a very warm welcome to "worldwide exchange." i'm wilfred frost. >> and i'm seema mody. these are your headlines around the world. >> oil edges higher, but remains below $65 a barrel. >> the ruble blooms amid the central bank hiking rates when it meets today as president putin begins signing a number of deals with india. pressure on the ecb mounts as core inflation in france

lauvens the first ltro are expected to disappoint. results out in over an hour. moving camps and demonstrators out of the financial district after more than two months of occupation. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> we are just getting news out of norway. they've cut the deposit rate by 25 basis points to 1.25%. we were expecting a slightly easing meeting announcement. we weren't expecting an outright rate cut until early next year. low oil prices hit a five-year low against the euro, which given the eurozone weakness is quite astonishing.

the economy has been weakening. t inflation, the most recent number declining slightly more than expected, but only fractionally. that has led the central bank to cut the deposit rate to 1.25%. the norwegian krona has strengthened against the dollar today by 1.2%. >> and we should point out the norwegian krona has been depreciating against the euro over the past couple of weeks because of the tumbling price of oil. we're talking about western europe's biggest oil and gas producer, having an impact from declining oil prices. the ifo institute expecting growth in germany to come and revising up with expectations for growth in germany due to the falling euro, a decline in oil prices. they said on thursday, today, it's expecting german growth domestic product to expand by 1.5% this year and next, according to falling oil prices

and a slump in the euro exchange rate have helped to pull the economy out of the state of shock. but, of course, germany's biggest economy in the eurozone still has been dealing with economic data that has been coming in weaker than expected. industrial orders, among others, have been weighing on investor sentiment. right now, we are looking at the xetra dax trade higher by around 0.4%. and some other data to bring you today, this is a busy morning. let's focus in on italy. italy's october industrial output contracting by 0.1% on the month and down 3% on the year. of course, this is italy, a country that is dealing with sluggish growth as well as high unemployment. in fact, youth unemployment, north of 40%. the industrial output contracting month over month as well as year over year. we're looking at the ftse mib. the italian markets right now trade higher by around 33%. the focus really on the tail end

and what he can do to provide growth and stimulate the economy, wilfred. >> we've heard from the norwegian central bank. meanwhile, the russian central bank is widely expected to raise key rates higher than expected. the central bank is also battling the sharp fall in the ruble which is down over 65% versus the dollar this year. earlier, the central bank conducted $348 million worth of forex market intervention on tuesday alone in a bid to stabilize the currency. joining us now, our guest for the next hour, nick karn. very good to have you with us. >> thank you. >> let's kick off with some of these central bank meetings. norway has seen big drops in their economy. we've just seen norway ease measures and we're expecting russia to tighten. why is that difference in policy?

>> russia faced with sanctions over the ukraine, in much more of a difficult sort of emerging markets type of corner trying to defense its currency. i think the norwegians are happy, to some extent, to see the currencies, the oil price eases and they're not, of course, faced with anything like the same dynamic of weak currency, starving interest rates, where the higher interest rates go for more distress the currency goes. >> when we look at the ruble itself, of course, it has declined further than the oil price in recent months. of course, it was due a bit of a correction. particularly the last few weeks, given that the volatility in the paring has picked up so sharply, as well. does that mean mr. putin is right? there is a lot of speculation going on in the selling over the ruble or is it purely based on the fundamentals? >> i think whenever a country sees its currency under pressure, one of the things you almost always hear is that it's

the fault of speculators often foreign speculators and this is a -- you know, this is a common coder over time from, you know, right from the 30s onward. so if your currency is under pressure, it's due to the evil activities of your enemies overseas. you're right in saying the ruble has fallen more than the oil price, but these things are closely relate and had that's 90% of the explanation. >> back to europe, the ifo revising its growth target for germany up 1.5%. better than what the market is expecting. is that one reason to get bullish on europe and this economic recovery? >> i think the story in europe hasn't really changed very much. germany, which was keeping everyone else going is less able to as time goes by because, of

course, 1.5% beats the hell out of nothing, but it's not particularly high growth rate. so i think the issues for europe are essentially the same. the risk, of course, is that it gets tucked down into a disinflationary mentality. and, of course, that's more -- there's more clear and present danger of that right now because of the fall in the oil price. euro lined inflation is almost certainly going to be negative next year. >> nick, you're staying with us for the hour to get more market reaction. getting the data we've been getting today, that will be welcome. thank you so much for now. i also want to get you some headlines from the ecb. the governing council is committed to new instruments if needed. he also says the ecb is to assess early to next year how its stimulus has worked. are they hinting towards

sovereign bond buying? something we will discuss throughout the next two hours. >> let's have a look at what european markets are doing today. we're basically flat. we opened up about 0.2%. we're now down about 0.1%, as you can see. but don't forget, over to last two trading sessions, europe has shed around 3% in total. the broader stoxx 600 index and, therefore, unsurprising that we're sort of treading water today. let's look in on the individual european markets. as you can see, it's basically a broad based flatness. germany, up 0.25%. the ifo institute has upgraded its growth forecast for germany. but this flatness we're seeing in the equity markets doesn't tell the full story, the level of bearishness, the level of risk off trade we've seen the past couple of days which is

highlighted by the bond markets. let's look at that. german bond yields, 0.7%. they were fractionally lower than that yesterday. the only country with a ten-year lower than that is japan at 0.4%. and japan was at this level as early as this year. and as we look here through the bonds, bend around clockwise and we get more towards the periphery in particular greece, which has moved in the opposite direction in the last few days. this is the greek ten-year. >> let's look at forex on

monday. we've had three days in a row of dollar declines. today, just pausing for breath. the euro has shed a little bit of ground over the dollar. 1.2436. the yen, 1118.19. the ruble is basically flawed today, which is very rare over the last couple of weeks. it's been moving 1% to 2%. we have the russian central bank decision coming up in about an hour. commodities, they've been a massive factor moving markets in the last few days. crude is bouncing back today, having hit fresh five-year lows yesterday. 64.6 for brent and 61.31 for wti. volatility has picked up sharply, it's up 24% today and up 51% over -- about seven days.

let's check in with what's going on in asia. samantha is standing by for us. >> good afternoon to you guys. we see a spot of green coming into europe. hardest hit today, thailand, down over 3%. we have lots of central rate decisions coming through. no change in rates in indonesia and bank of korea, no change of rates. log at the japanese markets, that's a low. down 0.9%. fitch warning that it will likely downgrade the country's debt after the budget is approved next year, saying unlikely government revenue will

offset a reduction or delay in that sales tax hike. of course, the second sales tax hike which has seen a delay. volumes there falling 7%. $126 billion. interesting to note, the brokerages today, all weak. down around 10% in the red. and news coming through the securities regulators will inspect their high risk margin lending businesses as early as next week. we're having news that the pboc is once again expanded. $81 billion in short-term loans to chinese banks. previous loans that are maturing this month and also news coming through from reuters that they're saying to the chinese banks, you need to step up lending into the new year. we're waiting for retail sales, fixed asset investment and industrial production, those key figures out of china tomorrow. back to you, will. >> thank you very much for that. going to bring you some flashes out of switzerland.

the smb kept rates on hold about 40 minutes ago and the swiss franc did rise off the back of it, 0.9659. the president of the smb is speaking at the moment. the main headlines, he's saying deflation risks have increased once again in recent months. he's saying further bank appreciation would push inflation into negative territory. he's saying the snb must make full year of monetary policy. he said there's no intention of selling gold. this comes after the recent -- was rejected. although they have the flexibility, there's no current intention to sell more gold. and coming up on the show, no one was lining up for 48 hours to get one, but this is

where it all began for the world's most valuable company. all the details on the auction of the apple one coming up. we also look ahead to the market debut of lenders club in new york, a $5.4 billion ipo. we ask if you should buy into the peer to peer credit marketplace. plus, we cross to stephane in paris with the latest on the problem facing tom enders and its shareholders. to help spread some holiday cheer. before earning 1% cash back everywhere, every time; and 2% back at the grocery store. thank you! even before they got 3% back on gas, all with no hoops to jump through, a couple was inspired to use their bankamericard cash rewards credit card to throw the ultimate ugly sweater party of the season. that's the spirit of rewarding connections. apply online or at a bank of america near you.

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zloo a isn't it true poll shows radically left party shows 41% of greek voters compared to 25.7% for greek democracy. 300 mps are expected to vote in the first round of elections on december 17th coming up next week, which could lead to a ruling election if the majority party fails to gain a majority for its candidate. >> germany confirmed annual inflation came in at 0.6% in

november, lowest figure sips february 2010. 82.6 billion of the 400 billion euros in cheap long-term loans were taken up in the first allotment back in september. 11 italian banks will sign up for a total of 26 billion euros. what should you expect? how should you trade the announcement? nick karn is still with us. is. >> well, i think the answer to that is substantial. i mean, we've seen net business lending in europe, in negative territory through much of this period. and, of course, that shines this

exacting light on how quantitative easing is supposed to work. >> and, of course, this is targeted as making lending incredibly cheap for banks if they want to take it up. but if they take it up without demanding on the side, they're charging themselves a low percentage to hold extra capital. >> absolutely. and you could characterize the whole monetary policy experiment in that sense as taking the economy to water or taking the banking system to water is one thing, but making it drink is something different. >> even though there's been a massive growth in the monetary base, we haven't seen that filter through to the end user. >> that is absolutely true. and i sometimes think that's how

this whole quantitative story has developed. the fed had actually stopped publishing m3, which is the most powerful, the most popular kind of measure, arguing that the information had kind of been leached out of it by financial innovation of one type or another. and then quantitative easing, which is almost kind of dead quantity, then came back with kind of born again fer vor. and i think that sheds important light on what the next stages are. >> monetary policy arguably worked in the u.s. we're seeing an acceleration in jobs growth in the u.s. the question is, will full blown

quantitative easing, will it provide the same results to the european economy? >> well, i mean, obviously, that's an excellent question. as we all know, the problem within economics is always how and to what extent you can pick one factor from another because, of course, it's not really possible to conduct experiments. it's certainly been the case with the qe experiment in the u.s. has been accompanied by a substantial fall in interest rates. but as we were looking at in europe, just earlier, european interest rates are already at very, very, very, very, very low levels. you know, before the next stage of qe. so it may have some other pecksy dust. a lot of lending is through the banking system and less to bond rates. >> as we wait for that to take place, do you see the euro

depreciating even more, then? >> yes, i do. inc. if price sg very much on draghi to go the next stage in monetary sxermtation. >> despite the pushback he's receiving from german policy measures? >> i think the german interests don't like it, but it's a hard case to make if you've got falling prices across the continent. >> nick, thank you so much. wilfred, over to you. >> sales rising more than 10%. it had a good start to the fourth quarter. despite warmer weather. >> air italia, maintaining its neutral rating on the telecom player.

down 6.4% in trade today after italian based investor company picked up $8.86 million worth of convertible bonds. for more on the story, claudia is in milan. >> good morning. they were taking up their stake. both exor and fca are trading down on their stokts after this convertible bond was priced ads at $87. and with the yield that was above expectations. from 7.1 % and 7.8% came in at 7.87 pefrs. it's going to be a costly convertible bond for sca. that's why we're seeing the stock down this morning. the stock was suspended limit down. we'll continue to see this pressure been fca is under pressure because of the rumors that they may be moving the

fiscal domicile of ferrari outside of italy. this will create some issues, not so much from a made in italy standpoint as much as a political standpoint. the idea that some corporate taxes would be leaving italy in a political situation as we are in now is, of course, difficult with the economy not taking off. the made in italy brand would remain. it's still a rumor, so not clear whether that will happen or not. so this rng month, we're watching both of these stocks trading down. airbus, shares tell more than 10% down another 2.7% today after the planemaker warned on postpones. let's join stephane in paris. >> good morning to you. there are three reasons behind the market reaction.

the first one is a profit warning. >> airbus will slow that down and it will be replaced but not.until 2017. that's the reason why. airbus won about a gap between the old and the new verge. that's the main reason for the profit warning. the second reason, it's not good is the postpone of the ceremony that was supposed to take place at the end of this week. the first delivery of the airbus 350, the launching customer decided to delay the infinity according to analysts from the sector. it's more like a strategy from the airline to get some last-minute concession. airbus could discontinue the aircraft after 2018. the problem will remain in the balance for the next couple of

years because airbus is struggling to find new clients for this aircraft. reaction this morning after this announcement, the ceo of the airlines says it would be ready to order 140 additional airbus 380 in case airbus would lush an abated version for this super jumbo and the comments from the ceo a few minutes ago from london saying that airbus will focus on kre increasing the number of clients for this super jumbo and also says that all the problems linked to the 380 were now behind us, which means that confidence for the future, after what was said yesterday. >> stephane, thank you so much. retail news, walmart's china business has reportedly been plagued by questionable accounting and sales practices. an internal review shows the

chain made bulk sales to other retailers and booked sales when there wasn't merchandise on the shelf. that made business appear strong. the report says concerns go back as far as 201 1. walmart says it has taken disciplinary action since then and strengthened its compliance. walmart is closing 30 stores in china and cutting jobs. down about 11 is.2% in frankfurt. meanwhile, walgreen's ceo will retire once alliance boots merger is completed. it will be the larnlgest shareholder in the combined company. walgreen so far in frankfurt is flat today. still to come on the show, after 75 days of occupation, hong kong police clear out pro

democracy protesters from their camp. we have live in hong kong after this break.

european market open in the green. oil edges higher, but brent remains below $65 a barrel.

central bank action under way, norway delivers a surprise cut as activity in its oil sector weakens while russia is expected to raise rates amid rising inflation. the ruble hitting a historic low ahead of that. take up of the bank's ltro action is expected to disappoint. results are out in around 45 minutes. police move through hong kong's protest camp moving demonstrators out of the financial district after hour than two months of occupation. a whole host of data coming out today. let's take a look at how european markets are responding. trading in the green, of course, there will be an active discussion around the help of european banks. we'll get a read on the tltro. access to capitol for very low interest rates helped revive the

european economy. that's a question we will get the answer to later on in today. that result coming out at 10:15 bft. right now, european stocks higher across the board. >> let's give you a recap of the decision we have from the norwegian central bank earlier. they cut interest rates by 0.25% to 1.25%. we were expecting some easing. we weren't expecting a rate cut, of course, norway is responding to the weaker inflation. they've got the weaker economy and, of course, the weakening currency in the face of lower oil prices. let's recap on what the swiss national bank did earlier. they kept rates on hold earlier. that was broadly as expected. but they also spoke about how deflation risks were rising. they did also say the governor said they have no intention of selling gold. they see the policy challenges remain considerable and they would keep focus on the rate

cap. the currency cap was crucial as pressure was increasing on the franc. in the last couple of minutes, we've had a new forecast for oil prices. they've cut their wti forecast from 69. they've cut their 2016 outlook from $82 to $80. that is from commerce bank. their oil price next year. >> hong kong police had the gun to clear out pro democracy protesters from the area they had been occupying for more than two months. eunice yoon is live in beijing with the latest. how are authorities responding to this? >> well, so far what we're seeing in the chinese press are several headlines that are along the lines of the people of hong

kong have spoken. these protests have had. they have been been in place now for two months. they've had a protracted impact on the economy and overall society. we heard from a government spokesperson, as well, who said china as well as hong kong authorities have the legal right. for the most part today, we did see the chinese authorities really down playing this event, trying to illustrate it as insignificant, and it's not necessarily surprising when you consider the hong kong protests are the biggest challenge to the beijing authorities. the two have been at odds. there is a right for hong kong people to choose their own

leader. they want to be able to make their own decisions whereas beijing as well as the hong kong government that's in place and that was put in place by beijing is indicating that the candidates that they would be choosing from would be vetted by the chinese authorities here. so right now, it looks as though the police are clearing the streets. but the resentment and frustration that is felt by these young people and this generation of hong kong people is not likely to go away anytime soon. guys. >> eunice, thank you so much. joining us online is peter from reuters. thanks so much for joining us. the protesters being cleared out at the present today. has the message going across? >> what they set out to achieve

was true universal sur raej in hong kong. the initial prediction was they would stay until their demands were met. that was never going to happen and, as predicted, that didn't happen. but i think the protesters have sent a message that people in hong kong are unhappy with the state of affairs and were willing to go out on the streets and also that they are willing to stay out there. they've been out there for over two months. that was something people thought these protests, if they happened, would be smaller quickly. perhaps that's not the case. >> the question is, will we actually get some type of action from beijing based on these protests? what are your thoughts there? >> i think it's -- i don't think there's any sign, really, that beijing is prepared to compromise on the substance of what it's put on the table with respect to holding electrics in

hong kong. i think there may be some wiggle room, some fiddling around the edges with the details of how the election might work. which may be enough to get the proposal accepted by the hong kong legislature which is one of the big hurdles. but that won't be enough for these protesters. >> they've gone much further than they thought they would. the next time something comes along that makes them happy, there will be a possibly they go out on the streets again. that's really -- what's changed about hong kong is the possibility that these protesters might be back and might be doing the same kind of thing in the future. >> given that, given that they can come back and people believe this new political class has awoken in hong kong, in the

short-term, do you at least welcome the fact that these roads are going to be cleared? >> yes. i think anybody who lives and has to move around hong kong has gotten increasingly upset with the fact that these roads are blocked and made traffic difficult and delayed people's journeys and things like that. a lot of the predictions before they started have been complete chaos. few exceptions to that. actually, the city has adapted and caught around it. as these have gone on, people have become increasingly and fed up with it. even people who support the objectives have got to the point where they said, look, we need to reopen the roads and get on with our lives. >> thank you so much for joining us, peter. let's stick on the topic of asia and bring back in our guest

host. nick, let's talk about china. an extraordinary rally in asia market over the last month or so. is that fueled purely by the rate cut or is there a fundamental reason for chinese equity markets to strengthen? >> i think we have to see the chinese equity markets this year in the longer term context. and that is that it's been very, very poor for a very long time. the long-term story of chinese stock markets is as it's opened decades ago, you will have a slightly negative compound here. that's how it stacks up as a long-term investment. usually to do with some kind of

activity in ipo related type things. i don't think it has much significance over and above, you know, it's own interest, if you like. what i do think is very, very important is the slowdown which has in china over the course of this year. china has accounted for more than 100% for the growth in demand over commodities and this last period of expansion. in other words, without china, global demand has been falling. i think what we're seeing now is a -- in commodity produces for the reality of the china slowdown. i think that's the single most important thing. more broadly, we know these economic models where you are very, very high levels of capital spending, japan in the 1980s, they have never ended

well in the past and maybe this time it's different. but, you happen, as investors, i think we always ask for high risk premium. this time, it's a different story. >> do you think investors will question the premise of international diversification in 2015? >> i think that depends very much where you're sitting. i think if you're sitting outside the u.s., you're going to -- >> if i'm sit hearing in london -- >> well, international diversification means lots of u.s. exposure, then you're going to wish you had it. if you're an american, you're going to be wish you hadn't bothered. >> nick, i want to come back to the point you made over the last month or so, i'd say the main lesson we've learned from oil priceses is it's more of a supply. are you suggesting it's more of

a demand weakness and in particular by china? >> i think it's for both, to be honest. i find it hard to discuss supply without price. you'll find lots of demand pore something at one price. this was our view of the oil price. this is the down swing, the up swing that started for $9 in 1998 and we all remember that famous right of the economist cover, a word awash with oil. at $150, everyone was franticly looking. you don't find it immediately, you start to worry, but you do find it and it unravels from the other side. we were more surprised by oil this year and last year than we

were surprised by the relatively weak oil price now. government figures released today show machinery orders fell from the previous month. has been growing steadily since june. machinery orders indicate spending in the private sector and the fall in figures can be worrisome. but the government shrugged this off saying it was an adjustment from the month before when there had been several new large orders for turbines used in power plants. meanwhile, fitch ratings down graded from its current single a plus. it says the government's decision to delay a tax hike from october 2015 has made it

almost impossible to reduce the nation's massive debt as planned. the rating agencies added in the korns call that the decision will come after seeing what kind of budget the government compiles for the income fiscal year. however, it remains unlikely that it will manage to offset the revenue cost from the tax hike delay. this follows the downgrading of japan last week. although its impact on the market is limited, it's not helping prime minister abe who faces an election this coming sunday. that's all from the nikkei. back to you. still to come on the show, instagramover takes twitter as users flock to the photo sharing app. we have the interview, up next.

"the wall street journal" says pay pal may shed about 3,000 position. most of the cuts are expected

from -- one person would not comment saying we were focused on setting up ebay and paypalace independent companies. now, there's some ipo news to get you. lending club has priced its ipo at $15 a share. that came in above the initial range. valuing the world's largest peer to peer lender at $5 billion. it will debut over the ticker lc. >> it will be interesting to see how that trade is priced above the range. lending club has been around since the mid 2000s. although it doesn't seem like it. >> just recently we've been seeing more. >> recently, you've been seeing more publishing. >> absolutely. we will see how these tech companies, if at all, steal

market share from the banks. >> so the lending club's founder and ceo will be on "squawk on the street" at 9:00 a.m. eastern time. fox has been one of this year's anticipated ipos, but the cloud scorage companies delayed its plans earlier this year due to market conditions. an s.e.c. filing shows revenues grew 37% in the third quarter, but that growth is slower than previous years. >> this is one of the most highly anticipated ipos for 2014. the results we got yesterday, they were better than what we have had in the past, but still, the company is highly unprofitable. we should point out, though, that box posted large revenue growth on a first three quarter basis from to 13 to 2014.

but let's see, maybe an ipo in 2015. >> big, big revenue growth. >> one trend we've been seeing in the cloud and new tech space. >> indeed. >> now, another tech story, photo sharing app instagram has passed a major landmark. julia boorstin spoke exclusively to the ceo and sent this report. >> instagram announce ago major milestone. it topped 300 million monthly active users adding 100 million since just march. making it now bigger than twitter. instagram's ceo telling us he's making it easier for people to discover content and on building instagram's ad business. >> there's so much data out there that sits on instagram to the tune of 70 million photos being uploaded every day of the world.

if you think about that scale of business, you realize that there are photos pouring in from everywhere in the world. if you're interested in eclectic topics, i guarantee you there are accounts related to that. so we need to make sure to connect you with the content that relates to you. >> there are no commitments right now. >> twitter last quarter had a lot more than $6700 in revenue. how long will it take for you to get on that scale? >> we're not competing against other tech space. we're competing against print and tv. we are selling brand advertising that shifts perceptions. chabani did a wonderful campaign on instagram to shift perceptions away from the fact that they were just yogurt. they had a 7.6 incremental lift through a brand on instagram. that's the type of thing you

typically see in a magazine or on tv. if you look at those markets, they are very, very large and i think that's what we're going after. you can see where we're headed. >> for more on what he thinks about being bigger than twisted and the billions he left on the table by selling to facebook when he did, go to cnbc.com. >> this is a major milestone for instagram. 300 million active users, which overtook twitter which has been dealing with slowing growth as well as disappointing user growth in specific. that's been a big concern for wall street. if we take a look at twitter versus facebook, facebook has been the win they are year, up about 30% whereas twitter has been underperforming, just about 40%. >> absolutely. i don't really like facebook. you can be messaged, you can get posts. in the end, i couldn't be bothered with it.

instagram is perfect. you can share pictures, like them or not. it's a great set of offerings that facebook has by having both. >> the facebook ipo along with my colleagues at cnbc back in 2012. at the time, maybe the acquisition of instagram for $1 billion, there was so much criticism that facebook endured because they were saying, why are you buying this app, this photo sharing app? but clearly, it was a good strategic acquisition. >> absolutely. we also want to bring smu news on walmart. some flashes coming in on walmart. china, leadership changes and disciplinary actions were also made. of course, we've been following this story very closely. let me see here. in 2011, walmart changes and discipline actions were also made. we're going to keep you updated on this story as we get it. walmart, down about 1% in

frankfurt at the moment. now back to tech, this vintage apple computer could be yourself for the right price. an original and fully functional pc goes up for sale today. it's the only one known to be sold be steve jobs out of his parents' garage. the computer still works. its original software, microsoft basi and the apple one star trek game is a cool came. >> copies of the ipad are selling for as much as $900 on ebay and other sites. if you're lucky enough to have the factory sealed special edition u2 ipod that am sold in 1994, a seller recently got -- >> if you have any gadgets you're still hanging on to?

and absolutely no jokes on this. about six months ago, there was an original ipod. >> so we can't sell it in and out on ebay and make some money. >> yeah. please join the conversation. worldwide@cnbc.com. @cnbcwex does the twitter handle. many people believe the american dream is out of reach. the "new york times" survey showing 64% say it's still possible to work hard and become rich. 7 2% believe they can achieve the american dream. the poll shows 45% of people think the economic system is unfair. and coming up on squawk, we sit down with business government and heavyweights at the "new york times" conference.

star guests include jack lew, goldman sachs ceo lloyd blankfein. coverage kicks off at 8:30 a.m. europe. what a lineup we've had for the last hour. nick karr is with us. let's talk about the situation in the u.s. in particular, i want to talk first of all about bond yields. still very, very low. to what extent are those bond yields a result of the situation for the rest of the world? and if we see more easing from japan, which one will stay low in the u.s. even if the u.s. is increasing its own rate? >> well, we've had a sort of ripple tiny run of that in the sense that the really short-term rates have nudged up 28 points or so. to some five- year area. particularly jobs data in the u.s. and the longer term rates

haven't budged. so we've had that sort of doable and i guess that continues to be doable. i do think it has a lot to do with worldwide conditions, a further china slow down to intensify the pressure downward for u.s. inflation. we're now going to be looking at $2 a gallon. gasoline, we may have a good jobs market in the u.s., but we clearly have no clear and present danger from inflation. and that is an environment in which you know you might as well -- you can afford to wait. >> nick, thank very much for joining us today, nick carn of carn macro adviseres. wilfred, what was once a bright spot for walmart may not be so now. we'll get you news headlines from that report on china. to open credit cards, destroying jill's credit and her dream of retirement. every year, millions of americans just like you

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5:00 a.m. in new york. welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. these are your headlines from around the world. >> u.s. futures indicate ago higher open after wall street had its worst day in two months. the price of oil, by the way, stabilizing with the wti hovering around $61. the ecb to announce the result of its second auction of loans within the next 15 minutes. more bad news for china's walmart business after the

retailer cut jobs and announced store closures in the region. the u.s. ipo market continues humming along. lending club gets set to make its debut today. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> many on walmart expected an easy right through the end of the year. clearly, there is a lot of volatility in this market. >> the s&p and dow are now set to snap seven weeks of gains in a row. yesterday, declines were led heavily by the energy sector which has been led by the oil price. on top of that, we've had weakness in asia.

so it would she an even bigger surprise if that continued. >> s&p 500, 38 months without a move to the downside. so perhaps this sell-off is being welcomed, seen as a breather. take a look at u.s. futures. perhaps a bit of a snap back today. the dow up 76 points in premarket trade. we should point out the vix jumping about 67% over the past three days, the biggest three-day gain since october. is it back in the game and what does that tell us about future market performance? right now, this is the market volatility up about 24% in yesterday's trade. diving into the european markets, we've been getting a lot of data over the past few hours. german inflation in november at

a 4 1/2 year low. italy, industrial output falling. no sign of a recovery in italy just yet. but despite that poor economic data, we are seeing green across the screen except the ftse 100 which is down about 5 points. >> and the predominantly set of green equity markets you're seeing today don't tell the full story. it's still a story of risk aversion in europe and that is highlighted by the yields we are seeing on some of the core bonds. germany, 0.67%. france, 0.994%. so incredibly low bond yields. similar in the u.s., which is at 2.16%. that is the yield over the last few sessions. that is the story across all the core. yield compression, risk

aversion. the likes of greece moving in the bond specific elections. picking up even more so in the past three years. >> let's look at forex. we're going to focus in on individual currencies. the nor weej yavntan krona had strengthened a bit. the central bank did cut its interest rates by 0.25%. that's off the face of a weak economy, weakening inflation and a sharply falling economy currency off the back of weak oil prices. russia, of course, facing a weak currency off the back of oil prices. we're speccing them to see the other thing, increase rates rather than cut them similar to the norwegian krona. oil has been falling sharply over recent weeks, including the last three trading sessions.

but today, bouncing back a bit, 0.6% for the wti crude. 61.30. 64.69 for brent. interesting news out of the bank of england, wilfred. it published minutes of the discussions alongside interest rate announcements starting in august 2015. the bank of england currently, of course, publishes minutes detailing discussions of monetary policy and a breakdown of how its members voted with a nearly two-week lag. so we're looking at not too much of a market reaction, although sterling is trading down versus the u.s. dollar. for more headlines coming from the bank of england, it plans to hold four joint meetings of monetary and meetings in 2015. so some changes there. now, more market reaction, a cnbc contributor and the head of investment strategy at brooks

mcdonald asset management. jenna, a pleasure having you on. would he be looking at the uk as well as the u.s. as bright spots when looking at the global economy. but the question is, going into 2015, do you think these two markets can continue to accelerate their pace of growth despite global weakness as well as broader europe? >> what we think is the u.s. and the uk are going to continue to lead growth. we had sterling being a bit of a head win. the caution that you're allude to go is in terms of europe and europe is becoming a binary trade based on whether we're going to see more quantitative easing or not. and the thing that a lot of people are missing, however, is that there has been a pick up in the demand for asset-backed securities in the likes of italy. so there are still some bright spots. what it means is the way we've implemented it is more of a bar bell strategy. you look for areas where you've

seen opportunity, but then you get into the yield. >> energy was seen as a defective sincer. it's also weighing a lot of the oil here in europe. >> what's quite interesting is that you're seeing it's providing a bit of a cap on inflation. but the lack of price inflation is a positive. >> wheel we're talking about europe, does that mean today's results isser ir to the market and if it is, it gets up closer to quantitative easing? >> it's not going to be a surprise. the target they had toing expand their balance sheet was far too optimistic.

but what it does mean is hopes for quantitative easing. it will be a case of bad news being good news because it seems to push us further towards the ending investors wants. let's get you a rundown of the data today. weekly jobless data is out at 8:30 a.m. eastern. followed by import prices for november. at 10:00, it's october business inventories, earnings in focus. lululemon and radio shack before the best. after the bell, there will be more. internal reviews showed the chains and retailer books sales. walmart says it has taken

disciplinary actions since then and will be closing 30 stores in china. it's down about 0.75% in frankfurt trade. walgreen's ceo greg lawson will retire once the drugstore chain completes its merger. it was expected lawson would stay on. he's ben at the helm since 2008 and is overyou a the acquisition of rival reed. the chairman will be the largest shareholder in the. . and we will get you the results after the second ecb teltro auctions coming up.

russia president putin is meeting india's prime minister modi. the two will signing dpraemts in trade, industry. it's expected to clench a ten-year oil deal with india's sr group. putin in new dehli meeting with prime minister modi. we're getting a couple of headlines from modi who says

russia will remain india's most important defense partner. russia has offered to fully manufacture advanced helicopters in india. politically, modi, who what had a successful visit to the u.s., he has to be strategic and diplomatic or how he handles president obama. >> mr. modi has been on quite an offensive in terms of the policy space since he took over, hasn't he? >> he's been meeting with political figures in china. >> we are awaiting results of the ecb's ltrlo auctions.

in the meantime, let's talk to jemma. this might indeed push the central bank closer towards quantitative easing. we've got france below 1%. what would be the point of sovereign bond buying? >> exactly. already at record low yields. and the other problem is, they have other options open to them. they can start buying corporate bonds before they start buying sovereign bonds. and it's a political issue. unlike the u.s. where you go out and buy treasuries. the problem is europe is how can central banks choose one day to support spain and another day to support italy? that's an issue that germany is putting that road block against. the only thing i would temple that with is germany is struggling and you're starting to hear them say they're no

locker opposed, but they're skeptical of how useful it's going to be. and that means investors are putting their hopes on germany continuing to deteriorate. >> is it a better pick up from banks? how do you trade europe? >> what we see is a great opportunity in italy because you get the greatest drop down in any of the yields. they're an ex important-led company. at the same time, going into pharma, going into the defensive sectors. yes, the valuations look stretched, however, the yields are incredibly attract i have. >>. >> a lot of of forex strategists that join us on "worldwide exchange" say they're seeing 119, 120 on the year in 2015. that should help exports, but at the same time, you don't want your currency to be that low, do

you? >> it's allowing europe to become more competitive. that type of environment, this is the boost they need in this scenario. >> you think about the multi nationals that do business in the u.s. and are benefiting from the recovery in the u.s., they bring that money back into euro euro europe. is that a trade? >> that is very much a trade. what you want to be doing is invest in companies that benefit from economic growth and you've got to focus on where they're telling to. you have strong economic growth in the u.s. and are they benefiting from the currency depreciate, as well? >> we're still waiting for these results. as we've said, it looks like european bond yields are going to stay very low for a long

time. does that mean that correlation effect will occur even if the risk is picking up? >> it does make us cautious on sovereigns. that let's in nicely because of what we've seen in the energy sector. when the oil price gets hit as much as it has, how are they going to pay that, as well. >> explain to us why high yields in europe have done so well? >> because they're -- yield. >> the ten-year in the u.s. at 2.3%. >> it's understandable. you can understand why high yield is doing so well. at the same time, there are risks that are there and it may not continue to do so well coming back into the markets. that's what we're starting to see. >> let's talk about the oil price. is it a supply issue or a demand

issue? >> what we're seeing recently, the trigger point has been the fact that opec didn't cut the price. so at the moment, it is a supply issue. there are concerns over china and slowing down there, but it's growing at a substantial rate. what we see is continued head winds and commodity prices and it's made us cautious on emergency markets. >> which emerging markets in particular if you -- for 2015? >> we've always waited for an opportunity to increase because these are the growth drivers of the future. and so what i would say this sth is holding us back from getting more exposure and trying to wait. moment, the greater upside is the consecutive risk.

>> oil has been one of the trigger points. when you start to see anything that triggers this shapedown and you're coming up to the year-end. people are thinking about locking in profits. you can see this contagion risk. >> does that mean we will not get the santa collaterally from thanksgiving to christmas? >> that's a very good question. i would hate to put a predict on what happens short-term. it's very hard to fight that good will that drive markets shorter term for the year. it means a shakedown is natural. but for the good quality assets, you may hold longer term.

>> and we've got some of the results from the tltro results. the ecb has allotted 129.84 billion euros in this second round of the first phase of the tltro allocation. the reuters poll was expecting 130 billion so they were out by very, very little, indeed. come in at 129.84 billion largely in line with the reuters expectations. that follows the september number of 82.6. he expected them to send it to be higher, but by all means, not higher to a large extent. let's get reaction from that. >> it's a great time to get some context.

we're seeing demand for the 100 billion mark. there is still pressure on straight quantitative easing. >> mario draghi said this sa four-year process for telcos. it is a four-year target for the banks. so yes, it's a small amount in terms of billions, not trillions, but it is a focus measure he wants us to give three or four years to take effect. >> i still remain skeptical. asset backed securities of small and medium sized enterprises while smes are the growth drivers of the economy. in that respect, it will have a bigger effect. >> when do you think we'll get

full blown quantitative easing by the ecb? >> i hate saying definitely, but it's unlikely to be early next year because we have a little bit of time on its hands in terms of waiting for these other targeted measure toes play out. however, the pressure is going to increase and increase towards the end of the year and investors are going to continue to price it in and so they try and force the issue. >> the stoxx 600 was marginally in the red, but now it's up 0.4%. although that's coming in line with the reuters forecast, perhaps it's more negative than it was with a take up of around 130 billion benefitting the bank stocks. uni credites and the italian banks up the most, 1.7.%. credit ago recoal, up 1.6%.

>>. >> they wanted to see where they stand before committing to the tltr program. that's perhaps one of the reasons we see that take up in trench one. trench two meeting expectations. >> we do. and the department continues. they wouldn't be taking up funding. >> do you think we'll see a pick up? will this prolong the chances of mario draghi to prevent outright quantitative easing or not? >> it's giving them a bit of breathing space. it's come in line where where the expectations were. however within you can boost splice as much as you want, but that's dependant on confidence. >> we said how difficult it would be to have outright sovereign bond buying. surely, if there is outright bond buying, is it tough to

make? >> it's true, but there's less of an obstacle. so corporate is the sneaky stage one, softens what they're doing while they're hoping germany continues to deteriorate. >> let's talk about market reaction. euro right now, the euro trading at a fresh-day low at $1.2415 on the day's low against the u.s. dollar. we're looking at italian, spanish, ten-year government bond yields falling to the day's low. markets are reacting now to that announcement. >> absolutely. has it made any difference to u.s. futures ahead of the u.s. market? we were expecting a slight bounce back to markets after declines yesterday. if that is still the case, we'll bring you that in a couple of

seconds. >> the u.s. markets are expected to open to the upside. nasdaq expected to up about 10 points and the s&p expected to open up about 8 points. thank you very much for joining us. it's been a pleasure, as always. and still to kot on the show, the russian rouble hitting an all-time low versus the u.s. dollar amid expectations of a rate cut. that is up after this break.

a big day for the markets. welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. another luke warm lttro auction as banks take up less cheap ecb loans than expected. but italian lenders rally on the news. u.s. lenders indicate a higher open. the price of oil stabilizes, b wti hovering around $61. now the focus is on russia. russia's central bank is expected to cut rates when it makes its decision. this as the ruble hits an

all-time low versus the dollar in trade today. >> more bad news for china after a pricing discrepancies announce ing -- in the region. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. we are awaiting the decision from the russian central bank. wr expecting them to increase rates and tighten the policy in the face of declining oil prices. it is back today, flat the ruble. 1% to 2% has become the norm. so far today, we will bring you the results of the central bank's decision as soon as we

get it, which is likely in about the next 30 seconds. >> yeah. the russian rouble has declined so far this year. president vladimir putin is in new dehli meeting with prime minister modi. new dehli's options had improved since the end of the cold war. taking a look at these emerging markets, even though india, the stock market, has been on a tear up about 30% year-to-date, it's still looking at high inflation and slowing growth. in that way, russia and india have similar problems. still, interesting to see these two leaders come together at a time when india is strengthening its relations with the u.s. >> indeed. so the russian central bank decision is coming. the norway central bank decision came earlier and went the other direction. >> here we go. >> the russian central bank has

come through. it raised its key rates by 100 basis points. we were expecting it to be more like 50 basis points, so a significant increase this the central bank rate. that is to protect against rising inflation and to protect the falling currency. the key rate is now at 10.35%. we haven't had any reaction from the ruble immediately. >> the main policy rate four times already this year and the latest october hike was a 150 basis point increase, taeg it to 9.5%. so there you go. the micex down about 0.25% on that news. >> let's bring in michael schlossberger. put your touch on this russian central bank. i suppose when someone's currency is in free fall, does a

small rate change affect much difference? >> the 10000 basis points shows they're trying to prop up the currency as much as they can. think about what's going on right now in russia. in a world where the standard now is zero interest rates, where germans are basically getting paid to finance their debt, the russians are having to raise their rates to 10%. that is going to create, i think, weak havoc in the whole community. i think it basically shows russia is in serious economic trouble because of the low price and the embargoes against it. >> it's a balancing act. by raising interest rates, that could weigh on growth in russia which is dealing with russian sanctions and the declining price of oil. the question is, will this rate hike help weight on inflation which right now is at around 9.1% in russia.

>> it's a classic emerging markets story where the central bank flails to try and raise interest rates in anl attempt to stave off capital outflows. the problems in russia are structural. oil prices now have des operated the only thing that they have effectively to trade with. so i think it's going to be ach more difficult situation for russia for the next year. >> boris, just getting more flashes out of the russian central bank decision, they're saying they see high inflation and devaluation expectations. they are ready to raise rates further, they're saying, after this central bank decision to increase rates by 1% already. let's talk about the bigger threat, as you just mentioned, on the russian rouble which has been the oil price recently. but the ruble has reacted more to the down side over the last

two weeks or two months, depending on which time frame you look at it than the oil price has declined. and volatility is the huge amount. does that mean there is some truth in vladimir putin's claim that this move in the ruble is down to speculation rather than fundamentals? >> of course it's a function of both things. but i think what you're seeing is the market -- i think initially the market was skeptical about this oil decline. they thought initially it was a spike in oil at which point it liquifies russia in a much better format. but with oil staying at these prices and perhaps even know going lower, it just puts further and further pressure on the russian economy. if oil pretty much stays at 60 or below for all of 2015, russia i think has a very serious chance of going into a depression. it is just in huge trouble the longer oil stays at these lower prices because it is the only asset that russia has to trade. >> boris, we're going to come back to you in a second.

russia is expecting annual inspection may exceed 10% in q1 of 2015. we'll talk more with boris in just a second. >> this is the day of data. we did just get earnings of 42 cents per share which is higher than analyst expectations of 32 cents. lululemon reporting earns that beat street expectations. net revenue coming up 10% year over year. just going to recap what we got out of the ecb moments ago. the tltro announcement came in intafkly in line with expectations. some were expecting a little more, some a little less. but the market has responded positively, that stoxx 600 is basically flat today. it had been down a little bit. the euro/dollar is flat. it's strengthened a little bit off the back, but most

importantly, the bank stocks have bounced. boris, cnbc contributor, the results today of the tltro, do they change the outlook of whether it's likely or not that we're going to get outright bond purchases? >> i think it's interesting what's happening in the euro. on the one hand, it is clear that the dollar is strengthening and the euro is eventually going to fall. and i think the 120 target on the euro is a reasonable target. it has become such a one-way trade and almost everybody in the currency market is short the euro. with any news that delays the idea of ecb qe provides a ground for a short covering rally. when you look at the technicals on the euro, it looks like it just kind of bottomed out here. this 1.2250, 1.23 level, is

bouncing around. so today's news is euro positive because it creates the idea that there may be a delay. maybe february, march, before they decide to pull the qe. it was decent enough that it still stays within the ecb parameters. and only when they are forced will they do the qe. so i think in some ways there could be a surprise short squeeze in the euro here over the next couple of week because there's no further bad news on the monetary policy as the market perceives. full blown quantities tafb easing at this point, boris, that seems to be priced into this market. could we be potentially set up for a sell-off in european stocks? >> yes, i think you're right. european stocks may see a bit of a sell-off if there's further

delay in qe action. in many ways, european stocks, there will be some order of easing and monetary accommodation coming. there is a bit underneath the european stocks that i think is relatively strong. especially if the euro stays around these levels. all of that is very positive for european corporates who get a much better exchange rate going forward. >> boris is going to stim with us. we'll be back with you in a few minutes. european markets are just in the red overall. the stoxx 600 is down 0.08%. the ftse 100 is a laggard, down 0.3%. otherwise, as you can see, a little bit of strengths across europe after we had about 3% of declines on the two previous trading sessions. germany up 0.5%. earlier, the ifo institute did upgrade its outlook for germany. as i said, the banks in both france and italy in particular

rallied a little bit off the back of the results of the tltro announcement from the ecb. >> markets down for the third consecutive day in the wooubs which is interesting given that seven days ago the market was buzzing about 17,000 dow. interestingly enough, futures indicating a higher open. we're looking tt dow jones industrial up about 64 points. the nasdaq up 10 points. s&p 500 up just about 7 points. the vix, the volatility index, up about 57% over the past three days. so volatility back in this game. what does it mean? will it derail the santa claus rally. >> there were pricing discreditsies after a report shows sales to other retailers when there wasn't merchandise on the is sheflts shelves. the reports go back to 2011.

walmart says it has taken disciplinary action. walmart is cutting 250 merchandise i merchandising positions. >> walgreen's ceo greg lawson will retire once the drugstore completes its merger. when it deal was announced in august, it was expected he would say on. boots' chairman will serve as acting ceo. wall green shares just flat in today's trade in frankfurt. new york regulator ben loti is looking to see whether reu r deutsche bank and barclay's over

possibly manipulating the forex market. deutsche and bank leps at wasn't part of that. in frankfurt, basically flat on the day. and if the market didn't have flufr to focus on today, wilfred, washington will be in focus. the house of representatives is expected to vote this afternoon on the massive $1.1 trillion spending bill. while it appears it will pass, conservatives are unhappy that it fail toes challenge president obama's immigration policy. many democrats are upset the bill weakens part of the dodd-frank financial reform. it's been a sizzling deal for the ip oss in the u.s. we'll be discussing, after the break. cute little guy, huh?

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. gravity taking hold of the stock market yesterday as falling oil prices, tech continues to be a focal point for investors. in fact, the so-called momentum stocks selling off, weighing on the nasdaq composite. let's get to some of the biggest losers. gopro, down just about 7.5%.

tesla down another 3%. even the online travel companies, which have been posting better-than-expected earnings are up on the year. yesterday, they were one of the worst performing stocks on the nasdaq. trading down 3% for expedia. price line down just about 1.7%, wilfred. >> indeed. some of the high prices we've seen in the likes of gopro leading to that kind of correction has been a benefit for other companies. other companies want to go list off the back of devaluations. the action isn't about to slow down because of the holiday season. with more, let's get out to landon dowdy. good morning, wilfred. renting club, once made the shady business of internet loans into a booming industry is going public today. the company pricing its ipo at $15 a share, above the expected

range. far more than gopro's record ipo in june. valuing the largest peer to peer lender at $5.had billion. lenning club will trade on the new york stock exchange under the ticker lc. lending club is the first online lender to go public. it helps match people seeking loans with investors willing to provide them and borroweders than a traditional bank, simultaneously producing greater returns for lenders. lending club has financed more than $6 billion in loans, but the business does face several risks, including more competition from banks and other online lenders. rising interest rates and more regulation. the company has some high profile names on its board, including former u.s. treasury secretary larry summers and former morgan stanley ceo john mac. analysts speculate lending club could use the proceeds from the ipo to make acquisitions beyond consumer loans. earlier this year, providing financing for private school

education and elective medical procedures. meanwhile, box is releasing its fresh update on its financial businesses. the cloud software product has delayed plans due to market conditions. a new s.e.c. filing shows revenues grew 70% in the third quarter, but that growth rate is slower than in previous years. that includes the $25 billion ipo. >> landon, thank you very much for that. as landon was just pointing out, some high profile members of the board on lending club, larry summers, his stake stands to be valued at $15 million. then there's john mac, former chairman and ceo morgan stanley. his shares are valued i believe

around 36 million to $40 million. you've got some big names on this board. >> absolutely. some nice profits for them, too. now, this vintage apple computer could be yourself for the right price. an original, fully functional apple ipc goes up in new york today. it's the only known surviving apple one that has been sold directly by steve jobs out of his parents' garage. it's expected to go today for up to $600 million. sticking with apple, wilfred, the ipod classic is a hot item even though am discontinued the device three months ago. now, reports say copies of the ipod are selling for more than $900 on ebay and other sites. if you're lucky enough to have the factory sealed special

decision ipod in 2004, a seller reasonly got $90,000 for one. you've got to be crazy to want one of those old ipods, right? >> i would agree, if it works, particularly. he want we want to hear from you on this. what gadget are you still hanging on to? arlo, an original nintendo game boy and playstation. if you want to inus on the scaled, worldwide@cnbc.com. do you know what i miss on the old ipod? the scroll button. it was somewhat soothing to flip through and find music within don't you think? >> i don't think if it was soothing, but -- >> before we go to break, u.s. markets looking to bounce back after their worst days in two months. the euro hit session lows after banks took up slightly loans and the ruble sees the russian

central bank hiking rates.

the dow & s&p are looking like they might end their seven-week whipping streak after yesterday's decline. but today, they are looking like they are going to bounce back. the dow is expected to he up about 40, 50 points. the s&p expected up about 5 points and the nasdaq up about 6 points. european markets are basically flat across the board. the stoxx 600 is basically flat. germany is up 0.3%. both france and italy are basically flat. this follows about 3% declines across europe in the previous two trading sessions. so it is jaufr setting that a bit today. but let's look at the banks

because the banks have rallied. we've had another take up by loans. results out show lenders borrow 129.8 billion euros. that is just shy of expectati expectations. bank stocks have rallied on the back of the news, especially in italy where we had unicredit up 0.9%. credit agricole in france is up 1.25%. seema. >> yeah. these loans are expected to incentivize bank lending. markets are reacting to that tltro announcement. take a look at bonds. bond yields have hit the day's lows amid expect ages that the low volume in the auction has increased expectations that the european central bank will have to launch its full blown quantitative easing. but the question is, is this already priced into the market? at this point, markets still moving on the prospect of full blown quantitative easing. let's take a look at currencies.

the euro is at a session low after that announcement. the norwegian krona hit a six-year low after the central bank could cut to counter the price. the swiss national bank kept its rates on hold, confounding expectations that it would prepare the ground for negative rates. you're looking at the norwegian krona gaining momentum against the u.s. dollar. of course, the euro at a fresh low for the day at 1.24. wilfred. >> indeed, let's talk now to forest schlossberg. let's talk a bit about currencies. of course, the u.s. dollar has just given up a bit of ground over the last few trading sessions. is that just a bit of profit taking or does the structural argument still stand for a strong u.s. dollar? >> i think the structural argument still stands. but i think it's interesting to take a look at the u.s. side of the equation over the next couple of weeks. there is a process.

there are decent short covering squeeze in the euro, in the pound against the dollar. we've seen the correction against the dollar. the reason why is because the market is very, very focused on the idea that fomc is going to definitively lift starting q1 of 2015. next week, we have the fomc meeting. unless we get a very, very clean message that yes, they are absolutely committed and now beginning to normalize rates, i think you'll see the dollar weaken basically on expectations. but the market is so geared up on the idea that the fed is definitely committed to the interest rate environment, any kind of delay or disappointment could give rise to the dollar profit taking move. i agree with jeff in a sense that there is no fundamental reason for why the fed should raise rates right now. it's much more of a philosophical again than a fundamental one. wages are still very, very tepid. growth is still problematic.

we're not seeing the growth that requires normal zane of monetary policy. there are some qualifiers here to this whole overall bullish dollar view we have in the market. >> how closely do you think the fed is watching the situation here in europe? we did get a read on inflation today, boris. german inflation in november now at a 4 1/2 year low. the threat the of deflation is still a big one for investors. is the fed watching that? >> i think the fed is watching that. there's always a fear that deflation could be exported to u.s. in a sense. of course, european gdz goods, european services could become much lower value here in the u.s. and keep a lid on price levels. the other thing that's interesting today is we're all going to be watching u.s. retail sales. the whole component of this normalization thesis is that u.s. recovery is really start to go take steam. u.s. recovery means the u.s. consumer is back. >> all right. >> so we're going to have to watch the u.s. consumer today very carefully. >> we will do that, boris, thank

you for your time. >> and that's it. that's all we've got time for today on "worldwide exchange." i'm wilfred frost. >> and i'm seema mody. "squawk box" is next.

sgro good morning. welcome to "squawk box." the markets are looking to rebound. the futures pushing higher at this hour. oil prices are dipping below $61 for the first time since 2009. ebay may cut thousands of jobs after. and after ten weeks, police in hong kong are clearing out pro democracy protesters, challenging the government's election plans. today is thursday, december

11th. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" on cnbc. i'm becky quick with joe kernen. andrew is in new york today and he will join us later from there with a special guest, u.s. treasury secretary jack lew. in the meantime, stories we are watching today, futures are higher this morning after the major averages lost more than 1%. 268 points to close at 17,533. and the s&p 500 had its biggest decline since mid october. the fall in crude oil prices taking the blame for the sell-off. oil prices hitting their lowest

levels since july 2009, dipping below $6 of 1 a barrel for wti. market watches verini says the drop in oil is what he is calling a black swan event. he says stocks will move even higher. we'll have more on that in just a moment. joe. >> here are some stocks to watch this morning. ebay is reportedly considering thousands of job cuts. "the wall street journal" says the company could trim as many as 3,000 jobs. that's about 10% of its workforce. this as it prepares for the split of paypal. most of the cuts would come from the marketplace division, which includes ebay.com and stub hub. and staples is getting some activist attention. starboard is taking a 6% stake in the retailer and raised its stake in office depot to 10%. and that, at this point, it may push for a combination of the two. and walgreen president and ceo greg waffen is going to retire after the drugstore chain completes its merger with the uk based pharmacy alliance boots.

alliance boots executive chairman stefano petina will search as acting ceo while the search for replacement is conducted. becky, walmart -- >> thanks, joe. >> you are very welcome. what are you looking up? >> i was just checking -- i haven't seen the new york post yesterday. >> their tabloids are running with the oil brat -- okay. here is the thing. no, no, not yet. we're talking about an actor or an actress that is a minimally talented spoiled brat. now, for me, that doesn't narrow it down one iota. >> can you name that person? >> can you name the actors and actresses? on the other hand, it would be a much shorter list that aren't -- >> who aren't -- >> talent and had aren't spoiled brats. exactly. so that doesn't -- if you say which actors are a minimally

talent and had spoiled brat, to me, it's like let's start with the as and end with the zs. no, i love everyone in hollywood. except for the universal stars, universal pictures stars, except in that case. they're -- >> part of the fold. part of the family. >> they're very talented and none of them are spoiled. >> not at all. nop nobody around this set is spoiled, either. >> no, no, or minimally talented. >> right. walmart said it discovered disincreasesies in pricing and inventory in china regulations. it says the issues were not material for the company's overall operations. the statement is in reports that china results seemed stronger than they actually were. and lululemon earnings, quarterly profit, 42 cents a share that beat the street's expectations. revenue was shy of forecasts. lululemon did see a surge in

online sales. it's up about 1.30, which is 2.75%. shares of lending club will begin trading today. the online peer to peer lending company priced its ipo at $15 a share. that was above expectations. we expect it to raise $750 by selling 58 million shares. the initial range was $10 to $12. police in hong kong, as we said at the top, are clearing out pro democracy protesters. it's been ten weeks that these individuals have been camping out in the streets. eunice yoon has the story right from nearby where it is having -- not right nearby, but closer than we are from beijing. hey, eunice. >> not so much. exactly. in beijing. and, of course, beijing is very quickly watching what's happening in hong kong. so far, what we are seeing is that the police have been clearing out protesters. this has been largely nonvoipt. some of the purchasers have been arrested. the mood amongst that crowd is one of defiance. there are a lot of people who

are chanting and who are holding up banners saying we will come back. and this is after many of them have been sleeping on the streets for the past 75 days in what's really been the biggest challenge to beijing's authority since the 1989 tiananmen square massacre. the two sides have been at odds over the way hong kong people can uses their own leaders. the protesters want ream choice. the beijing government as well as the hong kong government have said the people can vote just among candidates that are already vetted by the chinese deposit. so the police have been dismantling the barricades and the block aadeblockades. people have been backing up tents and walking away, but the frustrations and discontent among those protesters has not been going away and probably will not for quite some time. there's been a political awakening in hong kong, especially among many of its young people. really, the way that awakening plays itself out over the coming

years with these young people, the next generation of leaders in hong kong in conflict with beijing's authority, how that really plays itself out over the come years is going to shape the way hong kong stands as a financial center among the world. guys. >> eunice, thank you. it seems from the reports we've heard that there was not even agreement among a lot of protesters. this has not been organized. and that age divide that you talked about has been one that's played out there, too. >> absolutely. there is a big age divide. and there are -- there is one group that would say that they were the main leaders of the occupy movement in hong kong. but it's really a broad umbrella of people. and what i always thought was interesting the protesters is as you go out into the streets, you will see a lot of young people.

i really see a lot of young people -- i mean, i would walk out there and talk to people who are 14 years old, 15 years old, feeling very strongly about their rights. they've been complaining about not only protecting their own civil liberties, but they're worried about their economic future. and these are people within the city that really have a stake. because when they become working adults who are in the working world, their hong kong is going to become part of mainland china. so what they're worried about is that as the years progress, if they don't act now, then they really could see a lot of those rights as well as their economic future erode. >> eunice, thank you very much. again, eunice yoon. let's check on the markets back here in the meantime. futures are looking a little higher. yesterday, you did have some big declines. yesterday, the dow, the s&p 500 and the nasdaq all had their worst day in two months. the dow and the s&p 500 both closed at one-month lows.

dow futures are up by 51 points above fair value. nasdaq up by just over 8 points. checking out what's happening in the early trading in europe, mixed markets at this point, the dax is up by 0.3%. the ftse down by about 0.5%. and in greece, it like like the market there is down by 3%. it has been an incredibly rough week for that pkt. in asia overnight, declines not significant, less than 1% declines across the board. hang seng down by 0.9%. the nikkei down by about that much, as well. oil prices yesterday settled below $61 for the first time since july 2009. this morning, trading slightly higher, up by about 49 cents to 61.43. the ten-year note, joe, you may be right on this, 2.16 pergs is the yield. >> i didn't think that was going back down after friday's jobs number. but i did think the market was along with paulson, i agree with

him. when you see a -- and others. but you get 300,000. and everything is good. it's like every person around can mention all the good things about the market. when you get there, it's like what's going to -- it's already in there. that is why it went from 7,000 to 18,000. >> and now everyone is saying, well, it's oil again. when oil goes down, that's a big stretch to go from oil is down, which is obviously that's good. so you've got to get all the way to the point where you say there must be a bad reason why it's down. you have to just assume we don't know what it is, but there might be a reason why it's down and, therefore, i'm selling stock. i mean, the knee jerk reaction should be that it's good. the journal has a piece today. people that have been waiting for a raise finally got a raise in the form of the deal every week that you fill up, you're going to have more money. so i don't know. i don't know whether they're buying it out. i'll tell you, i don't just look at greece being down 10% a day

or whatever. just write that off? it's definitely a low. it's not greece or worries about the eurozone? worried about that sell-off in shanghai the other day? i don't know. >> shanghai was up 50% since july. >> we were up, too. >> not 50%. >> tripled since '09. >> 50% since this summer is kind of stunning. >> 35% last year and it was 14% this year. so that's pretty good. all right. we're going to -- the. >> take a look at the dollar. the dollar was down 1.5% against the yen yesterday. the dollar is up slightly against the yen. 118.63. the euro is stronger against the dollar. it's sitting right now at 1.2454. and gold prices, at least at this point, look -- they're down by about six bucks.

>> so we'll get back to this discussion. our low market prices. what the markets have been waiting for, the market guru calling the oil price drop a black swan event, an unpredictable move that the markets know is coming, but don't really know how to prepare for. so how are stocks going to digest this decline eventually? berini thinks they go higher. oh, the other point that i keep making is, you know, it's just dog ma that the market goes up between now and the end of the year. >> right. >> and yesterday i saw another indicator where it was 55 out of 55 that it happened and moved higher. usually people mark up their portfolios with the winners so that, you know, you see it and then in january you have the january, february, it goes down. everyone says it, maybe it doesn't happen. but who knows. with us to discuss, hank smith, chief investment officer at haverford trust.

here on set, jeremy fieeren at ubs. you're on the left. that's the way i read, hank, so it's just easier for me to keep things straight. where are you in terms of these, the last three days, really, because monday wasn't great. tuesday looked like it was going so be ugly. but then the nasdaq pulled it up. are we in a 5% to 10%er here or are we already done, hank? >> no. i'm not even sure we're in a 5%er. i would continue to see that pullbacks should be relatively shallow and brief, as they have been all throughout 2014. because there's still a lot of money that has missed this bull market that wants to participate and will buy on the dip. and i think that trend continues. and this recent sell-off, i know it goes counter to the christmas rally, but we might have bought ahead that christmas rally from the middle of october into the

middle of november when we had a 14% gain. remember, the markets were flat then. and it bodes well for 2015. remember for the year the presidential cycle, always the most powerful year and we have an economy that is gear to go a new level called the 3% world from the 2% world. so i look at this as constructive, not destructive. >> that usually happens. you know, when it goes up through december, then down in january, maybe it doesn't do that and it starts okay. because there's been years where it's been great at the end of december and it starts off -- >> terribly. >> horribly. and i said what you're saying. the 330,000, whatever it is, the jobs number, the ten-year is back down to -- you know, the only reason that a lot of jobs are bad is because the fed moves more quickly. that's the only reason you wouldn't want 800,000 jobs is because you would worry about interest rates.

markets is telling you rates are still low. that's probably positive, isn't it? >> sure. i think it's a positive because it's very hard to connect what's going on in the bond market right now with the momentum we're seeing in the u.s. economy. i mean, when you have job growth average in 240,000 this year and the last month, as you mentioned, 321,000, the ism, both manufacturing and nonmanufacturing indexes close to 60. clearly, growth momentum is improving. it is largely a reflection of inflaegzary or deflationary pressures we're seeing from outside the u.s. and the lower bond yields we're seeing outside the u.s. >> okay. so i think, you know, why wouldn't oil just be, as it goes down, why wouldn't it be a good thing? commodity necessary general are not correlated with financial assets. they have inverse correlation, don't they? so i don't know why -- >> what was it about cap ex that makes up something like a quarter of cap ex going into energy? >> more now than before, but still, what an -- it's still a huge -- it's like a tax cut. >> there's no question,

unambiguously, oil consumer countries like the u.s., we consider 70% of our gdp is consumption driven, but it's clearly going to be a net positive. outweigh negative effects from the energy sector. >> the percentage point of gdp, sustain about $10 decline in the oil price. if oil prices stay in the 50 to 70 5 range over the next 12 months, that should bolster consumer spending. >> it's about 0.2% or 0.3% increase in u.s. gdp. >> so you're talking about 1% to 2%? >> i wouldn't go right off the peak. from the geopolitical risks in the middle east and russia and ukraine, we probably are seeing a sustainable decline in oil that could boost gdp 0.5% to 0.75 perncentage points.

>> hank, what we are seeing in oil, that in no way causes you do downgrade global growth expectations? this is all supply? >> no, i think it is mostly supply. look, demand grows every year, albeit recently it's growing a little bit slower because of substitutions, energy efficiency and the slow europe and slowing china. but this is mostly about supply. and lower oil is good for the good guys. and it's bad for the bad guys. russia, venezuela, iran, there are a few others in there. obviously, that is not good for that. and there's concern about there's a black swan here on the negative side is geopolitical trouble caused by russia doing something unexpected because oil is, really, really collapsing their economy.

but, yes, can a black swan be good? i agree, this is good for the consumer, both u.s. and global consumer. it's great for china. it's great for japan, it's great for the united states. it's just that it's happened so quickly, there's a shock to it. but let's enjoy filling up at $2.60 a gallon. in new jersey, it's even less, joe. >> i know. i want a buck and a quarter again. that's what it was when i was in high school. we find more and more of it. it's like, you know, we all believe that ridiculous peak oil. >> you know, there's no reason why the malthusians have to come through. they usually doing. usually our technology, suddenly we do horizontal drilling. we've got more i think on the economy than in saudi arabia at this point. >> 9 million barrels a day of production this week.

that's the most production we've had in the early u.s. in the last 20 years. >> god, i can remember when we were arguing with certain administrations about opening up more drilling and we just kept hearing, look, we're not going to solve our oil problems domestical domestically. that's not going to happen. the one area that does sort of -- god, the cheaper hydro carbons get, the more the gap grows between that and all these other. >> the alternative sources of energy? >> all this stuff that -- you know, if you're, you happeknow, age and green. >> ge still -- no, we don't -- yeah. wind. anyway, thank you, jeremy. thank you, hank. thank you. we'll see you. go back to -- are you teaching a class today at all, haverford, or are you off? what are you -- you have nothing to do with haverford, the school?

>> nothing to do with -- >> you run their endowment? you do nothing? you just stole the name? what -- >> not yet, but perhaps you can help me with an introduction there. >> you're open to managing the endowment, okay, all right. >> absolutely. when we come back this morning, we'll have more on the oil shock and how it's affecting china. how that economy is coming to grips with lower crude and how this could be a good thing for the powerhouse. and three years after the moment between john harwood and texas governor rick perry, the two sat down and shared some barbecue. what was on the menu and is another run for the white house in the works? that's coming in the next hour of "squawk box." 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.

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dude, squibble bits. mareyayzee. mormal snap jebby rolban jebby deetle flosh. [laughter] eh. now's the time to get in the loop. just look for our fall tv picks with xfinity on demand. huh. quickly find the season's hottest shows, huh. quickly find the season's hottest shows, with a handpicked collection all in one place. only from xfinity. let's gate quick report on the national weather from -- and get a national forecast from the weather channel's keith carson. good morning, keith. >> good morning. let's take a look at what's going on. in the northeast, we have the remainder of the storm system here. heavy snow in places like buffalo, obviously, we said that a couple weeks ago. this will be soever what we're looking for along the east coast may see snow flurries.

not going to be a big deal. the real story today is out west. a massive storm system moving onshore against north california. wind gusts over the coastline into washington and oregon. high wind warnings. snow. in the san francisco area, wind and rains. obviously, california is still in extreme drought. we have 3 to 5 inches of rain coming onshore here. that is overall a good thing. it's going to happen really quickly, so that might be a negative. but the winds are going to be tremendous. in oregon, we could see wind gusts over 1100 miles per hour. >> lots of water and big wind, not what you want to see when you live near trees. >> no, absolutely. >> a springy time. what is that, wishful thinking? you're doing what you can, but -- >> the springy tie is annoying me because i'm getting too much showing on the bottom. it's a delicate balance, but i

can't get it. >> when you're weird like we are, i might tie my tie like three our four things. >> i do the same thing. different branch have different lengths. >> do you get bothered by the closet door being left open? >> it is an ocd thing. but watch some of these actors that aren't -- i'm back on my actor rant with the angelina jolie thing. some of the actors that have to put on a tie. i see them walking around like this because they've never done it brp they've never had to be productive in society. it's like this. it's this high. they're walking around like that with a jacket on and you can see that much of the shirt. they're clueless. >> this is like that eddie murphy moving coming to america, they have a person that ties the tie for them. >> exactly. >> anyway, thank you. >> keith, good to see you. >> good to see you. >> it's a good summary now. ♪ i feel happy ow

oh, so happy ♪ wti now down over 40% since peaking in june. some economists are now saying falling demand in china is to blame for a big yump in the dive. the process that has been set up there are now mostly complete. joining us right now to tell us what to expect from here, avandi shia. he jones us from hong kong. andy, i have to give you perhaps. you called this way back in september. you were looking for oil to plummet to $60 a barrel. what did you see that led you to that call? >> well, i saw china's energy demand kind of fell in august. so that effectively the overall economic picture of japanese over investments. china is kind of a growth and energy. and eventually oil price has to

catch up with the coal price in china. basically, energy supply, two-thirds is coal. the coal is down 60%. so i expect oil eventually to come down 60%, too. >> 60% from here or do you think that these prices were not far from what ud called from that $60 drop? >> yeah. it's about $60. i think $60 is probably comfortable with the coal price in china. >> andy, what's so interesting about this is so many people have assumed that this was a supply issue, that the united states has gotten much better at drilling. that we've been able to get much more oil out of the ground than we ever expected. you're saying the reason for this plummet is a demand situation, that it's a lousy economy. that depends on a lot of scarier scenarios when you start looking at the impact on stock markets. >> if you look at the

commodities, copper and iron ore, you know, most are very similar. you have lags between the different types of commodities. so i really don't buy all the theories. it's up as we see as massive industrial machines. they adjust for the cool down to digest over investments. for all the commodity prices coming down. >> so what happens? what's happening with china's economy? how bad is it? and you think it bleeds over into other economies. >> the investment cycle is different from oil that we see here in the west. the west is dominated by consumption. half of gdp is investment. and investment has a tendency to overshoot. so when you overshoot, you end up with a lot of overcapacity. then you have to slow down.

china has had an investment cycle for several times. i see that over the next four to five years, china will experience inflation and a sluggish demand. so i think a lot of the other things that will also exchange to some similar stuff. but not affect the consumption over the story. chinese households are okay. the exports are okay and the government infrastructure -- dp dp is a contract yop. to-thirds are still okay. >> what does that mean for a gdp number next year for china? >> well, the government probably is looking at 7%. i think it's going to be difficult. when we look at energy consumption, it's just stagnant. it's not growing. energy demand really shows how the economy is doing. >> so if you're looking at

sub-7%, what does that mean for other nations that have trade with china? >> well, it affects raw materials and equipment. so you have australia and doin' effectively with this story. japan and germany going through recession. it's very closely tied with china map on the other side, you have much more on the consumer side. they're experiencing much less impact. >> in september when you were looking for this crash in oil prices, wti was in the 90s, maybe $930 to $93 been right now, it's sitting just above $61 at $61. do you anticipate that range lasting long into next year? >> i think it will last at least five years. the oil price average is $20.99.

because of china's boom. when china goes into that situation, i fear the oil price will become too much. so $60 would be the minimal price for the next five years or so. the downside -- i don't know. i think china basically needs to cool off investment and to digest the overcapacity. >> beautiful.. i love that, andy. it was the chartel that just collapsed. i do. this long, national nightmare is over, right? that's what it's actually worth. >> yeah. >> i like it when people actually agree with me. anyway wsh he may -- >> oh, yeah, we hit 6:30. andy, thank you very much. we really appreciate your time. >> you see, i see this and i

think pontus pilot. coming up, ready for some -- i told you that i saw that on the tv screen and i thought they spelled it wrong. >> it does look like pontious pilot. >> it was women like pilots. that's not true. number two, they spelled pilots wrong, but it's pilates. we really do need andrew for this. we're going to work out the numbers for lululemon. and later, getting caught up in angry protests. sfoo . .

good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick. andrew ross sorkin is in new york today where he's hosting the "new york times" deal book conference and he's going to join us later this morning with a big, special guest. the treasury secretary of the united states, jack lew will be with andrew at 8:30 eastern. making headlines this morning, in a closely watched case, a federal appeal escort overturned the insider trading convictions of two former hedge fund a u.s. tournl says this will limit the ability of people to trade on inside information, but the whole issue is what's

inside, what's not? you pay these research firms, check channels, markets call their sources to find out how things are going. that's inside information. what have we really gotten in a nefarious way. >> what is digging, what is? exactly. maybe not a total surprise. sony pictures is on track to debut the interview today. reporters are banned from the event for the controversial comedy in an attempt to eliminate questions on the cyber attack which north korea is a principal. >> it's already what they're talking about on the great. >> in a place that is pretty closed, hollywood is not the most transparent place and there are some things that go on there. >> this is what we expect that is happening, and you see.

>> you know, it boggles the mind the kind of stuff that can come up. in any business, but even hollywood is spicier. and the russian rouble, falling to a new all-time low and the new all-time low. so it's lower than the last all-time low so it's a new all-time low. the dollar against the dollar extended earlier losses after russia raised its lending rate up to 10.5%. there you go. >> you know what's interesting? we feel like we know these people. so it's gossip we can get in on. >> i guess so. i guess that is. you know what? if you ever do run into one of them, go up and pretend like you know them and see how that works. >> if you're a huge star, you wonder why they -- >> why they don't like any of

us. >> it happens once every 4,000 people. >> let's check out shares of lululemon, the company out with quarterly results this morning. they came out with earnings better than expected. revenue did come in a little bit shy. the athletic apparel company has been struggling all year with shares down almost 19% to 2014. joining us right now on the squawk news line is pam catilaano at sun trust. is this a turning point for this stock? that's what some people are saying at this point. >> absolutely. they've come in given the low base but we have a new ceo in place who is trying to prove himself. this is what we like to see. they came in above guidance. revenue was a little light. it was 419.4. guidace was 4.20 to 4.25. there were a lot of issues out there with port delays.

but a good comp, that's great to see. also a very good sg&a control. all in all, we were very happy with the print. >> i read another an lift report that says some of the things they like are trepdz, comps are getting easier. and it's like international growth prospects at this point. there is m&a speculation out there. i just wonder, what is this, is this a real story of a turn around or a real story that somebody else might sweep in and be interested in this company? >> i don't think they're both mutually exclusive. everything comes at the right price. obviously, the founder, chip wilson, had made inflammatory comments in the past. at one point, he was chairman of the board. since that time, he's sold half his stake to a firm that, you know, helps that speculation that they could go the private equity route. and he is not as involved in the company. so clearly, all of that would seem to indicate that they are cleaning up their act to make

themselves look more attractive. on the flip side, they did bring in the new ceo, i think they're both very focused on getting the business turned the right direction. i am confident that the turn is occurring and we are seeing that in the stock price and we will continue to see that in the stock price. but there's always the opportunity on the private equity side. that said, i don't think they come for cheap. we have to think about the situation here. they have growth both domestically and internationally. that's a true rarity in my space these days. >> i know you have a buy rating on the stock. do you have a price target? >> yes. we do have a price target on it and i apologize that you guys don't have it in front of you and i will get it for you in one moment if we could go on to the next question. i'm sorry. >> sure. let's take a look at some of their competitors. i know that nike, under armour, gap, there's a lot of competition out there. how strong are they versus the competitors? >> it's a different brand. the market is expanding so dramatically across the board.

so lulu is among the first on the leisure side, which is now a turn that's anything. nike is a lot more for the actual hard core athlete, in my opinion. when we think about it, they're going after that yoga product, as well, and that lifestyle. but if you look at the product versus the product at lulu, lulu has much more of that aspirational quality. lulu still has going for them the innovation with the product and the design and we think that they still get that customer who is willing to pay the higher price point for it. >> we have to run, but do you have that price target? >> i will get it for you. >> send it in to us and we'll talk about it later. the stock is at 46.70 right now. thank you very much for joining us this morning. right. see what this natural burger is. okay. okay. still ahead on "squawk box," three years after the oops moment, john harwood and texas governor rick perry got together for some barbecue.

is he gearing up for another run for the white house? and did they completely forget the barbecue sauce? that's next right here on squawk. will that be all, sir?

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welcome back, everybody. we were talking about lululemon. the price target she has is $62. the stock price is just below that. it was under review and she wasn't sure if she could say it or not, so she had to get approval. it's been three years since john harwood and rick perry had an oops moment. they sat down with some texas barbecue to relive that moment. how nice. and to look ahead to a potential

2016 run for the governor, not for harwood. >> do you have any concern that that moment would be too big an obstacle? >> i don't. one of the errors i made was in not being prepared. i was a little arrogant and that had as much to do with my demise as a candidate as, you know, forgetting the third agency of government. i spent the last 22, 23 months in preparation to run for the presidency. >> the real tragedy, john harwood, was that a libertarian-type candidate from texas -- if you can't come up with three agencies to close down, you're not a true libertarian. he should have had seven or eight ready to go if you're looking for a superfluous useless government spending. right, john? >> the craziest thing that we had about that whole moment that we had was on television, he remembered two and he couldn't

remember the third, ron paul, mitt romney, everybody on stage was throwing lifelines his way. and iran paul says epa or -- or no romney said epa. if rick perry and said yeah, the epa, the whole thing would have stopped and we wouldn't have had the oops moment. but he was honest and said that's not the one i'm talking about, but i can't think of the one i'm talking about. >> honest politicians never get elected, john, or rarely. >> i'll tell you one thing about rick perry, though. he is a gracious guy and a personal guy from very soon after that happened, he couldn't have been more genial about the whole thing. he's having some fun with it now, which is why we sat down. >> and talking about some social issues, too. he made some comments about gay people. he came on and he said, you

know, i was really dumb. he cops to saying some stupid things, which aren't obviously -- he doesn't have a monopoly on that. you know, you're eating foot food. i don't know whether he runs or not. it looks like he's going to run. we have cke on later, charles jr. they have a new all natural burger coming out, john. i have to ask you a couple of questions and play a little game with you here for rankings. i loved it. i got a lot of mail. when you called jonathan gruber a big nothing burger, number one, an entire network needs to re-examine their programming for the past three weeks base that's all they've talked about for three weeks. >> which one are you talking about? >> it's not our sister network, shock me with a feather. it's a big nothing burger. so i'm trying to find something that is a burger. so gruber was a big nothing burger. how about what -- is benghazi a

nothing burger? is it a -- how about what's the bigger burger, that or the lois lerner the big nothing berger? could get sustenance from either one of those? >> it extends on what you want in your burger. >> they seem like serious things to me. >> of course they're serious things. >> but you're calling them nothing burgers. is this bridgegate, is that a ten-course meal to democrats? because, you see, i would call that a -- i wouldn't even call that -- that's like eating air. i mean, a couple of underlings to hayes, you know, some guy in ft. lee closed down a couple lace? another network is ready to take that all the way to watergate, yet you're telling me these acts -- using the irs to extract punishment or -- >> i didn't say anything about that. >> but where do i get a meal?

do i get a meal with bridgegate or do i get a meal with -- >> you know where you get a meal, joe? you get a meal on the living standards of average people. that's the biggest problem the country gruber or benghazi or irs? >> gruber is not a scandal. >> okay. >> gruber is just a guy mouthing off in a stupid way. benghazi is a terrible -- >> to put something over on the american people and call them stupid and to not even sell what you're really doing is not a scandal? >> oh, that's a policy guy talking about what policy people do all the time. it's not -- there's no gravity to that. >> how about benghazi? how about irs? >> look, benghazi was a horrendous national security failure and tragedy. and the irs is a set of actions that shouldn't have happened. but was it directed by the white house? no. >> well, certainly the media won't find out on that one. anyway, thank you, john.

thanks for playing along. you can see this entire digital original on cnbc.com. when we come back, reinventing the rust belt. columbus, ohio, says it is making a comeback. but is a perception problem keeping companies away. as we head to a break, check out some of the most clicked on on cnbc.com.

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for decades the region known as the rust belt has been a symbol of american decay as manufacturers head for warmer and cheaper climates. but there is evidence of a comeback as the rust belt remakes itself. scott, good morning. >> good morning, becky. on the campus of ohio state university. i had had all these ideas of coming here and gloating that wisconsin beat ohio state for the big ten championship. we'll leave that alone. it is five minutes to 7:00 in the morning and it is exam week. so that's part of why we're not seeing a whole lot of students around here, but there is a lot of attention not just to what they've learned and studied this past semester, but also what happens after they leave. that's a big issue not only in ohio but throughout the states formerly known as the rust belt. this so called brain drain. ohio's governor john kasich says

for young graduates really everything they need is right here. >> there are great companies all across this state. there are opportunities for young people to get them excited along with a renovation with a lot of the neighborhoods in our urban areas in this state. so, you know, it's cool to live over the rind. it's cool to live in the flat. >> over the rind, cincinnati, short north here in columbus, the flats in cleveland. i studied up on that. here's the thing. it's not exactly working out here in ohio or anywhere else. according to the cleveland fed, 47% or so of the students with degrees or people 25 to 54 with a bachelors degree moving out of state. in the state, only about 29%. that's saying the state is not attracting people and that adds

to this sort of brain drain. we see it in our top states for business. but look at the workforce rank. 46. and the quality of life rank, 43rd. there's an issue in the rust belt as they try and rebound getting people to come back, keeping the talent part of the thing that will do that, of course, is the economy and jobs. and in that regard, this area is on the comeback trail. >> it's a bohemian, like, yuppie mecca over the rind now. you need to switch to basketball, scott, for wisconsin. they won last night. you went to wisconsin, didn't you? >> i went to wisconsin, yes. >> very liberal school. very liberal school. but i went to colorado, very liberal. what happened? what happened? it's weird. >> you were the start of the ohio brain drain, you realize. when you left cincinnati, that's

when the brain drain started. >> yeah right. it's a good place to be from. thank you, scott. >> thank you for everything this week. "squawk box" will be right back.

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