good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernan as andrew ross-sorkin is off today. police are treating this siege as a hostage situation and negotiators made contact with the gunman. >> our plan and only goal tonight and for as long as this takes is to get those people that are currently caught in that building out of there safely. that remains our number one priority and nothing will change. >> we'll have a live report from the scene in just a minute. in the meantime, here are the other big stories we're watching. the fed is in focus as the central bank is widely expected to signal its easy money stance is coming to an end. and it is on track to start raising rates next year. many watchers think the fomc is set to change the language in

its statement to drop the pledge to keep rates close to zero for a considerable time. the fed's two-day policy meeting begins tomorrow. the oil shock continues as crude oil prices bounce back after volatile early trading. brent had dropped to a 5 1/2 year low after the further price declines. also in the headlines, opec's chief defending the decision not to cut the output. wti is up by 40 cents only sitting at 58.21. last week' 13% decline in oil prices sent waves throughout the global markets in the last five trading sessions. the yield on the ten-year t-note posted the biggest weekly decline in terms of a drop in terms of basis points since june of 2012. and the dow dropped almost 4% over the course of the week. that was the worst week since november of 2011. we've been watching the equity futures this morning that look to be bouncing back, at least in early trading. you can check it out at this point, triple-digit gains for the dow futures up by 102 points. the s&p 500 up by 11 points and

the nasdaq up by 27. the market is clearly not concerned at this point about the situation that is developing in australia with a major hostage situation in the heart of sydney, australia. matt taylor is joining us from there with the very latest. matt? >> reporter: hi, michelle. just over 12 hours since the gunman went into the lindt cafe in martin place in sydney right in the heart of downtown sydney in an area populated by a number of financial institutions. the bank head quarters is there as well as the u.s. consulate. all the buildings were evacuated earlier in the day as police surrounded the area. at first we did not know how many hostages were inside. reports ranged from anywhere between 12 to 50 who is imagines. but we have now heard from authorities who believe the number is no more than 30. in fact, in the last few hours, it looks like that number could be closer to 15. but five of the hostages have

emerged from the building. it's unclear at this point in time whether or not they escaped or whether or not the hostage takers did release them. now, police officials here in sydney say that they are not speculating on motives behind this incident. and they are not confirming how many hostages are inside at this point in time. they do say that the individual who is holding these hostages is known to police. and negotiations are underway with that individual. we should also point out as well that a flag with arabic characters on it was put up in the window and a number of the hostages forced to hold that flag up at the front of the store in full view of all of the media that had gathered outside. the australian government saying at this stage it looks as though it could be a politically motivated incident. back to you. >> matt, have the terror levels been raised at in point?

was in of this expected in any way? clearly not expected, but were they on watch for anything like this? >> reporter: yeah, about three months ago in september we saw the australian terror alert level raised up to the second highest notch. and this followed a number of counter terrorism raids that occurred right throughout some of australia's biggest cities like sydney, melbourne and brisbane. that was on the back that government intelligence agencies had received information that terror groups were sympathetic to the isil movement. they could be planning to kidnap people on the streets of sydney, martin place is where this incident unfolded, and it was named in a particular spot in that intelligence. kidnapped people on the streets and then with the threat of beheading them. of course, we want to clarify that that is not necessarily the situation that is occurring right now, but authorities have been well aware that there may have been something of this magnitude that could unfold in

the major cities here in australia. >> matt taylor of cnbc australia joining us. thank you so much for bringing us the news on that. >> it's not an isis flag, right? it is not an isil flag. it says it is generic. >> one guy, right? >> we don't know at this point. >> it just raises everybody's awareness. you never know how big it's going to be. you listen to all the gnashing of teeth about the torture report, back then they thought it was attack. but back then we didn't know it was just 9/11. there could be a nuclear device and this was just the first of a series of waves. >> someone was prosecuted for attempting to bring in a dirty bomb, remember? it did happen. right. we'll talk about oil once again dominating the market this morning.

opec's secretary general says the group can ride out a slump in prices. despite the slide, the chief says the gulf arab nations will continue to invest in oil development. the secretary general argues that oil markets, i don't know about this, it's not reflecting supply and demand. fundamentals are fine being driven by speculators according to him. i don't know what this says about the fed. not that i would ever say crude -- >> i was just going to ask you about crudeman. >> he wants rates to be -- set permanently at zero. he said 15 is off -- >> did you also hear him say i'm trying to bully them into not raising rates. he said that specifically. >> given what he -- a lot of the stuff he's said in the past that makes no sense to me, you can argue that you don't want -- they have a dual map date. and if they have a 2% inflation

target, and this actually lowers that to where we are not at 2%, you can make the case they shouldn't. >> and they already telegraphed that through the wall street journal. >> but do you want to raise rates when looking at -- if you're channeling your inner januariette januariety ettiette janet yelli watch this spiral all over the world, are you in a hurry to raise rates here? >> when you see jobs at 300-plus, it's hard to ignore. >> if inflation stays at low levels -- >> i saw one person who said in terms of black swans and not seeing a true black swan would be an analyst that predicted this. that would be a black swan. someone that follows the industry that actually -- that would be the thing that is totally out of the question. >> that they don't raise rates next year? >> no, that someone that called the oil up. you weren't listening to that,

huh? >> we did have the and lianalys last week. he called for $60 oil back in september when oil was still in the 90s. >> but the true black swan was if we found an analyst that was bearish at 90 and said it could go to -- there's not a single one. we would have thought they were outliars. >> we would have mocked them. >> but it was barely holding 90 with all the geographic -- everything happening. >> the ebola story and concerns about nigeria as a result. and the oil story is filtering through every aspect of the global markets. there's a story in today's wall street journal that reports there are now cracks in the 1.3 trillion junk bond market. prices have dropped 8% since late june with a third of that drop in this month alone. that puts the junk bond market on track for its worst and yule return since the financial crisis. speaking of bonds, pimico is

working to get business back on track after investors pulled tens of billions of dollars following the departure of bill gross. the pimco investor studying the firm with aggressive maneuvers, managers have said to buy more of certain hard-hit investments l like mexican, italian and spanish debt. don't miss the interview with bill gross live from the head carers from denver coming up at 2:00 p.m. today. the shinzo abe coalition turning in a landslide win over the weekend in the election. but he's going to stick to his inflationary projection. and the boj business sentiment is getting weaker with two-thirds of companies saying they view the coming quarter as not so favorable. a couple of currency stories grabbing our attention this morning as well. the indonesian rupiah dropping

to the lowest level since 1998 today declining risk appetite and increase for demand and loan payments. there's also rumors about a political change that didn't come about. the central bank intervening to support the currency there and the bonds. russia, the ruble trading at record lows against the yen. 59. holy smobs. i heard people say they think it's going to 150. you're nodding your head. >> in the short-term? >> within a year. traders cite concerns about u.s. sanctions over russia and ukraine. >> lou said no contagent from oil, but you can't say the rupiah has something to do with oil as well. and the junk bond market, i guess it's because a lot of the companies going to expiration are not investment grade, but also it seems to be saying that if you were thinking the global economy is going to go

gang-busters, maybe this is a supply issue. but obviously there's something going on with demand. yeah. we'll check on the markets this morning. we'll get a little bit of a snap back, but that was pretty ugly last week in terms of now we're not at triple digits anymore. 88 on the dow. almost 10 on the s&p. and the nasdaq is looking at opening about 24 points higher from where our value was plus 7 and it's up 31. but that gave back a pretty good chunk of not all the gains for 2014. but we're not feeling as flush as we were, for sure. in europe, they still might be reacting to last week, but they are up a little bit. germany dax, france, across the board with greece up the most. and the ten-year was below 210 over the weekend. it's come back a little now in terms of yield and is back at 213 or so.

and as you'll see if we ever change the boards, the things freeze up with these things. anyway, the ten-year was at 213. and the dollar was strong. we have not seen a reversal there yet. and gold, there it is at 1.24 an the euro and 1 gold at 1,200. a little rally since november. last week we are hoping to see the slide in the mirror. the dow index now down 3% in this month. and it's been about oil ever since thanksgiving. wti crude lost 20%. and since peaking in june, it's now down close to 50%. for more on what is next for all of these different things, we're joined by mike ryan, chief investment strategist of wealth

investment at america ubs. and chris wolf, chief investment officer of portfolio solutions for merrill lynch private banking and investment group. i'll start with you, mike, do either one of you worry that we're missing something in the oil story that is bad for financial assets? because i don't know when commodities and financial assets became correlated. it should be -- we think they can move in opposite directions, but here we are worried about stocks because of oil. >> well, first of all, we are never completely dismissing it. there's linkage in anything that happens anywhere in the world today, it matters everywhere. but i want to be careful here, i don't see a decline in oil prices translating to a financial problem. in fact, i see this as i refer to chris' views on this as well, i see this as positive in terms of the impact it has in terms of the u.s. economy and the consumer sector. it doesn't mean winners across the board as the energy patch will be affected by it, and it will impact on the corporate

profitability, but this won't be the kind of thing to undermine the financial markets. >> chris, we know the oil sector has gotten bigger in this country over the last couple years, but still it's relatively small for us. and you think about everybody else that's input costs go down and how the margins could be fatter. it just seems like it is overwhelmingly going to be a positive. >> there are two things here. it takes a while for the costs to filter in. in the meantime, lower oil prices result in lower earnings for the energy companies. the first hit is to the s&p. so we took our numbers down and the team did a couple bucks, about $124 for 2015 to reflect that. it takes probably six months to get all that lower oil price. it's the lower gas leap to translate all the way in. while it's good, the time delay is missed by people as the first thing. the second is you brought up a point earlier, is this a supply or demand thing? there's a lot of supply coming online. if you get into the story of fracking, you realize that all the oil coming online, there's still more coming.

so our view is oil will stay lower longer and it translates into a tough year for 2013. >> i heard a statistic today, did you know texas was a country and would be the sixth largest producer of oil in the world, which stuns me. i knew it's supposed to not be as big of a deal for texas with other things going on in the economy, but it's going to hurt the economy. >> yeah, i'm listening. okay, we cut a couple points off the actual earnings number for the s&p. but we know multiples contract when interest rates go up. right? so if they go up slower, and if the economy is still recovering, people say, well, interest rates go up for the right reasons then that's fine. so we could have a better economy, but they might not go up because inflation stays low, which seems like you could get even expanding multiple or not a cop tra contracting multiple. >> we can see that globally with liquidity supplied by the u.s., less this year, more liquidity

and more from europe. but that is necessary to fight the deflationary trends. we'll see multiple expansion because the high profitability in the u.s., low inflation and ultimately the oil benefit at the end of the year is likely to result in pretty good profit margins for u.s. companies and that supports multiple expansion. >> mike, this could be a real difference in the last -- let's say this goes on for five years and the whole world gets a tax cut in terms of what it costs for power and energy and everything else. is there anything else, another black swan out there that we are not worrying about? are we overleveraged given the easing around the world or is there a problem with too much money flow? that's what we used to worry about, but now we don't worry about it because of inflation. >> we'll talk about leverage. i actually think we have seen over the course of the last seven years a de-leveraging process. but we have seen the ongoing

de-leveraging in the financial system, so from that perspective i don't see leverage as a problem. to the point you made about central banks, is there a risk given the washing of liquidity and the presence of large central banks, could that translate to a problem down the road? i would argue that's probably more of an inflationary issue. in terms of the energy patch and in terms of the supply, this translates to lower sustained prices. so i don't see that as translating into perhaps the kind of issue you're concerned about that it could undermine financial stability down the road. these are the things that as i say don't keep us up at night but they wake us up at night. do they em mate from the likely geopolitical concerns we are seeing right now. and there could be embedded issues within the financial system that we are not focusing on right now. >> to that point, chris, we are hearing more complaints that the corporate bond market is broken. that when we saw the ten-year

yield drop 33 points in a nano second on october 15th, that was a single that something is wrong with the bond market. that if there's going to be a black swan, that's where it's coming from. and we have seen weird stuff happening in the bond market last week. and some people argued that the equity fallout was related to that more so than oil. are you hearing that from the bond side of the house at all? >> two things about the bond market. first, the liquidity is not distributed evenly. the federal reserve and the kind of government's own large portions of the bond market so that makes it hard to think about where the liquidity is. >> which makes it strange to ask about a lack of liquidity, but the fact of the matter is that's what happened in the corporate bond market. >> exactly. the second is the bond market is a great place to finance all sorts of interesting things with low interest rates, in particular, shale fracking, et cetera. you have seen a lot of high-yield deals. which i think you guys mentioned going into the energy space. the reality is it's not necessarily a bad thing if oil prices stay low in these companies that are not doing

well. >> but the spillover is from high yield. >> yes, but the rest of the higher market is okay. it's the energy base, this will be more contained in our view. >> is this something the fed would consider at all when thinking about raising rates? >> in our view is that they will consider some of it. the lower oil prices is a long-term effect. we think it's a very long build at this point. we just don't see any pressures up front. if you look at the jobs data, yes, there's more being created but not $70,000 to $80,000 jobs a year. they are much lower. so the wage pressure we see in the system are actually quite muted. that's not necessarily inflat n inflationary. >> thank you, mike and chris. the black swans, they got a bad wrap. they are beautiful but exist in the southern hemisphere. >> i don't really want to see them in the financial markets. >> yeah, but how did that happen? >> because that guy wrote that book. >> because the guy wrote the book. one place they are prevalent is

in australia where hopefully -- >> they have been doing fine for a long time. >> but really, they were like, we're beautiful, we're gracious, we're not white but beautiful black swans. now every time you talk about it, we are all dreading the black swan. >> and they are not that rare essentially, right? >> no, and they are beautiful and getting a bad wrap. but they are in the southern hemisphere. we are in the northern, am i right on that? >> you are right. you are good with geography. >> all right, thank you. when we come back, this morning's top corporate stories including the buyout for petsmart. and another day in court for apple. but first the fox sports news, congratulations to kobe bryant passing michael jordan. what? taking third place among the top nba scorers. he now trails only kareem abdul jabaar and karl malone. because of pippen, he had

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welcome back to "squawk box." keith carson is joining us from the weather channel. it's monday, so you aught to be able to give us an idea of what

to expect this week. wow, you look really corporate today. more than just a white shirt. >> what do you mean? >> you look corporate. is it blue? >> it is blue. we're banned from wearing white shirts. a little inside tidbit. >> they try to do that here, too. >> don't let people try to tell you what to do. >> don't let the man keep me down, right? >> this is a conversation we'll have another time. i actually think that -- >> i'm going to give you a couple names if you -- don't let the man push you around. >> honestly, i think the white shirt does sometime blow out. >> not if you're wearing a jacket. they are fine, man. >> i'll give you the number to my boss. you can have a chit-chat about the white shirt. >> repeat after me, the viewers are my boss. >> have you seen the movie "cool runnings"?

this is the conversation we're having. i can't repeat what they say. let's do a little weather. we'll talk about a big story. it's much cooler than average now across the southeast. chicago sitting at 45. jacksonville, florida, 36. it's not often they are a little warmer here than florida. parts of the midwest and the plains today way above average waking up in the upper 40s. and getting into the low 50s, which is pretty warm stuff. it's short-lived with the next storm system to move in to give us snow. 10 to 20 degrees above average. des moines, minneapolis, duluth, chicago, all looking good today. and a relatively quiet weather day. that's one of the big stories with all the warm stuff. but eventually we get a cold front to come through here with snow on the backside of it and warm, moist air ahead of it to give us some showers. places in the eastern seaboard deal with showers heading into tomorrow and tomorrow night. but it looks like a rain event that won't be snow, so that's something. here's a look at today. des moines, kansas city, minneapolis, chicago, and again

marching eastward, places like new york city, probably tomorrow and tomorrow night will see some showers. and guys, i apologize for the lighting here. we do all kinds of things to make my nose look smaller and up in of it works. and we end up with weird shadows. it happens. >> what do you see when you look in the mirror? >> what do i see? >> i see pride. i see power. >> thank you. we're going to leave that part out. >> there's a man comfortable in his own skin. i like that. and don't we have the same ultimate boss? >> yes, we do. i don't ever get to talk to that level of boss, but ultimately, yeah. >> he's great. and i think he has a boss. and then we all answer to that higher power. >> there's a hierarchy there. >> are you married? that's what i'm talking about. >> yes. >> the wife. every 12-step program teaches you that. there's a higher power. and you are powerless against them. and they are talking about our

wives. thank you, keith. good to see you. in deal news today, a group of private equity firms is buying petsmart for $83 a share. that's about $8 billion. this makes it the largest leverage buyout of 2014. the pet supply retailer has come under pressure from shareholders calling for a sale. apple is he court today. the federal judge didn't agree calling it price fixing. if apple loses it has to pay $450 million. coming up, could james bond be the latest victim of the sony hacking scam? we'll have david boys here. this is kind of weird, everyone publishing stolen stuff -- >> and silicon valley says you shouldn't be publishing any of this. it's stolen material. >> it's neat. >> last week, the people we talked to last week said, well, i would consider publishing. every one of them read it, though.

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♪ good morning. welcome back to "squawk box" here on cnbc. i'm joe kernan along with becky quick and michelle caruso-cabrera. andrew ross-sorkin is off today. a surf and turf men you could be in jeopardy as the 2014 lobster season had a lower catch than the previous two years meaning pricier lobsters for consumers. maine's lobster topped 125 million pounds in 2012 and 2013. however, this year fisherminute expect that number to pale in

co comparison. the senate is passing a spending bill to shutdown the chance for the government to shut down. the board is trying to revamp the restaurant following a proxy fight. and the sony hacking story takes a new twist. producers of the james bond movie say the early script was among the material stolen. now david boise has been hired to tell the media not to use the leaked documents. >> what would you do? there's so much material in there. >> but it's stolen material. hey, what is wrong with just stealing it? why are you guys doing this? why do you think that's any different than stealing?

somebody else said, are you talking about what is happening with sony or the entire model for silicon valley? >> if it is all over the internet anyway, what does a news organization do? right. we are suggesting a bounce-back from last week's sell-off. we'll show you what is happening with oil. wti overnight while you were sleeping hit 56.25 even though this morning's higher by 30 cents to 58.17. brent fell to 60 bucks but is higher by 79 cents to 62.64. gas leap trading at 1.61. the ten-year t-note is at 2.127. looks like we are back to october levels that we saw. and the dollar was mixed. it is mixed still, 118 yep for every dollar.

the euro will cost you 1.24 and the pound is at 1.56. rebounding this morning as michelle noted, we have been watching oil prices down 40% this year alone. they will not cut the output even if oil prices drop to $40 a barrel. we'll talk about this with jason bordoff from columbia university and is the founding director of the center on global energy policy. jason, thank you for being here today. >> thank you for having me. >> you are of the opinion, correct me if i'm wrong, but you think is a supply picture and not a dropping demand picture? >> it's both but the primary story is on the supply side. we have seen dramatic increases in demand from the united states. and we also saw the supply come back into the market from the disruption of libya that came back around october but has come off again now. and opec sort of took a lot of

the market by surprise by saying we are not going to cut but let the price fall like the stone and let the higher cost producers cut production instead. >> even if it falls to $40 we are not cutting prices. who is that message sent to? >> well, they are trying to show discipline to the world and also to the other opec members because there's not -- there's disagreement on what opec action they need to take. the u.s. shale boom is really a severe threat to the major opec producers. so if their theory is to let prices crater and we'll let higher cost producers bounce the market instead of us, u.s. production growth will slow at much lower prices. but for a host of reasons, productivity improvements, companies are hedged, they have a lot of contracts, we'll see production growth continue through at least the middle of next year and slows down a little after that. but it will take a while. >> the amount of futures supply in theory would come down. you are not going to invest the

in a well at $75. you are not going to bother. >> we are seeing companies like conoco reduce their capex spending, so all the big xaps are going to announce reductions. >> that's what opec wants, right? >> but does that lead to the result in the decline in u.s. production. and that takes a while to actually happen because, look, 70% of the production comes from 30% of the wells. so if you focus on the most productive ones, the time it takes to drill and complete them, the amount of production from each one is getting better and better. even with a reduction in spending, we can continue to see growth in u.s. production. it won't be as fast as it would have been, but that doesn't mean you pull back supply to the extent we would need to get prices back to where they were. >> how long do you see we see prices in this range and how far do you think they fall? >> well, that's always hard to predict. it's the old saying, it's hard to catch a falling knife. it's hard to know, but prices, it's easy to see them fall a bit further before they stabilize

and then start to rebound. and i think it will take time. we'll be in a low price environment for a while. >> but what happens geopolitically, where are you concerned about problems popping up? >> well, this is a severe threat to the major oil exporters that really depend on a high oil price to survive, to balance their budgets. countries like venezuela, russia, saudi arabia, nigeria, they have expensive social bargains with their people to require significant government spending. and in an environment where they lose a lot of government revenue because of low prices, we'll see currencies fall and we'll see big challenges on their ability to meet that social spending and the potential for instability is real in some of these countries. >> peak oil to me sounds quaint. sounds like something, wasn't that funny when people thought of that? but the larger implications are that the whole renewable area which i don't really think was going that swimmingly before

this happened, because natural gas was what we talked about then. who was going to use other things when natural gas was that cheap. now you have this happening. are there still overleveraged companies out there that are definitely not going to be able to make their payments, are they? >> the lower fossil prices go, that's not great news for renewable energy. renewables are driven, we have seen dramatic growth with the costs coming down quickly. that is driven by policies supporting this and driving the technology of this. >> but does that make -- >> were you involved for those because you worked for president obama, right? >> yes, i worked for the administration. >> what is the total subsidies for solar then, because it's still less than 1% of what we use in the country, right? >> i don't have the total. >> it's less than 1% still. is that money still well spent? >> i think over the long term it still is important to keep focused on the need to make much more aggressive progress than we

have to reduce carbon emissions and deal with the threat of climate change. that's going to take time and that's why over time we need the right policies put in place to do that. >> i didn't want to get to this part. i don't argue with religion with people, so i won't -- we have that, in the constitution, freedom of religion. we are at, what, 0.04% atmosphere co2? >> we are -- we are rapidly approaching the 450 part per million concentration. >> that would be 0.045. it's climate scientists that tell us. we have had a 20-year pause. we are still -- we are 0.8 a degree celsius. >> many of the past few years have been among the warmest on

record. >> right, 0.081. it stopped 8 degrees over the average of the last 130 years. >> so i think that the message coming out of work by climate scientists and other scientists are doing -- >> as i said -- >> it will lead to more progress. >> do you have regrets for things put in for solyndra and other companies like that? >> i think there's a role for government to step in, when we use fossil fuels, we are putting pollutants into the atmosphere to cause climate change. >> now you are referring to co2 as a pollutant? >> well, the supreme court said it was. >> okay. all right. we'll see. >> jason, thank you for coming in. >> all plants need to breathe and we breathe out, right? i don't know if i would call it something similar to sulfur

dioxi dioxide. a particular pollution to destroy environments, right? >> we need it. beyond a certain environment, it can be harmful as well. >> okay. in the past where we have had 20 times the amount of co2, it looks like the warming proceeded the increase in c oso2. we'll have pictures from the ground on the uber protests. and we'll check in on fedex. then at 8:00 eastern, the crippling effects of the lower oil prices. why con summsumer gains will co a cost.

if you are just waking up, breaking news from sydney, us a trail y australia. this is a hostage situation as negotiators have made contact with the gunman. >> our only goal tonight and for as long as this takes is to get those people that are currently caught in that building out of there safely. that remains our number one priority and nothing will change. >> this has been ongoing all night or all day if you are in australia. we'll have the latest from the ground at the top of the next hour. don't move. and in global news, taxi drivers are urging the french government to ban uber. 200 taxis blocking the road

heading to the airport from paris. this comes as the france interior ministry says uberpop will be outlawed as of january 1st. right now the rule is in paris that uber has to wait to pick you up even if you are right nearby because the new regulations to try to protect the taxis. but they are not satisfied. >> it's going to be a tough year for uber around the globe as the governments crack down. >> i see uber as this touch stone. i cover the rest of the world, as a national correspondent, and the way every country reacts to uber to me is a telling way of the government and what the society believes about vested interests and change and everything else. >> it would be quite a world if everybody bit of excess capacity was somehow utilized. we would all be better off. think what that does to the price of oil and energy and everything else. i don't know how you do it with the, what is that --

>> the excess capacity -- >> why are you nervous about it? >> i don't want people coming in to sleep in my sheets and stuff. >> you have a spare bedroom. >> you can opt out. you don't have to. >> i can't believe you with germophobia. >> i'm not. >> are you going to stay in their house? >> no. >> but you are in hotels. >> i don't like hotels either but i deal with it. >> in really expensive cities where you stay in a hotel is ridiculous. >> it is so hard to get places. if you get a house, everybody can stay there. but, yeah, then we decided -- >> we stay in davos, a place that used to be a tb sanitarium. >> they were famous there. >> that happened long ago enough that you think it has been cleaned since then? >> i feel like it is so cold it's frozen any potential germs.

>> you wish they would turn on the lights walking the halls, pitch black. >> because the lights come on supposedly as you walk down them. but sometimes you are in a long underground hallway. it is like a scary movie. >> luckily, the hotels in general there are not -- >> my whole body is a weapon. i hope somebody messes with me. i hope somebody messes with me. anyway, sy berg has died. he's the famed designer of the topps version featuring a card with team logos and simulated player autographs on the front and bios and stats on the back. and i can remember the day when i lost all my cards, all my reds. >> did you cry? >> because you flip them. you gamble. >> oh. >> as a child, you flip baseball cards. >> i thought you left them on a bus or something. >> i was going to win them back and -- you had to buy, like what i never got was a whole box of them. you get a pack for a nickel and

the box was, i don't know how much, but you would be sure to get a bunch of reds. so i had to wait out of five to get them. and when you got them, it was a big deal. >> but that was probably a valuable life lesson. you didn't ever gambleright. i didn't like that idea of trying to get back even. i went home, i think i was crying. it was horrible. when we come back this morning, u.p.s. and fedex both planning for record shipments today. retailers are playing with the calendar trying to deal with the dates to guarantee christmas arrival by. when "squawk box" comes right back. (trader vo) i search.

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welcome back, everybody. if you have been shopping online for your holiday presents, you better hurry up and try to get things together. u.p.s. expects today will be the busiest shipping day of the year. not just the year, the entire history of the company. it's expecting 585 million packages to be shipped today. it's still dealing, of course, with criticism from last year when thousands of packages didn't arrive by christmas eve. but it's not just u.p.s. fedex is dealing with some of this. we'll be speaking with the senior vice president on services from fedex from hub in memphis and it's the retailers trying to figure this out too.

right now walmart is saying the 19th of december, target saying the 20th, macy's saying 22nd. nordstroms is promising to the 23rd. >> that is way close to christmas. >> you should check this out. many have been changing their mind. last week ralph lauren was saying you can ship up to 21st. now they changed it to the 19th. you only have a few days left. coming up, a live report from australia where a hostage situation has now been going on for more than 12 hours. plus the bulls look to battle back after last week's massive selloff. futures are pointing to a high. we will be right back. was just namedkswagen f motor trend's 2015 car of the year. so was the 100% electric e-golf,

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what will move markets more this week? the slide in oil prices or the fed meeting? tom lee will tell you what to expect. >> florida governor rick scott recruiting companies to move to the sunshine state. we'll talk his narrow election victory as the governor joins us on set. fedex expecting its biggest day ever. we will take you live to the company's memphis hub for a look at the shipping volume and the chance to avoid delays as the second hour beginning right now. welcome back to "squawk box" here on cnbc, first in business worldwide. i'm becky quick along with joe

kernen and michelle caruso-cabrera. listen up, everybody. what do you get when you cross taylor swift with a holiday festival of lights? the answer is a new viral video. we'll show you that new hanukkah song that's blowing up on youtube later this hour. >> let's check futures this morning after the worst week for the dow since november of 2011 and the worst for the s&p 500 since may of 2012. we are indicated to bounce back almost triple digits. we've seen that number up over a hundred earlier for the dow. but at this point, we're up 97 on the dow. the futures are up 111. for the s&p we're up about 10. the implied open for nasdaq about 26. headlines this morning, petsmart is being bought for the price $83 a share. or $8.25 billion. it's the largest private equity

buyout of the year. and sony has told several news organizations over the weekend to stop publishing information contained in documents stolen by hackers. "the new york times," the hollywood reporter, variety, all reported receiving letters from david boisen who demanded the documents be destroys. >> would you even bother to send gawker one? >> i don't know. but it's all over the internet, how do you keep it from other organizations? you've got to go after the first leakers if you're actually doing anything. >> you know, things like drudge pst been locked every day. >> it's great reading. >> they say we have a lot more. we're going to have a christmas gift that's going to blow the lid off of a lot. >> that gave the option e-mail us and we won't publish your e-mails?

>> what are you doing? >> i was like it's a phishing scam. >> i thought the same thing. >> i mean, it was -- when we were doing one of the scandals on wall street we said the expression what's the "e" stand for. e-mail is evidence mail for the scandals. apparently sony, they still thought you could do personal -- like, i'm scared of personal. i'm scared of everything. >> your personal e-mail on the work account, you're done for. of course. >> anything. >> are you like me? on occasion i touch it and say i can't wait to see this in "the new york times." you know? like, ooh, great. >> anything that's just blatantly that you know shouldn't be in print. that's when you call someone. >> e-mail has become the form of communication. it becomes like a conversation. it just happens to be typed. but at this point it is -- i

don't even check it. >> i talk about colleagues. >> with or without their name? >> with their names. but not bosses. of course, i would never have anything to say bad about any of our people. >> of course not. >> an update on the hostage situation going on in the heart of sydney, australia. matt taylor has the latest. >> hi there, michelle. we're now into hour 14 of this standoff which began at just before 10:00 a.m. australian eastern time this morning at a busy cafe in the heart of sydney. this area frequented bay number of business people and holiday or vacationers alike. we know a gunman entered the building where he then held a number of people hostage. the number is still not being disclosed by authorities in australia.

and the range has been anywhere from between 12 to 15 people. but at this stage we believe the number is around 15 people remaining inside that building. five people have emerged from that cafe in downtown sydney. three were released initially. and then another two followed about an hour later. it's still unclear and authorities aren't saying whether or not they escaped from that building or whether or not they were released by the hostage takers. authorities saying they're not going to speculate on the motives behind this incident as it sits right now. now, we did get some updates a little bit earlier with a number of these hostages inside the cafe contacting australian media outlets and passing on some demands from the hostage taker. this included he wanted to have a phone conversation with the australian prime minister tony abbott. and he also revealed that there was the potential for two explosive devices to be inside

the cafe building. and two other explosive devices to be somewhere else amongst the sydney cbd streets. but authorities at their last update a couple of hours ago saying they are not concerned about any other locations in the sydney cbd. their main prior to for now in the overnight period is to get the people out of that building as safely as possible. and they are not concerned about other devices having been planted around various parts of the city. none less, we did see a number of australia's iconic landmarks going to shut down and evacuation mode. this morning the opera house was evacuated as authorities found a suspicious package. that was later not confirmed. and the harbor bridge was also briefly shut down before a number of traffic changes were put in place to restrict the flow of traffic. that's the latest for you. back to you.

>> matt, the authorities there were on alert. weren't there a whole series of sweeping arrests several months ago related to terrorism investigations? >> yes. this was in september, a number of counterterrorism raids were conducted in a number of the big cities like sydney, melbourne, and brisbane. they had advice a number of islamic extremists that sympathize with the isil movement were threatening. finance ministers were meeting as part of the g-20. we saw a lot of security bolstered ahead of the g20 in brisbane just last month. so authorities have been on high alert for a number of months now. >> thank you, matt. thanks to matt taylor. we're going to continue to monitor the situation, bring you any updates as they happen.

markets are going to pay close attention this week. joining us now with more the tom lee. is head of research at fundstrat global advisers. and our guest host for the next hour is ian shepardson. gentlemen, welcome to both of you. ian, i think the fed has a lot on its plate trying to figure out what to do this time around. obviously the jobs report was great and strong. but you're also dealing with lower oil prices and pressures throughout. >> i think they're going to look at lower oil prices and say it's mostly a good thing. on average, it's a big tax cut which is more than enough to offset it. i think they'll take it for a positive for growth. i think they'll say they're more or less sustainable. which means they have to forecast a lower rate.

it's getting close to the levels -- down to 5% or even with a four handle next year that's going to be a problem. we're heading towards a period of change. i think they're going to take time before doing anything. >> you're talking about if it gets down to four -- >> it's going to have a four handle by next year. you can't be sitting with policy with unemployment with a four handle. >> why does paul krugman say they're not going to raise rates next year? >> he doesn't think recovery is strong enough yet. i think he's wrong about this. they're seeing signings now. the problem is once it starts to rise, it tends to accelerate quickly if the flood gates are still wide open which they are. i think just to make a gesture to start pushing things back towards nu central as the unemployment rate and rates get going. >> is the market ready to hear

that? >> i think so. what the markets want to see are householdings to believe there's enough inflation to make long-term changes. i think expectations would be positive for markets. >> you think it would create that flurry of consumer spending like i better buy this car before rate gos up? >> that's right. cars, houses are essentially an inflation bet. that you don't want to believe in deflation, you want to the believe in inflation. >> tom, you have been unshaken by any of the things thrown our way. you still think that next year is going to be a productive year for the markets. >> that's right. you know, i think this market has surprised to the upside every year. we just looked a the data, but if you look at strategists for s&p targets, they've missed it by about 3% too low. the surprise is to the upside.

>> what are you expecting for the s&p? >> we'll be publishing our targets shortly. >> so you won't tell us today? >> it's a little early. >> you don't know or you don't want to tell us? >> i do know. >> so don't hold out on us. aren't we good to you? >> you guys are good to us. i wouldn't want to get in trouble. needless -- >> so you could get in trouble with us. >> maybe i should get a job at sony first and let you see through the leaks. >> you're saying right now the markets have been acting like the drop in oil prices is a bad thing. right? >> yes. >> oil goes down, stock market goes down. >> i think the drop on oil is a good thing. because it affects more positively consumers who have to buy gasoline. >> i can't believe we're discussing it. >> yes. >> honestly. if it just hits you -- >> what if the market falls?

>> the market is down 2% from its highs. >> 18,000 last week. >> to what? there are a lot of reasons the market was probably down. i have people that say the market was down because we did 330,000 jobs and we're sitting at zero on -- >> i see. and people complaining about the corporate bond market as well. >> is something staring you in the face that the entire world gets -- and suddenly money that we would have spent there is spent on heating and traveling and everything else. i don't see how it can be -- i understand people are looking near term. people might be -- >> the world deflationary, joe. >> i don't think it's deflation. and low interest rates, it is nice when money is easy for expansion and for business. the only thing you worry about is inflation. so if you do get a little more time based on not being

inflationary, that's good too. >> it's free money for everybody in the country. it's a hit to see big drop in oil producers cap-x next year. >> let's just talk about some of those oil stocks, some of the energy stocks. what level ds do they have to g before you think they're attractive? >> i think in some ways the bottom has to come when the stocks feel they can't own them at any price. i think we're very close. you know, we got calls last week about people who were really identifying the amount of debt exposure that the energy sector is. we had people telling us how many countries have oil link debt. i think in some people's minds this is becoming so scary, i think that's how you get close to a bottom. so i think to say energy stocks should do well next year. >> if someone came to you six months ago saying oil is going down to $50 or $60 and that's

going to be bad for the markets, you'd go, tell me again. what am i missing here? because -- you know -- sometimes things are more obvious. >> it's because right anyway we have an obsession about deflation. we've seen japan. we've seen the potential for it in europe. this feeds into it. >> you guys remember what inflation can do. it's the worst. and if you have growth with low inflation with no growth with high inflation, that's what got me negative on the markets. all the good news is in the stock market. how much better does it get than the opposite of stagflation which is goldilocks basically isn't it? >> yeah. >> and everybody knows that now. which makes me think their bullishness may have already -- where you bring some of the complacency out. >> things could get better. earnings growth could sort of stay at this higher rate. >> airlines aren't going to get better if they haven't hedged or the trucking companies or

railroads. >> there's a big reduction for everybody. manufacturing costs are dropping like a stone as well. so actually the drop in -- >> you're making a lot of sense. the only thing that has me wondering is "the new york times" said you had an accurate record. >> that was 2010. >> you don't want it to be accurate? >> i don't want them to say he's accurate. >> why? >> because everything is in the prism of what's accurate or not. totally subjective. i can say it today because you're in that chair. no one's going to cry. >> tom, thank you very much for coming in today. and ian, again, is going to be with us for the rest of the hour. coming up, fedex expecting its biggest day in history. we're going to -- and that could happen today. we're going to take you to the company's memphis hub. then at the bottom of the hour, florida governor rick scott joins us on the set on the economy, employment, and a lot

more. then damage control at sony pictures, but are there more leaks to come? then at the top of the hour, fallout from the sharp drop in crude prices. former gulf oil ceo will join us. and he thinks it's good too. and he's an oil guy. so we'll be back.

it's the most wonderful time of the year which means the busiest time of the year for fedex. shipping giants expecting another record-setting holiday season. forecasting more than 22 million shipments going out across the globe. joining us for a first on cnbc interview is patrick fitzgerald senior of services at fedex. great to have you here. >> thanks for having me. >> not to bring up bad memories, but last year was a tough year for christmas retailing. app lot of people got packages late. is that going to happen this year? >> we're doing everything we can to deliver service. just to be clear. we did provide excellent service last year. we're proud of the service we provided last year. we have the largest air cargo fleet, more than 600 aircraft in the air. and it provides us great flexibility and we were able to make adjustments for the

conditions last year. we're proud of what we did. >> how much more do you have going on this year? when you say 600 aircraft, people are buying more and more of stuff online every year. so i assume you've got to ship more and more, you've got to hire more. can you give us any comparisons? >> so there is growing e-commerce. that increases the residential deliveries we do. so we made arrangements for that we have more vehicles on the road. we have more team members sorting and delivering packages. but e-commerce is driving a lot of that. and the delivery allows us with services like fedex delivery management gives consumers control of their deliveries increasingly, that's an important consideration for customers this year. >> how does it work with the retailer -- who is it -- >> nordstrom says december 23rd. can you possibly get it there in time? >> i'm sorry, i didn't hear the question. >> nordstrom is promising it can get your packages there in time

for christmas if you order by december 23rd. how does that work? >> we are an overnight delivery company. so december 23rd we will be delivering next day for delivery on december 24th. so we're able to accommodate those needs. >> you cut them a special deal? it's got to eat their margins, right? it's so expensive. >> we work with customers and we understand their needs. it's a customer by customer basis. but we have an efficient network that allows them to give their service and special needs including overnight for christmas eve. >> what's going on behind you? is that for real or is that a control set? >> that is for real. so you can see we're tracking all of our aircraft in the sky. >> you should get an ipad down there. get rid of that i see a live picture over your shoulder of a

shipping center and then flights. it's pretty incredible. >> yeah. so we're tracking all of our flights. we track, we have 100,000 vehicles on the road today. couriers all over the world and particularly in the united states making deliveries and sorting packages. you can see our olive branch which is one of our sorting stations here in memphis with the packages going. and doing everything to make sure we get those, what's expected to be more than 22 million packages picked up, sorted, and delivered today. >> well, it was great to have you on. best of luck getting everything everywhere on time this year. >> thank you very much. when we come back this morning, taylor swift meets hanukkah. a youtube hit. and then florida governor rick scott will be talking his foich bring business to the sunshine state.

thanks.

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welcome back, everybody. fuel costs are dropping but airline fares aren't going down yet. charles schumer is calling for an investigation of the high ticket prices.

the senior senator from new york is asking the department of transportation and the justice department to investigate why airline prices aren't following the drop in oil prices. price of crude has fallen by 45% since july of this year. now trading at five-year lows. major airline stocks up sharply over that same period. ian shepherdson is our guest host this hour. what are you thinking? >> got to be patient. fares will come down. fuel is half the airline's costs, give or take. but we've got to be patient and it will take a couple of months with b but i'm pretty sure that getting away for easter, say, is going to be much cheaper than last year. >> we need a senator to do an investigation. >> the good senator when oil prices went from $40 up to $120 he didn't say we need to give the airlines relief. he didn't urge them to raise ticket prices at that point. >> i doubt it. >> i don't think so either. politicking is great. >> i know. i'm almost mad we did that

reader because it's all about schumer getting more air time and publicity for doing something meaningless. >> although he in my eyes, recent chuck schumer commentary -- >> about obamacare, absolutely. >> he doesn't do anything that's not smart for him. i understand that and maybe for democrats. but that was still something. >> that was cynical. those people don't even vote. >> tell me to move on. move over adam sandler, a cappella group 613 may have the biggest hanukkah hit song in years. the group's parody of taylor swift's "shake it off" is a hit on youtube racking up more than half a million views in just four days. >> looks super cute. have you seen it? >> no. i thought -- the way we've been teasing it i thought it was an actual taylor swift video. i didn't know it was a parody. coming up, florida governor rick scott is in town here in

new york this morning trying to convince businesses to move to the sunshine state. the governor will join us next. as we head to break, look at equity futures. they suggest the dow would open higher by 96 points. see you after the break.

welcome back to "squawk box," everyone. luxury car maker bentley is reportedly raising its target for sales. the voex wagon owned brand is raising targets. bob evans ceo is out and called it mutual. but the firm would benefit from new leadership. and keurig green mountain announced it will move most of the coffee buying to switzerland. >> and check this out of an implosion for a good cause. watch this. a detroit area college raised a blighted building that needed to

be torn down. so the school posted an auction on ebay for the right to push the button. which ignited the implosion. total donations -- look at that. those are always so fun to watch. >> no matter how many times you've seen them. >> $12,000 is how much they raised. >> i don't get it. i understand people like watching it. but it's weird -- >> we think of explosion. but implosion it settles in on themselves. florida governor rick scott is up north today meeting with companies to dwins them to relocate their corporate headquarters to the sunshine state. hertz, a recent example pack up to move to naples just over a year ago. the governor joins us on set. good morning. you were the first one to be re-elected in florida since jeb bush, i think. right? >> well, i'm here to get more businesses for florida. my wish for 2015 is we will be

the global hub for business creation. just in october we added 42,000 private sector jobs and our professor is growing. to get more jobs for florida. >> there's no income tax in florida. >> i'll give you the pitch. no personal income tax, llc no taxes. c-corporations 70% of them don't have to pay a tax. we cut 3,000 regulations already in four years. cut debt by $4 billion. i think our taxes are one-half per capita of new york's. >> and you cut debt by $4 billion yet you didn't win 50% of the vote because there were huge hits on you from all over the country. if things are going well in florida, why don't the people in florida know it? >> it's hard to get your message out. >> who tried to change their minds? >> tom stire. >> he lives in california though. he doesn't live in florida.

>> i know. >> but i don't think a single one got re-elected. he's going to steer us back to what he wants to talk about. but we're there -- >> i want all the companies to come to florida. >> are you like scott walker, union backlash? >> we've done all the things to make sure we're a right to work state. focused on driving down the size of state government. we've got the lowest number of state workers per capita in the country in the history of the state of florida. so if you like big government, i'm not the person you're going to elect. >> but governor, governor, governor. this is a race to the bottom. where does it end when states are -- i'm pretending to be andrew. >> i know. but in this case they're staying in the united states. we won't call these people unpatriotic. i wish that people that put down in inversions and say that they're unpatriotic, i wish they

look to see this is what happens when capital isn't treated well. >> capital will move. >> but they don't see this in some type of ideological spectrum. >> talks about how much money is moving to florida. it's moving. i mean, they're -- >> that's what happens. >> and we've got to have lower corporate tax rates in this country, less regulation. we've got to say we like businesses to compete and win. if we don't do that, we're going to lose all these jobs. >> when you come to new york and new jersey, what do you hear from governor cuomo in new york, governor christie in new jersey. do they think of you poaching with a better deal? >> no one likes it. i've done missions around the world. they don't like it, but we're competing for jobs. i want all the jobs in florida, but the truth is i want the jobs in our country. i'm going to do whatever i can

to make it a great place. governor perry was doing the same thing. >> what kind of competition is it between the governors. rick perry and you have a friendly competition back and forth. what about some of the states up here who can't offer the same sort of did sh. >> they're not anxious for me to come up here. they're not anxious for me to call on their companies. we've had 400 companies that have since i got elected that have either moves or expanded significantly in florida. i've got so many people if you start with starbucks in florida, that moved from the northeast down to florida. >> you've got the weather, you've got all this. >> it's going to be 73 in miami today. >> then you've got zero income tax. >> number one, we're the number one safe for infrastructure. $10 billion last year. you know what? i've cut tacks 40 times. we've cut regulation. what happened? if the highest online in history in the state of florida, we have

the highest per capita -- we have the highest funding in the history of the state. >> i disagree with you joe, i think there are a lot of people on the left who hate this. they hate state competition. they think it's a race to the bottom. they want universal regulation across the country. >> i think we need to use it for people say we don't need to change the tax -- >> we want it all in florida. >> i know you do. >> i go to meet with companies. i was at boeing the other day. they moved their training center for pilots down in miami. so a young lady is the excited because she has a great job. she can go back to work. >> what's the state of the homeowner insurance down there? there was a long time it was considered you had underfunded or it had been underfunded for so long.

if there was a major storm, there would be a high cost across the state because taxes had to go up to pay for it. >> we cut the number down to about 7,000 homes. there were 1.5 million homes when i got started. so we've -- it's not completely fiked, but the state risk is way down. >> when's the last time a hurricane hit florida? >> 2004 and '05. >> so it's the longest period in recorded history. it is weird, isn't it? how many months? >> another reason to move to florida. >> how much do you hate texas? what do you say about them? >> we're going to beat them. >> i know. but are they -- you got any pajoritives with him?

>> rick perry isn't going to run again. >> you told him there were five agent sis you would shut down. not three. >> rick's a good guy. governor perry worked hard for texas. so he was a good competitor. but now florida will be number one. >> so what's the pitch for the small business guys like me? what's the draw for the small business guy? >> you have first off our university system. i have performance funding tied to what's the cost for a degree. do you get a job, how much money do you make. focused on the right workforce. i'm putting the same thing in for our state colleges. our k-12 system, our fourth graders are number two in the world in reading. highest gains for students in the country of any big state. we've had the biggest student achievement gains for our lower income students in the last three years in the country. our education system is very good switch what you need. if you're an llc, no income tax.

if you're an individual, no personal income tax. only a 5.5% business tax. even if you have to pay it. so we have a responsive government. >> still florida state. and there's going to be two heisman trophy winners in the same game on opposing sides. >> i'm sure florida will win again. >> you're sure? >> oh, yeah. we've got a great coach. we've got a great team. >> that really -- the art that was just down there. >> yeah. miami is busy. miami, palm beach, broward, tampa. the whole state is busy. >> universal. you've got the greatest -- >> spanish television teltelemu

is there. >> let me sell something. would you please? god almighty. there's no oxygen left here. doesn't harry potter have a new -- >> it's really nice. >> thank you. have you had butter beer? go just for that. >> have you been down lately? >> i want to come down. >> you're a golfer right? >> well, i play. >> so we've got two golf courses that everybody wants to play at. >> we'll be there in a few months. thank you, governor. >> congrats too. is sony's reputation on the ropes? executives at the company find themselves in a battle to save face after hackers leaked e-mails and deals. plus we've got the fed this week set for final meeting and news conference of the year. what you need to know before the fed heads gather.

welcome back to "squawk box." the futures right now are suggesting a positive open. the dow would open higher by 99 points and the nasdaq by nearly 28. sony pictures in damage control mode as more hacked files were leaked over the weekend. the company trying to keep leaks

news from spreading. but the latest the script of the new james bond film. that was released on the internet. joining us is the ceo of dezenhall resources and author of "glass jaw." also with us on set is brent lang. he is senior film and media reporter for "variety" magazine. welcome to both of you. eric, let's start with you. how big of a problem is this for sony and when does it end? >> well, i think that you have two issues. you have a corporate issue and you have an executive issue. on the corporate side it's embarrassing. i think it's a black eye. i don't think it's a knockout blow. basically the problem is one of ridicule. whenever you have a scandal that causes ridicule, people simply enjoy talking about it. it's a lot of fun to see a big shot go down and get a poke in the eye. again, i think this is the type of thing like a black eye that

heals. the second challenge, i think, is more of an executive nature. i mean, racially tinged comments tend to be the cyanide pill of scandal. there is really not a great history of people recovering from having made racially tinged comments. but in terms of the solution to the extent you can call it that, i think the business has fundamental issues. you solve the fundamental issues, everything else goes away. that said, i do believe that this will stay in the news for as long as there is a drip, drip of allegations. but there's no correlation between how much of a road show sony goes on to talk about it and the speed with which this will move out of the press. >> brent, off huge issue with sony finally deciding to fire back hiring lawyer david boise. what do you do with that? what's the debate that takes place in the newsroom? >> it's an ongoing debate but

clearly indicates that seony is trying to get ahead of the story. they're pushing back aggressively. they're trying to change their narrative from villain to victim. and they're emphasizing the stolen nature of those documents. but there is some precedence here. dealing with the stolen recording ruled that the broadcaster was fined because they were a third party in that case. and in this case the media is a third party. they do not steal the documents. >> you still have ethical questions in your own mind whether this should be published? >> of course. nobody wants to do the work of guardians of peace for them. and this is clearly an attack that's meant to undermine and embarrass sony brass. but there is also a newsworthy aspect to many of these revelations and the fact remains

we don't exist in a vacuum. these conversations, these e-mails, these budgets, these scripts are being debated on social media sites, on blogs, and we owe it to our readers to reflect that. >> how much is newsworthy and how much of it is you knew this was being said behind closed doors and now it's just being said? >> well, it's always -- i think that one of the challenges here is -- i mean, the old type of crisis were product defects and product recalls. now it's all about seeing how the ugly sausage gets made. you're right. people do have a sense that this type goes on. there is something that makes people exuberant to see the inner workings and the humanity and the flaws and the pettiness of a big enterprise. it's simply a lot of fun. that's why you can't make it disappear. >> more fun with hollywood dpp you see "swimming with sharks"? >> absolutely.

apparently the character in that -- >> also the studio heads and the -- it's amazing. but what kind of gets me is if it is north korea, i mean, the bad guys are sitting there just laughing because they did what they wanted to do. they just nailed sony. and it's almost censorship. you can't say this about their guy. >> this could have a real chilling effect. >> north korea is winning. how could north korea ever win a pr battle? >> well, north korea has no moral authority to win a pr battle. that's why they use guerrilla warfare like this where the little guy even though they're a big guy, they have hiding behind the idea of a guerrilla who can attack a big organization. and whoever has the mantle of it wins. >> has anybody lost their job

yet? >> it's hard to recover from a scandal like this. but in the case of amy pascal, that's a dangerous precedent. these were private correspondence. >> and she works for somebody else opposed to rudin. >> there's no corporate malfeasance. there's no corruption. it's not a fireable offense. >> and i think there's far too much obsession nowadays every time somebody steps in it, the idea that firing them is the solution to everything. i really think that is something that needs to be revisited. >> i think she has been defended a little. the guy that did the movie, seth rogan defended her. tom hanks reportedly. >> it has been amazing. this has been a woman head of sony for over a decade. a lot of a-listers not coming forward. >> they're calling it racist. they stopped using racially insensitive. i don't know if amy pascal from that conversation, i'm not

willing to say she's a racist based on that. >> in her defense, this is a woman who did make some very offensive remarks, but -- >> i thought rudin was the one that made it. >> she did too. >> they threw out movies. >> they both did. they both made insensitive remarks. if you look at sony's track record, they have produced a lot of films featuring african-american actors. >> how easy was her rise to where she is to where she came from. >> she's one of the few women. you look at the salaries, she's the only woman. >> then i'm stepping out. >> and i would argue in this day and age none of us could totally survive the kind of scrutiny that she's going through. >> that's got to be what every other company is thinking there before the grace of god. >> that's right. there's nobody in the world who hasn't sent a stupid e-mail of some kind and that's what makes this the new type of crisis of

our age. that it's not just big companies that are vulnerable. we're all vulnerable. >> i know what jon voight's been dealing with his whole life. i like those quotes too. >> everybody approved of that e-mail. right? is there anybody in hollywood who doesn't think that of angelina jolie? >> maybe brad pitt. >> i'm afraid to comment. >> thanks for joining us today. coming up, committee economic events to watch this week. and a news conference on wednesday. ian shepherdson will tell us what to expect. and as we head to break, take a look at futures.

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let's get back to our guest host ian shep hahershepherdson. lack of liquidity. we talked about it because of the federal reserve. but the corporate bond participants are talking about not being able to get trades done. regulators are nervous about what happened. to them that was a red flag. are you focused on this at all? should we be worried about this? is it a potential credit event? >> it is a red flag. because the dangers, we don't really know why it happened. and therefore we can't be sure that it's not going to happen again. or that it's not going to happen on a bigger scale or it's not going to happen in multiple markets at the same time. and then it starts to look like

a systemic risk or failure. regulars are all over this. no clear decisions or outcomes yet. it's not like the stock market where nobody bats an eyelid. a 30-something basis point move in the treasury in the blink of an eye was astonishing. >> it got lost a bit because it was a move for the dough that day. still they're looking back on that and thinking more significant is what happened there. >> yeah. >> explain to an average person why lack of liquidity might matter at some point. >> it's lack of liktty with a gigantic move in the market. the ten-year treasury is the benchmark interest rate for the whole world. it's the most important in the u.s. and it makes regulators and participants in the markets deeply uncomfortable if they think that out of the blue we

can see an enormous swing in that market that we can't explain. and it scares people. and when markets get scared they freeze up. and when they freeze up, credit availability shrinks. so we have to know what's driving it and how we can stop it happening again. >> thanks for joining us this hour. we appreciate it. still to come, oil's big slide priming the m & a machine. we'll talk about that next. and later, like a kid on christmas morning investors are looking for presents under the tree. but which stocks have been naughty and which have been nice? "squawk box" will be right back. you can bring back a lot of things from a trip around the world. but you can't always bring back customer data. because many customers don't like it when their data moves around. can i go now? if you're going to do business globally, you need a cloud that can keep your data where it needs to be.

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the final hour of "squawk box" begins right now. welcome back to "squawk box" on cnbc, first in business worldwide. i'm becky quick. breaking overnight a serious hostage situation in sydney, australia. sydney's business district is in lockdown after an unknown number of hostages remain hosage in a cafe. five hostages were able to get out. it's unknown if they released or escaped. ambulances have been deployed. >> let's get the latest on what's going on down there. matt taylor from cnbc australia joins us from there. matt? >> thanks. we know five hostages have

emerged from that cafe. some hours ago now. it has just struck midnight here in sydney, so this hostage crisis has been ongoing now for more than 14 hours. we saw three of these hostages released in about an hour and then two more later in the screen right now. it is unclear whether or not these hostages escaped or whether or not they were released by what we believe is one lone wolf assailant inside that building. we believe he is armed and reports suggest that he has threatened the use of explosive devices. reports suggest they're in the cafe as well as other reports around the business district. however, police authorities here in sydney say they are not concerned about the prospect of other devices being in locations in and around sydney. and their main focus is on that cafe building at martin place which is a very busy thorough

fare in the center of downtown city. the u.s. consulate is also located in a building in martin place as well while those two buildings have been evacuated. and many hours ago now. authorities saying that four tonight the plan is to continue discussions and negotiations with this individual inside who is known to police as far as the motives go, they're not going to speculate on what is behind this incident, but we do know is number of the hostages from inside that cafe have been making phone calls to australian television networks and radio stations saying the assailant is demandi ining a phone call withy abbott. we have to stress these are just reports coming out and that the identity of these people that are claiming to be hostages cannot be verified at this point. becky, back to you. >> all right, matt. thank you very much. again, matt taylor.

we do have a lot of news already for the markets to be digesting. overnight asian markets reacting to oil prices which declined sharply. they've also been focusing on declining manufacturing sentiment in the sydney hostage situation. you can see the shanghai market closed up by half a percent. and the nikkei was down by 1.5%. also check out the early trade for european markets at this hour. the greece market up by 1.4%. but a last week decline, that's not much of a rebound. we've been looking at the futures. dow futures up by about 91 points. s&p futures up by close to ten points. the nasdaq up by 26. >> opec secretary general says the group can ride out a slump in oil prices and keep output levels unchanges. he argues that market weakness did not reflect supply and

demand. the cartel's chief says the fall is overdone and part of the fallout today is now the ruble is at 60 this morning. it was just 50 last week. 32 earlier in the year. >> wow. >> you enjoy that, don't you? >> no. i think most people are going, 60, huh? and where was it before? >> that's why i said it was 32. >> i know. it helps. but most of us aren't in the habit of -- when did russia -- didn't they go bankrupt a few years ago? and they had to devalue. >> caused all kinds of fallout. >> now it's devalued from -- it's all -- do they make anything besides vodka? >> oil. >> besides oil? >> no. they produce almost nothing. >> they produce almost nothing staggering, isn't it? >> for a country that size. >> yeah. >> supposedly that advanced. >> oil prices touching a five and a half year low overnight.

it says here it's a new one. so it's a new low. so it's different than the old low which is why it's called a low because it's different than the old low. anyway, crude plunging 40% from its high this year of $107 back in june. so will prices lead to some consolidation in the industry? joining us now is a former ceo of gulf oil and greg zuckerman, special writer at "the wall street journal." he's also the author of "the fraccers: the courageous inside story of the new billionaire wildcatters." you knew at the time you thought about it. these were the mother of all fracking companies and you could have called them the mother fraccers but you wimped out. >> i did. i didn't go for that title.kers. >> i did. i didn't go for that title.

>> it's great to have you on. this is deep. everything that people are talking about, that was the game changer. horizontal drilling. do you -- i thought going back and asked for something of the president saying again and again that domestic wasn't going to change it. he said, look, we're never going to deal with our oil problems domesticicly. we can never make an -- we can never do anything really significant. i mean, that was wrong, wasn't it? >> it was. but he wasn't the only one. and each president, president bush said the same thing. you go to the experts at the exxons and the chevrons, they agreed. so it was really some stubborn kind of iconic entrepreneurs who believed in this country. >> there was money to be made. and somehow that worked and we're all better for it. even though they are profit

mongers. net net it's a positive and we're seeing all kinds of pos pressure on our friends in russia and iran and venezuela. >> things can happen in any heavy industry. we understand that. i know co2. but how about cesium? go over to fukushima and see what's worse? co2 or cesium in the water around -- or chernobyl. >> or go to germany where they're shifting to dirty coal and you're seeing carbon emissions rise. >> anyway, you have been sort of positive on this. and i think you're probably unabashedly for what this does for the economy and stock prices. >> absolutely. i think there's nothing better. i think we are about to go into a golden period not unlike the 40s and 50s when energy prices to gdp were similar. and we had rapid growth and a

rapid appreciation. >> how could it unravel? how could there be a contagion that becomes a financial event here? could you see that happening if a bunch in the business were unable to pay their bills? could that be a problem? or they just merge? >> there's going to be a lot of merger activity, i believe. if you look at some of the really top producers in the shale formations like anadaco, their debt is close to their ebita and they have great management. chevron and bp are both obviously have great balance sheets. and they are cutting cap-x spending. but frankly i think we've always seen the consumer benefit, just briefly with retail sales last

week. remember the average person uses 500 gallons of gasoline over a year. here in the northeast we use 1200 gallons of heating oil in a concentrated 90-day period. now you're just starting to see the benefit on consumers' wallets of lower bills. >> okay. sorry. finish that thought. all right. never mind. greg, you know exactly what you're talking about. how many energy companies -- if oil stays where it is, how many will have a problem and what will that mean about either consolidation with each other or our debt restructuring that they'd have to do? >> about 16% of the junk bond market are in energy. that means we worry that they're actually not going to make debt payments. and it's not just confined to junk. you've got banks lend to these

companies. you've got insurance companies that own big energy portfolios that are junk bond related. you do worry about the contagion and what it says. junk bond prices maybe signify there's global growth concerns. so you don't want to be, like, with subprime we thought that was confined. i still am a little concerned. net net it's a positive for this country, but you do worry about contagi contagion. >> and so many people went into high yield, a place they never would have considered junk bonds. but when you're desperate in this environment you tend to go to places you wouldn't otherwise go because you're looking for yield. >> that's exactly right. now they're stuck with pretty big name energy companies, shale, others that are going to have real problems if energy doesn't rise. if you look at opec and kind of the oil pouring out of north dakota and texas that's going to

continue, you'll see more oil supply issues. you can have pressure on oil for the foreseeable future. which means pressure on over a hundred different companies. who are believers more than the other big guys. maybe they come in here and they swoop in and buy some struggling companies. >> how many of these people -- >> if i could put -- >> go ahead, joe. >> it also depends where you think the price of oil is going to go and how profitable and lower cost these energy companies have done with their production. the lateral drilling, now we're getting more frac stages off of the same drilling bit. they've actually done a great job of lowering their marginal cost of extraction. and i do believe we've bottomed out of oil prices. there are signs in e the market we're going to stabilize here and move higher over the next 60 days.

>> hey, okay. i want to go back -- we got a little time left. how many of these companies are naked? how many have no hedges in? is it all of them or some of them are hedged? >> it's a good question. it's a mixed bag. you've got some companies, big name companies that don't have much in the way of hedges. and they're suffering a lot more. others are well hedged. but hedges don't go on forever. so next year, six months or so, they're pretty well hedged. then it runs off and they suffer. >> could average break even for wells? i know there's a huge range. >> but tends where. in the bakken there's a different price. eagleford in texas you can produce $60 or even a tad below in certain areas. the bakken is more expensive, a little more of a punishing environment. so you're going to have all kinds of people suffering. they're focusing on their best wells. app lot of them can just pair

back. you'll see production -- you're already seeing production reduced. but, you know, at these levels, there's pain. >> gentlemen, thank you. can i just call it mother frackers? >> feel free. >> just because you didn't have the -- >> as long as people are buying it. >> meet the frackers is good too. >> we thought about that one. >> did you really? >> yeah. >> you say you thought about all these things but you didn't want to do it? who's your publisher? >> i'll put you guys in touch later. yeah. >> well, it's a missed opportunity. all right. thank you. when we come back this morning, get your orders in now. today is expected to be the busiest shipping day in the history. you might want to listen to our report after the break. >> did the just throw that? >> yeah. he got in trouble.

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welcome back to "squawk box." the futures now do suggest a positive open. we've seen a rebound in the price of oil this morning. there are annual changes to the nasdaq 100 which have been announced. nasdaq adding american airlines group, electronic arts, and lam research. the name rest moved, expedia, maxim integrated. the exchange also said new shares will be included following a recent revision to the methodology. this results for index components that include comcast corporation-a special. and liberty global class c shares. and comcast is our parent company. with online and mobile sales is soaring, retailers have no decision but to get delivery right the first time around. courtney reagan has the shipping

score card and joins us with more. >> with just nine days for shipping left for those packages to get delivered in time for christmas, let's take a look at what shippers and retailers are getting delivered the fastest. based on 148,000 orders, excluding amazon, u.p.s. is winning market shares. 44% on cyber monday followed by all others before fedex comes in at number three. the cost of shipping, more retailers are offering free shipping. that is including amazon. now, since black friday on average, u.p.s. slightly shipping faster than fedex. though usps lags them both. target and walmart have longer than average shipping times. after last year's polar vortex, winter storms delayed those gifts from getting delivered on

time, many more retailers more cautious about promising cutoff dates for shipping in time for christmas. according to data gathered, december 19th is the most popular cutoff date among retailers in shipping for time for christmas. but there are others whose have already passed. >> you know, you look at something like that, the numbers ex-amazon. >> they use all three and report their shipping dates different. so it skew cans the data to make it data for the others. >> i know amazon uses all three, but who do they use the most? >> to be honest, i don't know off the top of my head. it depends where they're coming from. which shipping speed you chose, which center they're coming from. that all determines which one gets the package. you won't know if it's coming fedex, u.p.s., usps. >> so far so good. >> so far so good. but i think retailers learned their lessons last year and they're a little nervous about

overpromising and underdelivering. we've seen them move up their cutoff dates or take their promise by off just in case they can't make it. >> thank you very much. even when i think you're not listening, you are. so to speak. >> said overpromising and underdelivering. >> yeah. >> underdelivering. >> got it. you are more awake than i am. coming up, a deal for petsmart. plus hackers promising sony a christmas present. it may be one they don't want to get. details a the break. check out the futures please. not ordering you to do that. up 99 points on the dow. almost 11 on the s&p and 28 on the nasdaq. ♪ my baby drove up in a brand new cadillac. ♪ ♪ my baby drove up in a brand new cadillac. ♪ ♪ look here, daddy, i'm never coming back... ♪

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sony pictures telling certain news organizations to stop publishing information. "the new york times," "the hollywood reporter," and "variety" reported they had each received a letter from david boies. he is saying to immediately destroy them. in the meantime the hackers said they will quote, sent a christmas present to sony soon if they do not meet their demands. sony's stock now lower than 2.5%

at this hour and down more than 4% for the month. >> sharp. coincides with the release, doesn't it? private equity firms is buying petsmart. it's about $8.25 billion. it's the largest leverage buyout of 2014. the pet supply retailers come under pressure for retailers calling for a sale. you guys have -- >> pets? >> yeah. >> cold fish and crabs. >> no. >> hermit crabs. [ laughter ] >> because if you did -- you don't go to petsmart. you go to walgreens. if you did have pets -- >> i want pets. >> you would know there's a petco and petsmart and they're near each other. >> i'm pretty sure it's a petco

we go to. >> with this will they merge? probably not, right? >> they have teeth. >> beyond the dogs. >> exactly. toothless. but they definitely have -- but they've done weird things. it's a new world and it's like sirius xm. with spotify you held that merger up? >> online retailers. >> same kind of thing. yeah. >> from amazon or walmart or anybody else. up next, dom chu's list of naughty and nice stocks. plus investors bracing for more oil fallout. the 10-year logging its worst weekly drop in years. take a look at how equities are shaping up this morning. much better picture if you're a bull. s&p values up by 10.5 and the nasdaq up by 27. also a developing story this

morning, a hostage situation in sydney, australia. right now you're looking at a live shot of the chocolate cafe on martin street. police soon filled the area halting public transportation, evacuated nearby buildings near the cafe. and a black flag with arabic writing was placed in the window leading many to believe the hostage situation is terror related. the holiday season is here,

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welcome back to "squawk box," everyone. let's get to some of the headlines we're following this morning. november industrial production figures are out at 9:15 eastern time. they're expected to rebound strongly from november from that october decline. also at 10:00 eastern time we'll be getting a december read an home builder sentiment. new jersey's richard stockton college has bought a casino for $18 million. they plan to turn it into dormitory and campus space. and "exodus: gods and kings" led the weekend box office knocking "the hunger games" out of the top spot. also apache is a stock to watch

today. the company is selling its stakes in australia and british columbia to woodside. the net proceeds -- wow. $3.2 billion. stock's up 1%. energy stocks as we have been telling you just getting crushed during the oil shock and our dominic chu is here to bring us staggering stocks on the slide. a lot of s's there. >> it's also a 'tis the season for the naughty and nices of the markets in 2015. one of the naughties has been what's happening if you've been long crude oil. it's been a big, big, big move to the downside here. you can see here we've lost 46% of our value in at least from west texas crude since june 20th. we've seen the big slide down. it's had a huge impact on the overall market, the sector in energy specific here. if you look at wti, down human

amounts. it's 60% of the s&p 500 energy sector. the stocks there have lost more than 30% of their market value because of this big slide down. so energy stocks taking a huge hit because of that. and then if you look at this as well, almost 80% of the s&p 500 energy stocks are down more than 10% in just this month alone. so over the course of the bast month, we've seen a huge move down in a lot of these energy stocks which makes some people think as a bottom we don't know yet. still a lot of people are pointing to this. if you look at two of the stocks that have had had the most point i guess for a lot of investors is the way to put it here. you see crude down 25%. a quarter of its value here. two of the stocks that have been hit the worst, one of them here, denbury resourss. a huge move down. one of the biggest lagers in the

s&p 500 energy. another naughty stock for those who have been long it, at least, check this out here. this is transocean. a deep offshore drilling contractor. two-thirds of their value gone. when it comes to the naughty side of things, a lot of investors who were long this sector it's been a painful ride. back over to you. >> let's talk about the wider impact of the markets. futures pointing to a rebound after last week's sharp decline. dow posting its worst weekly performance in three years. while the s&p suffered its worst decline since may of 2012. joining us now to tell us what's drive declines, richard bernstein. good to see you this morning. >> how are you? >> good. you're one of those that thinking the oil is good for the u.s. economy.

and yet the u.s. market is acting like it's not. every time oil goes down, we see the u.s. market go down. if you're right, when does that finally happen? >> i think we'll see it pretty soon. i think -- look. probably the good historical analogy is '85, '86. oil prices collapsed. oklahoma, texas, louisiana, colorado were in depression. not just recession. but all-out depression. rest of the country did just fine and benefitted. now, i think that's what we're going to see. i'm not saying we're going to see depression in those states. but we could see a recession in those states. but the rest of the country is probably going to benefit. so the bottom line is i hope you don't hold real estate is north dakota. >> how are you then translating this into what you think happens with the markets? if oil keeps falling and stays at a certain level, you think b

the dow and s&p could do what as a result? >> sure. we've been positioned for quite some time. not with the energy providers but with the users of energy. so that could be consumer stocks, industrial stocks, all those kind of things. we were very wary of the energy stocks because the goal of the energy boom was to lower the commodity price. i don't think there's ever been a time in history where energy stocks have out-performed where the energy prices have been falling. so we think the energy users -- where are we seeing this already? look at consumer confidence. hit a cycle high last week. and more importantly is above the long-term average. what that says is the consumers are more confident than normal. that has to be partly -- at least partly attributable to the fall in oil prices. >> do you have a trigger for the s&p and dow and is it higher now as a result of the decline in oil?

>> we don't make formal targets. one of the good things is you don't have to make all those silly targets anymore. but i will tell you that we have been and continue to -- this has been the last three or four or five years. we think we will see above average returns on the s&p. >> and where do you go -- so when you say -- is that the one main investing point you're going with? >> i think that's absolutely right. i think you're going to see huge consolidation. you talked about this already this morning. you're going to see, i think, continued large scale consolidation in the energy sector. i think you will see the marginal player step down. and eventually this may be a year or two years or three years out in time we will eventually see that take hold. >> did you leave your phone on? >> yes. making all kinds of noise, they're saying. >> no. sorry. >> that's all right. >> it's just me. i must be radioactive.

>> there you go. >> he hasn't changed it yet. i've asked him. you have not. right? >> no, i still haven't, joe. i've got the papers but i haven't signed them and sent them in yet. >> you deserve three names. >> it's only 50 bucks at the courthouse to get a middle name. >> i've been too tied up. >> a cool middle name. you hear what he says now i don't have to make those targets. didn't mention how much more money you make on the buy side. do you have a target for what you're going to make this year, rich? >> no. no. no. we don't -- >> more. more. >> i like that false humility. he's acting so shy. all right. thank you. >> okay. >> no, you're not shy. >> see you later. >> i like when they take shots at you. it's like a reality show. because we're all listening. you didn't notice? >> i did notice. >> they just -- cut to becky. cut to becky. she had an interesting take on what bernstein's saying.

and then they -- that's the new way of doing it. it is. >> that's right. >> use a kleenex is all i'm saying. because if they're going to do it when we're not expecting it, yeah. >> look out. be on alert. >> here. right here. >> oh. good. take that shot now. i'll tell you when to come back to him. in the meantime, we were looking at a deal crossing the wires. riverbed taken private. shares are halted right now. when we come back this morning, thinking about getting sop lobsters for your holiday feast? you could be paying more for those crustaceans. that story is coming up. first, though, cleanup in the snack aisle. one disrupter is doing just that. jane. >> i'm already tailgating for the holiday bowl. fight on! beat nebraska! but what if you could have a chip or a puff that's healthy for you? we talk to some guys who think they got the idea.

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welcome back to "squawk box," everyone. we have been watching the futures. they have been indicated higher all morning long. the dow futures up by 72 points. they were triple digits much of the morning. also we've been watching what's been happening with oil prices. they dropped sharply overnight before rising. wti crude now giving up most of those gains. it's up by only 18 cents.

below $58 a barrel. brent crude is up by about 67 cents to $62.52. listen up to shell cracking lobster dipping fanatics. a surf and turf menu may be in jeopardy this holiday season. the lobster fishing season had a lower catch than the previous two years. that means pricier lobsters for consumers means lobster fishery topped in 2012 and 2013. fishermen are expecting this year's numbers to drop significantly. >> when you eat lobster, you usually have butter unless you're in japan. japan is dealing with a butter shortage. and it's blaming the problem on exhausted cows. yes. the shortage couldn't come at a worse time as people try to make traditional christmas sponge cakes. japanese officials say cows are worn out by the hot summer. couldn't meet their milk quotas.

some stores are going so far as to limit butter purchases to one pack per customer. who knew. it could also be -- have you heard the is? bulletproof coffee. where you put butter coffee? >> that sounds awful. >> i don't think they're exhausted. i think they're mad. >> about what climate change? >> mad cow disease? >> no. they have a right to be mad. you ever drive around and look at them out in the rain. i mean, whenever you're driving around and there they are just -- lucky the leather doesn't get messed up until it's actually made into -- >> a coat. >> a coat or shoes or something like that. but i'd be mad. do they ever put them in? >> horses stay out there too. >> i have seen cows in, yeah. >> but a lot of times they're out in the rain. anyway, chips made of beans. a new upstart taking the

industry by storm. jane wells joins us with more. without the salsa, you know, they're not horrible, but they're fine with the salsa. >> they're not horrible. >> i think they're pretty good. >> if they're healthier than doritos is that why you can eat them because you can get away from the fried doritos and use these? >> well, since they have protein in them and they fill you up sooner so you don't eat as many. so you don't feel like an exhausted cow. >> do they have any of the downside of beans and do you know? >> i'm getting to that. i tested it out. stand by. actually stand by right now. folks, the latest food party getting a healthy makeover is the tailgate party. beanitos is trying to break in with chips and puffs made out of something high in protein and fiber. beans. founder doug forman didn't know beans about making a bean-based

snack. he just saw a need. he knew food and then he brought in dan costello as ceo. a guy who used to work at frito-lay. >> well, i've been eating a lot of these lately. >> yes. me too. >> now, it costs a lot more, a lot more to make chips from beans than it does from corn or potatoes. but they're targeting the whole foods crowd. though they're in half the nation's markets. and a growing number of school lunch programs, michelle obama. >> i think the word snack has gotten a really bad wrap. people think if you're going to snack you're eating ice cream. it's not an easy thing to build a market where people haven't seen a product before. we have to make delivers out of people. >> when we have chains that treat us like a mainstream corn chip potato chip and we're in the snack aisle, we're one of the top better for you brands in

the chain. every time. >> they're now in 30,000 outlets. okay. they don't give you gas. i tested it out. kate rogers dared me. i tested it out and like an hour later i'm saying i don't have a problem. two hours later -- well, i had indian food so i don't know the issue with that. but the bottom line, the process of making them bakes out the sugars that causes the problem you're talking about. >> you don't look like a gassy person ever though. i need to test them myself. you know, like if i test them on my wife, i don't think it's ever happened as far as i know. >> do you remember when i brought those gas be gone seat cushions to the set? those things worked. >> they do work. >> i tested those on my son. they work like magic. >> but i would need to test it on someone who has a problem. i don't think you have a problem. >> here's the problem. you guys are eating. do they taste like chips to you?

>> i have another question for you. i'm looking for chips that don't have carbs or snacks that don't have carbs. are the carbs better here? or are they the same? >> of course. the carbs on here is a total of 15 grams carbs which is 5% of your daily intake. it's less. >> and potato chips are 27 or 30 grams typically. >> with me it can happen. >> the calorie count is exactly the same though. >> you're right. it is. but you don't eat as many. >> it tastes like a tortilla chip. >> let me try it again. i don't know. it's instantaneous. maybe you don't have the same issues. >> no. i think with men if you have the y chromosome, there's something in that process that's different. >> it's true. it's a sex-linked trait. >> it is. i agree.

i agree. men can do it on command. >> right. and there's also a gene that make you proud, too, for some reason. >> you have that one too. >> they're linked. >> jane, thank you. >> was the sc stuff? >> tailgate party. >> all right. >> holiday bowl. beat big red. beat nebraska. fight on. >> they're good. they're good. i know. i love them. i have to root for them. >> well, thank you. they've been okay. well, we do have a lot of other news for the markets to i did just this morning. >> digest, get it? >> jim cramer will be joining us to tell us what we're looking at this morning. these are better. i agree. today bill gross is going to be interviews on cnbc. stick around. "squawk box" will be right back.

let's get down to the new york stock exchange where jim cramer joins us now. we are going to get some of it back today, jim. do we -- are we back to where we were when, remember when we said a oil's got to go up for the stock market to go up? are we there again? people are nervous if they don't connect the dots they're

nervous. >> i don't trust it. deal in congress, information overseas, not that bad. again, let's not kid ourselves. if oil goes down, whatever rally we've got going is going to be wiped out because the algorithms, the machines say sell, as soon as oil says sell. we're not that moment where we recognize the goodness. we're back in the moment recognizing horrors of small cap oils. i listened to you, joe, they're going to get bought. in the interim there's pain. the pain will override any gain. >> they have to restructure some debt. but even though it's a much bigger part of our economy than it was, what is it, it's not 10% is it? is it 10% of what we're doing. >> i was listening to governor scott thinking, you know what? florida's a total net taker of production, right? that's one of 35 states, call it, total net takers of production.

how can the other states bring us down? when i was -- just listened to your previous guest, he said, use 85, 86 paradigm. i've been looking at 2007-2008, 2009 paradigm, oils went down. a lot of them exceeded the down target already. accept the fact these companies are very small, they do have a lot of debt but it doesn't overwhelm the market. in the interim, a lot of hedge funds to say it's my last chance to make money on the downside. >> a 65 onyard kick? you know you're going to have a rough game when it starts like that, don't you? >> they took the crowd out. >> first play. >> unbelievable. >> i didn't see. >> it was bizarre. none of the eagles picked up, dallas guise picked it up on like the 20 yard line, bizarre. thank you. >> thank you. >> got to watch sunday night, that's the best game of the

week, sunday night nbc game. >> drag me in there. >> what? >> my husband tries to drag me in there to watch it, yeah. >> got to watch it? >> back 30 sydney, australia, at lindt chocolate cafe. sara james joins us with an update. >> reporter: yes, we have more information for you about the gunman who is holding these hostages here. about 200 yards behind me at the lindt chocolate cafe, start before 10:00 this morning when what we now believe may be a lone gunman went into the cafe, took hostages, forced them to hold up their hands and put up an islamic banner. we now believe that we know the identity of that gunman. while we are not going to release his name, we can tell you a little bit about the person police suspect. this is somebody who is aself styled sheikh, iranian refugee

to australia, and this is somebody with a long and very significant criminal history. somebody who is out on bail. and that, we believe, is the gunman who is currently holding hostages. behind me, just a couple of hundred yards away. back to you, becky. >> thank you very much. sara james from nbc. when we come back this morning, stocks to watch and a downgrade of we've been watching futures, so far, so good. dow futures up by 70, s&p up by 8. nasdaq up to 20 points. "squawk box" will be right back.

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the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? take a look at stocks to watch. oracle upwaited from overweight to equaulg weight. morgan stanley says the company's poised to benefit from accelerating cloud apps growth in 2015. exxon mobil upgraded, gain on capital markets to market perform. had been underperform, the firm cites oil giant's defensive posture, adding the stock, though, expensive, it says

compared to its peers. deutsche bank, the analyst auto argues in its sixth year of recovery and ford shares in 7% of the firm's 12-month target. 14, when it first started recovering five years ago it got up to 14. hasn't gone anywhere but we talked about recovery. deutsche bank says the risk/reward profile is more balanced after 10% jump in the stocks since the most recent earnings report. >> microsoft's bing search engine dropped from facebook website after the network introduced new search tool. joe? and "30 rock" jam'ing to holiday classics to the tune of tubas. hundreds of tenor and bass tuba tenors gathered at the base of the tree at rockefeller center,

the event is the brain child of tuba legend harvey phillips. >> didn't know there were tuba ledge ents. >> there are. his name is harvey phillips. the first concert kicked off in 1974. it's now in 250 cities worldwide. check this out. nothing can stop this 104-year-old polish man. he has broken yet another running record. he ran a 60 meter sprint in less than 20 seconds. last spring the oldest person in europe to run 100 meter race. i'm not convinced i can do it faster. i'm not convinced i can do it faster. >> it would be close. >> looks amazing. >> so cool. isn't it? >> look at that. he does -- >> he needs to write down some of his secrets. >> testament to exercise. >> look at him. looks like he's of 60. >> a little older than he may

be. >> barely. >> make sure -- make sure that when you wake up tomorrow, number one, set your alarm, set it for -- >> left the chiron up on you. >> funny. make sure you join us tomorrow. "squawk on the street" is next. ♪ come on show me what you got♪ >> good monday morning. welcome to "squawk on the street" i'm carl quintanilla with jim cramer, david faber at new york stock exchange. big monday morning shaping up. alcoa expanding aerospace business with an acquisition. we'll talk to klaus kleinfeld. bulls trying to regroup. the worst week for the dow in three years. oil's stable for the movement despite the opec chief saying we're not going to change our minds. ten-year at