>> live from new york where business never sleeps, this is squawk box. >> good morning, everyone and welcome to squawk box on cnbc. breaking news, turkey shoots down a russian war plane with the border with syria. the fighter jets fired after the russian plane violated their air space. russia confirmed the war plane went down but it said it was shot down by ground fire. a state run newspaper reports the kremlin maintains it was flying above syrian territory and not above turkey. here at home the u.s. state department is warning a risk to americans traveling abroad. the travel alert issued because of increased terror threats overseas. terrorist groups like isis, al

qaeda and boko haram are planning attacks in multiple regions. it advises them to avoid crowds and be vigilant in public places, particularly around the holidays. more on those stories in just a bit. let's get a check on the markets as well. the markets ended lower. dow futures are down. they're down by 10. >> a second lead on third quarter gdp or third read on second quarter gdp? that's the question. >> second read on third quarter. >> second read on third quarter. >> >> you could look at it again. >> the number is expected to be revised higher at 9:00.

the s&p case-shiller home price index is out later and then consumer confidence if there was any. in earnings news the consumer is front and center. among the companies set to post quarterly results before the bell, tiffany, campbell soup, dollar tree, chicos, cracker barrel and hormel foods and spanning the global, we'll have hormel in studio and apparently he's bringing gifts and is there any better gift than some spam. spam and eggs. in other corporate news this morning the wall street journal reports that apple plans to launch apple pay in china by early february. the tech giant is said to have made deal with china's big four state run banks but there's still regulatory hurdle. apple pay will directly compete with ali pay. now back to the breaking news of the morning, turkey shooting down a russian war plane at the

border with syria. we're joined with the latest. confusing to me. both pilots ejected safely and trying to avoid capture by -- who is trying to capture them? turkey wants to capture russian guys? bizarre. >> well, the question of course is over some of the rebel forces in the area. >> there's differing accounts on what happened. turkey con if i recalled it shot down a war plane this morning. turkey claims it violated turkish air space ignoring repeated earnings according to the armed forces and that it's f-16s fired on the russian plane but the defense ministry said the plane was over the syrian territory throughout the flight and was hit by ground fire more recently a spokesman said it would be wrong to make any assessments and assumptions now until they have the full

picture. dramatic footage shows the plane going down in flames in a wooded area and a pilot parachuting down. so far no updates on the status of anyone that was in the plane but russian helicopters have been seen searching for the pilots. russia is an ally of syrian president assad and running bombing raids targeting isis and rebel fighters. this comes as president obama prepares to host french president holland at the white house where they're expected to discuss efforts to defeat isis and part of that discussion, russia's role in the fight. joe. >> i think part of the confusion, joe, if i'm correct is that there's turk men in northern syria that turkey feels very protective of and some of these are the rebels that the russians have been bombing and targeting, correct? >> that's part of the tension in the area. it's a lot of forces with

different opinions. that's what makes this so complex. the battle with isis on the border and it's probably why-concern over the pilots. what's happened to them as we wait for an update to see if they have been safely rescued. >> and part of the news today, putin in iran. the alliance between those two countries which wasn't that great before now it's going to be great as they both combine to try to prop up assad which we don't know whether to back him or not against isis. it's enemy of my enemy is my enemy or -- it's really hard. you need -- we need a diagram. will you do that for next time? >> we'll work on that. there's going to be a lot of discussion this week. president hollande not just meeting with obama but meeting with germany and italy and putin later this week as they try to form this international coalition to battle isis. >> okay. all right. thank you, appreciate it. >> in the meantime, one of europe's largest cities remains on lock down as a man hunt

continues for a key suspect in the paris attacks. julia joins us live from brussels this morning. julia. >> good morning, becky, you're right. the city of brussels remains at the highest level of security alert this morning. clearly this threat of an imminent terrorist attack, a copy cat of what we saw in paris remains very much front and center for the authorities here but the other thing is they clearly want to bring the city back to some level of normality. so the lock down that we have seen on the subways, that's going to start unwinding from tomorrow, even if it's in a staggered basis but that doesn't mean the police work is pulling back. we have seen one in connection with the paris attacks and as you mentioned the manhunt from the suspect continues. still believed to be here in belgium. now of course belgium remains at this high alert stage, europe also more vigilant. we have seen the u.s. too follow through this morning. the state department as you mentioned issuing this worldwide

travel alert for u.s. citizens. they say it's not about a specific threat. they just want a heightened risk awareness and i think clearly ahead of the thanksgiving holiday on thursday a great sense of awareness makes sense here. but it's hit european airline stocks this morning so ahead of the u.s. trading session today the u.s. airline stocks clearly ones to watch. guys, back to you. >> thank you very much. again, we were just talking about this. the idea that they want you, the u.s. authorities are telling you feel free you're going shopping. macy's day parade. feel free in sometimes square. none are actual threats. but if you step outside of the united states don't go to a shopping center or train station. >> that's not in response to specific threats. it's more in response to its happened in the last month. wouldn't you do that if you were a government official. >> i guess so.

>> and i don't know whether it's -- do we still have the -- what happened? >> i don't know. the light just went out. do we still have the colors? are there different grades of red, orange? >> i don't know. >> because we have done this, president balm has done this -- it isn't the first travel alert. >> but watching the headlines obviously, many people were looking at their travel plans and deciding whether they want to travel or not. >> should be good domestically for like places like universal studios and new harry potter. >> all right. we should also get back to business news and tell you about high profile activists in the news this morning. carl icahn announcing a 7.1% stake in xerox. the investor plans to discuss operational and strategic alternatives with management. the investment makes xero

xerox icahn's -- i take that back, icahn is now the second largest shareholder in xerox. >> okay. because there aren't that many left. >> that's an interesting play. i never know what icahn is -- >> yeah. >> but it was a nifty 50. she has been trying to bring it back into some type of relevance although, more services, back office services, i don't know how successful it's going to be with all of the competition, all the new age competition. i don't know. i would do, you know -- i don't know how it works but i would do 3-d printers. i'd do kidneys. i'd make kidneys. i'd make cars. and you know how i'd do the 3-d printer? i'd use the cloud. >> you know enough. >> i know enough to where that would be my strategy.

that would be my strategy for yahoo! too. they're having some problems. >> they are. she is struggling with this. >> everybody is leaving. they lost like a dozen of the senior managers that don't know if it's going to work. >> i was surprised they didn't have contracts to begin with. she wanted them to sign a three year contract and some of them walked out. >> don't you think they should do more with the choud. >> yes. sure. >> do you guys use the cloud? a lot of your analysis is cloud derived? is it scalable? >> the cloud. going forward. >> you know all the terms. >> i do. you should see me at a cocktail party. people are gathering around. >> let's tell you about another activist investor, bill ackman is doubling down on his investment in valeant. boosting the stake in the company to 9.9% from 5.7%.

shares of the canadian pharmaceutical company have dropped about 60% in the last three months. >> other stocks to watch today, the latest results beating on the top and the bottom line. not 2 cents above but the computer network hardware and software company issued some weak guidance. as a result stocks down about 9% and shares of palo alto networks on the move after results beat analyst earnings and revenue projections. the company also boosted it's outlook for the current quarter. coming up at 8:30 eastern we'll have the company's ceo that will join us here in studio. and then barrick gold is lowering it's gold output forecast. they claim a mechanical problem at its jointly owned mine in the dominican republic. the rival owns the other part. >> let's talk about the markets. we showed you that it is looking

like the u. s. stock market futures will open lower. down about 80 points for the dow. check out the early trading in europe and you'll see at this hour declines are 1% or greater. dax is down by 1%. cac in france is down by 1.6% and in italy down by 1.3%. in asia, overnight, you saw some declines at least for the hang seng. it was down by a third of a point. shanghai composite closed higher as did the nikkei in japan. oil prices rose after them and ended down by 0.4%. you can see it's up by 31 cents this morning to above $42. wti trading at 4206. in the bond market you'll see that the yield at this point is 2.225% for the ten year note. take a look at what's been happening in the currency

markets. the dollar index rose above 100 for the first time since march. this morning dollar is down. euro is at 106.56 and the yen is at 12251. gold prices up by about $7. $1,073.90 an ounce. >> multiyear low though. >> it is. >> before it went up. >> in global market news this morning, the chinese premiere says that china is on track to hit it's growth target of about 7% this year. those comments came during a summit with central and european countries. germany's economy is growing at a modest pace. among the drivers an increase in private consumption and more state spending on refugees. >> fed chair janet yellen calling for a cautious approach to the pace of interest rate hikes so you made the comments in a letter to consumer advocate ralph nader. she writes an overly aggressive increase in rates would undercut

the economic expansion necessity a lasting return to low interest rates. she was responding to an open letter from nader which asked her to consider the impact of low rates on what he calls humble savers. a point that we have made again and again and again. but, after december, they can look forward to. >> .25%. >> is it $2.50. is that what it is? invest a thousand? you get 1,250. >> i never thought we would agree with ralph nader. on anything. >> i know. i didn't think that either but in this case -- i thought he was, you know, he's so far left that he's coming -- he's almost now made it -- time space, it curved back on itself finally. >> i read the letter and i said wow. >> they figure nothing is ever going to happen. you can get free money no matter how you do it.

doesn't matter which government agency. >> no. >> exactly. exactly. >> well, the s&p may be coming off the best week of the year but the recent rally has a group of disbelievers. new at a at a shows that corporate insiders have been dumping shares at a average pace. that selling averaged $450 million a day since november. that's the highest level since may 2011 but company buy backs hit more than $96 billion this month. that's the most since 2009. let's bring in the global chief investment strategist at city private bank. he's the chief market analyst at the lindsey group and also a cnbc contributor. if we're seeing insiders sell at the highest pace in years but we're also seeing share buy backs come at the fastest pace in years, who is right on this? who tends to be in the right position? >> may of 2011 wasn't exactly a market top. this was a period where it continued and i think that, you know, this pace of buy backs, obviously, it's coming at a higher level in markets.

it's coming at higher risk for companies buying back now deeper into a rally but none of this stuff is going to tell us that the economy globally is going to start collapsing and that we're going to see big declines in share prices. it's a totally different issue. >> but you're seeing insiders selling and you have plenty of people out there that think maybe we're a little nervous about prices at these levels. where do you come down on that? >> i don't blame the executives. we're 7th in a bull market. it's the third longest of all time. >> what would you do with your money? >> i'd be very diversified. it's hard to find value. so if you're willing to ride through some turbulence over the next couple of years but if you want to play more conservative and defensive then i think it's a proven thing because it gives you optionalty to buy things in what i think would be cheaper over the next year or two. >> do you agree with that? >> think about what you said

about interest rates. the five year note in the united states treasury yield is above the global ten career yield now so pretty amazing that we're finding value in the u. s. market. the u.s. bond market particularly at the long end of the curve in municipal debt is a long opportunity. because the world has even worse fixed income opportunities than the united states very clearly. so we made some moves up there but continue to like equities to a certain lesser extent. >> but maybe you hold on to cash thinking you could see a 5% discount, 8% discount, 10% discount. there's people on the sidelines thinking there's more volatility here. we saw a 10% decline and it could happen again. >> we were very happy to run down cash because we thought there was a false signal. a worry about a repeated financial crisis and global collapse and went back up to neutral now looking for opportunities if markets do decline. >> the new structure for ceo

compensation since it's not cash a lot of it is based on share performance. run your stock up to where you have a nice profit in the stock for the buy backs and then take profits for yourself and whether that means we're near the top, ceos have never been better than anybody else. they excel too soon and buy to early. i don't know if any of it is really -- the zero percent interest rates are why they're certain. >> you can magically turn flat net become to 2 to 4% eps. >> 14 declining quarters of revenue growth to keep your earnings going. >> a lot of them get paid on the eps. >> that's a good point. >> you get paid on eps. >> so yeah, this share will probably end the most amount of buy backs since '07. >> but it's a quarter of the companies reducing share count 4%. there's a lot of companies out there not doing that. we have a 2% dividend yield. a lot of the companies are on auto pilot doing that. >> beat him in a way he done

turn tabs he's looking at supply and demand and you're reducing the supply that other people buy but when you're selling as a corporate insider you're off selling the shrinkage of, you know, the buy backs. so that's a negative signal. i don't know. >> it's never a timing mechanism. >> i don't think, you know, reading mark grant's stuff is what gets me. that's living in your little guilded cage. you think you have an ocean between you and problems. just know that you're not safe and there's going to be an event, just how serious it is for the markets is questionable but there will be -- >> yeah. >> but there will eventually be something. how many isis guys are here now? 900? they can't get an ak 47? >> with all of these stock buy backs the new york stock eck change index which is 3,000 plus companies is back to where it was in december 2013. so. >> what surprises me though too.

>> every day we talk about stocks that are down, 22% this year, 40% this year, there's an amazing number of well-known household brands that are hit pretty hard. does that scream to you that this is an opportunity or is there a reason that the stocks are down that way. >> there's a tremendous men t s rotation. there's been massive differences beneath the surface and it's deep into a bull market. this is a mature end bull market. and it's one sector in energy and this obviously is where it has to go in-tur terms of earni improvements there's other places in the world where the recovery is earlier. in the euro zone earnings are 25% below where they're about 20% above in the u.s. but we have to have growth in the u.s. for this to work at all globally. >> i want to thank you for coming in. it's good to see you both. >> good to see you.

>> coming up we'll talk about the big bets by carl icahn and bill ackman. plus how one former star is beating almost all of his peers with returns of nearly 40% this year. first as we head to break, here's a look back at this date in history.

>> can you explain icahn? he didn't know what to do with motorola. >> these tech companies plays are tough. >> what's his idea for xerox? >> let's walk through it but as an initial idea it's a storied brand. we were talking about this in the control room. a assume he thinks it's maybe similar to buffet with ibm. >> so there's brand value. it's a $12 million company. >> they need to make operational changes? >> he juans to make operational chang changes. but some are still going strong with it. carl icahn has taken a 7.1%

state in xerox. it has fallen 22% this year and he said he may seek board and operating changes. the company is ware of his ownership and it's up 5% in premarket trading. meanwhile, bill ackman, i want to say doubled down but actually tripled down in valeant raising his ownership to 9.9%. >> but that 5.7 was already where he doubled down. >> exactly. he bought another 2 million in october. now these stock an options purchases occurred as recently as yesterday. overall valeant helped push his fund down 25% this year so it's been a big dog for him the last month or two. so far this year, other icahn bets haven't panned out as per what joe was questioning where as longer term holdings are doing pretty well. ackman has been hurt by his

short on the other side but is doing well with mondelez which is one of his biggest investments. this year's best performer is a consum consumer oriented investor. gabe. they're up 40% year to date. >> because of what? >> he own amazon. it's up 118% this year. expedia has done great for them. they have a couple of holdings up close to 50%. >> did he start this company? >> he started it last year. he got money. >> he named it melvin capital. >> after his grandfather. >> see i'm questioning his -- that's nice i guess. i wouldn't invest with them. someone had all the names in the world to pick and picked melvin. >> when you talk to hedge funds that start up their own companies they'll tell you it's hard to find an url, domain

name. >> good name for a puppy. >> initials and like environmental sites have all them taken. >> he is mad probably. >> probably. >> but i don't know what's going on with these guys making these old school -- >> i don't know. >> there were times when he has been to me. but probably melvin. you are just wondering -- it's too early -- >> no i'm just not sure what to focus on whether sits brand names or the hedge fund business it's had a terrible year. >> it's probably also stock picking. it's down 22% so maybe you get in. shake some things around and reengineer a couple of situations. >> the reason that i would view it a little bit cynically, these guys have so much money. everybody tries to pick stocks. i mean, i was a stockbroker.

everybody has ideas. let's buy some zeros and it's an idea i have. i don't think they have much of a better idea than the man on the street but they immediately get all of this publicity because they have enough money to buy it where it actual believes the needle on the ownership. they get above 5% or whatever. suddenly people think oh, i'm going to get in too and the stock goes up. naturally you get a 5% bump. >> that's true but it doesn't explain also why, for example, icahn continues loading up on this this natural gas. he has bought like three, four, or five of it. he was going to go active and reached a stand still with the company earlier this year. he keeps buying it. >> rebounding energy prices. >> they're going to start exporting thisly natural gas. a lot of people think it's a

growth area. we have an abundance of natural gas here that's dirt cheap. sells for much more than asia and europe. >> you can say that with valeant to. now people will say if you believe in a stock and the market doesn't like it stick with your convictions but make sure you know your research. >> if you have money a lot of times it's easier to make money if you had money. >> leverage or just moving the market. >> through people seeing and it's just easier and then you become an activist. i want to do something with the board. i have no idea what to do with xerox. i'm going to change the operation. i can do down 25%. i think i'm good for at a probably. >> the other -- >> i could beat that i think. couldn't you? if i had all of that. >> i could beat down 25 -- >> the average hedge fund is at 0. so it's not a bad benchmark to

try to go after. >> there you go. your smarter than ackman. >> i don't know about that. >> well, ackman was up 40% last year. this year he's down 25. it's amazing. in a way give him credit for having the conviction on valeant. >> that's the thing. >> if you have conviction on this stuff people say buy it and stick with it. so we'll see. >> i was trying to remember -- i probably listened to six hours of bill ackman in the last six weeks on this stock. i can't remember if he said we're not going to spend any more capital on this name. if he did east going back on it. he was buying as recently as yesterday if you look at the exhibits. >> you don't buy the hong kong dollar. >> no. me. >> i saw 400 slides. >> i have like, you know, an index fund and bond fund. nothing too exciting. >> kate, thank you very much. >> thank you. >> now to washington news french president hollande will be meeting with president obama today. john harwood joins under the

circumstances with the details. >> good morning. the french president in the wake of the terrorist attacks trying to accelerate the campaign against isis. he meets with president obama today who has said that he will intensify his current strategy but has not indicated any fundamental change in that strategy and the remarks yesterday of the white house press secretary that noted that the french actions, military strikes against isis have been facilitated by what the united states is already doing. gave no signal that anything was about to change imminently. >> this is a time when the french people are grieving and knowing that they can count on the most powerful country in the world to have their back as they determine what is necessary to strengthen homeland security in their own country but also to take the fight to isil. i think that will be a source of significant comfort to the french people. >> domestically, president obama is going to be closely watched

for whether he displays a greater sense of urgency about the fight. he got a lot of criticism for appearing mass passive on his overseas trip elsewhere. we have seen the risk in the last few hours on both sides of this. we also had the attacks in mali. brussels is on lock down. we also saw a few hours ago the shoot down of a russian military yet by a turkish military yet underscoring the risks of if you have a deeper footprint in the area create a safe zone that people like hillary clinton and marco rubio called for you do have the potential for a hot conflict with russia. that's something that president obama has on his mind and of course he meet with vladimir putin later in the week. >> when sticking with t i got it here, i got it under control. not changing my strategy. you'll see that i'll be right in

the long-term, it's mostly republicans but there are some democrats criticizing to stick with that strategy and then you wonder if there is, god forbid if something else happens and democrats aren't going to stick by him. he's a short-termer. he has a year left. they think that -- all of these guys are the same. if they think they can get political points for criticizing him they will. >> he's already getting criticism. you have hillary clinton advocating a more aggressive posture. some of his advisors have been saying we have to do more and do it more you are scently. not a fundamental change in approa approach. but the strategy the president is pursuing they're arguing needs to be done more aggressively. >> why be so stubborn? you have gates and generals and people in his own party.

what is it? he's never wrong? ever. >> well, he doesn't like to be pushed and secondly i believe he believes he has the right strategy. now, you know, the larger question, if you step outside of president obama is to wonder whether or not his instinct against intervention, which is something he talked about a lot during the 2008 campaign which that placed too great a constraint on him in his own mind that prevented him from acting aggressively. that's what he has to reflect on but this is a president that has a lot of confidence in his ability and we haven't seen signs that he himself is thinking, yes, i underestimated. yes i leaned too far in the other direction and, you know, we'll see whether that changes today. >> yeah. knock me down with a feather if

that happens. anyway, thank you. coming up state department issues a worldwide travel alert just days before the thanksgiving holiday. we'll talk to a top security consultant when squawk box comes right back. 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.

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welcome back, everyone. the state department issuing a travel warning for u.s. citizens due to increased terrorist threats around the globe. the travel alert will be in effect until february 4th of next year. michael is a security consultant and former new york state senator that wrote the homeland security laws for his state. thank you for being here today and when we hear this warning we wonder if there's specific threats for this, what people should do, its a little confusing. >> and understandably so. there are two elements to this type of a warning. the first is so what are the areas that you should avoid. the state department has always done that traditionally. hot zones in the world. try to stay away from places with with civil unrest and things like that.

now it's a little bit more specific. they have information that isis is going to target americans. the implication here. they don't tell you specifically what countries they're going to try to attack because it's a global network but practically speaking when you travel regardless of what the threat is out there, you should always be aware of where you are. avoiding big crowds, well, okay. it's a part of your own awareness as you travel through any other foreign country. >> not just foreign countries. >> exactly correct. so it is a little pit bizarre. they mention boko harang gem an don't know any attacks out side of nigeria. it's a little puzzling to me. >> it's difficult if you're at home watching the news coverage and seeing the coverage of the attacks in mali and france and libya it makes people think that the world is a more dangerous place than a few years ago.

>> that's all this is. it's in response to previous attacks and not any knowledge of any upcoming attacks. >> that's one of the things you can actually take a look at this. intelligence doesn't work like that where they say stand on the street corner because this is where the attack is going to be. it never works like that. so the phrase in an abundance of caution we'll issue these alerts in case something does happen like that. it's so non-specific you have to question the value out there. >> sure. >> and the other thing is when we have these types of attacks it is -- you can sit back and say is it smart? it's the beginning of a campaign but remember what the point of the whole campaign is. it's to terrorize and instill fear and that's why they're attacking in different places and attacking different modes of transportation in the city but they have given us this video about new york city itself. that to me says they don't have the capability. otherwise they would have come.

>> they would have done it themselves. >> instead of putting out a call saying someone should do this. >> in all the cases i reviewed over my career there's never a time where they forecast it we're going to attack this city in this time period. that hasn't happened. why go when everybody is watching. >> exactly. >> what i wish i knew is what the authorities in brussels knew. because do they know more than the guys from there? is he still on the loose? how old is that guy? 20 years old hiding in a boat scared to death and the entire city is shutdown because the one guy that was involved with that. >> the problem with brussels is there's a suburban kmcommunity outside of brussels that has a large immigrant population and has always been the focal point of its intelligence focus.

the problem of course is that they keep seeing more activity. charged with terrorism activities but then they find the suicide vest. but there's a lot of things happening there and the question is are there other people out there who are waiting for an opportunity to come in because there is great advantage to say, we're still going to hit you. >> it's saying being on the look out. i guess we'll see where things stand but for people sitting at home today just wondering what to do, what would you advise them? >> global alert for three months to me doesn't make sense to me that you would have -- seems like you wouldn't want to evaluate that. i think that this is a -- if

you're going to be traveling maybe take an extra step and try to decide what's going on in the country. know where you're going. just plan a little bit better but i would not stop. i would go personally to paris now. a lot of my friends in the city itself say it's slowly getting back to normal. i think it's very important to not let the bad guys win. not let somebody across the world tell us be afraid. >> michael thank you for coming in today. >> appreciate it. >> coming up why it might be paying too much for your mortgage. i'm not going to do this next part. i'm going to say this to you. if you own the shares of this one luxury goods maker, you're going to wish you didn't. that's what i'm going to tell you. >> what just happened? make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care,

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there's tiffany. that is not a current trade that you're looking at now. i have a bid of 68 and an ask of 72. that's not a trade there that you're looking at as far as i can tell anyway because the ask is 72. 52 week low is 73, and, actually, it's not been down below the levels in a couple year, since i think around 2013 is where the stock could trade

today. revenue, same store sales, earnings per share all below expectations. the company earned 70 cents, estimate for 75 cents, and them the revenue number was the 938 million and the estimate was for 971. analysts for the year already dropped their number to $4.04 even though the company's previous guidance was 4.20. the street was below that, and now the company is saying it's going to be 5-10% below the 4.20. if it's below the 4.20, then that would be -- yeah, if it was 10% below, then that would be, you know, well below 4, like 3.80, right? 5% gets it to where the street is now. the company said volatile

uncertain economic and market conditions are affecting consumer spending even of rich people, theoretically. this is a luxury goods maker. we talk about the market and the 1% doing well. in this case, you can see it was 110, now at a multiyear low. the company said that the strong dollar also impacted the. >> used to be big for the flag ship sales, stores here in new york city, big influgs of tourists who bought a lot >> right. >> so already the -- it's now 68-73.50, so we'll see whether it recovers at all. a lot of this, you know, depends on christmas. >> right. >> obviously. the company earns 75 cents in third quarter and doubles in the fourth. it's still possible they could have a good christmas,

depending. >> we should talk about home prices. they are still rising at a fast pace as well as traditional mortgages. is a traditional mortgage the best bet for home buyers saving money? why a 30-year is not always the best financial plan. good morning. >> good morning, becky. home prices are the highest in a decade, and now we're facing the prospect of rising mortgage rates, making housing less affordable, but it does not necessarily have to be because all mortgages are not alike, and a lot of us choose the wrong one. just 6% of mortgage applications today for adjustable rate loans compare to 35% in 2005 before the height of the housing boom. this as the average rate is 3.2% compare to 4% on a 30-year fixed. now granted, there is risk to an arm that adjusts, but how mobile we are today, you have to ask yourself if a ten year arm is not going to save you a lot of

money on that monthly payment. the issue is most consumers today are hype risk averse. >> i think it's just fear and the nightmare. i mean, you remember the exploding sub prime adjustable rate mortgage, just in mind a few years ago. it takes awhile for people to get over their fear and buy into the idea that, you know, an arm might be a good deal for them. >> now, today's arms are nothing like the sub prime interest only negative, i could go on and on. you have to have skin in the game and pay principle. back to you guys. >> okay. thank you. >> i'm not afraid. i'm not afraid. you can pay it off, can't you, if you have to? >> a 30 year, fixed at low rates -- the bank is like giving it to you. >> tell her, cheaper to do an arm. >> so much cheaper to do an arm. i was one of the people who was afraid to do it. i was afraid. i was in the 30 year fix the,

and i switched over. >> who lives in the house 30 years. >> if you plan on living someplace for 30 years. >> 2%, becky, 2% will be in their house 30 years. >> i have no plans to go anywhere, though. if you are planning on staying there 30 years, better to have a fixed? >> maybe. we're serial refinancers. what if you refinance. >> below where they are today, though? >> well, today's very, very rare, but say we go up, we go down ten years from now. it's possible again. all are cyclical. >> per month on let's say -- i don't know, on a big mortgage, how much can you save by doing the arm? it's a significant element. >> i cut my payment in half. >> half? wow? >> wow pay it off, right, there's no penalty. >> you're paying principle. >> if i'm not planning on moving, i feel like i get a deal from the bank. >> you're not listening. you're risk averse.

you shouldn't be. >> i feel like i got a great deal. thank you. when we come back, we welcome our guest host, waste management ceo david steiner. stay tuned, everyone. the challenges of keeping everyone working together can quickly become the only thing you think about. that's where at&t can help. at&t has the tools and the network you need, to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most.

breaking this morning, a war plane shot down. warning americans to travel abroad be extra vigilant raising a red flag on the threat of more terrorist attacks. meeting of allies, president obama hosting the french counterpart hollande at the white house today, agenda, fighting terror. 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," everyone. this is cnbc, first in business worldwide. i'm becky quick with joe, and andrew is off today. our guest host today is david steiner, and, david, great to see you. >> great to be you. >> in the meantime, we have to look at the u.s. equity futures under pressure today, and you can see right now, the dow futures are down by 71 points below fair value. s&p futures down ten, and nasdaq off by 20 points. we've got a roundup of the business stories in a moment, but first, breaking news from overseas this morning. turkey shooting down a russian war plane near the border with syria. nbc's joe friar from london has the latest. joe? >> reporter: conflicting accounts over what happened. turkey confirm it shot down a russian war plane near the syria border this morning, and turkey claims the plane violated

turkish air space ignoring ten warnings in five minutes according to the turkish armed forces, and its f-16s fired on the russian plane, but russian's defense ministry says the plane was flying only within the borders of syria territory, citing objective monitoring data. russia is looking into the circumstances of the crash. a kremlin spokesman says it's wrong to make assessments and assumptions now until they have the full picture. this shows a plane going down in flames in a wooded area and a pilot parachuting down. russian helicopters seen searching for pilots, but so far their status is unclear. nato says its monitoring the situation closely, and a meeting is expected on this later today. russia is an ally of syria president assad running bombing raids targeting isis and rebel fiegers. this comes as president obama prepares today to host the

french president hollander at te white house and part of the discussion is russia's role in the fight. back to you. >> all right, joe. thank you. good to see you again. corporate headlines today, the wall street journal reports apple plans to launch apple pay in china by early february. the tech giant said they made deals with the big banks. there's four of them, state run banks in china, but there's regulatory hurdles. apple pay competes directly now with the alibaba service, called ali pay. hormel five cents above estimates. sales impacted by declining pork markets and the avian flu outbreak but adds, look at the chart, spamming the globe, spamming the globe, spam eggs and ham. profit above current analysts'

estimates. hormel's president is joining us this hour, steiner, bringing stuff, gifts. >> i never bring you spam or a gift. i'll bring you garbage next time. >> thank you, thank you. just having you here is enough garbage. no. he's going to be here. you're going to be here. you're going to be -- the benefits of booking who hormel. >> we can be the background singers. ♪ spam spam spam >> you can. your stock, you've done it. you did it. recycling is awful. you got out of the stuff. management is working. you're at a new high >> we're not outle it. we'll always be the largest recycler, but we learned how to manage it. learned how to manage -- >> waste energy, got rid of the waste energy stuff. >> we did. >> tf not working at these prices. you got criticism for that. you were right, stock back at a new high. in the terrible market. not terrible, but for commodity type. >> yeah. looking that's only about 8% of

the business, and so we've been able to manage, but i don't want to be hurt by recycling. i don't need to be helped, one day we will, but for now, i don't want to get hurt. three years, we were hurt. >> why better? the economy's better? more garbage? >> you know, looking at our recovery from the great recession, we are not back at the volumes we were at pre pre-recession. that was driven by housing. they build a house, we get a 00 c 500 cans and commercial businesses around it. once subdivisions spring up in the country, which you are seeing now in the west coast and south and in florida. once subdivisions are built, we get a big volume booth from that, and i like to say, right now, when we see good housing starts in the last few years, now is our time. >> how would you compare this? >> that's a great question. i keep saying we're coming into the phase where we were --

>> 2005-2006. >> exactly. >> you know, we're starting to see that happen. you know, the economy slows for us, we shouldn't see the effect for six to nine months, and so, again, we're in a good spot. we're not seeing tremendous growth, but we don't need to see tremendous growth. we have such a large infrastructure, large fixed costs that when we layer volume on to the heavy fix cost structure, that's the bottom line. >> you're not a fans cy pants c. people want their garbage picked up. >> that's all they want. >> try living with workers on strike and nobody empties the dumpster. you'll pay too have that emptied. i will. i said it before, after your doctor, garbage man, number two, maybe lawyer. lawyer might be number three. >> remember them at christmas, put that tip out for the garbage guys. absolutely. going from that to tiffany. tiffany, the little blue bags, not many around.

strong dollar impacting latest results. see where it is now. see, i told ya, below 72. >> yep. >> down 6%. yeah, the 1% and the economy and, you know, the rich are doing well, everyone -- >> it is my fault. >> 5 cents below estimates. revenue well below forecast. comparable store sales up 1% compared to app estimate of 3%. it's full year profit, 5-10% below it's previous guidance, i think. i didn't see it below last year. did it say below last year? below the previous guidance. >> looking up quickly, it was last year. >> last year too. i saw -- >> looking it up quickly. >> i also saw below previous guidance level. lower -- earnings 5-10% below previous earnings per share of $4.20, so what they earned last

year. >> 4.20 was last year. they're in a weird fiscal collar. >> oh, okay. >> below -- >> why -- previous earnings per share. looking for flat results them? >> looking for 4.04. street was. >> street was, but i don't know that the company's guidance was 4.20. >> okay. they were looking for flat. >> flat. >> same as last year. >> okay. >> they just didn't say strong dollar, but said that uncertain economic and market conditions and volatile market economic conditions. >> tiffany's is a stock pushing lower in too, pushing in the middle classes with things. all kinds of items. look, even kids who are middle school kids were looking for some of the tiffany items too. part of it may by they pushed into lower price points, and that may hurt them too. >> this is elastic.

steiner, waste management is inelastic. you will pay the garbage man. >> leave a blue box for the garbage man as a tip at the holidays, they'll appreciate it. no one wants to see it not being picked up. they do not get the credit of being the backbone of america. >> you don't pay the bill, and then my dad's in waste management, then you -- right -- i bring that up with you. >> well, we don't want to talk about what happens if you don't pay the bill. >> all right, fine. i pay my bill. >> turning back to the economy, bank of england governor telling parliament this morning that rates remain low for sometime. is the u.s. about to go with a loan in hiking rates, or are others jump on the rate hike wagon? steve is here with the fed effect on global rates. >> yeah. this has an impact on the story you talked about with tiffany and effect on the dollar and global concerns. if we do end up going it alone, it's not the first time. look at the past rate hikes and

cut cycles. we show sometimes they act together, and sometimes not. the fed cut rates in january 2001. you see there, five months before the newly born european central bank, the fed hiked in june, 2004, the last time it raised rates, en18 months before the ecb would get in on the act. even japan hiked, although briefly. you stlee, that green line at the bottom of the screen. the fed cut in september 2007, 11 months before the ecb. looking at another group of central banks, u.k. more in lock step with the fed on the way down to 0. china cut as well. now china's going the other way easing, but there's a major question about the u.k. here. thinking they would go along with the u.s., but now economists not so sure. we put together a map. here's a list from a variety of sources including a reuters poll and our reporting talking to economists all day yesterday of those who could, could follow the u.s. if the fed would go in december as expected.

the u.s. goes, mexico likely as well, saudi arabia, chile, peru, colombia, some think april or may if the country goes in december. they move because the currency is pegged to the dollar or fear deappreciation or capital flight or inflation from rising import prices. here's the other side, a map of those who could be easing in a year, russia, europe, of course, maybe as soon as next week isas, australia, south africa raised rates this week as preemptive strike. look, countries are prepared, countries that are not. those who got the budget defi t deficits in order, don't have debts in foreign currencies, those are the ones best positioned for us. south africa's hike was preemptive. there was going to be move the, but in general, the u.s., when

it comes to the big three, four central banks is going to be on its own, and so guys like carl wineberg say, you know what? this is the number one call, a strong dollar and my number one concern, a strong dollar. it's something to watch. >> stay here, steve. let's continue the conversation. rebecca patterson here, chief investme menment officer, and, rebecca, you talked about the strong dollar for over a year at this point. something you've been watching for. what happens when we actually see the central bank start to move? >> well, maybe good news for u.s. manufacturers and exporters looking into the year ahead. we're still positioned for a strong dollar. we've been hedging the last couple years in portfolios, but at this point, we had a nice run up in the dollar. the dollar's no longer very undervalued, so now it's trading around historic averages, which is good news. it means from here, further dollar strength might come more

slowly. i think to steve's point, while maybe not all of the rate differentials are priced in, a lot is. the ecb, the european central bank doing nmore easing in december is a fully consensus call. a lot of what we saw on the map is discounted in the market, and markets react to surprises. if it's priced in, we get move on the back of it, but not a big move. for the dollar to repeat in 2014-15, a 23% rise in the trade way to the dollar in nine months, which is extraordinary, i do not think that's happening again. so if the dollar goes 3-5% in the 12 months in a trade weighted basis, a slower pace, yeah, it's a head wind for exporters and manufacturers, but that's already discounted in consensus views for the u.s. economy that exports are a drag. the dollar keeps going up. you want to position for it, but the degree of the head wind is substantially less than what

we've had over the last year. >> although, when you start looking at stories that were not as obvious, i think of macy's, tiffany's, as companies really impacted by the stronger dollar because you don't have the same tourists who are coming here and buying things like they used to be. i mean, that's kind of just, like, a juice that's gone for good looking at stronger dollar from here on out. new york city is not america. i'm careful to not extrapolate from what i see working in rockefeller center. >> macy's ceo told us specifically it's people not visiting flag ship stores here. here, san francisco. >> yeah. i mean, when you look at the retailer news we had out over the last two weeks, be careful thinking that it's all the dollar or it's all consumers because there's, i mean, you got -- i think a structural change in how people shop. you have done a great job talking about it on air the last year or so, and so i think you do have to be careful not to read too much in. there's news on retail that was good, so it's been a mixed bag, and the amazon sales, clearly,

rise by double digit percent year on year basis. the dollar is hurting. >> is it too early right now to start playing the next part of the chart that i talked about? the fed moves first. it's six months or a year later. it never happens that the other central banks go the other way. >> i totally agree. >> they always eventually come our way. maybe it's one where the eric cb does go the other way, but it's hard to know how much further they could go, but there's going to be a point in time where you say, you know what, this differential closes, and six months from now, it's a cleyear. what about the u.k., especially, car any was lock step, and now they diverse. >> that's a good point. even though there's a lot of divergence in the current economic cycle globally, there's links between the countries, and if the u.s. economy continues to do okay, maybe we get slightly better growth next year, fed hikes, ecb, bank of japan, all

the countries follow the u.s. cycle with a lag. for europe to hike, a year and a half, two years from now does in the surprise me in the least, and that's in the view anyone's looking for now. i think the u.k. policy -- u.k.'s economy is the cross between the u.s. and europe, right? >> right. >> doing trade in both areas r structural things in common with both areas, so i believe the u.k. hikes next year. i think they follow the fed just with the lag. i think carney's comments was trying to play a balancing act. >> he has to get up in front of parliament and explain why he's not explaining the 2% target. every month. >> and write a letter of apology. >> the fed does not do that. >> not yet. >> thank you for coming in today. >> thanks. >> see you later? >> 8:30 for the big -- big, huge gdp revision. >> second look opinion. >> i'm excited about this. sorry you're not. but i am. >> third revision on the second quarter? >> second revision on the third quarter. >> i spent 12 years -- 11 years

or 12 -- it was you -- >> this is 11. >> i don't remember. all right. coming up, my ups guy and his family are now so close he's coming over for thanksgiving because i know him and the packages come twice a day most days. >> what about fedex? >> i'm not kidding. he's not coming for thanksgiving, but steiner, is he making more money with waste management because of the card board? that's what i want to know. is that recycled. when we return. other wireless carriers make families share data. some way to say happy holidays. switch to t-mobile now and get 4 lines with up to 6gb each, and no sharing. just $30 bucks a line at t-mobile.

still to come, more from waste management, talking to the ceo as joe mentioned about what's happening with the packaged boxes, with the card board that comes to your house, and what red lobster is doing to keep diners happy this holiday season. here's a hint, it is big. time now for the aflac trivia question. what u.s. city has more bridges than any other city in the world? the answer when cnbc's "squawk box" continues. aa-flac! aflaaac. aaaa-flaaaac. someone's sandbagging.

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now the answer to today's aflac trivia question. what u.s. city has more bridges than any other city in the world? the answer? pittsburgh, pennsylvania with

446. all right. props to david steinerment he knew the answer to that beforehand. makes sense, three rivers. i get it. also, red lobster is changing the size of the shrimp between 47 and 86% larger than before, thereby, no longer making them shrimp. >> well -- >> you're not a shrimp if you're big. >> there's always been a jumbo shrimp, right? >> right. >> yeah. >> why does your nose run and feet smell? what colors do smurfs turn if they hold their breath? according to the epa from thanksgiving to new year's day, there's going to be an extra 1 million tons of food waste, not to mention the over 630 million boxes that are predicted to be shipped by ups -- i'm sorry, let's bring in our guest host,

ceo of waste management, fedex board member, ups, both, dhl, they are all delivering boxes. >> all busy this time of year leading up to the peak. >> recycling things, aren't they? >> absolutely, absolutely. recycling, the best thing to recycle is card board. cut the tape, flatten them out, and put them out there to recycle them. >> do you make money on them? >> card board, yes. any other material right now, no. biggest offender is glass. you get little benefit from glass, but it's expensive. what we do with the customers is saying, let's have the conversation, we can recycle anything you want us to, anything. the question is, how much do you want to pay to have it recycled? looking at the greenhouse benefitings per dollar, glass falls off the table most of the time. >> who pays you to be aware of the greenhouse gas benefits? government through subsidies? you don't get any -- >> we don't get government

subsidies. >> they decide there's a benefit to lower it? >> they decide if they want to recycle a broad range of materials or if there's -- if you want to be cost effective, recycle card board and plastic. >> no inherent business reason for you to be aware of things like that? >> correct. >> other than the government. nice. how, when you decide i want to grow waste management, housing is back, obviously, but what have you done as ceo in the last couple years for the big paycheck? how did you earn, it's not exorbitant, well paid, but under compensated. >> look, i never thought i'd make the money i make, i'm appreciative to the shareholders for that, but -- >> what's the strategy? how do you grow a company like waste management? seems like it's just blurred. >> you know, joe, what i establish is back in 2007, every ceo in the world, no matter the business, ceos had two strategies, oil goes to $200,

remember that call, and then china eatings every commodity in the world because they are growing so fast. we based our strategy on that. if that's the case, commodities we collect are valuable. when they don't happen, they are not valuable. that's why we're in the position today to recycle what's valuable, do that cost effectively, but charge the other stuff. >> we'll get to the other smart things you've done after 7:30. >> when we come back, though, details on a worldwide travel ale alert. and can you explain why you recommend synthetic over cedar?

"super food?" is that a real thing? it's a great school, but is it the right one for her? is this really any better than the one you got last year? if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. sure... ok. but are you asking enough about how your wealth is managed? wealth management at charles schwab.

welcome back to "squawk box" here on cnbc, first in business worldwide. among the stories that are front and center this morning, it is a busy day for economic data. we're just an hour away from the second estimate of gdp, and getting the case schiler home report at 9:00 eastern time and consumer confidence data at 10:00 europe time. we'll get earnings later today.

for a company that no longer exists, hp issuing numbers for a quarter that proceeded the split into two separate companies this month. the bidding battle for pmc ended. it struck an agreement to be assembled by $2 million cash and stock. pmc agreed to be acquired by sky works solutions before microsemijumped in. the state department, as reported, this was all over the news last night, issuing a worldwide travel alert for americans. hampton is live from washington with the details, hampton? >> yeah, joe, specifically, essentially, the state department travel alert is for the next 90 days says americans should be alert to travel risks, especially in the holidays following increased terrorist attacks around the world. the information, it says, suggested that state department is saying that the islamic state, al qaeda, boko, and other

terrorist groups continue to plan attacks in multiple regions. now, as well as other individuals not affiliated with terrorist groups, engaging in violation on their own. authorities say americans should be extra vigilant in public places and goes on to say, quote, be aware of your immediate surroundings, avoiding large crowds and crowded places, exercise particular caution during the holiday season at holiday festivals and events. this as millions of americans travel over the thanks giving holiday period. the state department says the u.s. continues to work with foreign governments to disrupt terrorist plots and, of course, travelers worldwide encounter extra security measures. back to you guys. >> okay, hampton, thank you. happy thanksgiving if i do not see you. >> same to you, sir. >> hormel posted quarterly results a moment ago, another all-time high this week.

currently trading just up 4 cents. look at the chart. unbelievable. let's get more on the numbers, the coo of hormel foods here to talk through the quarter, hormel owns well-known brands like spam and others. you diversified, jim, in the past five to ten years ago, what have you added in addition to -- do you still have spam, a lot of other well-nope brands added, right? >> well, good morning, great to be with you. you know, the last five years, we've seen a really nice balanced growth between our legacy products and also some of the great acquisitions we've made. we acquired this skippy brand, muscle milk brand, and, of course; in the most recent year, the family of applegate products with a nice balance of growth between our historical products and our acquired products.

>> if you're not in your business, jim, it's hard to understand how economies of scale work. you deliver stuff to supermarkets, and you have self-space in supermarkets, right? how did the new meat products, what is it? apple? how did they fit in, how do they work with everything you already had? you were able to do that easily, right? >> yes, yes. we had a very well developed refrigerated platform over the years. this natural organic space is a space that's continued to grow and connect with consumers, and it's one that we've identified as one we wanted to be bigger in. it was a question of whether we build internally or buy it, and when applegate was available, it was clear that with that kind of brand recognition, we wanted to buy the brand, and it tucked in nicely with the rest of the refrigerated platforms and give us synergy and scale. >> yeah. yeah. that's what i was thinking. when did you buy -- i like

that -- people say holy guacomole. which is w-h-o-l-l-y. when did you buy that? >> the 2012 time frame, fitting in the pillar of being multiculture. we have a strong, well developed ethnic platform centered around mexican product, and, again, you think about healthier items, guac is right there front and center. the acquisition of whole wheat made perfect sense. the other thing we did is innovate around the product line. we came out with wholly minis, consumers need convenience on the go. >> you can't control economic cycles and imagine the products are not necessarily as elastic as others. what -- what determines how you do? input costs? commodity costs?

beef? pork? things like that? >> you know, it's a balance, joe. we certainly have some market volatility that impacts our pricing of items that are more towards the commodity side of the business, but we do have a number of value added products that continue to be what we're able to price those for the market and way the consumer will bear, and i think that's really led to our ability to expand margins and deliver the continued pattern of growth that we did in fiscal 2015. >> in other words, you got the stock to now highs on a 2% gdp economy through acquisition, so that's something i would imagine you are going to continue to do, so you get more mexican add-on or any big transformative acquisitions? just the same thing you've been doing? >> well, i would say that our growth has not come exclusively

through acquisition, but it's been a nice balance of our core products, legacy product, and, also, the companies and brands acquired. we have to continue to grow brands that we have, and we'll certainly continue to be on the lookout for companies and brands that meet the fit for us that allow us to have record quarters like we did in the fourth quarter which was our tenth consecutive record quarter, and sets us up to be able to increase our dividend, which we did, again, this year, for the 50th consecutive year, which is quite a track record. >> so how much does spam represent for total sales at horm hormel, and how much is in hawaii? >> hawaii is the largest per capita market on a domestic basis. that's a significant portion of our grocery products division. we also have a very large presence with spam outside the

united states. it connects with consumers all over the globe. >> of course. >> and this year was another great year -- >> it's spam. >> spam brand. >> of course it connects. it's spam. the dollar affect it? a head wind? do you have enough internationally where that's. a problem? >> you know, it had some impact. our international segment, although rapidly growing piece of the business, it's still the smallest business segment we have, so, yeah, there was an impact, but, certainly, nothing that was material to the overall business. >> but you truly are spamming the globe. would you say that's true? >> absolutely. >> all right. jim -- >> we are spamming the globe and expect to continue to do that. >> okay. good do you know are there interstate highways in hawaii, if so, how does it work? >> i don't know the answer to the question, joe. i don't know how they work, but i expect the interstate highway system is very similar to what we have here in the domestic or

in the 48 continuous state. >> there's only one state. nose runs, feet smell, why -- okay, let me ask you this. why do 7-11 open 24 hours, why are there locks on the door? >> great question. >> thank you, jim. thank you for playing along. see -- >> joe, i got one. >> i got one. >> steiner's in waste management, picking up the spam cans that are out in the garbage. >> i grew up on hormel chili. beans or no beans? >> beans. >> absolutely. absolutely. right answer. >> go ahead, jim. >> yeah, i'm a hormel chili no bean guy. >> no bean guy, interesting. all right. >> i am. >> so we like beans, we like bean-o, quiet after. thank you, president and ceo of hormel foods. we found out a lot, about the interstate system. >> thank you very much.

>> a little tmi over here. >> t mrmi? that's the ad. >> i know. >> really is. >> i know. >> said with a straight face. >> you did too. >> i did too. >> well done. when we come back this morning, construction spending, 7-plus year highs, the u.s. ceo of bal phenomenon jour beatty to talk about the surge, and after the hour, dr. scott gottlieb, op ed in the journal over the weekend joining us to talk about it. "squawk box" will be right back. 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.

welcome back to "squawk box," everyone. futures under pressure this morning. the futures look like they are down for the dow by 75 points below fair value. s&p off nine and nasdaq off by 20. shares of tiffany lower after earnings, revenue, and same store sales fell short of what the street expected. retailer sees full year profits below the street's consensus, stock down by close to 5%. shares of xerox got a boost after announcing he's taking a 7% stake in the company. called the stock undervalue, and

it's up 2.5%. the latest data shows construction spending reaching the highest level in seven and a half years, and now mark, the ceo for balfour-beatty, ceo, and, mark, thank you for joining us today. great to see you. >> thanks so much. >> so way is driving construction at this point? is it home sales? is it apartment sales? is it construction for buildings and beyond? >> you know, i think there's a lot of factors driving it. really, almost all the sectors that you mentioned are at all-time high, and, you know, the great recession was so strong and so deep, our markets dropped 45% from 2007-2010. >> did you say ha%? >> 45%. >> holy cow. >> right. in 2016, it's the first time

we're expected to get back to pre-recession levels. i think there's a huge amount of built up demand in the corporate office, if it's infrastructure, health care, huge amount of money just sat on the sidelines for a lot of year, and it's coming back. >> where are the hottest markets you see right now? >> you know, commercial office buildings expected to get back and lead the market. education is a hot market. public money coming back on to the scene. hospitality resorts, all those are markets that are coming back really strong. >> i met in terms of geography, is texas a big return? >> yeah. so, you know, we operate primarily on the coastal smile, which is from, you know, washington, d.c. all the way around the coast to washington state. hottest market out there right now is texas. i'm not saying that just because i'm here, but it truly is the hottest market. >> never heard that coastal smile before. i like that term.

mark, when you take a look at what's been happening, and we shoumtd thi should think in terms of, what, you're a leading indicator of what's happening, working on projects that take years to build or a real in the moment type of play? >> i think we're a leading indicator. you know, for instance, when we started to come out of the recession, our big corporate clients start building 12-18 months ahead of the, you know, the true market recovery, so that they've got capacity and they've got the facilities ready to go. we often can see ahead of time what's coming. we work not only on market data, but we got folks in local markets that are meeting with developers, corporate clients, city leaders, and we get a good view, three, four, five years in the future. >> mark, at $40 oil, why is texas not in a deep recession? >> you know, i think texas got sufficient structural fundamentals in its favor. you know, first of all, you got easy access to land.

you got a strong talent labor force in texas, favorable tax laws. >> okay. stop there for a sec. all right. so that -- leading the witness. all right, you got that. you got tort reform, don't you, down there? when richard fisher comes on, a cnbc contributor now, former dallas fed guy, he bristles, texas, you got oil, that's why you are better than everyone else. this is proving right now at $40 oil, and texas is still the place where you're doing the best. there must be something more to it than just oil. >> right. i think that, you know, certainly, the houston market, a big market of ours, is heavily tied o oil, but austin, san antonio, dallas, not that significant of an impact. i think they are diversified economies. they got -- >> taxes helps. >> they got so many things going for them, you know, what's amazing is we spent time looking at population growth, and up in

what we call the rust belt area of the country, in the last decade, they lost 40% of the populations. you know, so much of that is relocating to texas, you know, a lot of corporations from california. texas certainly is not the only market that moved, but it's strong. >> well, that's just, you know, the big ere conversation we're having right now, mark, is corporate taxes. if you can look at intercountry movement from california with corporations moving to lower tax places, then it's -- you don't need to be a genius to extrapolate that to globally and why we're seeing inversions, why there's other countries come in and buying asset, and so all the hoopla about buys or moving, you know, not to get off on a tangent, but money goes where it's treated best, and capital goes where it's treated best. you see it happening inside the country, but with texas, and it's probably happening outside the country. that's why we see inversionings. >> certainly true. certainly true.

>> you know, mark, at balfour beatty, leading the charge in diversion, as i recall, 70% of the construction material is recycled. >> it does. >> not only do they make great office spaces, but it's done environmentally friendly. >> there are huge waste leftover even residential construction. not only does housing help you in terms of getting more people signed up for garbage removed, but the construction. >> absolutely, absolutely. mark hit it on the head. it was a house led recession, and, finally, we're seeing the housing and commercial construction back to where it was in 2007-2008. >> hey, mark, one of the things we heard from home builders we spoke with is they have a hard time finding enough skilled labor to fill the jobs. do you have that issue too? >> yeah. it's certainly getting to that point. again, you noergs the industry really did not cut capacity when we went in the recession, so

there's been capacity up to this point. i think 2016, 2017, that probably certainly grows. it does at the work force level or at the skilled labor level, but, you know, we're also construction managers, and we're having a hard time even getting enough professional service labor into our industry so it's -- it's a problem for the next couple years. >> problem from your perspectivinperspectiv perspective, but good news from the employees' perspective? do they make more money? >> they certainly are. they certainly are. it's a great opportunity right now to be in the industry. i'll put a plug in for females in the industry as well. our industry actually has only 9% of the labor force is represented by females. there's a huge opportunity, a human thirst to get more females and diverse labor in the market, so great opportunity there. >> all right. >> you talk about the pay differential.

i believe our industry has the smallest pay differential between genders, pretty much any that are out there. it's a great place to be. >> well, mark, thank you for joining us today. great talking to you. >> thank you. when we come back this morning, how much food is wasted during the holiday season? the number is staggering. we'll ask our guest host, david steiner, of waste management what it means for his business, and the deal that's raising concerns about tax inversions and drug pricing. dr. scott gottleib will join us.

welcome back. we asked how much food is thrown out between thanksgiving and end of the year. an extra 1 million tons of food waste annually. the u.s. accounts for 133 billion pounds of food waste, but the usda and epa trying to get the number down by 2030. david steiner, ceo of waste management, and our household is bad with this. stuff you buy, you think you eat, goes bad before you do. is that what this is about? >> well rs first, use less, right? eat what you can eat. we all know that those expiration dates on the food are suggestions, not actually when the food goes bad. >> it's the fresh produce and meat. >> absolutely. what we're frying to do is say, it's 40% of the waste that is organic. we've been trying -- >> 40% what we throw away?

>> 40%. figuring out how to take the organic and do something environmentally friendly and environmentally friendly with them. at $150 oil, we can make energy, collect it, and do things with it. right now, with low oil prices, low energy prices, we compost it. we are the largest composter in the united states, but we can compost it. we can do other things with it, but it's something that, again, we have to charge our customers for, and our customers willing to pay for that? that's the question with organic. >> what did you find so far? >> mic xed. it follows the smile on the coast, east coast, west coast, very much more willing to do something with organic to create energy and pay for it, and middle america, not so much. >> middle america, a lot of people there have their own composting. if you have a big yard and space for it that's what we did. >> absolutely. texas, you spread it out on the

ranch. >> absolutely. overall, when you try to figure out, you mentioned before that, look, when the situation changed, commodity prices down, you flipped your modelins quick. my guess is that could change again. how quickly can you react? >> you can see it here on the slide that we just had up that when you look at it from an economic point of view, paper and plastics are always going to be economically beneficial. organic and glass, those are the two that really move with energy prices, particularly organic, and so what's it going to take for us to flip it? high oil prices, high energy prices, then we can do something with everything you produce. >> okay. david steiner the guest host with us the rest of the program. when we come back, hillary clinton slamming pfizer for using legal loopholes to avoid taxes in a deal with allergan. talking drug pricing after the break. later, a russian war plane shot down on the turkey-syria border.

fate of the pilots unknown. turkey says it shot the plane down after violating air space. the situation adding fuel to the fire in the middle east. implications just ahead. "squawk box" will be right back.

washington targeting drug makers, democrats and republicans blasting the deal, but for completely different republicans, inside the debate and talk the future of drug prices with dr. scott gottleib. putin meeting with the leaders of iran, and french president hole lande talks terror with president obama today in washington. latest developments ahead. state department issues a worldwide travel alert days before the thanks giving holiday, raising a red flag on the threat of more possible terrorist attacks. what you need to know before you leave for the airport as the final hour of "squawk box" begins right now. >> live from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk

box," everyone, this is cnbc, first in business worldwide, i'm becky with joe, and we are less than the 0 minutes from the opening bell on wall street. the futures this morning under pressure, dow down by triple digits, decline of 110 points below fair value. s&p futures down by over 13 points, nasdaq down 30 points, market in europe seeing pressure there throughout the trading session. in fact, things are worse there too. the cac down 2%, germany down 1%, and similar declines across the board. today's top story, turkey shooting down a russian war plane with syria, calling the downing of the plane is stab in the back. he says it will have serious con kwe convinces for relations. more on the story later this hour. economic calendar, a read at 8:30 eastern time, less than a half hour from now, the number

is expected to be revised higher. icahn announced a stake in xerox, calling the stake under valued, talking about strategic alternatives with management. >> a few stocks on the move this morning, campbell's soup earning 95 cents a share, above the estimates of 76 cents. then the food maker did, indeed, raise its full year profit forecast on increasing benefits from cost savings measures. they went up to sales growth -- or earnings per share growth had 4-7%, and previously it was 3-5%. tiffany missing top and bottom lines issues a full year forecast below estimates, but the stock recovered a little bit now, and it's above -- it's -- well, might be just on its 52 week low. retailer said results hurt by a stronger dollar and economic conditions make consumers less

willing to splurge on luxury items. pseudoluxury. >> well, look, part of what they did over the last several years is create lower price point items that appeal to middle school kids who want things for christmas, different thing, and that could be the point where there's pressure too. in the latest op ed, the coming takeover the drug prices by u.s. government, policies in the affordable care act controlling what procedures doctors can perform lead to drug prices as well. hillary clinton attacks the drug companies over pfizer's deal to by allergan. >> sick and tired what we just seen with the giant pharmaceutical merger where companies are leaving america to cut their taxes when they should be staying here and investing in the people and the opportunities that will build our economy.

>> we are joined with more on all of the stories, a resident fellow at the american enterprise institute, and, scott, first of all, talk about drug prices in particular. this is something you are concerned about. you think that wall street is missing what is probably a long term structural change with how drug prices are set in the country. >> you know, obamacare gave the administration the ability to tax unilateral to control drug prices in the new legislation. people think the new legislation needed to get through congress in order to adjust drug price controls, but under the act, there's a lot the avid mrgs does to act unilateral will impose controls on drug pricing, and some authorities are triggered in 2017 as the new president comes in. depending who he or she is inherits authority. >> the legislation was written, but does not happen until 2017? >> some authorities are not triggered until the growth of

medicare outpaced some pegged to inflation, triggered until 2016 or 2017 if you look at medicare's estimates, triggered in 2017. that new authority inherited by the next president. they have broad authority to impose price services. this is to control doctors, hospital care, and providers and drugs. these authorities. >> used heavily with doctors and what they are doing at this point? >> not yet because it's independent payment advisory board that's not been constituted yet because it's not been triggered by the law. the law triggers the board once the rate of growth, medicare outpaces inflation. >> once medicare is too big -- >> essentially. all the authorities kick in. there's also other authorities in the law through what's cmmi, sentser for medicare and medicate innovation, giving administration power to act to impose price controls on products and services that are in violation of existing federal

law or regulations. they do not need to respect existing regulation, but impose new controls. >> why do you think wall street analysts and drug companies, themselves have not paid attention to this? there's political rhetoric right now, and many seem this toy this is just a normal election year. >> right. i think they believe they need to get anything through congress and feel congress as long as it's controlled by republicans, there's a block on bad legislation. the reflection changed a lot. not support for the drug industry as there was once, but i don't think people appreciate there's a lot of executive branch can do now to act unilaterally to impose controls without congress. that's what they are not seeing. >> you look at the growth of medicare, you see people saying, yes, there has to be ways to rest the development, to slow this down. what happens if price controls are set? what do you think happens? >> you ruin the investment model. model for drugs is based on cost of capital, high in the

industry, costs a lot of money to develop drugs, a lot of capital at risk for many years, taking a very substantial chance you write off the entire investment. in order to justify that kind of investment, you need the promise of a big return if you are successful. >> you think the answer is less innovation, fewer drug development, and fewer -- less progress? >> i think, absolutely. the problem right now is people are under insured for drugs. obama's popular structures that leave people under insured. look at the rate of increase in drug spending, last year on average, 5%. the real effective increase in drug costs, and if you look at premium increases next year, average premium goes up $25 on a monthly basis of that $3.29 is drug spenting. the biggest component of the premium increase is the insurance industry's data, biggest component is hospital charges. we really don't have a drug cost problem other than small subsidy specialty drugs that cost a lot,

but provide benefit. we have an underinsurance problem. people are underinsured, especially for drugs getting a disease like cancer, something like that. because of the new design,s. >> i think of many of the obamacare plans being catastrophic care that you have to pay so much for out of pocket, pay so much for other things there, but -- >> if you look at the drug plans there, called closed formulairs, meaning if it's not on the list, there no co-insurance, completely on your own. what you spend does not count for out of pocket spending or deductible ps. >> if the medicine's expensive, no coverage? >> you're on your own. the only other place was in medicare part d with protections built in to make sure they were broad with protected classes so drugs that had to be on the list. under obamacare is a combination of narrows and no coverage. >> no protections. >> right.

because the plans are now the predominant structures in obama care, they are migrating into commercial plans, and they are making them politically acceptable, seeing them in the commercial plans of the workplace. >> scott, my understanding is that the research and development for drugs happens in the united states, and good thing that happens with inversion, they bring foreign profits into the united states to invest in research and development, and so from that perspectivings there's good things that happen in the united states from a job creation point of view from the inversions. >> tremendous investment in the united states. most of the research and development shifted to the country. i don't expect much to happen with respect to the inversion announced yesterday with pfizer. the administration will pout. they want the political issue going into the election. there's not much they can do. >> exactly. you saw hillary clinton demagoguing it. you remember she was the apparent seven years ago, and she got waylayed by president obama. that's fresh in her mind.

why not do it just in case? running left on popular issues, but see if she wins over the general and people watching her now, like, that's just obscene. >> that's the problem for the drug industry. drug prices are a good issue because people pay a lot for drugs and think it's a drug price problem. in part, it is, but it's mostly underinsured. we are litigating premiums internationally. used to be state by state, but it was a national discuss so you need a national monster to say this is a target. >> even president obama realizes that the corporate tax rate should be lowered so that capital wants to stay here and that capital becomes attractive in the country. >> it's not going to happen. >> not until he's gone. >> right. >> he acknowledges it needs to be lower. elizabeth warren, go up to 50% tax rate, whatever number she said, raise corporate taxes.

>> paul ryan said they would put forward a comprehensive tax reform. don't expect to see anything passed until the next administration. >> right. we don't need comprehensive, just something we can agree on, everybody agrees the corporate tax rate should be lower. can't we get something done everybody agrees on? >> that's the problem. >> you miss the "new york times" lead editorial today. this guy's a genius at economics. they are all over there, aren't they? [ laughter ] just really well versed in the way things work. ways of the world. >> scott, thank you for coming in. >> turkey confirming -- nevermind. [ laughter ] elephant in the room. shot down a russian war plane claiming it violated air space and ignored warnings. more on the tension situation and implications for all sides this war in syria, check out the futures at this hour, worsened throughout the morning, now down triple digits, and gdp data,

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putin is in teheran for the first time in eight-plus years. the russian leader there as part of the gas exporting forum. in some comments in the last

hour, putin called turkey's downing of a russian fighter jet today a stab in the back carried out by accomplices of terror, saying this has serious consequences for russian, turkey relations and it's worth noting that turkey is a member of nato. nbc is now with us live from teheran. good day, ali. >> reporter: good morning. that's right. the turkish military's reportedly shot down a russian military aircraft on the border with syria, and russia's defense ministry said the aircraft crashed on syria territory after being hit by fire from the ground and its pilots managed to eject. in contradictive reports, turkish military officials said they shot down the plane after repeated warnings they were violating turkish air space. this incident is sure to further complication relations over syria air space. back to teheran here, and as you

said, it's putin's second visit here, came here in 2007, had extensive meetings yesterday with iranian leadership on the sidelines of the gas exporting countries forum summit here in teheran. the meeting between putin and iran's supreme leader is a clear sign of converging interests between russia and iran on a broad range of issues, most importantly, syria and the fate of assad. russia and iran support the syria president while western powers with turkey and persian gulf arab states want him out. iran's supreme leader had tough words for the u.s., and he said america had a long term plot to take control over western asia, dominating syria, and then expanding its domination over this entire region saying the plot is a threat to all nations and countries, particularly russia and iran. he said the exception of the nuclear issue they will not engage in mutual negotiations

with the u.s., syria, or other issues. the russian president said no country has the right to impose views on the syria people and make decisions about the structure and government and the nation's president on behalf of them. the two men welcomed stronger ties between teheran and moscow on bilateral regional and international issues, and mr. putin addressed the gas summit, also ease the ban on supplying iran with nuclear technology for energy purposes. back to you guys. >> all right, ali, and in teheran for us, thank you. he said good day, he said this morning. he knows what time it is there. i'm not sure. joining us now from washington, senior associate for the carnegie endowment for international peace. did you -- you heard that entire report from our guy in teheran? yes? >> most of it. he does terrific work.

i know ali. >> that's great. at this point, these are -- the ties between russia and iran and vis-a-vis syria, they strengt n strengthened? what's that mean to the united states at this point? >> well, i think it's first worth noting that the russian-iranian alliance is really a historic anomaly. it was in the cold war the united states was aligned with iran against russia. iran saw russia as a threat, and at the moment, i think, as ali noted, the two sides have converging interests in syria, united by the fact that they are close to the united states, so i think russia and iran see an opportunity here. the united states is trying to reduce its footprint in the region. russia's trying to increase its footprint in the region, and it's historically been said about russia they seek stability and their neighbor's instability. i think, likewise, iran in the

middle east seeks influence in stability. >> so how does that all relate in terms of the imminent threat we find ourselves in with isis? it's hard for me to look at it as a horrible threat to us because maybe near term the russians and iranians do something to defang or to hurt isis, and, you know, that props up assad. i don't know how to think about it. that's what i mean, it's so confusing to someone sitting over here. how does it all work out if. >> well, remember what happened in the civil war in afghanistan and the russian invasion of afghanistan, what happened was that in the fight against russia, we, likewise, the danger

here is that russia and iran, which is syria going on the offensive against the sunni jihads, and rather than decreasing sunni jihadism, they actually fuel sunni anger and disenfrance chiezment and look forward that year from now which isis is actually larger than it was before iran and russia started this campaign. i call iran the arsonist and fire brigade. they fuel sunni anger begin the support for assad and sunni leaders in iraq, but at the same time, they are on the front lines against isis. if isis is going to be defeated, it's going to be defeated by fellow sunnis, not iran or russia. >> what about nato, france, and the united states, and cameron, and everything else. how do they play into it? >> well, you know, now president

obama, two weeks ago, said isis was contained just days before the attack in paris, and, the reality, i think, is that, unfortunately, this is going to be a new normal. i don't think anyone believes the attack, which took place in paris is the last of these attacks, but, you know, ultimately, if you look kind of big picture, you have to lock at what are the causes of isis, and, certainly, one of the causes is sunni disenfranchisement, sunni-arab anger, something that's going to have to be defeated within the sunni community themselves, so, you know, we can kind of try our best to contain isis within its current borders, we can do our best to eliminate their resources of funding, but this is going to be a long term battle. there's no short term silver bullets. >> what are the chances we defeat isis and get rid of

assad? both things. zero? >> no. i think bashar assad does not have a long future ahead of him, bun one of the best lines of secretary's tenure of secretary of state saying there was a symbol relationship between isis and assad. as long as isis exists, assad exists, and he looks like the moderate alternative. there's a possibility five years from now both of the groups will be out. >> john kerry said that? wow. amazing. all right. thank you. appreciate your time today. >> thank you. >> okay. the futures are continuing to add to the losses. stay tuned. we'll talk more about it when "squawk box" comes right back.

welcome back to "squawk box," everyone, futures are under increasing pressure this morning. now looking at the dow futures down by almost 130 points. had is coming as we continue this see head winds coming from turkey and syria about what happened with the russian plane shot down earlier today. we got reports, another flash across the wires that says the turkish foreign ministry summoned u.s., russian, french, chinese, and british enjoys to brief on the downing of the russian jet. obviously, the rhetoric coming from putin stepping things up,

saying this cannot be forgiven. turkey is a nato ally. futures down 125 points, and nasdaq down 35, and s&p futures down by 15. in the meantime, the u.s. state department warns increased risk to americaning traveling abroad. issued last night because of terrorist threats overseas. this advises citizens to avoid crowds and be vigilant in public places. coming up, gdp data that could move the markets. we have a great markets round table to look forward to when we return. heading to break, equity futures, 130 points on the dow, 15 on the s&p, 35 on the nasdaq.

revisions seconds away, let's go to rick san tetelli, a rick, we watched futures under pressure, what are they talking about there today? >> well, people are talking about a variety of issues r regarding the head winds, fed normalization, terrorism, all things taking away from the growth of the pie, but at the end of the day, it's the

discrepancies between how the equity markets are acting and how generally people feel about the economy. buybacks are a big issue. and many traders on the wonder what the source may be, and close to the data, we not only see the second look at third quarter gdp, but a trade balance for october. all right, 2.1, exactly as expected. there was an upgrade. it was an upgrade. 1.5 to 2.1. we want 3, 4, but it is an improvement nonetheless. personal consumption a disappointment at 3%. consumption quarter over quarter and price index the same. in terms of the trade deficit, it's not out yet. it was to be out. let's look at corporate profits. here an important area, especially when you consider the notion that general earnings and profits seem to be not keeping

pace with the growth. think about corporate issue, down 1.6. that's the third quarter preliminary read on corporate profit, and that's versus a look of 2.6. that pretty much sums it up. we'll continue to monitor everything. interest rates, you know, i know they are drifting lower. we were in the 230s, now at 22 is 1, but keep in mind, we settle at 217, four or five points higher than we settled. think about that in terms of dow jones, negative territory, and s&p is close. how important dynamics, simple as they may be, whether you're in the black or red with regard to december 16th and what the fed does. back to you. >> rick, thank you. see you tomorrow. me were action to the numbers, lindsey is chief economist at fixed income, and steve is here on set with us as well, and, steve, any other thoughts on the numbers? >> yeah.

i want to go back to when this game out at the end of the october. we talked about how there was this debate in the markets over what happened to inventories with an atlanta fed gdp now thing that had a really low number of 1.1%, and we argued having spoke it at length with mike england at action economics they were overstating inventory adjustment. what you had here entirely was inventory revision. with the idea being the second quarter inventory buildup will be worked out more over time and not in a single quarter. bottom line is, when you talk to enough economists, there's a better idea it's a 2% economy and not a 1% economy. don't drop everything and write home to mom about what a great economy it is, but it's not as bad as we thought, just even paced, averaging out again at that 2%. may have 2.5% if we do better in the fourth quarter. no reason to change the fourth quarter at 2.4%.

steady growth. the good news, consumer 3%, revised down, yes, a little bit, business sentiment lackluster at 2.4, and net exports, i don't have the number yet, but the government at 1.7% on the low side. >> you'd say a lot of head wind? not bad with a lot of head winds? that's good news. >> turn it around, joe, say the fed overstated the head winds from the global side, another way to think about it. >> how the economy is doing against the rest of the world? china's hurt, europe's not great, not horrible, but 2%, look at two ways. we have some head winds holding us back. >> which, by the way, is an argument of the dollars. you just made, they look at seven years, see just 2%, and say, you know what, if that's the best we get at zero, what's the case? >> how would a dove -- >> you became a dove. >> always been a dove.

crazy to raise rates now. ask me tomorrow. >> i will. you change your mind on the dime. >> yep. >> liend sndsey, what do you thf the numbers? how does this change models, if at all in. >> well, it's in line with expectation. we anticipated a modest upward revision thanks to favorable numbers on the business side, but as steve mentioned, we are left with the same story, with or without the revision. the first quarter, a slow start out of the gate, a nice upward rebound in the second quarter, and third quarter split the difference leaving us with 2% trend rate that we've seen since the end of the great recession. it is a positive economy, but very modest, good and bad news for the fed. remember, committee members anticipated the economy to be seeing much greater levels of momentum headed into the final quarter of the year making their decision very easy at the december meeting, but with a 2% trend rate and modest growth, nonexistent inflation, it's going to be a very difficult,

very exciting conversation for the fed at that december meeting. >> you still think, david, they will raise rates in december? >> yeah, i think so. unless something goes wrong with the employment report for november, this report, you know, if we saw an upward revision in inventories, significant, means more of a drag on the fourth quarter. we are looking at 2% growth in the fourth quarter. this economy's like a car where every gear is broke other than the first two. we can't drive faster than 2%, but it's going to overheat. we're going to see the unemployment rate come down, if it does, i think that will be enough for the fed to move in december. >> okay. steve, go ahead. >> i have to ask david and lindsey this question. when you look back at periods of time at 3-4%, there's a bubble. what's wrong with the argument we don't know there's not a bubble right now. wouldn't you prefer a 2% slow and steady? we are, in fact, again, nothing

to write home about, but in the longer capti longer expapss for a long time, better way to grow, and look what happened with bank lending, hard to find a bubble in that sphere in terms of being over their skis when it comes to lending. isn't 2% better than a 3% bubble economy? >> no, i don't think so. i get what you're saying that it's nice if this is slow and steady, but keep rates at zero, you are misallocating capital all over the economy. >> i accept that potential proposition, but i don't see it in commercial real estate. hard to see in housing. point to the bubble there. why are you not shorting it making billions? >> i'm not saying that there's a bubble, but there's under investment in the areas of the economy that i'd like to see investment in. too much investment going on, too much money going into cash or into financial assets as opposed to real investment to the economy. i think if you set interest

rates at app appropriate appropriate level, that allocated properly, and businesses have reason to hope. the advantage of a 3% economy or had% economy is people are excited. they make business decisions to grow the economy. 2% nobody has incentive to do anything. >> where was the bubbles? you had 20 years of 3-4% growth, and there was no bubbles. what bubble was in the 80s? >> mexican peso crisis. you won -- >> oh, god forbid. how did that help us in a human way? we grew 50% -- >> people lost a lot of money. >> 50% faster than europe for 25 years, 50% faster above 3% than all citizens accrued the benefits of that. >> i agree. would be great to be -- >> the mexican peso crisis? 2% because we don't want a mexico peso crisis, god forbid another mexican peso crisis. >> bubble from one to another.

>> david has a great point, which is, you know, okay has become the new normal for ceos in the united states. >> right. >> it's okay. >> better than okay. >> we look at it, say, well this negative thing has not hatched or this or this. to get growth, get positive things to happen. instead of us saying, you know, we didn't get so horribly hurt by regulation or so horribly hurt by tax rates, say, let's get helped by regulation. helped by rates. >> it's not just the new normal for businesses, but, okay has been the new normal for central bankers as well, patting themselves on their back for eking out the bare minimum of growth. 2% is the minimum we should see, 1% for population, 1% from productivity. >> right. >> this is years of zero interest rate. we should be at 5%. >> that's why we have got to get the economy off the morphine drip of 0% interest rates. that just misallocate the capital. we need more optimism. the fed has to tighten.

>> you can't begin to raise interest rates. to get 5%, you have to see momentum in the economy prior to raising rates. >> i don't agree. i believe that the first few rate hikes stimulate demand and so it would help the economy get to a faster pace of growth next year. >> look at pretightening cycles, 1994, 2004, growing robust, much faster job gains, inflation at 2%. you're now talking about the slowest pretightening cycle pace in three decades. >> when you look what happened -- i'll ask david this, is what happened in the house market in the united states in 2004 and 2005, which easily added that percentage point that we're looking for here, was that normal? do we want to go back to back? stair sorry, david kelly, i meant the other david. >> you end want that, but american businesses say raise 25 bay sis points, doesn't make a

difference. banks lend money? that's a huge difference. in my mind, that's the capital constrained. interest rate talk is for the economists to talk about. the fact that that money's not getting out to small businesses -- >> a company like you laz no problems getting capital? >> no, absolutely. >> what's the cost of funds in the debt market? what fraction of a percent is it? >> 100 basis points over treasuries, 3% 4%. >> you're not necessarily borrowing to invest right now? >> no. >> why not? >> because we don't know what's going to happen in the future. because, okay is the new normal. until we see a sign of on tptim -- >> you never know what happens in the future. >> as ceos, we're paid to look in a crystal ball. when it's smokey, you don't make decisions, when it clears, make the decisions. get the interest rates up, get the capital, and start getting clarity for ceos to make investments. >> i like that analogy. that was good. steve, thank you, lindsey,

david, thank you. >> joe doesn't agree with the thank you. >> 2% is good, that excuse obama administration for the policy mistakes -- >> don't get fires here, joe, i got you going. >> let's go to europe where everybody's sort of doing okay. they have health care, you know -- >> where they were 11 months behind.

welcome back, everyone. futures have been under pressure this morning. they are down by triple digits, dow down by 109 points, s&p down

13, and nasdaq 21. >> security software maker posting fiscal first quarter results well above estimates and boosting guidance, governments spending more to protect themselves against cyber attacks. joining us now for exclusive is mark, chairman and president and ceo of alto networks. mark, i never -- are salad days the best of times or going back to previous greats? what about -- what days are you? these are unfortunately, days for security providers. >> what's going on is we live in a digital world, which is fantastic. there's a lot of productivity increases and gapes that obvious come from that, but flip side of that is it creates major security issues that can bleed out trust in the digital age, and if that happens, that's bad for everybody. we get the productivity gains of the digital society, but at the same time, we have to take the

bad with our security concerns around that. >> so when are -- when do you get the most calls for the products? after the month we had recently? is it more hacking when the banks are hacked, 300 times a day? when it is it the best of times for you? >> you know, for our business, we don't get emergency phone calls or panic buying situations. most of the customers we're talking with for quite some time for security architectures, needing something that works for them for five to seven years. we have long conversations, white boarding sessions, and there's customers, as you see from the number, invest with us heavily. >> are we, at this point, where we've heard -- heard both sides, we walked back our security, just overall after snowden, and then i hear we're head and shoulders above anything that europe has right now. in terms of the balance of

privacy and security, where are we in the united states right now? >> well, i think you used the right conjunction there, and, proo privacy and security. the pendulum swings depending on events. post-snowden, the pendulum swung to the privacy and security side, and after we see attacks in certain places, it swings back more to the security side. ultimately, things try to find a middle ground in security as it should be. >> how do we balance this, what we just talked about with, like, smart phones that are encrypted so that even the company themselves issue they do not have the lock and key. should there with some way that we're able to get in there when we really need to, or would that ruin function of the smart phone for the people who get them? >> well, you know, from a security perspective, look at

the traffic, on the one hand, there's benefit from a law enforcement perspective, but there's a back door in the technology that is used by criminals as well. it's not an easy technical question to solve and it comes back to getting the right balance of privacy and security. >> mark, everyone thinks banks and retailers are the only people attempted to be hacked, but we get thousands of attacks every day. >> really? >> absolutely. when we fight them off, they are botched attacks. will china do something seriously to address the attacks coming from china? >> well, i think you're correct in that it's not just a vertically specific situation. we see it in our business, which is horizontally distributed as far as the revenue contribution and what that looks like, customers from technology, retail, banks, government, you know, every vertical in existence, and they are all getting attacked, and that's the

situation in the digital age. i think on the china question, you did see the u.s. and the china recently agree to try to dial down some forms of those attacks. we'll see if it takes hold over time, but all the movements are positive. >> david, i never thought about that. i don't think of them attacking other people. i think retailers and banks to get customer information. i think, maybe, a boeing or somebody to steal some of their plane designs or something. what are they trying to steal from you? >> guaranteed that every company in america is being attempted to being hacked right now, and -- >> yeah, every company. >> literally, we get 10,000 attempts a day, and they are baht generated, not someone trying to specifically attack us, but there's a broad net, and once in the system, then they understand what they want, you see, that's -- it could be anybody from financial information to credit card information. >> right. >> that's exactly right. everybody's got some personal identifiable information somewhere in the system about employees or customers.

there's a market for those things, and there's intellectual property rights. everybody has something of value to a cyber criminal. >> a lot of times might be a competitive attack, whether it's china or chinese company or something like that. what about actual terrorists? what -- where are we most vulnerable in terms of -- shutting down the financial system? shut down the power grid? who needs palo alto? who do you need to help? >> going back to what i said earlier, this is the digital age, everything you mentioned, the power system or the airline systems or the banking systems, you all rely on digital information, right? if you really wanted to create chaos, if you could interdict those and make them where they don't work, people rely on them every single day, if you lose trust in the systems, you have chaos. that would be the terrorists understanding that, and go after the targets that, if they were

just not working the way they were supposed to, there's a lot of panic. >> yeah. are you -- do you feel confident we don't need to worry? do you have a gun, mark? have you bought one? >> no, i >> no, i don't. >> you don't? should i guy one? >> that's completely up to you. >> i have a right, don't i? how about you. >> you have to worry about cyberattack s worry about the solar flares. >> we got a civilized society licked? i see people getting their head cut off and i'm not so sure sometimes, even though it's the year 2015. i guess keep working hard out there. working 16, 18-hour days, aren't you? absolutely. we all are, yes. >> all right. thank you. good luck. >> thank you. >> scary. when we come back, jim cramer from the new york stock exchange. check out the institute chores again.

they have been under pressure. down 120 points for the dow. s&p off by 14. "squawk box" will be right back.

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jim cramer joins us now. tiffany was one that we saw. campbells soup trading higher based on that. that's a view of the world right now, i think. >> campbells soup, they are doing internal activism there. cutting costs. it's like 3g went in there. i applaud the ceo for getting costs down. people like that getting more natural, organic. a good quarter, not a blowout quarter, but i have to tell you they are drif ven towards getti rid of excess. they talk about internally unallocated capital. i like what they're doing. it's like the people from 3g came in there and said we mean business. i like what is going on. >> you know carl icahn, he's a piece of work. does he know what do with xerox? >> xerox has been poorly run. they made a big move into

healthcare. people have been critical of them. they lost a terrific cfo. i think the company was in the last conference call saying we screwed up. we'll get better. that's maybe a thing where icahn can get getter. this is not oil or gas or minerals. by the way, i loved your discussion about getting money and doing things. david steiner is right. big companies can get money. smaller companies have to be careful. that credit line doesn't work for them. they can't get it. they can't get it in part because the banks are scared to give it to them. david is right. we don't know the direction of the company. we don't have confidence in the country. i think that's washington's fault. in terms of spoiled business, they're crazy to take out loans in this environment. the banks are crazy to lend it to them. it's too frightening. >> you have a 30-year or a.r.m.? >> i got a 2% mortgage.

that's what you get when you're doing okay in life. >> i'm glad you're doing good in life. >> i'm lucky. >> coming up, more with david steiner from waste management.

in panama, which is a city of roughly 2 million people, we are having 5,000 new cars being sold every month. this is a very big problem for us with respect to fast and efficient transportation. it's kind of a losing proposition to keep going this way. we are trying to tackle the problem with several different modes.

one of them is the brand new metro. we had a modest forecast: 110,000 passengers per day in the first line. we are already over 200,000. our collaboration with citi has been very important from the very beginning. citi was our biggest supporter and our only private bank. we are not only being efficient in the way we are moving people now, we are also more amicable to the environment. people have more time for the family and it's been one of the most rewarding experiences to hear people saying: "the metro has really changed my life."

our guest host today is david steiner, ceo of waste management. we talked about the economy quite a bit today what would your message be to people, somebody who sees things that are happening across the company? >> you know, 2% growth is good. not great. we need to see something that makes us optimistic. let's get some go signs instead of stop signs. there's plenty of things in washington that everybody agrees. everybody agrees that can create growth, tax reform number one. but they tie it into something else, then it gets dragged down. let's quit playing that that's the frustration with a business with washington. there's things we all know they should be doing but they tie them into things that none of us care about. >> you're probably not going to see anything accomplished in an election year. >> that's the sad truth. >> isn't the most frustrating things, two parties now, one party that doesn't realize that the corporate sector -- doesn't help to be anti-corporate when

they provide the private sector jobs. you need the taxes from the private sector. >> absolutely. >> how can you be an anti-corporatist? >> to give credit to the other side, you don't want to tie planned parenthood into it either. >> that's true. >> happy thanksgiving. >> right now time for "squawk on the street." good tuesday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. busy morning of retail and consumer earnings. geo politics has the headline today as a russian jet is shot down on the border of syria and turkey. putin already blaming turkey for what he calls a stab in the back. oil and gold rallying. that's a live shot of a