ten centers, ten warehouses across the country. remember, amazon acquired kiv,for $775 million in 2012. but this is the first holiday season the company is using these robots in the warehouses. instead of reggie here having to go walk through the warehouse picking up different items, the robots are actually bringing the merchandise right to reggie. it's his birthday today.

happy 34th. amazon says this idea to use the kiva box which has been used in other warehouses before helps speed up efficiency. instead of taking 90 minutes on average to get the items from the shelf to the box to be shipped out it takes about 13 to 15 minutes. it also increases the storage capacity. so a facility like this which is about 28 football fields as far as the footprint, essentially increases its storage by 50% because these kiva bots as you can see, they can jam the products close together. what about layoffs? when there's automation. amazon says these robots are not meant to replace any workers. instead, they're meant to help the employees who are already here work more efficiency. and that's one of the keys for amazon. over all when you talk about the holiday season, amazon is expecting one of the best ever. 7% to 18% growth over last year in the fourth quarter. >> that is a great look at the edge the. thank you so much. halle jackson at the amazon

fulfillment center. when we come back, sales of kindle e readers up over three times year over year on black friday we will talk about that with amazon books. as we said, companies seeing record sales online this holiday weekend. this s. this the last year brick and mortar stays on top? and best holiday deals anywhere for your eyes. we'll talk to the co-ceos of warby parker. daughter: do you and mom still have money with that broker?

dad: yeah, 20 something years now. thinking about what you want to do with your money? daughter: looking at options. what do you guys pay in fees? dad: i don't know exactly. daughter: if you're not happy do they have to pay you back? dad: it doesn't really work that way. daughter: you sure? vo: are you asking enough questions about the way your wealth is managed? wealth management at charles schwab.

welcome back to "squawk alley." tesla stock has fallen for the second consecutive session from a report from a german newspaper that says bmw is not interested in buying a stake. tesla said last week there had been informal talks over a possible collaboration in batteries and lightweight components. tesla is down 5% so far in today's trade. >> thanks so much, dom. revival, station 11, redeployment, a few of the book on amazon's best of 2014. it's not just the bookshelf though that's lighting up. am skon says it sold four times as many kindles as last year. it's cyber weekend deals updated every ten minutes up what should question keep our eyes on this holiday season? sarah nelson is amazon's editorial director of books and kindle and she is here at post 9. ints good to see you. >> hi. >> i read your editorial team

read 480 books. >> i think it is that conservative. this is over the course of the year. it's not like we sat down last month and did that because we compile a list every month. so when we go compile the best of the year we take 12 best of the month -- 12 lists and then add things that we came to later. so we read a lot. >> do those end up being the best-sellers or are they just a guidepost for consumers who are looking for something that would be a good xwigift? >> our lists are completely editorial cure rated on what we like, what we think people will like. if they become best-sellers afterwards, that makes me feel great. that's good. >> how would you characterize? i'm thinking back the big published books of the year. how would you characterize the gallery of 2014 versus years past? >> there wasn't a big fiction block bbuster this kraer. last year there was the "gold finch." this year our pick is "everything i never told you,"

admitted sleeper. we've seen great success with that. you can see the jump after you name a book that people have heard of but they don't really know and you call it the best book of the year and you really see which is satisfying to me and i hope to the writer and the publisher. >> have we moved from a franz and king world to a more of a john green thing where the sleepers are the real success snes. >> there's stephen king book on our list this year at number six. you can always. count on him to tell well. there's john grisham. there's james patter son. so i wouldn't say completely but i would say in the -- outside of the blockbuster range, this year there wasn't one big blockbuster like there was last year. >> sarah, you know the publishing industry really well. you're the editor of publisher's weekly, lately there seems to be a recalibration in digital. taylor swift pushing back. some questioning the value of lowering prices on books.

what do you see as the key issue? >> i don't really -- i'm not sure i'm the best person to answer that. i mean, i'm not -- i'm not involved on the pricing side or on the business side. and we are really platform ag s agnostic on our team. we want the content that we want. and don't pay attention to the publisher or the format necessarily. and most books are available on both ways. so that's what i'm concentrating on. >> how did your team have to adjust editorially when the content say earlier this year wasn't available for presale? >> as i say, we're pretty publisher blind so we pick the books we wanted and i tried to stay completely out t. i really was learning everything i knew the same way you were. so we picked the books we wanted and let the chips fall. >> we were looking -- we were talking during the commercial break about giving kindle books as a gift and it hasn't been popular in the past because people want to open something but do you see that changing? do you see the shift favoring

kindle books more than real books in the future? >> that's a good question. i think the advantage of giving a kindle book, i mean, there are advantages to both. obviously with a print book you get to present somebody with something. they goat to open a wrapped thing, et cetera. kindle book, i don't know about you but i sometimes forget somebody and at the last minute, oh, here, i just sent you five books. so, you know, i think it depends on the personnd the timing. >> sarah, we appreciate you joining us today. editor aftial director of books kindle. one company is looking to expand its brick and mortar footpri footprint. the co-ceos of warby parker are going to join us. what they saw on black friday. i'm only in my 60's.

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trailer for "house of cards." there it is. shows frank and claire, kevin spacey, robin wright, appearing to climb the stairs to air force one. of course, president underwood now. netflix revealing thor isries are or live february 27th. be sure to clear that day on your calendar. meantime, a quarter to day chart of netflix is very difficult to look at. down 25% since the beginning of the quarter. >> but those original series increasingly driving viewers to them. so i think that's a bright spot for anybody who is excitedn't where this trend could be headed. >> if netflix is lucky hopefully they will have a countrywide snowstorm that weekend where everyone has to stay in and watch it. february 27th. let's bring in simon hobbs as we count you down to the close in the uk and across continental europe. simon? >> clearly the ecb meeting on thursday is central for many people in the market at the moment. today we got some final reading on the pmis which indicate the three major economies from the you're ozone are manufacturing

sectors are in decline. below 50. deutsche bank suggesting you will get nothing new of the of the ecb on thursday as they await for the other measures to come through because there's been no serious deterioration in inflation. we'll see. in the meantime, focus on greece. positive territory overall. the financial times, remember that we have a deadline of next monday for greece to do a deal with the rest of europe on whether it can exit its bailout early. the financial times is reporting that they may actually bend to the rest of europe and not exit early so the monitoring stays in and they get a credit line from the emf. that's bad news politically. it could mean the paesht for the left in greece wins power. it's a shaky government there. we'll see what happens with that. throughout the session today, clearly a lot of the energy stocks are in negative territory for all the reasons we discussed during the course of the session. two big leisure stocks have been moving to the downside during the course of the session as well as a result of downgrade through goldman and ubs and

carnival. valuation concerns. vodafone is in negative territory. on the reports that internally it it's looking at doing a deal with john malone's liberty global. though whether john malone would want to go through with that, interestingly, another deal that went down today. one of the israeli billionaires by the name of patri it's a hot area of the market. one more from the debris that is the regulated energy sector in germany, eon, the biggest of them all, has decided that it's going to split itself in two finally with try and deal with a very decision. stock up 4%. a lot going on, guys. but thursday, front and center. back to you. >> simon, thank you. when we come back, online sales continue to rise, why is warby parker expanding into brick and mortar? we will ask the co-ceos in a moment. and max levchin.

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shopping away from brick and mortar and doing more of their shopping online, warby parker is going in the other direction.

starting its business model strictly on internet and now they have opened more than a dozen physical stores. dave and neil are cofounders of warby parker and join us here at post 9. good to see you. >> thanks for having us. >> asaw on the website you have 18 physical locations now or 18 that are in the works. what was black friday nor retail for you? >> for us it was our biggest black friday ever. it's actually we've been calling it sort of black weekend because the entire weekend has just been spectacular. friday, saturday, sunday. it's happening both online and off. >> what's your approach to discounting? you say you don't have anything special happening cyber monday, bonobos was just on, they were heavily promotional. why are you doing what you're doing and what are you doing? >> we're actually not offering any sales. we don't discount at all because our glass is already so cheap they start at $95 including prescription lenses. we offer a gift card that sdarts

at $50. we just launched that today. then we are also launching warby parker press, stationary available for $15. and we've also launched a book with our gift cards called "good omans for the good era." >> meanwhile, they name you finalist for their competition of entrepreneur of the year. of course, only dave gets in. i'm not sure what that's all about. what do you make of this and which does it say about your business model right now? >> i think we're just flattered to be mentioned with a number of other great companies. and for us we focus on providing great value for consumers. great glasses that normally cost 5 or $600 offered for $95, being ail to do that both online and off line. and we're finding consumers are voting with their walleting and seeing tremendous growth in business. >> how much more physical space will you add in 2015? >> somewhere between 10 and 15 stores. we're finding the stores are the

triple threat. they elevate the brand. they expand awareness. and they're highly profitable. so for us, again, we're only selecting sort of class a, best space available. they're often in urban centers. it's been great for sxwlus the you have to be betting on huge growth then in terms of revenues. meanwhile, throughout the morning we were talking about how sales on black friday and how consumer spending per ticket has not been as exciting as maybe a lot of analysts had opened i'm wondering what you think is so different about your consumer and what type of growth you think you will get going into the end of the year. >> i think we're seeing a couple of things happening. gas prices are down. consumers have had extra dollars in their pocket. they might not be sure how long it's going to last. so people might be avoiding major huge ticket purchases but our products start at $95. we think it's a great gift. it's something a pair of glasses can change the entire way that you're perceived. it's one of the only things you wear on your face. we're finding record traffic and

sales both to our stores and online. >> these things are so personal. how much of this is gifting in this season versus how much of this is i need something special for myself a so i'm going to go ahead and buy? >> we're finding that it's both. one of the things this we did on black friday is that we lauchlked our gloesly internation international collaboration. second time we did it to celebrate their 15th anniversary. people are buying more frames per cart than typical. so we think that a lot of people are buying themselves a pair of sunglasses and ones they plan to gift. >> residents of new york know that your stores are frequently very crowded. is there a time of day that people who live here should be going to avoid crowds? >> right when it opens. 11:00 a.m. >> you mentioned stationary. are there going to be a lot more categories in the months and years to come? >> we've been trying to build warby parker in a way we can have permission from customers to expand into other categories but this is a little bit of an experiment. we tested with greeting cards

and stationary in the past but this is the first time that we're doing it under the banner of warby parker press. >> is clothes out of the question long term? >> we think warby parker is going to be an impactful brand over the next coming decades and we don't want to limit the possibilities there. but right now we're just focused on eyewear and other fun products that we think are customers will like. >> mickey directionler on the board, forgive us for asking the question. good to see you guys. happy holidays to you both rnlths let's check back on the nasdaq, the biggest loser down a little over 1%. bertha coombs is live at the nasdaq. >> good morning. of course it's the big names on the nasdaq that are moving the big caps, definitely, a big drag and the biggest drag of all, not surprisingly is apple. right now it's responsible for about a third of the point impact to the downside on the nasdaq 100. a few things going on. morgan stanley out with a note

on outlook for 2015 saying it's trimming about 1% of the position on apple because of the stock has doubled over the last three years. we're also talking to traders and some are thinking a little bit of self program, a little bit of collateral damage on the real negativity over retailers and consumer stocks after the nrf report over the weekend. amazon certainly getting hit with that despite the fact that amazon said it sold three times as many kindles and fire -- fire tablets over the weekends. they also did see over at amazon moody's putting the outlook on the credit to negative as amazon is issuing more debt. over although if you come back it's the momentum names today that are getting hit pretty hard. tesla with the bmw not taking a stake in the company. gopro, facebook, netflix. some of the big names today are some of the biggest losers. and also, guys, we're also seeing a little bit of the

energy collateral damage here as well. there are a number of regional banks on the nasdaq that deal in texas and a lot of folks concerned about what their loan situation is going to look like with the pullback in the oim patch. back to you. >> thanks so much. when we come back, a new way to buy gifts for friends, loved ones, or yourself if you need a little extra cash. paypal's cofounder max levchin with us to explain later on. first, rick santelli, what are you watching today? >> we're looking at two things. first thing, of course, is thursday ecb meeting. what are we going to hear? and will it be enough? but the second issue is, we're now well under 220 in ten-year note yields, but some have moved up today. we're going to talk about that and more right after the break.

it is coming up, the fallout from plunging oil. is the six-week rally in jeopardy because of the continued drop in crude? unexpected nachls are falling. we have all the trades coming up. we are live in the one place feeling pressure from falling oil. plus, one 0679 biggest bulls on the street. morgan stanley's adam parker is here with the surprising sectors he says to buy in 2015. >> sounds good, scott, thanks. let's get over to the cme and get the santelli exchange with rick. >> good morning, carl. i'll tell you this thursday is going to be important as many ecb meetings are. let's call it for what it is.

bigger placebo, please. great set of sentences in an article in the wall street today. written by simon nixon called "2340 magic bullet, junker plan still might ease bottlenecks." let's put it up on the screen. this is in regard to how bachkers see the issues. bankers complain the greatest bottlenecks to investment are bureaucratic, political and legal. byzantine, procurement processes, regulatory uncertainty and corruption. to vary iing degrees you could pretty much use those same complaints around the globe. whether japan, the united states, or in this case, europe. what's really fascinating though is, is that the call for quantitative easing just gets louder and louder for every meeting but it is in many ways a placebo because it's going to address any issues i just read. we could have read these same issues two years ago, four years

ago, five years ago. some say when it comes to europe you could have read these 15 years ago, that the trends are trying to change but there needs to be more work done by the political class and we've all heard the argument. political class isn't either up for the challenge or looking to take on some of these issues. and any of the countries or areas i mentioned. but it still doesn't change the fact that as a placebo certain things do happen. now, let's look at some stock markets across the globe. the first one is the boon. you could see it's almost a 10,000 getting very close to all-time highs. remember, in their own currency, all the stock markets of europe are still higher. so look at italian stock market since the end of last year. look at the spanish stock market. now, granted, the patterns are different and there is some discrimination by the marketplace on the stronger versus the weaker economies of europe. but in the end, everybody is going to get administered virtually the same medicine.

maybe that's the unique issues of europe that make it tougher to cure. with regard to the u.s. we've heard it all before. and as we get ready to swear in a new congress very shortly, many are saying that maybe they will tackle the issues. maybe they will, maybe they won't. one issue to tack is whether central bankers, in this case, the personal reserve, is way in the gray on their charter as mr. vol kerr said when they i'm barked on these crises at the son set. back to you. >> rick santelli, thanks so much. up next, a way to buy gifts for family member, friends, or yourself if you're short on cash. it's all thanks to paypal co-founder max levchin's new company. [ breathing deeply ] [ 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,

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welcome back. lending club is kicking off ipo road show this week. the peer to peer loan platform expects to price shares next week between 10 and $12 apiece raising up to $692 million. the offering will -- in the third quarter. lending club posted a loss of $24 million, largely due to

higher marketing expenses on revenues of 100. consumer loans, lending club's smaller peers on deck capital both expect to go next year having already filed. what that means for this space going forward. >> it's been a long time coming. paypal co-founder max levchin offering consumers a new way to buy gifts with a loan through his banking start-up affirm. how does it work and should big banks be scared? >> to expand beyond that but you go to fi a few hundred dollar item, say, a mattress from a new york city based casper and you

say, hm, putting up my credit card is going to make me carry a balance. not excited about that. revolving credit account, yesteryear's problem. what i want to do is spread it in three easy payments or six and a firm allows you to do that. basically put your name and birthdate and if you like it -- >> approval happens instantaneously. >> what's the interest rate like? what's the average score? how do you judge the creditworthiness of some of these millennials who have little history? >> mostly the prime customer for us are misrepresented by the fico score and credit bureau data but we look at other things. people are excited about putting themselves out online.

we gather information both online and offline and give credit instantly. we try to offer them a rate that's a little bit better, sometime as lot better than what their credit card would be if they had one. most people are not excited about using a credit card. half of these people say i have access to a credit card but i'm not going to use it. >> i've been bn hearing about a lot of financial startups trying on to take unique approaches to shaking things up, looking at soeshl and taking a look at their friends and judging. is that sort of the secret sauce and how has that done over the years since you've been doing it. >> it's done very well. we're completely agnostic. we look at everything. everything with ke honestly and

legally get our hands on. the most important thing is to offer a transparency, honest rate to a consumer. this is not about trying to underprice or scare anybody in the big bank world as you said, but rather beat them by being honest with the customdata. >> this is like lay away. if somebody can't afford a relatively small purchase at the transaction, maybe they shouldn't be buying it in the first place. what do you think of that? >> i think that's the right thing. your soy latte -- >> say something that's $30 or $100. >> i think those things should probably not be financed. that's why credit cards can be so insidious because lumping all those purchases together a revolving credit card creates a problem where you're carrying interest that compounds and

compounds. what we do is create a sickle loan that stops once you pay it off. it's it's split into payments and then you're done. the rates are less than your credit card would be. the sweet spot for us is it's several hundred dlars. it's impacts your cash flow and makes it smoother. >> something like a television at a best buy, is that too far afield? >> it might be because we don't support best buy although we would love to. underwriters would make their decision based on the purchase and the consumer. for some we would say, hey, this is a great thing for you to finance. we'll take the risk, the loan. for some people it's not a good idea to buy that. >> what kind of scale do you need to have the kind of impact you want to have? are we talking thousands of mer chants? millions of customers? >> if you look at the exponential scale of our volume, it is impressive even for someone who's lived through a

paypal scaling. i think we're just about to hit 100 merchants. we expect to significantly improve that number in 2015. more than half of our loans are second-time loans. that means people like what we do, they're excited about what we're offered. i think we're already making a difference. the real scale is billions of dollars. >> as we look back on 2014, apple pay, all the drea ama wit square, what are we going to say they did this year? >> hopefully if we're looking back, we're going to say this is when the next great online bank for the younger generation really started happening. at least that's my aspiration here. >> then big banks should be scared as we said at the top. >> there's plenty of room. it's a big market. >> can paypal fill any void in that market? we haven't talked to you since it decided to become a company. what do you see as a challenge and opportunity for that?

>> i think they have a tremendous opportunity to shake off the cobwebs of being something that's already successful. as far as competing, they have a lot of fish to fray. i don't plan to go up against my own brainchild of yesteryear, but i think it's great. they'll give it a real go and have it be held up to a higher standard. >> well, come back from time to time and let us know how it's scaling. >> would love to. >> max, good to see you again. >> thank you. intel could have google seeing more clearly. why the two tech titans are teaming up. that story when ""squawk" alley" comes back.

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up. "the wall street journal" is reporting that intel will now supply the processors for google glasses by next year. they'll replace texas instruments which currently provides the product. they'll push it to hospitals and manufacturers. >> you've got to remember the volume is not big on google

glass and pushing its into those kinds of verticals isn't going to make it that much bigger. >> down three-quarters of 1% when the rest of the momentum's face is running off a cliff today. we haven't mentioned alibaba. it's down 4.5%. it was down nearly 5%. there's talks, carl, about a lot of american retailers pushing against alibaba. now it seems they're going after the chinese counterpart. >> on taxes, obviously. meantime some of the damage in retail today is getting hard to ignore. you're looking at a name like kohl's, down 4%. michael kors, one of the worse of the performers. amazon down 3% plus as people are starting to ask about the season. >> adam's apple down 2.5%. yelp, down more than that. >> we'll keep a close eye on oil

as well. it got a nice bounce. bear case tends to be around 65. >> we don't know whether at this point that will be true. >> bull case for citi is around 90. they're all over the map. let's get over to headquarters with scott wapner who's got the ""halftime report."" >> hello, thanks. stephanie link is with jim cramer. and john and pete najarian are the optionmonsters. the game plan looks like this. whether bill oil, big slide means bust. running with the bulls. we're going to talk about where he sees stocks g i