breached but not to worry it's tuesday, january 13th 2015. and squawk box begins right now. >> live from the most powerful city in the world, new york this is squawk box. good morning everyone. i'm becky quick along with joe and andrew. congratulations to ohio state. the buckeyes beating oregon 42-20 last night. the first college football playoff national championship. in the old system ohio state would have never had a chance to win the title. it began the first college playoff as the fourth and final seed. this is the buckeye's first national title since 2002. we'll talk a loit moret more about the big game and the big money behind it. did you stay up to watch. >> i watched the first drive. the first thing we have to

change is it should be on a sunday and at a time when everyone could watch. so i watched the first drive. marcus mariota takes it down in like 8 plays and i said i'm going to bed oregon's going to win. that's what i thought and i woke up this morning and i was shocked. urban myer has got it going. only the second coach able to win with two different teams. >> that's right. and he had already -- it's amazing to win the national title and for ohio state these fans are rabid. do you remember woody hayes? i certainly follow the team and it's good to see the big 12. did you see yesterday rutgers beat wisconsin? >> i did. but i can't take the wins without having to win with the massive losses. >> so you don't even bring it up. >> i'm wearing red for ohio state and for rutgers. >> third string quarterback, the third quarterback too was able to do it. >> is he wearing different sock

socks today too? >> no he thought he would be in one pair of socks today. he thought it was going to be the ducks. >> yeah everybody did. >> let's get you caught up with the headlines this morning. here's the three big stories we're watching. oil prices are plunging and doing that again. brent and wit crude dropping to their lowest airs in almost six years. today the uae oil minister defending the decision. airbus delivered top numbers of aircraft last year. we'll talk to the coo of airbus in a bit. also in washington news this morning a controversial nominee for a top treasury spot has now withdrawn from consideration. antonio facing opposition from a group of liberal lawmakers lead by senator elizabeth warren. they cited his work as an investment banker and that resolving door.

weiss will now become a senior advisor to treasury secretary jack lu. a job that doesn't require senate confirmation. we talked about it at one point. it's been a running issue and seems like months now elizabeth warren won this little battle. >> this is elizabeth warren who herself was prevented from running the cfpb because they didn't think she would make it through the senate nomination process. antonio weiss is going to have this other job. >> he's going to be able to have some influence. he's going to be sitting there not at the same place but he'll be there and have that opportunity. >> right. >> i think it's a loss. not necessarily -- i think it's the larger loss is that to the extent that you believe there's talented people in wall street that want to serve and should have an opportunity to serve being disqualified because of the resume doesn't make sense. >> he has all your viewpoints on a more -- hard to imagine -- but even a more progressive tax and

wealth tax and income redistribution. he's a progressive. that's why it's so funny. >> republicans by the way for the most part have said nothing about this because they have enjoyed this food fight over here and thought let these people scream and hollar at each other. why get involved in this. >> right. enjoyed it marginally. what's the guy going to be under secretary of the under secretary of something. >> he would have been number two. >> who was the last one? and who was the one before that. >> bob steel. >> before that? you know it's like we wouldn't normally be focussing on it so much if it wasn't for the new poster child for them. now to this morning's stocks to watch, alcoa posting better than expected earnings in revenue. a boost from automotive demand. higher aluminum prices and lower energy costs as well. elsewhere advanced micro, yeah

we'll still talk about advanced microi guess. it's $2. $2 a share and the market cap now -- >> it's 2.63. >> yeah old habits die hard. $2 billion market cap. advanced micro says three senior execs are stepping down after recent lay offs and the appointment of a new ceo and shares of wolverine worldwide coming under pressure. the footwear designer expects 2015 earnings to come in roughly flat with last year citing some currency head winds at wolverine and some pension expensions and this wolverine worldwide is 50% larger than amd in terms of market cap and two tech giants this morning. shares of google already down by more than 6% so far this year off 19% from the stock's all time high. that's a number. that's a real number. and get out apple: the gadget

makers stock. >> you don't want to be a gadget maker. >> the stock dropping 2.5% yesterday. putting the stock 9% below it's all time high. tesla got crushed yesterday. how far is that off an all time high. people are saying not to worry, not to worry. >> 202 down from 291. >> what's the break even? on your tesla now? you spend all that money buying it so you don't have to -- >> i don't think there was ever really a break even on the tesla. might be on a prius or hybrid. >> maybe not as much. but how much sense does it make now at $2 a gallon. >> all the sense in the world if you want an awesome car that goes fa. >> there's plenty of awesome cars that go fast that actually make a sound as they're going fast. but you'd like one of those. i could see you in that.

almost a fast golf cart. they're nice. >> you think they are very attractive. >> pretty car. >> i'd like them to make a cooler looking smaller car with a backseat. >> right. >> rather than a coupe. >> the next one is coming out as an suv. >> i drove the little one. i'm not that -- i'm pretty manly. not really but i was really -- >> sitting in the car you always make fun of phil. >> yeah he looked like mr. incredible in that little smart car. >> let's take a look at markets this morning. yesterday the futures or the market sold off. the equity market sold off as oil prices declined. oil prices pretty important too. take a look at what's happening right now and this morning the dow futures are indicated higher up about 60 points. s&p futures up 6 points and

nasdaq by 16 and if you check out what's been happening in europe this morning we have been taking queues from them recently. green arrows with cac up. in asia this morning you'll see at least at this point, as the markets close there the nikkei was down slightly after the holiday on monday. shanghai and hang seng markets closed higher with the hang seng up by about .8. >> in global news france is mobilizing 10,000 security forces to protect the country's most vulnerable locations. french police warn six terror cell members may be at large after last week's terrorist attacks. in the meantime charlie hebdo is now out published by survivors of last week's massacre it features a cartoon of theprophet

holding a signs that translates all is forgiven. >> the world in terms of censorship. the progressives is what they love to see but if you look at kim jong -- you put that context in and then you throw this in did you see the news about homeland. >> in, which piece. >> they may avoid next season there may be a new antagonist that has nothing to do with islamists or with jihadists. >> because of the concerns. >> they're saying they didn't want to get competitive. >> the saying is its going to be chosen for creative reasons to avoid repetition and it has nothing to do with shy agoway from it because of what's happening now but, you know showtime doesn't need that and neither does the producers and a lot of it is filmed over there. >> do you think it's going to be north korean antagonists. >> i was thinking maybe we could

do a russian, what -- cia is -- russians are -- that's islamist too isn't it. >> north korea. >> i guess maybe you could do north korea, maybe. although, you know we don't -- showtime is going to get hacked then but people are telling us what we can and can't consume. >> this is what happens when technology as the world gets smaller. we assume that our same set of values are going to be appreciated everywhere. they're not. we're encroaching on each others yards and each others territories and this is what happens when technology and immigration and migration. >> i will find out. >> yeah you got context here but in the west we thought we had gotten past the point of you know 2000 people dying or being slaughtered in a day or whatever and beheadings and but that's kind of -- to see this happening is very disconcerting and i don't -- it feels like

we're back in 800 a.d. or something with hoards. it's very weird in this day and age. >> yeah. >> i'm not going to say anything else. we all have to think about this now. meantime here in the u.s. military social media account versus been attacked raising all kinds of questions about the security of the nation's most important information. a man aman joins us with the latest. you'll have to visit our new studio at some point too. i know you think we're just picked from new jersey but come on in here. you'll see our name right across from 30 rock. our three names. >> you guys know they rarely let me outside of the beltway. >> come up here. we'll see you soon i'm sure. >> all right. look last night centcom tweeted we're back after a half a days outage of their twitter account after somebody that appears to

support isis hacking into their twitter account and putting out pro isis propaganda on the account. there's the command that handles the middle east among other hotspots for the u.s. military and what they said yesterday was this hack of their public facing twitter and you tube account didn't compromise any classified systems or classified information. defense officials characterize this as more of an embarrassment. centcom called it cyber vandalism. still it was embarrassing on a day when president obama was out talking about cyber security and he has a new proposal today. the white house released details on a new cyber security proposal that the white house will be putting forward later in the morning. they want more protections for companies that share information back and forth with the government in term of liability so the companies feel more comfortable sharing information with the government when it comes to cyber security so

that's one thing to watch as we go through the day here. the president is going to be talking about cyber security each of the days this week in the run up to the state of the union. that's why the hack of centcom drew so much attention. >> before you go how is the liability issue going to work? >> one of the questions is whether they can give what they're calling targeted liable protection to companies that share information. privacy advocates are totally comfortable with that. they say if a company shares information with the fbi for example is it going to be shared throughout the u.s. intelligence apparatus. who is going to see that information? what individual privacy protections are there for it? companies say we need to have liability profession if we need to share information. we don't get sued for violating privacy requirements of our customers. this is a sticking point where it prevented them from sharing information in real time before. >> thank you so much. joining us now to continue this

conversation with more on the latest cyber security breaches former new mexico governor bill richardson is joining us right here in new york city. how are you? >> nice to be with you. >> what are we supposed to make of all of this? vandalism or cyber terrorism? >> it's a combination of both. this is serious even though the hacking didn't go into national security didn't two into security breaches classified information. the fact that it's happening so extensively and vastly means that we have to get a cyber security policy in place. we need to get our allies dramatically involved. beneed to find ways to get the arab states the muslim states to cooperate too because this is getting out of control. >> are you surprised there hasn't been a larger breach or do you look at edward snowden to say that's the breach of all breaches so hacking a twitter

account is nothing. >> no i'm worried this is more expensive. we have to find a way to balance this technology with our security needs. i don't totally agree with joe but i think he's on a good side. what we have to pro vent is the cyber breaching of classified information. of national security information relating to our nuclear weapons. i think privacy in our values are key. >> where do you land between private and public sector? the issue that aman was talking about. if you're a big bank or any type of big private institution, when you go to the fbi there's a big question and then what the fbi is going to do with that information. how should that work? >> what has to happen is there has to be an accord that involves liability protection. the private sector needs to be players in this. they can't turn everything over without some kind of protection. >> i mean that's also been a

question -- bankers will talk about being attacked by nation states and the government hasn't stepped in to help them. they have been trying to protect frus that and pay for the costs along the way too. how does that strategy what does it look like, what's composed of it. >> well it has to be like look what happened with sony. the attacks on sony. you have to have the private sector, you know the heads of google apple, sony working with the government and means legislation. you have to pass laws that involve liability protection that involve some kind of methodology that allows you to be partners and that's not happening. there's too much of a breach. too many differences. >> well you still have friends in high places i know do you have anything to give us about sleeper cells being activated in places other than europe?

what i think changed in all our viewpoints is that the boston marathon was a bombing. you can have a lot of security for bombs but two guys with a.k. 47s that are motivated and are ready to be martyrs, that doesn't seem like a very high bar to get through and i'm just wondering whether, are we on the cusp of seeing this happen more and more frequently even in this country? >> i think we are. i think we have to be very very careful. they're isolated cells. al qaeda, isis they're not working together but they're so spread out and i think that we need to do is find ways to you know, whatever it takes in terms of technology funding, we have to fund the nsa. don't play around with let's cut them a little bit. let's get the best kind of technology to deal with this policy. this is serious. >> there's still war on terror.

>> this is serious. >> would you put the hammer down on isis where they are right now? more than we have at this point? >> i probably would but i think what has happened in paris shows al qaeda is still a major threat and we said we're going to go after isis. >> but if they stay viable as far as aspirational to a lot of people that are disaffected instead of defeated it seems like they can look toward that as something they want to be part of and join and that are standing up against, you know the evil. >> i think internationally the perception was that this was basically a u.s. problem. what happened in paris what's happening in europe this is an international problem that involves not just the allies in the western world involves and will hopefully activate moderate arab states activist moderate muslim states to go after these very crazy people within their

own ranks. >> bill i want to get your reaction to something we talked about a lot yesterday. i want you to look at this. the white house reacted to criticism about the u.s. not sending a senior official to the historic rally in paris this weekend. here's what they had to say. >> some have asked whether or not the united states should have sent someone with a higher profile than the ambassador to france. and i think it's fair to say that we should have sent someone with a higher profile. >> where do you land on that? >> well you know i'm very much a supporter of the president and his administration. they should have probably sent the secretary of state. >> an oversight or deliberate action. >> probably an oversight. the president and vice president can't go. the security situation in the middle of the street in paris but secretary of state is very popular in france. he speaks very good french. i probably would have found a way to send him from india there but. >> would they have put him as

far away as netanyahu as possible. >> no. >> how are relationships with israel right now? >> well they could be better but at the same time i think that the president said some very strong words. there's no question our alliance with france our oldest ally one of the great allies we all shared in this. the american people shared in this. it's not just sending officials but you can't send the president or vice president to a street, ab an open street. security problems are too massive. >> you called the leader of north korea misunderstood amid all of the sony hack. >> yeah i made a mistake. i made a mistake. >> what were you trying to say. >> what i was trying to say was he was a recipient of bad press deservedly so and i said he was a victim. it was 5:00 a.m. in new mexico. they were taping me but that's no excuse. i misspoke. i screwed up. what else. i have been very tough on north

korea. i just think -- now i don't think that they were entirely 100% behind that cyberattack to sony. maybe 92%. >> did the u.s. overstate their involvement in north korea. >> no and i believe the fbi and our technology. but i think they had some help. some hacker in china. some hacker in russia. somebody internally at sony that was disgruntled. i think that will come out. >> i think you should have stuck with it. does anyone think they understand north korea. i don't understand what goes on. i have no idea. >> he is totally unpredictable. he doesn't react the way we do. >> misunderstand, maybe we don't understand would have been better. misunderstand sounds sympathetic. >> i screwed up. it was early. >> it's early now. maybe i can get you to say something now. i don't know. >> no, he gets a lot of bad press deservedly so but i said that he was a victim and i meant

that he was just getting bad press. >> i would have been happy to have that person portraying me. >> yeah. >> the latest was some of the people that saw it in north korea thought they got a bad wrap too. they were all goons for following him when a lot of people in north korea wishes he would believe probably. >> i was in north korea about two years ago. we were trying to get the internet in there and they didn't want it because the leadership knows they spread the internet it will be their downfall but unpredictable, misunderstood i made a mistake. >> thank you for coming on this morning. thank you for being here in our new digs. >> very nice very fancy. your names are everywhere. >> you're a private individual. who care what is you say now. i would say anything. i wouldn't take anything back. anyway. thanks bill. looks like we're going to weather now or. >> in fact we are.

today's national weather forecast is going to be with us when we come back. it's a must see for every business traveller today. make sure you stay tuned for that. squawk box will be back live from the heart of new york city right after this.

welcome back. let's get a check of your national travel weather forecast from the weather channel's keith carson. what kind of tie are you wearing

today keith? the always dapper keith carson is how we should introduce you. >> thank you. i kept it simple today. relatively simple with the tie. the story today relatively still cold. 17 in chicago. 9 below in minneapolis. 5 in buffalo. 33 in new york but this is this evening in new york. right now this is the high temperature. the rest of the day is falling going downhill. look at it. 22 21 if the wrong direction. the high is 27. falling 11 below average. 16 for a high in chicago. isolator on tonight in through tomorrow morning is the main weather story across the country. going up 95 through the carolinas could see problems there. winter storm watch. raleigh the biggest city involved in this. it doesn't take much to cause problems. during the day the sun counter acting the temperatures. it will be tonight, early tomorrow morning that we'll start to see more of the purple color. that's freezing rain into fayetteville and the coastline should remain rain just have the ocean influence keeping them

warmer but watch that and now for good news after the ice in raleigh the big warm up across the eastern seaboard. our pattern flip flopping here. we saw this about 7 or 8 days ago in the computer models. we go from this pattern that's been cold all of the cold air coming down into the southeast. pattern flipping now. trough going back up into canada and we're seeing temperatures going way above average. unfortunately guys for you in new york city you have one or two warm days. that will be saturday and sunday. good timing at least. >> keith you finally bring us some good news but there is a coda with it as always. thank you. when we come back this morning black rock's global chief investment strategist. where he is putting the firm's $4 trillion plus to work. later ohio state claiming college football's national championship. just follow the money. the six highest rated shows on cable history are all football

on espn. the price for a 30 second ad was up 30% from last year. right now as we head to a break look at yesterday's s&p 500 winners and losers.

♪ >> live from the heart of

business new york city this is "squawk box." >> i think he's got michael douglas right? >> got al michaels. >> pretty good. >> darn good. >> good morning, i'm along with becky quick and our top story this morning another huge drop in oil prices. can't go any -- it's not going any lower than 45. oh wait a minute. 44.57. check that. 40. 40 is the bottom. making a bottom right now as we speak. 40 has to be the bottom. can't go below 40. i would say this is making a bottom at 40 today. >> obviously as investors prepare for earnings season crude oil prices has been causing a lot of confusion on wall street but our next guest has a list of investing dos and don'ts and areas to stock up on fur your portfolio and joining us is our squad market master. he is global chief investment

strategist at black rock and you saw those oil prices. how do you even figure what to do with stocks or anything else when we can't figure out crude oil prices. >> it's slicing through every support level. i think what's happening though and probably the good news at this point it looks to be more about supply than demand. the global economy is disappointing but last week we got news iraqi production is up russia production is up and u.s. production is at all time high. so it's more about a glut of supply. >> would you tell people that invest in energy stocks at this point do you think they've seen the roughest days or we don know? >> you to pick your spots. we would be more cautious on the ap names and more cautious on the service companies. for some of the large integrated oil company there's some values out there. i don't think you're going to cash the bottom but if you see energy companies, any of the large companies trading at a massive discount to the market about 35%, the most we've seen since the 1980s there's some

value there. >> the previous times i was thinking about this and it occurred to me. previous times when you have 911 or shock to demand the supply was sort of staying tight staying stable and the demand comes back and oil prices go back up to 100. this is the first time we've seen it where it hasn't been a shock to demand. people just didn't calculate the supply. it snuck up on people that we're doing 9 million barrels a day. it doesn't need to immediately go back there. it takes a long time for people to pull in and this could be totally different. >> a couple of things. the supply response is different. the break even is probably closer to 50. future production is a different break even than existing production and the other thing that's happened you had a lot of resilience in middle eastern supply. back in the summer libya is pumping 200,000 barrels a day

and that shoots up to 800,000. so you've had a lot from opec. >> where did that money used to go that we spent on powering cars and any type of power? isn't the entire globe going to save billions -- i don't know if it makes trillions but we're going to save everywhere. billions of dollars doing what we're going to do? what happened to that? wealth and prosperity. >> it's going to go into con sumps a lot of places. the average family uses 600 gallons a year. if you take gasoline down by a buck a gallon that's extra. not just in the u.s. indonesia and india. this is a biggal leapt for their budges and current accounts. so yes this is bad for russia and venezuela. it's a positive for the global economy. >> everybody i would think. >> for most. >> you say this is an age of divergence. going back to your broader view of what's happening around the

markets. what do you mean? >> the first of most obvious is you're having this emergence between the u.s. and other developed markets not just in the pace of economic growth but what the central bank is likely to do. we're going to see a fed hike this year in the other major central banks. we'll see them expend their balance sheets. so big divergence but there's another dimension to this as well which is between what i call the cyclical and secular. the fastest pace of jobs since '99 but there's still holes in the economy. we have fewer people working the labor market and wages aren't going up so there's structural issues not lending themselves to being fixed by monetary policy. >> so you would tell investors you think stocks are a better place to be. >> stocks are still a better place to be with one caveat. we had an unusual period where volatility was well below average. that was a policy by the fed.

as that starts to change we think we're already seeing this. we believe volatility goes back to normal. so that and you have to rethink and for one thing that means probably a tougher road for momentum stock which is do best in environment of low volatility volatility. >> even though you think that the united states is the outperformer when it comes to the economy right now you're not necessarily telling people just to put things in u.s. stocks though. >> the reason for that is the u.s. is the best chi in the developed markets. the problem is everybody knows it. u.s. stocks trade a significant premium to the rest of the world. it's very profitable to have u.s. over the last two or three years. we look for select opportunities in asia. european cyclicals and just not be overextended in the u.s. market as you would have wanted to be the last couple of years. >> where are those opportunities? where in europe? where in asia. >> in asia in developed and emerging markets. japan had a strong back half of the year. they'll continue to benefit.

japanese companies are stealing a page from u.s. companies. they're buying back their stock. we have seen a lot of earnings growth in japan and in addition you have monetary accommodation and then you also have massive buying by japanese pension fund which is are effectively doubling their allocation to domestic stocks. >> and they touch zero for the first time. >> german yields or negatives. where else are you going to go there? >> which is why you see yields here in the united states still under pressure. >> i think that's it. it's very hard to explain the u.s. at 185 if you just look at domestic conditions. u.s. had the best two quarters of growth since 2003. while yields in the u. sflt look exceptionally low by history they make much more sense if trading at 50 basis points and japanese bonds are at 30 basis points. >> and what if they didn't -- what if they do qe over there and give us the perception

they're going to do it for awhile? why would we raise at all in 2015 and when would the consensus be that we don't do it in april or june? >> the consensus would be more based on the domestic considerations. >> if they'll do it anyway. >> they'll do it anyway unless you get a shock. i don't think that stays the fed's hand. if the ecb is easing because you have a shock to europe that may change conditions. >> where would that put the dollar when we go up in april or june? the euro will be at par. >> at that point a stronger dollar starts to become a challenge. then you'll have companies starting to talk about having a snap in earnings. >> a lot of different things. >> but still more good than bad at least for now. >> russ thank you for coming in today. >> thanks becky. >> we'll take that. still ahead this morning we have a big rebound in business travel. plus macy's ceo is going to be joining us. the retailer's restructuring and the health of the consumer and

dunkin brands. why they're betting big on expansion in china. but first here's a look back at this day in history. we're back in a moment.

welcome back to "squawk box" take a look at u.s. equity futures and see how things are setting themselves up for the day. the dow likely to open up 83 points higher. the nasdaq would open high. s&p 500 about 9 points higher. headlines are making news. businesses spent $292 billion on travel last year and expecting to spend even more in 2015. this aaccording to the global business travel association and in related news dubai is replacing heathrow as the busiest airport. they saw about 71 million passengers last year. >> a new study shows that men dramatically out number women on the boards of public companies. >> it took a study for that. >> yeah women's issues research group catalyst says in the u.s.

females hold about 19% of s&p 500 board seats. >> when we come back this morning, the big money behind ohio state's big win last night and then later we know america runs on donuts but what about china? the coffee giant ceo joins us to talk about opening 1400 stores in the country. >> as we look at what's happening right now check this out before we head to a break. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach. to get the real answers you need. start building your confident retirement

today.

opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

all in on a big bet. ohio based morris furniture company made a big bet promising to refund customers that spent at least $1,199 between december 17th and january 1st. there was a catch though the buckeyes had to win the national championship by 7 points. ohio state did that. they won 42-20 last night and now about 500 customers will see refunds totaling $1.5 million. >> last night's championship bolstering the argument that college football remains king. with us cnbc's senior editor at

large. >> wow you have made it. >> i made it here. >> you made it. >> squawk box. >> you made it to squawk box number one which would have been a dream come true and now -- >> didn't workout for me though. >> didn't happen there and we talk about it but now you're here. better here. this is twice as good. also nbc sports reporter, i'm getting some mail too saying do people that watch football not work? >> that's correct, sir. >> at 8:30 at night you can stay up. >> this is all have to do today. >> got to be saturday or sunday. they have to change it. i'm psyched about the playoff system. this is huge. >> i think you bring up a great point. the weekend before the super bowl producers that same thing this morning. >> you did? >> i think down the road you have to look at getting this format on a sunday sunday afternoon, evening. you're not going to get super bowl-like numbers. but you're talking about the majority of the east coast can't stay up midnight. most of you people do have jobs.

some of us don't work. >> but you're not even going to see nfl playoff-level numbers. a lot of people thought this was going to be 40 million viewer number. it's going to be maybe 30. >> there has to be -- we weren't the first ones to think this. there had to be thought in this. >> it always has been on a monday night just as the college basketball final is on a monday night. because of the nfl. but if you could push this thing later to the week before the super bowl and there is no nfl games, what would that require? expansion of the college football playoff. wouldn't shock me. >> let me get back to what we know now. would -- was the real title game alabama/ohio state? would alabama have killed oregon? >> well look. the real title game last year would have been florida state/alabama. let's be thrilled they got it right. >> ohio state killed florida state though right?

>> they got it right. >> oh no. i'm sorry. oregon killed florida state. oregon killed florida state. >> let's not talk about them. if ohio state can kill oregon. that's the end of the story. >> we learned it in math but it doesn't work in football. >> it worked perfectly. this is total redemption of the system. total redemption of the people if that room that took a lot of heat for leaving tcu out and putting ohio state in. the experiment change is usually tough. in this case it was perfect. best team in the country. >> but blowouts are bad for ratings. all the people that had to work are tuning out third and fourth quarter. so that doesn't help them in the viewership. there's a tradeoff between controversy. >> what does urban meyer do that's different than other coaches? is there a tangible quality? >> there's not. look, he said this is one of the

great stories in the history of college football. he's right. this is a team that lost two starting quarterbacks and was left for dead twice. a team that shouldn't have been in the playoff but somehow got there. it was pretty simple for him. give it to the best in the country who was notzekiel elliot. eight touchdowns. he was flatout the best player in the country all year. in fact we just found out a little too late. >> he's not going to get any money out of this. all the money in the sport, espn is paid $7 billion over 12 years just to air about seven games a year. just the bowl games and the playoffs. the only guy who's going to make money here is the ohio state athletic director urban meyer. but the players don't get anything. this goes back to that whole question is college athletics really about amateurism or is this is professional sport? >> i don't want to talk about

it. >> we have to talk about it. >> there's a piece in "the new york times" today about this. >> but i want to go back to -- i always saw oregon. i never believed them until this year. i thought they were fast but -- >> gimmicky. >> yeah. but never strong enough. then i finally went to bed saying oregon is going to win. >> it took you this long to figure that? they've been in this game before. this is not their first appearance the the title game. >> but they weren't big and strong enough when it counts. >> i asked you about the quarterback, the way he ran through alabama. >> cardale jones, unbelievable performance. although he did have an inexplicable fumble late in the game that made your head spin and think, wow, oregon's going to get back in this game. he fumbled twice. >> i saw the first drive. >> now ohio state has three quarterbacks who could start at 75% of the programs in the

country all on their roster next year. what a great problem urban meyer has. >> becky went to a college that is in the same conference with ohio state. she told me that. >> but they're not in the same league, but they are in the same conference. >> they are in the same conference. and z i pointed out, they get a cut of the cash too. so go rutgers. >> huge cut of the cash going your way. >> joe, he's like you. he just realized there was something called college football and his angle to make it interesting was the money. >> joe has been writing about the money angle of the ncaa and football for the past two or three years. >> he's not really interested in the sport. >> here's the problem with all the people -- and with all due respect to all the people who write about this give me a model that works that you can pay kids that you can get around title nine because you can't pay women's athletics. they don't generate a dime. they lose money. give me an equation that keeps corruption out and keeps ethics in. there isn't one.

give me something. >> it isn't about corruption. it's about getting dollars into the wallets of the people. >> you used to come in here and i said i'm sick of talking about roger goodell and ray rice. i want to talk about the different teams, and you know there's some people that don't want to talk about the sport. all they want to talk about is the ancillary crap that goes with it. >> paid college athletics i believe is the ancillary crap in this case. it's a big deal. >> yeah. the whole thing, you thought you'd still be talking about that. was i right on that? >> he always finds a way to -- >> but you were like swarming. you were swarming all over the poor guy. >> and for good reason. >> i don't know. >> and there were plenty of things left out of that report. plenty of whitewashing still happens. >> -- more about money than the actual game. >> it's all about the dollars and cents. >> it's a money story. >> it's the only time you woke up about this.

>> this will be the most watched show in the history of cable television. >> "squawk box." >> last night. it takes over from "squawk box." you guys are down to number two now. >> it will probably top the 30 million. but college football still has a regional feel regional aspect to it. never going to get near super bowl numbers. >> we've got to go. >> thank you guys. coming up when we come back we've got another monster drop in oil prices. we'll talk about that. plus terry lundgren is here. what's macy's up to and what's that giant going to do? cutting costs to start the new year. we're going to talk his strategy and his take when we come back. . mmm, a perfect 177-degrees. and that's why this road warrior rents from national. i can bypass the counter and go straight to my car. and i don't have to talk to any humans, unless i want to. and i don't. and national lets me choose any car in the aisle. control. it's so, what's the word?... sexy.

go national. go li pro.

you just got a big bump in miles. so this is a great opportunity for an upgrade. sound good? great. because you're not you you're a whole airline... and it's not a ticket you're upgrading it's your entire operations, from domestic to international... which means you need help from a whole team of advisors. from workforce strategies to tech solutions and a thousand other things. so you call pwc. the right people to get the extraordinary done. ♪ ♪

crude gets crushed again. the impact on the markets and where that extra money in

consumers' pockets will be spent. are you confident in your stock picks? investment ideas in telecom, banking, the energy sector. straight ahead in today's platinum portfolio. and chief executives from macy's, dunkin' brands making their way to our set as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. arizona. he's in arizona. >> huge. >> unbelievable basketball. terry lundgren is here. let's start with u.s. equity futures.

wow. i don't know whether it was our sports conversation or what, but itted it kicked into high gear. let's look at oil which fell sharply. wti. you can see at $44.78. under $45. what was i saying? is $45 the bottom? now $40. >> not $42? >> the market's supposed to go down with it. i'd love to see that linkage cut where equities go down. >> if you can see this stick it out. >> let's hope that continues. and the first two weeks of the year shaking the faith in some of the people that say we got 8% to 10% in the bag. >> down five out of seven sessions. >> and the journal came out with a piece last year that profits in the first quarter are not -- for this quarter. as far as comparisons go aren't going to justify a 10% rise in

earnings if that's what you need to get the market up there. >> we will see where things land. in the meantime let's talk about headlines this morning. divers have retrieved the second black box from airasia 8501. it should help them determine what caused the flight to crash on december 28th. also amazon.com has now created 6,000 new full-time jobs in europe thanks to surging demand. amazon says they now have employees of 32,000 permanent staff in the european union. and we are watching stock of alcoa. it beat street forecast on the top and bottom lines. alcoa also expecting a strong increase in demand for 2015. macy's announcing plans last week to close 14 stores and restructuring marketing units. these are moves to save the company this year. it's also cutting an estimated 122 jobs.

the savings will be put into business development. shares of the company initially traded down but have since rebounded. joining us more to talk about this is terry lundgren. he is the chairman and ceo of may sis. it's great to have you here today. >> thanks, becky. >> we know wall street looked at this and tried to figure what it all means. their takeaway initially was this is not great news. other peoples have thought these are the right moves. why don't you just tell us what you were thinking. >> the day before the stock went up and it sort of bounced back up day two. i think overall the investor community gets our story, understands our story. i think they understand our story. but the thing about this company and this team is that we just don't sit still. we can't. we just have to be thinking about what's next what's the future, where is it going, how can we get in front of the consumer. that's what all this is about. >> the 14 stores that are closing, those tend to be in "b"

class malls. not "a" class malls. >> oh, yeah. this is just going to happen. a new mall opens next door to the old mall and the old mall closes. that's just the way it's going to go. developers develop. so they're going to continue to look for new opportunities to build stores. it's almost always going to come out of an older mall older store. that trend is going to continue. but in our case, stores are critical to our success. i'm bullish about the fact that we have as many stores as we do. we're in so many neighborhoods as we are. i think the it's the right formula for the consumer of today. which is an omni-channel consumer. wanting a conversation about how do i work and how does this work for me. >> when you say the money is going to be reinvested in technology, i automatically go to online shopping. is that correct? >> we were the eighth largest internet company in america last year.

i think we'll be the seventh this year. we're a serious player in the online world by itself. but that's not the answer. in fact i will predict that five years from now any major online-only company will have stores. you know i was just with -- this is national retail federation week. big show at the convention center. and so we were presenting awards to different people. the guys who i had not met before. they're opening stores. they started as an internet-only company. that was their vision. now they're opening stores because they got a feel for what it's like when the consumer comes in and interacts with them. this is what my customer wants. so i think that's going to be a trend of the future. i think it's going to go the opposite. >> you think amazon will ever open a store? >> i can't speak for them. i think at some point they should. but i hope they don't. i hope they don't. but at some point, you know, they probably should. >> you think people will start, like leaving their house and actually interacting with other people rather than facebook and

just -- you think people will start going out again? i mean we do have weird conceptions about what the world's going to be like. this seems really profound to me that this place that was online opened up a store. that's backwards. you think the demise has been greatly exaggerated. >> i sure do. i do. and i really do. without question our best most valuable customer is the one that touches us in multiple ways. he or she starts the journey with their phone. they say where am i going to shop today? what product am i looking for? then they decide where they're going to shop. >> it's hard to buy your stuff on -- i could never. on the web. i don't like shopping. but i do like going in. i see a lot of things i want. i never get any, but i see a lot of things i want when i walk through a macy's. >> thank goodness becky is the other side. >> does it really work? >> i click. i do both. >> i say where are you going,

going to the mall. people still -- but we have the short hills mall. >> that's a pretty good one. >> the answer is that -- don't forget about the social experience here. you know when consumers want to come in and talk to someone and have -- or go with friends or go with their family. you know don't forget about the social experience. you don't get that online. by the way, i love online. i'm benefitting from it. but i think the omni-channel experience is really going to grow. >> where's the better margin for you? right now saying everybody in retail is playing for market share rather than margin to some degree. if i go online and buy something from you, is that better margin for you to mail it to me than for me to go to the store and pick it out? and then if i come back and bring it to you to return it or i send it in there's that many more hands on it which makes it that much tougher to make. >> i tell you, i want you to come into the store. you come into the store, you're going to see something. >> chances are i'll buy more.

>> like 20% more. that's the ratio. it's 120% radiated sales. two years ago you didn't do this, but today many, many customers they buy online and pick up in stores. both click and collect. so they didn't even know they wanted to buy this blender or whatever. so they are coming to pick it up. when they do they say oh you know, there's a great looking tie or that's a nice lipstick and i'll pick that up too. >> that's interesting. >> you get the same way online. i buy more stuff than i meant to buy. it's a catch no matter how you do it. >> but also when you come in the store, you try it on or hold it. you're less likely to return it. if you buy it online, you think that's not exactly the color i thought it was going to be. so i think the store -- the sale inside the store is more lasting sale. >> what's the percentage online. >> it's definitely higher

without getting specific numbers. it's definitely higher online. it makes sense. because you haven't tried it on. >> a lot of people buy two or three sizes and then just ship it back because it's free these days. >> let's talk about oil prices. that's something we're watching every day. i just wonder has it showed up in the customers? do they feel more flush coming in because they're spending inging less to fill their tanks? >> i've been asked that question lately and i think that's just beginning to show itself in the consumers' wallet. only in december. because you have to fill your tank up two or three times before you start to realize, wow, i'm saving 30 bucks a tank. and that really matters. i mean the size of the pot that has been expanded here with the money being reduced is enormous. and so i think that should play out well over 2015. i think that's probably the single biggest positive going into 2015. >> short of that how does the consumer feel?

>> i think the consumer feels pretty good. you know i think, first or all, we've had such a sluggish you know, economy for the last couple of years. right? we've had reasons to believe it should be better and yet it hasn't really kick started. and still 2014 still didn't really burst through the ceiling. but i think the fundamentals are all in place. i mean how much lower do we need to go in unemployment? in fact now we have real jobs. it's not just unemployment rate. it's actually jobs. and a new statistic that's been revealed is that people are working more hours and so they're getting paid more for more hours of work. that's more money in their pocket. as i mentioned the gas prices. you're starting to see consumer confidence finally turning positive. and so they've been spending it on different things health care has been eating up a lot of that extra. i think we're at a place right now where consumption can return back to what we've seen in the

past and it should be a positive for the consumer as we head to 2015. >> all right. that smell. is that au natural? when you walk into macy's? is that just a composite of all the perfume and makeup? where does that come from? >> i haven't noticed. >> it smells good. >> they're always trying to give you the perfume and cologne. >> you don't walk around spraying something. >> no. they compete with each other actually. >> but it never turns out bad. i like coming into either saks or macy's. >> you don't get the smell when you buy online. >> how is it those people that always come up to you asking for perfume. do they work for you or how does that work? >> they work for us. they work for macy's. they work for bloomingdale's. but they're generally encouraged

or incented by the brand. >> you are like a fashion king i think, in your own personal life. look around. what do you make of this place? >> this is fantastic. by the way, thank you for coming to manhattan. this is close enough to drive by here. >> how is our style here? >> i drove by here and there you were in the window this morning. >> did you see our names go around in lights? >> do you think you could do the macy's day parade down 6th? is that possible? >> all kinds of people get involved. i don't need you guys to get involved in our routes like everybody else is involved. >> your name is going around today too. >> not mine. hopefully macy's name. >> no yours. >> we love the new location. i think you're going to get lots of people wanting to come and visit you. >> is it easier on set to talk to? >> this is fantastic. yeah. congratulations. well done. >> terry, thank you so much for coming in today.

we appreciate it. we'll watch the earnings coming out to. >> thank you. >> thank you very much. we appreciate it. and you're looking splendid in all sorts of macy's and bloomingdale's gear. in the meantime when we come back on "squawk box," the platinum portfolio is in session. then at the bottom of the hour, we've got the ceo of dunkin' brands. and then in the next hour sam waksal served time for insider trading, was banned as serving as an officer of any company. a drug company is about to go public and he's stepping aside. sam waksal is going to join us live at 8:30 eastern time. we're back in a moment. ally do sound like a sure thing but i'm a bit skeptical of sure things. why's that? look what daddy's got... ahhhhhhhhhh!!!!! growth you can count on from the bank where no branches equals grea

e financial noise financial noise financial noise financial noise so ally bank really has no hidden fees on savings accounts? that's right. it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees from the bank where no branches equals great rates.

welcome back to "squawk box" this morning. take a look at the futures right

now. they're green in a big way. dow looks like it would open up 118 higher. s&p 500 up about 13 points. and the nasdaq up over 31 points. we have a little news out of washington this morning. paul ryan saying he will not seek the president in 2016. ryan is the new chairman of the house ways and means committee. he was the republican party's vice presidential nominee in 2012 and also served as a "squawk box" guest host. >> yeah. he said that yesterday. not this time. doesn't mean he won't at some point in the future. that narrows the field down from 28 to 27. >> there you go. >> cross him off. all right. the squawk platinum portfolio is back. now you can go to cnbc pro to track the portfolio manager's picks in realtime. of course read their exclusive

reports. >> for you, joe, it can be whatever you want. >> it looks like hennessey to me. asset management has $30 billion in funds. were you dividend? >> yes. >> that's not a term you hear a lot. dividend plays? did i mumble that? >> i've got you in my ear. so it's disconcerting. >> did you sell those or are you still holding them? >> we sold two of them. canadian oil sands and we sold -- >> probably a good idea. >> the other oil company as well. >> what are your new ones? >> bpp and telestar.

it's interesting to try to come on a program like this. we're essentially all about the underlying process and how the portfolio is held for us. it's not that we're really excited about swiss occurrence. it's the fact that it's one of the cheapest stocks in our large stock universe. financially strong. so we're looking for the underlying process rather than at names in particular. and so, you know, for quant to pick just three names is challenging. what we're going after is how will the overall portfolio do? we think one of the structural problems with the money management industry is that we're always looking at today or this month or this quarter. when we design all of our stuff to do well over much longer

periods of time. so, for example, the portfolio this comes from is called enhanced dividend. historically in realtime it beats its bench mark about 63% of all rolling one-year periods. however, when you go out in a time frame to a five-year period you see that it beats its underlying benchmark. >> the last two years you maybe should have been somewhere else instead of dividends, right? >> potentially. but we think there's a huge appetite particularly among the baby boomers. >> it's zero everywhere. >> yeah. if you can provide a portfolio that's got a dividend yield of 5%, that's a very attractive portfolio particularly for people who really do need the income. >> and you think these companies will continue to raise to do it. that's the one way you can play it in terms of growth. if they're doing well. they're well managed. >> yeah. we have found, though we have studied looking at companies,

buying companies that have increasing dividends. actually not a good way to invest. >> really, why? >> what we found is the companies that are most financially strong very very cheap significantly better than the companies that are just raising dividends. so we don't really even look at that. >> so you're buying the yield not even thinking it's going to go up then. >> that's right. we buy the yield but only after they make other specific criteria. they have to be very cheap. they have to be financially strong. in other words, great cash flow. they have to have good bookkeeping. in other words, we don't want shenanigans and foolery. then we look at -- >> the names that you sell did they cut their dividend? >> yeah, they did. >> did you lose money on this? >> kraeyeah, we did. >> this is a rusty tin

portfolio? we want a platinum portfolio. again back to the nature of trying to pick three stocks. what we're trying to do is stay true to the underlying process. it also illustrates it's a very difficult way to invest. because it puts you in places in the market that tend to be very unpopular. and historical lyly -- >> how old is this story? and maybe they make one quarter of dividend payment. but there's a lot of these companies that are going to -- >> exactly. so back to the whole, our process is designed to do really well. >> when you say cheap, are they stocks at the low end of the 52-week cycles or pe cheap? >> it's pe cheap. ebita to enterprise value. enterprise value to cash flow. we use a variety of the various

metrics. sometimes you can get caught up in a stock that's got a very low pe. we'd like to avoid using any one particular valuation metric. >> thanks jim. >> thank you. >> all right. o'shaughnessy. >> joe, i've known you since '97. you should get the name right. >> i know you say it's o'shaughnessy. i'm just wondering whether you could be wrong. >> i tell you, when i went to ireland, they told me i was wrong. >> they did? >> i walked in they said mr. o'shaughnessy. learn how to say it. >> they would know. don't forget to go online to cnbc.com/pro to track the picks, get realtime alerts and

exclusive analysis. coming up at 8:15 a guy you're going interview today. marty sass. when i was a broker he was our guy that we thought knew everything 30 years ago. so we'll have his top platinum picks for 2015. coming up this morning, a houston furniture store making a big bet on oil. plus time to make the doughnuts. the ceo of dunkin' brands joins us on set. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

she's still the one for you. and cialis for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any allergic reactions like rash, hives swelling of the lips tongue or throat or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. you just got a big bump in miles. so this is a great opportunity for an upgrade. sound good? great. because you're not you you're a whole airline... and it's not a ticket you're upgrading it's your entire operations, from domestic to international... which means you need help from

a whole team of advisors. from workforce strategies to tech solutions and a thousand other things. so you call pwc. the right people to get the extraordinary done. ♪ ♪ so what's going on today? news alert! message! email! calendar update! most of us admit to being overwhelmed by information at work. that's why ibm created verse. it uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. it continuously learns how you work. and helps you prioritize the people and projects you need to focus on. there's a new way to work and it's made with ibm.

welcome back everybody. a houston furniture retailer is making a big bet that oil prices will remain cheap. be one of the first 500 people to buy $7,000 worth of furniture by the end of the month from houston gallery furniture. if u.s. crude ends the year above $85 a barrel you get your money back. yesterday a hundred customers qualified for that deal. the owner said the promotion leaves him on the coke for $10 million to $20 million if he loses the bet. the ceo of dunkin' brands joins us on the set to talk about expansion. why don't we put dunkin' donuts

in california. that's why he's ceo. breakfast with nigel travis is next. ♪ ♪ [ radio chatter ] ♪ ♪ [ male announcer ] andrew. rita. sandy. ♪ ♪ meet chris jackie joe. minor damage or major disaster, when you need us most, we're there.

state farm. we're a force of nature, too. ♪ ♪

welcome back, everyone. in our headlines this morning, italy's president is expected to announce he's stepping down because of age-related illness. cargo traffic has slowed. talks remain stalled. and the ex-wife of oil man harold hamm is vowing to press forward with an appeal of her divorce case. this comes even after she cashed that $975 million check that hamm had written to her. >> she's got to live doesn't she? she has expenses and things. how much did he have? >> well it's been doing down because of oil prices. >> i know. but he had a lot and she deserves more than that. you sound like a billion is enough. >> i think i could get by on a billion dollars. >> that's not the point.

you want equal pay everywhere else. >> i do. >> behind every successful man there's a wife. >> i know that. i'd take the money and run is what i was saying. >> guys we have a bit of breaking news to cross the tape. we want to get to it right now. metlife is about to sue the government fighting back against the designation that the customer is systemically important financial institution. metlife says it is not too big to fail and not a sifi. joining us right now here on cnbc to discuss this action metlife chairman and ceo steven kandarian. we are thrilled to have you literally as this news is breaking across the tape as we do it. a huge decision for a company to appeal in this case. but effectively to sue its regulator. >> first let's welcome "squawk box" to manhattan. we're happy to have you here. metlife financed this building during the great depression.

so even back then in times of financial distress metlife was a stabilizing force. as well as the empire state building. >> we thank you for that. >> so i was o former regulator, andrew. i believe in strong regulation. the sans not regulation. we think they got this one wrong. we think it's the right thing to do to appeal this decision under dodd-frank for the benefit of our consumers, shareholders all stake holders. our belief is that this action and is likely to lead to higher costs for middle class consumers of insurance products. without any additional safety being provided to the system. you think about competition in our market-based system. you want a level playing field for everyone to compete on to see who has the best products and services. here yourself singling out insurers and putting them on an

unlevel playing field. wi67 means more capital likely. more stringent regulations compared to the already very strong regulation we have at the state system. finally i should mention that there's a better way to do this. there's other tools to employ. they used it for the asset managers. >> how do you explain your view of this to aig. the ceo of aig said the fed was a ideal watch dog. how can they believe that and they are systemically important and you're not? >> actually that's not exactly true. they did not say they were systemic. i don't believe any life insurance company today is systemic and hasn't been other than aig's financial group.

all of the state regulated entities of aig were liquid and solvent throughout their financial crisis. in fact, we bought one of them. we bought the international division for over $16 billion a couple years after the crisis began. the year 2010 made that purchase. we took no t.a.r.p. money. wrote a check for $16 billion back to aig which went back to the taxpayers. again, we were a stabilizing force just like in the great depression during the most recent crisis. >> so this is what they said when they designated you. metlife could have significant adverse effects on financial forms and markets. that could be severe to inflict damage on the economy. after the financial crisis isn't this what we're trying to avoid? >> that is what we're trying to avoid. let's use an activities based approach to say what kind of

activities either led to the crisis last time or can lead to a new crisis. i'm not just saying things had happened in the past. but we've done a lot of compelling analysis provided. and we demonstrate to them using both external and internal studies. the biggest impact of any other financial institution to metlife is about 2%. that's just not enough interconnection to result in a designation being specific. >> let me ask. i understand what you're saying. i think you're probably doing the right thing for your shareholders by doing this. i can understand regulators saying forget it. we looked at aig. we saw what happened there. if you are this big, this is the way it's going to happen. we have stamped the banks with this same sort of cycle. it wasn't necessarily the banks that were the problem. it were the ones that weren't regulated closely that got us into this trouble. if you were designated sifi how

will it change your activities and what you're able to do? why would you not be able to be a stabilizeing force in the market anymore? >> if you're above a certain level of assets you're automatly regulated as a sifi. they were concerned about the aig that got them in trouble. metlife has never engaged in those kinds of activities. no other life insurance company has engaged in those activities. let's look at the kinds of activities that get someone in trouble and could result in the con todaya contagion. we don't even want life insurance companies to fail. we want strong regulation. i'll give an example. back in 1991 there was a company in the west coast called executive life. they bought a lot of junk bonds. the junk bond market crashed.

they became insolvent. they were resolved over a long period of time. the final resolution of them was in the year 2013. 22 years later. there's no run on these companies. ultimately. to make sure they can feel good about the long-term promises we're making. metlife wrote a check for over $300 million to bail out. we want stronger regulation. we want appropriate regulation. >> what did it do that's such a problem for you? >> we don't know. this is another point i should make here. we've been designated before they'd written the rules. i always looked and saw what was the impact of my actions as a regulator. they don't know because the rules haven't been written by the fed. so we don't even know what the impact will be. all we do know under dodd-frank

is it has to be on a level playing field. >> what prevents you today from getting involved in some of the financial transactions that took down aig? >> nothing. >> so if you wanted to go into that business today, there's no regulatory body that could stop you. if you become a sifi could they stop you? >> no. our primary regulator, the state of new york would look at what we're doing and say there's a problem here or you want to go at this risky business, okay. here's the capital you need to go into the business. you don't have that capital, you can't do it. that's the case today. we're probably one of the most regulated in the united states already. that's one of the provisions of dodd-frank. look and see if these companies are already regulated. we are extremely strongly regulated. our primary regulator is the state of new york. just open the paper any day. we are well regulated.

>> how did you think about the company and not just the shareholders but the brand. this is a brand associated with snoopy we were talking about. and the metlife stadium. it's a publicly known -- people don't think of it necessarily as a company that's going to fight with the government. >> i don't think we should call this a fight with the government. this the law. this is dodd-frank. so we are simply pursuing under the existing law. the laws -- congress passed a law and said if you don't think they got it right, if you think b there's a policy outcome for consumers. you have the right to appeal to the district court in d.c. or your home district. we're following the existing law. we're doing this very respectfully. we don't think there's any ill intent. we think they're trying to do their job to keep taxpayers from engaging another bailout. we support that. we simply think they got this decision wrong. >> real quick, just explain.

so what's the path now? you will file this appeal today. >> yes. later today. >> and then how does this work? >> it goes into district court. existing record we presented 21,000 documents. and they will argue their case before the court to say did they meet their standard to designate metlife or did it not. we think we have a strong case. >> thank you for coming in and sharing this news with us literally as it was breaking. >> thank you. coming up we're going to get our morning jolt of java. and then maybe one munchen. ceo of dunkin' is here to check out the new set. maybe we can ask him to backing our co coffee. we'll talk about the company's

huge commitment in china when we return. ifferent criteria... why did a panel of 11 automotive experts... ... name the volkswagen golf motor trend's 2015 car of the year? we'll give you four good reasons the all-new volkswagen golf starting at $17,995. there's an award winning golf for everyone.

dunkin' brands has announced that in 2014 its franchisees opened 142 new stores making dunkin' brands one of the fastest growing companies by

unit count in the industry. joining us now to talk expansion nigel travis chairman and ceo of dunkin' brands. good to see you. there's room for you and starbucks. starbucks has been doing exceptionally well. and dunkin' donuts continues expansion. we're addicted to coffee. >> we are. and we were delighted with those development numbers. i think if i just break it down we hit the high end of our guidance on dunkin' donuts 17 new baskin robbins stores. baskin had had a spectacular year. i think that was driven very much by online ordering. but i'm really enthusiastic. and the franchise sees have done a great job. great franchise economics. i know we had criticism last year. but most important in our business is franchise margins. and they're great and our pipeline for this year is terrific. we've increased our guidance again to 440 for this year.

>> and talk about california. >> well california is way ahead of expectations. i think you said to me about three years ago, when are you going to get there? we've been there. we've got five traditional stores opened. >> is five enough? >> no no no no no. hundreds and even a thousand -- >> how many is enough there? >> i think a thousand in california. we're going to open another 15, 20 this year. and we're very pleased. i was looking at the numbers last night. they've been open for some time now. and they're keeping way above our expectations. and california's going very well. >> can i just ask a question. you said online ordering is helping baskin robbins. are people ordering ice cream cones before they get there? >> ice cream cakes. and my daughter whose eighth birthday it was this past sunday, i did it myself. it's so easy. i'd encourage anyone looking for a ice cream cake to go to baskin

robbins and order it. >> i had one for my birthday. and it had a -- it was ice cream but the center was the key. it was like a chocolate cookie strip in between the chocolate and the vanilla. >> and we had an oreo cake on sunday. she made me go and check it to make sure i got it right. >> does michelle obama -- you don't get complementary notes from her, right? you sell ice cream and doughnuts. >> we are supportive of menu labeling. it's all about consumer choice. we've got dd smart on the dunkin' side. right choice on the baskin side. look. there's even labeling it for cnbc. >> wow. that's edible? that label? >> andrew i remember the time you were straight on the show. you're going to eat at least one of those. >> can you get a "squawk box" label next time? >> yeah. you can ask me when we're going

to sponsor it next. >> we gave up on that. >> you're now downtown we may get more visibility. >> yeah. on the thing going around. >> we're already in times square though. >> we didn't ask for money. we just wanted doughnuts. >> and free coffee. >> just doughnuts and free coffee. how do you distinguish now in the battle between you and -- and it is a battle. it's almost like dog and cat people. there are starbucks people and there are dunkin' donuts people. two kinds of people in the world. who's winning right now and how do you continue to -- starbucks has -- >> i think there's plenty of room for both of us. many of our customers go to starbucks. many starbucks customers come to us. convenience is very important. we're focused on convenience. we're working this year on mobile ordering. we're trying to speed up our

drive-thrus and sandwich stations. you know, it's all about making it more convenient. >> you're talking all throughout the u.s. right now. let's talk about china. how big an opportunity is that right now? how many stores are you rolling out in the next year? >> we announced the deal to open 1400 stores with this new partnership. >> but 1400 stores over how long? >> over 20 years. we'll probably start slow. it's very important you get a good base in china. but jolly bee, they a dominate the philippines business. they're a franchiser in their own. >> same flavors? >> we will have some green tea. we've learned from the mistakes in china. we now have two groups. a new group which is basically jolly bee and private equity company. we're very excited about the

opportunities in china. >> what are one or two mistakes you've learned from? >> i think we over-localized becky. i don't think we focused enough on coffee. >> thinking that they'd want tea instead of cough dpeffee? >> yeah. i think that was a mistake. going back to the earlier discussion about development in the u.s. it's about great operations. and i think that's the big change in the last five years. >> nigel, you have a -- is that a styrofoam cup? >> it is. >> you heard what mr. de blasio wants to do. he wants to get rid of that kind of cup. >> so do several other people. >> where do you stand on that issue? >> we're going to obey the law. here's the good news. we've got a new cup coming later this year. we've been testing it. it has the same feel, it keeps it very hot and occasionally dangerous liquid inside. and it's totally recyclable. >> more expensive to produce?

>> it's a bit more expensive. we're working on that right now talking to our franchisees. >> and will you roll that out throughout the country or just in new york? >> we've got it in california and two other places. we will roll it across the country. >> is that the right decision broadly? >> i think it is. sustainability is very important. it's not only here that it's important. i was in sweden two weeks ago which is going to be a great market for us, by the way. >> it's cold. >> it was cold. and the great thing is everyone is talking about sustainability. i think we've got a very good story to tell. the new cup is going to be spectacular. >> a lot of people write in whenever you're on. >> really? >> yeah. have you started dunking your doughnuts yet? he doesn't dunk doughnuts. >> i keep asking for the handle doughnut. >> you've never dunked though. the name of your company is dunken donuts.

>> next time i see you -- >> it's so messy. >> when we go skiing will you show me how to do it? >> i will show you. is that not the greatest place? amazing. all right. and you're thinking about sponsoring us with -- you like munchkins? >> they are better for you a little bit. because they're smaller. >> there you go again. worried about the health concerns again. will you dunk? >> i will always dunk. >> here's the important thing. >> i want a dunk in hot chocolate or something. >> our hot chocolate is -- >> look at him. he's always on. all right, nigel. thank you. >> thank you. >> do i need my people to call your people about the big sponsor snip. >> put it this way. i'll talk to the guy of advertising. >> okay. >> i'm going to tell you folks when we come back we've got big movers ahead of the opening bell. joe has your list of stocks to watch after this. plus how facebook knows you

better than your own family. what? we have that story when "squawk box" comes right back from the heart of midtown manhattan.

does facebook know you better than your friends? apparently they do whether you like it or not. the stanford and cambridge university conducted a study that nailed down your interest based on your activity.

the findings showed just by analyzing ten likes, facebook could more accurately predict your personality than a coworker with 150 likes. -- i'm sorry. with 150 likes facebook could be more knowledgeable than a family member. and with 300, it could determine your temperament better than a spouse. >> oh that is so not true. i don't buy this for a second. >> do you click likes ever? >> no. and by the way, maybe they could predict which pair of shoes you would rather have. but i don't think that knows your temperament. i don't think it knows who you really are. maybe it knows what some of your likes are. but it doesn't know you. that's a farce. >> i'm with you. >> would you mind andrew -- >> i'm not going to eat any of these doughnuts. >> i have not had one. but he's on a carb-free diet. >> these are free. >> not carb free. >> yeah.

but free food. i don't eat on air. you do that. >> i want them to sit here the whole time. i've never known andrew not to eat doughnuts. >> he likes the glazed one. >> oh this is going to be a tough morning. i'm just going to sit here like this. when we come back roger altman is here. and then the first interview with sam waksal since he announced his new company is going public.

ameriprise asked people a simple question: in retirement, will you have enough money to live life on your terms? i sure hope so. with healthcare costs, who knows. umm... everyone has retirement questions. so ameriprise created the exclusive confident retirement approach. now you and your ameripise advisor.... can get the real answers you need. start building your confident retirement today.

tdd# 1-800-345-2550 [ male announcer ] your love for trading never stops tdd# 1-800-345-2550 even on the go. tdd# 1-800-345-2550 open a schwab account, and you could earn tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 so if you get a trade idea schwab can help you take it on. tdd# 1-800-345-2550 we're getting a lot of questions tdd# 1-800-345-2550 about organic food stocks. tdd# 1-800-345-2550 [ male announcer ] sharpen your instincts tdd# 1-800-345-2550 with in-depth analysis by schwab experts. tdd# 1-800-345-2550 and if you want to run your idea tdd# 1-800-345-2550 by a schwab trading specialist, tdd# 1-800-345-2550 our expertise is just a tap away. tdd# 1-800-345-2550 what's on your mind lisa? tdd# 1-800-345-2550 i'd like to talk about a trade idea. tdd# 1-800-345-2550 let's hear it. tdd# 1-800-345-2550 [ male announcer ] see how schwab can help tdd# 1-800-345-2550 light a way forward. tdd# 1-800-345-2550 so you can make your move, wherever you are tdd# 1-800-345-2550 and start working on your next big idea. tdd# 1-800-345-2550 ♪ ♪ tdd# 1-800-345-2550 open a schwab account and you could earn tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 call 1-877-670-3357. tdd# 1-800-345-2550 or visit schwab.com/trading. tdd# 1-800-345-2550 schwab trading services. tdd# 1-800-345-2550 your go-to for trading know-how. tdd# 1-800-345-2550 ♪ ♪

oil plunging again. opec holding firm. the cartel won't change its production strategy. crude now down 60% since june of last year. the latest on what all this means for the market straight ahead. sam waksal is back. the founder and former ceo who was sent to jail on securities charges is looking for the next big drug breakthrough. and fast casual in the form of noodles. the ceo of noodles & company on how they plan to take advantage of the lower prices at the pump. and talking about the big premier on cnbc tonight as the final hour of "squawk box"

begins right now. ♪ welcome back to "squawk box" here on cnbc first in business worldwide. i'm andrew ross sorkin along with becky quick and joe kernen. if you missed it last night, congratulations to the ohio state buckeyes. ohio state beat the oregon ducks by a final of 42-20. >> here's what's making headlines at this hour. metlife is filing a legal appeal in federal court today. the insurer's ceo told us this morning that rug laterers got this one wrong. air bus beat its rival in new

orders. and macy's ceo says closures are inevident pbl. terry lundgren blames creating new shopping centers. he says this is part of progress as it happens. you end up moving to the higher end ones as developers put in new malls. we are less than 90 minutes away from the opening bell on wall street. the futures right now are indicated higher. we were triple digits earlier, but still up about 88 points or so on the dow. i might sneeze. >> i'll cover for you. want me to talk for you for a bit? >> no. the feeling passed. although it's not a good idea to do that. it's like holding it in. and check the markets in europe. we do have some positive numbers across the board. pretty nice gains, too, in france and germany. >> i think the doughnuts are making your eyes and nose water or something. >> maybe. my whole body reacts to where they are right now.

>> carbalicious. >> you're talking tough. here. move it over. >> oh you want it closer. >> to you. >> oil to six-year lows. let's get a little bit more on the energy complex with matt smith. good morning to you. which way is the number going? what's the lowest you want to put out there? >> oh my gosh. every time you get me on the show, we're $10 lower, it seems. once we've broken this $50 level, we're now looking at $40, it would seem. should we break $40 we're looking at the lows of 2008 around $36, $34 at wti there. if you're asking me to make a shot, we're swiftly heading towards those numbers. >> and do you see a turnaround? i mean people have been predicting we're going to bounce. at some point we're going to bounce. the question is when. >> that's the billion-dollar question. it's really difficult to try to

establish what that catalyst will be. at the moment what we're doing is really establishing these producers in the u.s. much more resilient to these lower prices. and they're going to be able to hold out much longer than initially expected even just a month ago. so with the top ten producers accounting sort of 50% of the volume of production here it seems that prices are going to stay low for at least the first half of this year. and that's why you've seen 73 different banks revising their forecasts lower. >> all right. so let me make your life very difficult. you came back a year from now, what do you think the price would be? >> higher. >> higher than what? >> higher than what? how much higher? >> higher than $50. higher than $60. i think what happens is once we get this sort of response in the buying coming back in we'll see a swift rally. we could see 10% in a day, something like that. but i really think we're going to finish yeah $60, $65,

something like that. >> is there any reason to believe we could be where we are today a year from now? >> by all means, yeah. we're looking at these break evens saying they're $60 to $70. here we are in the $40s and the producers are looking to hold into thex year. we could see production here in the u.s. strong but it will start to impact global production. the projects that have been planned but won't come online. we should see a supply response by the end of the year. >> we're going to leave the conversation there but we appreciate your perspective this morning. >> thanks. >> thank you. congressman chris van hollen unveiling a tax plan with ratebreaks for the middle classes while trying to raise wages. >> we have a provision that says you don't get to take a tax deduction for bonuses or

compensation over $1 million unless you're giving your employees a raise that reflects worker productivity and cost of living. >> joining us now to talk about what we'll see on capitol hill this year when it comes to tax reform chairman and founder roger altman. good to see you. >> good to be here. love the studio. >> it's great, isn't it? >> especially with the doughnuts here. >> you want to swing by for the doughnuts? >> andrew's going to take the pink one. i know it. >> i'm a glazed man. there's two of them right now. they're beautiful. >> i wonder when i see the republicans introduce things that have no chance the democrats. this has absolutely no chance. why even go through the motions when you're not only the minority party in the house now, but you're a minority party in the senate. just like to say things that sound good and compassionate. >> you're right that a proposal like this isn't going to pass.

and i don't happen to think there's going to be much which passes this entire congress. although there are a few things that have to be dealt with. but in general i don't think there are going to be a lot of new initiatives. as to whether the broad idea of middle class tax relief makes sense, i think if you could partially or pay for it which is difficult, it probably does make sense. i think the biggest problem facing the country is the degree to which about 90% or more than 90% of americans have suffered declining living standards. and we have to fix that. but is this going to go anywhere? you're right. the answer is no. >> because we're now at 5%, 6% unemployment, it doesn't erase the uneven recovery now we've had for six years. it's been below what it has been for a variety of reasons in past recoveries. and there's nothing like a

better job market or more high paying jobs that may have been created, maybe not, but they have been created if we were friendlier in certain ways. we could be in a much better place right now. but we still aren't addressing those things. we're back to wage controls and i read krugman the other day. he was laughing about the republicans saying maybe we had something to do with the prosperity. he goes, these are people that believe that prosperity could come without any legislation having been passed. and just reading that i see the whole mind-set the notion in his mind you couldn't attribute any prosperity increasing unless congress passes legislation that's responsible for it. that's the mind-set of a lot of people on the left. why do you need legislation to create prosperity roger? >> he's doing really well isn't he? first of all, i think the outcome for the u.s. this year

is good. and we're gathering strength. >> but it's about time. we shouldn't assume. >> yeah. but i think himpbsstorians will say the legislation required five or six years to get through. i also think historians will say the federal reserve especially was heroic and wrote the book so to speak on emergency response to a crisis like this. i think we are gathering strength. we'll have good growth this year. we're going to have a continued good rate. i think we will continue to see wage growth even though yesterday's revision shows other the last few months has been small. and i think even the energy price change is a big plus for the united states. it's the equivalent of a $200 billion stimulus. yes, there are some disruptions in the downside. but this is a big plus for this country too. so a lot of things are going right for the united states.

and i draw the focus on the positive. >> i want you to comment this morning on a separate issue. it has to do with your party. and potentially how fractured the party is. which is this antonio weiss nomination now withdrawn. he's going to be special assistant -- >> counselor. >> to jack lew. but he's not going to go through the process. it effectively means that the senator won in this case. >> first of all, i know antonio. i have the highest record for him. i'm glad he's going to the treasury and i'm glad jack lew will have the benefit of his counsel. so i'm glad they found a way to do that. since there are only two years left in this term -- >> by the way, is that a middle finger to elizabeth warren? to say, you know what we're not going to do it this way. we're going it the other way. >> i wouldn't interpret it that way. i think it's just trying to solve this in light of what the opposition turned out to be. yes, i think that opposition is

unfortunately because he's well qualified. i think a lot of people forget that this is the finance ministry of the united states. and it has to have markets expertise that antonio has. you can't run the department. you can't run the country. >> do you think any talented people on wall street for better or worse would ever put themselves up for a job like this in this environment given what just happened? >> not over the next couple of years. >> only two more years of this. but we'll come out of this. i don't think this is a permanent on the financial. >> it already happened with larry summers. what's more interesting is whether the president is going to be able to get anything done on the trade side not from what should be done and what he wants to do but not from republican opposition. >> they can actually negotiate the tpp. the asia deal. and that's complicated.

and bring it -- and then get fast track authority to present in effect to set it up with the congress. i actually think that could pass. >> complicated, though because of the trading partners? >> there's a kind of an aspect to the following sense. a number of the would-be trade deal participants like japan are essentially saying we're not going to sign the deal unless you show us you have fast track authority. because otherwise we're just going to sign the deal and look foolish because it never happens. >> then what else do we have hope for? >> my point is if the deal can actually come to the congress under -- >> do you think he could go to the left? >> well i think historically trade agreements at least in my lifetime have passed with a majority of republican votes. >> right. >> i think the republicans which now have bigger majorities than almost ever are prepared to step up to this if the president can

actually get it to the congress. so i think -- i actually think if it gets to the congress, it will be a real struggle. it will be very very ugly in some respects but i think it could pass. >> that's all we've got going for the next two years. >> well, the biggest even this year is going to be the decision on the affordable care act. and the subsidies. that's going to be the biggest single event. decision expected in june. the arguments are in march. >> talk about congress an things we can watch people voting on. >> well, there's going to be a lot of vetoes. i think there'll be this effort to change obamacare and lower the threshold. >> would you be for that? it was to go up to 140 or something. it made sense to do that. >> i think obamacare for all of its controversy is actually working. and no i'm not in favor -- >> you didn't watch "60 minutes" the other day. >> i have watched it. i read the book. >> none of the cost containment

had -- >> here's the one thing. i think steve is a really smart guy. i like him. but i think the one thing people are missing is that for years and years and years we had health cost inflation in this country of 2-x, 3-x, 4-x. it has been flat in this year including medicare. i think that is a response. >> you attribute the recession to why the jobs have come back so slowly but not why utilization is down so much for health care. >> i'm trying to say a n a lot of ways directly and indirectly obamacare is working. health care cost inflation reflects the degree to which other things providers have made a lot of changes as they anticipated this and now are adjusting to it. which have really affected costs. and so i don't think the cost equation is as negative. >> i want to know before you go

if it's a jeb/hillary game where do you think wall street really comes down? >> wouldn't be happy with hillary clinton or jeb bush. and historic -- it's still a more of a republican community than a democratic community even though that's been changing steadily over the years. used to be entirely republican. now it's 60/40, something like that. but i think mrs. clinton would have big support in the financial community if she decides to run. and we'll find out about that. i hope she will. so they'll both have lots of support and i think wall street does view both of them quite favorably. >> thank you so much for coming in today. >> thanks. >> don't be a stranger. when we come back today, our platinum portfolio series rolls on with marty sass. why he is betting big on returning from real estate firm apollo group. also the bottom of the hour, a

cnbc interview with sam waksal who spent years in jail for insider trading. he's taking a crack at the drug market yet again. also coming up tonight, a look ahead to tonight's big premiere of "restaurant start-up." and jim cramer live from the new york stock exchange. "squawk box" will be right back. a... why did a panel of 11 automotive experts... ... name the volkswagen golf motor trend's 2015 car of the year? we'll give you four good reasons the all-new volkswagen golf starting at $17,995. there's an award winning golf for everyone.

welcome back, everybody. the squawk platinum portfolio is back. now you can go online to cnbc pro to check our platinum picks in realtime. plus read exclusive analysis. joining us on set to give us his top picks is marty sass. he is chairman and ceo of m.d. sass. you brought old and new with you. let's talk new. apollo is a new pick for you. >> yes. i like apollo. i like the whole group that is gaining market share in this market of low interest rates. they're one of the world's leading asset managers. they're targeting growth 250 to 300 billion over the next three to five years. >> is that as pension funds are investing more with these

alternatives? >> exactly. that's the biggest part of the flow. they also have $30 billion of dry powder capital that they've been harvesting to get ready for it. with the collapse in oil prices we're going to see a lot of defaults. we're going to see distress debt becoming a great investment opportunity and they're very well positioned for that. and secondly they're focused on buying assets out of distressed banks in europe that are being forced to divest assets. this is their specialty. they have the highest rate of return out of every asset space in private equity. >> let's also talk about a stock you mentioned before. american airlines group. you started liking the airlines how many years ago?

>> mid-2013. on your show i recommended u.s. air which became american. which is trading at roughly 50 yesterday. still like it. and i think wall street is way behind the curve on this one. give you an illustration. what's happening now as you know is oil prices have been in free fall. and they have not adjusted to the impact. >> even though we've seen some of the airlines really take off. >> that's right. and the illustration would be that you took jet fuel at today's prices and if you just assume it stayed flat wall street estimates would have to go up 50% to -- >> 5-0? >> 5-0 just to match the impact. to quantify that they're the largest consumer of jet fuel a year. so you can do the math. on the impact $440 million on

every 10 cent drop of oil. so the numbers keep going up every single day. that's only part of the story. that's the part that wall street has to catch up on. they haven't caught up on the estimates. takes a little time for the analysts to run the numbers. but that's the math. offsetting that somewhat intelligently in my view is that they just came to resolution on long-term contracts with pilots and flight attendants. that's going to cost them and it's going to net against that impact. still the numbers are going to be very big. >> activist. >> we talked about that. they bought activist. now they just transformed this company in a huge way with the acquisition of allergan. which will close at the end of this quarter early. takes this company from what was a generic drug manufacturer to one of the leading megacap pharma companies but with the

fastest growth of every major pharma. it's trading versus 16 estimate for large pharma companies. >> all right. excellent. marty, i want to thank you so much for coming in. hope to see you again soon. >> look forward to it. >> appreciate the picks. and don't forget you can go online to cnbc pro on cnbc.com to track the pros' picks. also still to come tomorrow louis navellier and susan byrne will share their picks. coming up a subway fire in washington, d.c. that left one dead and dozens injured. and the futures at this hour dow looks like it would open up about 80 points. come down from earlier. back in just a moment.

welcome back everybody. the national transportation safety board will investigate the subway fire in washington, d.c. that killed one passenger and injured as many as 80 other people. amateur video shot in the subway shows how dark and smokey it was when trains stopped and the lights went out. i think we are taking a different feed right now. at least that's what we're seeing back here in the studio. we should tell you more about this train incident yesterday. this was on the subway the metro in washington, d.c. passengers reported -- is this what we're seeing on air too? okay. this is what -- passengers were

reporting confusion and in some cases panic in the tunnels. fire and ems reports say 84 people were transported to hospitals. disruptions on two subway lines continue this morning. when we return a first on cnbc interview. sam waksal is going to join us. the man who was convicted of securities fraud. he is back in a big way. we're going to speak to him in a couple of moments app z we head to a break, take a look at equity futures. we're back in just a sek.

welcome back to "squawk box," everyone. alcoa posting better than expected earnings and revenue. some cited aluminum prices and lower energy costs. apple upgraded. the firm is citing what it calls sustainable performance in iphone sales. and hewlett-packard downgraded. they are noting valuation in something the firm is calling hyperconvergence risk.

whatever that is. it is day two of the jpmorgan health care conference in san francisco. our meg tirrell joins us and she has a very special guest this morning. meg? >> good morning, andrew. that's right. we're joined bright and early in san francisco by dr. sam waksal. the chairman and founder of kadmon. thank you for joining us. >> it's my pleasure. thank you. >> tell us about your new company. in some ways people might think of it as emclon 2.0. >> well 1.0 became an important part of eli lilly's pipeline. which i think is going to get on the market soon. becomes an important part of lilly. kadmon is a bit of a different company. at imclone, we worked on what are important now. kadm o rks n's working on both

antibodies and small molecules. and we have expanded from the cancer area into very novel areas. we're in oncology. i know that area very well. harlan and i know that area very well. but we are now in autoimmune diseases. i think we've got one of the most novel targets in the immunology field. no one else has developed a selective inhibiter. it is a rocking target. it has really allowed us to look at the immune system a different way for autoimmune disease, fibrosis, a number of different areas. we're a fully integrated company with a commercial footprint. number of products in mid-stage clinical trials. and one of the best scientific foundations of any biotech company in the world. >> right.

and still a private company. you told me toward the end of last year, you do have plans to go public. tell us about that. >> well i think you know that harlan waksal came on as ceo. >> that's your brother. >> he is my brother. he built imclone with me. we worked together for 25 years. he's now ceo. we're a biotech company. biotech companies look for liquidity for both themselves and their shareholders. and that's an area of liquidity. >> i want to talk more broadly about the industry. you had to bring in harlan to be ceo or something to be ceo because of s.e.c. rules. tell us about your brother being ceo of the company, people might believe you're still running the show. >> i'm not running the show any

longer. i'm chairman right now. i'm going to b the chief of innovation strategy and science. it's what i like to do. i like to think about what scientific areas we should be in because of the number of things that are changing in our industry. we look for people to join kadmon as ceo harlan worked as chief operating office and president after i left imclone for awhile. i couldn't find anyone better to join the company to really move forward the vision. to focus our clinical work and development work to make sure that we're going to become what i think is the most important biotechnology company in the 21st century. >> okay. so a modest goal there. joe, you have a question? >> i do. sam, good to see you.

>> hi joe. how are you? great to see you. good to almost see you. >> yeah. good to be interviewing you. we've known each other a long time. you were riding high. i had a couple barbara walters type questions for you. >> oh, joe, joe, joe. >> if it doesn't kill you does it make you stronger? are you a better person now after what was -- none of us can imagine the experience you've been through over the past ten years. >> well you -- you know, i'm one of the few people that knows joe's background so well that i know what lab he was in when he tried to be an immunologist. i never asked him about that. i knew it was a tough experience for him. >> that's not true. and it wasn't immunology. it was -- that wasn't actually what it was. >> i'm teasing you. >> yeah. but having come through it all,

you're back bigger than -- it's amazing. and i won't ask you, you know we all get bitter about things. it was a huge drug. it helped save many many lives. sop after it was said and done it was like it's a crazy story. >> well i love literature and i do love shakespeare. >> all right. so never mind. you're here to talk science. >> no look. i will say of course any event in life changes one. and that was an event that probably did change me. i am a more introspective person. it helped shape how we're building kadmon in many ways. and so those sorts of things change one for the better or for the worse. i'm certainly not a bitter

person. i love the fact that the drug is great for patients. i like the fact that our antibody is now on the market is gastric and lung cancers. and is saving people's lives there. and there's going to be other products that i develop. i'm happy. >> let's do a science question. with all the -- you mentioned immunology. that actually was not what i was doing. but meg has reported on and a lot of the recent studies. but what you've had success with on therapeutics it has been sort of blocking some metabolic processes. a totally different way of approaching it. do you think we're going to have some kind of combined approach eventually? are you excited to try and do this other type of ramping up the immune system individually or do you still want to proceed

with you know the route you've been on developing these small molecules? >> joe, that's as usual from you a great question. i think that one of the great things about what's happening in biotech and pharmaceutical industry. and it has to happen. because we have to have outcomes that really change things or this next big issue for our industry of who's going to pay for things will never happen. but both of those approaches become important. i believe that oncology works best when the tumor looks most foreign. in patients who have failed a number of therapies and who have mutations in the tumor will probably be the tumors that respond best to these dampening effects on the immune system. we're making -- we have a

product that is an inhibiter that deals with signaling and resistance genes. we're very excited about it. it's in clinical trials in breast cancer. it's going into clinical trials in gastric cancer. but we also have made a very clever next generation about antibodies. and we've done something where we've made a bifunctional protein. we've made one of those antibodies and on its tail is a molecule that's called 15. and it recruits to the tumor. >> sam, you just said a million things that half of our viewers i'm not sure were totally following, but the science sounds very exciting.

unfortunately we've got to leave it here but thank you so much for joining us. >> meg thaunksnk you. >> and joe, thank you. >> back to you guys. when we come back this morning, the chairman and ceo of noodles & company on fast casual growth. and then the quest for america's next generation of top restaurants premieres tonight. joe of "restaurant start-up" will joins up. "squawk box" will be back after the break.

welcome back to "squawk box." these guys are on our plaza this morning. now that we're right here in the middle of midtown manhattan across the street from radio city music hall. they have their own poster for us. i don't know if this will be a daily tradition or not. it looks like we have a couple fans from montreal who are big fans of "squawk box." also they hang out in omaha, they said they've seen us. a nice little fan there of too big to fail too. like that. thank you, guys. in the meantime let's show you the futures. dow looks like it would open 95 point higher. and s&p 500 about 9.5 points higher. icr exchange is one of the biggest conferences of the year. it's being held in orlando. that's where we find our courtney reagan with a special guest. good morning. >> good morning to you becky. i am joined by kevin ready of

news noodles & company. >> i can't speak about current numbers, but yes i think the third quarter release we improved to 1.7% positive same store sales. we're able to forecast a range of 2.5% to 4%. and certainly improved consumer confidence having some disposal income, i think that's a helpful thing to the consumer. >> and so gas prices how much does that help your business? >> well i think it's incremental. when you have the average american family having $60 more a month in their paycheck and being able to get through that it's like getting a little bit of a raise. it allows them to go out and enjoy restaurants like ours and appreciate and learn about fresh ingredients in real cooking. so it's a good thing. >> a lot of americans are looking for fresh ingredients, organic, gmo-free products.

how are you making sure that you're meeting those demands? >> well we focus pretty heavily on the supply chain. so we offer antibiotic-free, naturally raised pork. wheat in general is gmo free. so all of our pastas are gmo free. it's really about a purpose and focus. in colorado we have antibiotic-free chicken that we're offering as well. and we've long offered a whole chicken breast. >> how does your commodity cost look going forward if you're going to forecast it for the year? >> we feel pretty good about that. we think it's relatively low. we're thinking 2% commodity inflation. most of that's driven by the wheat we purchase which is a heartier grain. and it's great for the pasta that we make. >> thank you so much kevin. that was very fast but i know we've got a lot to cover here at icr and you have a presentation coming up. thank you. andrew, back to you. >> we're going to continue this conversation.

foodies can rejoice because "restaurant start-up" is back. the popular reality series kicking off its second season. it's doing it tonight right here on cnbc at 10:00 p.m. eastern time. you don't want to miss it. joining us now is the man behind the show. celebrity restaurateur and co-host joe bastianich. he's also the founder of bnb hospitality and my favorite restaurant where i was last night. >> thank you for being a customer. we appreciate it. >> tell us what happened last year and what you hope to accomplish this year. >> well i mean it's an incredible show where people come from all over with their entrepreneurial food and restaurant ideas. we screen them we pop them up. we see them operate then we make investments. >> which one have investments already? >> in the first season baby's burgers, tim made a deal with congee company. >> which ones are working and which ones aren't? >> baby's burger is continuing

to expand with more food trucks and regionally we're looking for brick and mortar. bonza pasta is on third round of financing. hundreds and thousands of chick pea pasta. so far they're working. >> and can you give us a tease of what we're about to see? >> so this season you know the contestants are more prepared. we know what we want the kind of investments we want to make. we're more seasoned. >> are you trying to look at fast casual kind of stuff? >> we'll look at anything. anything. quick service is a big one but anything from restaurants to coffee shops to wine bars. >> what's the one common ingredient that the successful places have to have? what catches your eye? >> profitability. like, we are able -- you know like there's a lot of restaurants and passionate people, a lot of talented cooks. the one thing sometimes missing in our industry is the ability to create margin. as i say the restaurant business without profit is a hobby.

>> i want to get your reaction to this. we had tom colicchio on the program last week. we were talking about shake shack. i want to show you something. >> are you surprised by the success of shake shack? would you buy into that ipo? >> i don't know. short maybe. i'm surprised that the numbers. >> in terms of how much this is being valued at. >> yeah. e spshl especially looking at the value. >> it's a funny thing. a lot of people asking us. so, you know shake shack is a hamburger concept. certainly the history of hamburger quick serve casual chains has been incredible in this country. of course there's an incredible valuation for a burger concept like shake shack. i don't know the exact number. there's a lot of interest there.

there's a lot of hype. >> so how many edile stores? >> 30 in the world. we just announced we are opening in freedom tower this year. and in boston l.a. and just announced a partnership that it will be in london. so seoul, korea, opening. there's 32 in the world right now. certainly the greatest quality food producing in the world. it has the greatest biocultural diversity of work. eatily is the marketing arm of italian food for the entire world. >> you have eatily which is a publicly traded company. do the high/low thing with other restaurants. how do you -- you know is there a point where it's just too

much? >> well, i moo enean, no. eatily is like italy in the world. and all of italy supports it in its efforts. it privately held company. hopefully publicly held in 2016. but it's really about exploiting the greatness. just think about between now and hopefully china, southeast asia all those things that we take for granted, think about the potential of italian food in this world that hasn't even been tapped yet. >> i want to go back to what you see in people. i realize that to be a great restauranteur, you have to have great business chef and also to really know food. if you find someone who is good at one but not the other, what is easier to teach? >> i think they're both specific skillsets. we say on the show food first. nothing happens without great

food. food. you have to have the food in hospitality. it's always food first. >> is there one hot food concept that you think is about to emerge that we don't know about in. >> i think that in new york, there is a pendulum swinging back to more luxury dining fine dining. i think the last ten years of hipster style restaurants, exposed wood rusted metal, is kind of over. and i think that me and mayor crow will be opening a new restaurant in manhattan with more into that like luxury. >> so we got to shave and put a tie on. >> put a tie on, shave, mario will take a vest. accept it up a notch. with you we are very excited about opening up a restaurant. it will be in the meat packing strict district. >> joe, thank you and congratulations. didn't forget tonight tune into

the broadcast that's at 10:00 eastern time. when we come back we'll head downtown to jim cramer. crude sitting at six year lows.

we'll head down to jim cramer. i had a couple things i was wondering what you now the about. all based on oil. market going up even though oil is still going down. but then i was thinking about google being down and some of the tech stocks showing some

weakness. and then i was thinking about tesla. really doesn't matter oil is $45 for the long view? i think it does matter. the gm competition will be big. terry lundgren said it really takes three fillups before it dawns on people. ten fillups and you start thinking why did i need to go electric. and i thought terry made a series of points that were really good. sandisk controls technology. we all love flash. that was the stock that really drove everything down. i know google has gotten a total dog house. i saw e-com channel advisory saying you don't really need us. people use google. i would not be a seller but i have to admit there is a funk. >> i wonder if that means anything. they were leaders, were they not? >> yeah, but we have to see what intel says. they can change everybody's mind. but micron last week says flash

not that good. we got a lot of good commentary about apple. so it's just kind of like not great is the way i look at it. it's day to day, too. if intel report as good number maybe sandisk was an outlier. could tiffany be an outlier versus may sis's.cy's. >> january is a great month. and then we got football and everything. super bowl. anyway thanks, jim. see you you in a couple minutes. up next water, water everywhere. we have the details after the break. "squawk box" live from new york is coming back.

can't say thank you enough. you have made my life special by being apart of it. (everyone) cheers! glad you made it buddy. thanks for inviting me. thanks again my friends. for everything for all your help. through all life's milestones our trusted advisors are with you every step of the way. congratulations! thanks for helping me plan for my retirement.

you should come celebrate with us. i'd be honored. plan for your goals with advisors you know and trust. so you can celebrate today and feel confident about tomorrow. chase. so you can. check it out. in tulsa arguesactualtulsa, a water main break like no other. enough portion to bring down the awning over a gas station. luckily no one was injured. >> luckily we're out of here too. make sure you join us tomorrow. right now it's time for "squawk on the street". ♪

congratulations to the ohio state become eyes. urban meyer. on their national championship last night. what a game last night. i'm carl quintanilla with jim cramer david faber. got some between numbers. csx reports tonight. oil crummy as usual.