the day that will live in infamiliar now. "squawk box" will begin right now. live from new york where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin and michelle cabrera sitting in for becky. u2 played to 20,000 people. the irish band returning. front man bono paying respects to the 130 people killed in paris that day and the 14 people killed last week in california. meantime, back here at home, president barack obama addressing the nation last night saying in his words freedom is more powerful than fear and discussed the broader threat of what he's calling a new phase of

terrorism. john harwood will join us from the white house. before we do that, let's get up to speed on this morning's other top stories. michelle? >> let's start with oil. crude prices dropping after friday's opec meeting. as a result there's no agreement on output targets. in fact, the cartel didn't even mention a quota, something we haven't seen in decades. analysts say this is a message that opec or saudi arabia is willing to deal with low prices. you can see wti is back below $40 per barrel. u.s. gasoline prices dropping again as well. the lundberg survey says the average price is down 4 cents. $2.10, the lowest level since late january. in global news, big win for venezuela's opposition. the party winning control over the national assembly and changing the balance of power. the victory comes 17 years after hugo chavez started the

socialist information. it could mean dramatic changes down there. >> in corporate news, general electric is terminating a deal that it had to sell its business, its appliance business, remember that? ge's appliance business to electrolux. the price tag was $3.3 billion. the transaction did face a lot of regulatory pressure from u.s. authorities. in mid summer the j.d. stopped the transaction citing worries that it would push up prices for consumers. meanwhile, carl icahn is taking a 12% stake for pep boys. the auto parts maker agreed to sell itself to bridgestone back in february. they say pep boys retail segment will be a perfect fit for privately held auto plus which the activist already owns. chipotle slashing its guidance as a result of the e. coli outbreak. it had an adverse impact on sales. it now sees fourth quarter earnings well below.

it says it can't reasonably make an estimate now given in light -- or in light of that outbreak. let's check on the markets so far. the futures suggesting that we're going to get it's a positive open in the wake of the huge rally. dow would open higher by 14 points, the s&p higher by 3 and nasdaq by nearly 11. let's show you what's going on over in the pond. gains of nearly 2% in germany. france higher by 1 3/4%. ftse, italy higher as well. in japan, higher for the nikkei by 1%. the hang seng essentially flat as was shanghai as well. the ten-year yield. 2.282. not really moving out of that range that we've been talking about. and the dollar is stronger against all the major currencies, against the euro, the yen, and the pound. 1.08 euro for every dollar. gold at this hour is lower by

$1.50. let's move to the conversation back to washington. president obama delivering that primetime address to the nation last night from the oval office. john harwood joins us from the white house with the key points and the reaction this morning. good morning to you, john. >> good morning, andrew. anyone expecting president obama to outline a new strategy against the islamic state was disappointed by last night's remarks. the president said the attack in san bernardino was terrorism. he vowed to defeat isol but he said we were going to do it with the same strategy that he's been pursuing, which does not involve a large injection of american ground troops. >> the strategy that we are using now, airstrikes, special forces and working with local forces who are fighting to regain control of their own country, that is how we'll achieve a more sustainable victory. and it won't require us sending a new generation of americans overseas to fight and die for another decade on foreign soil. now the president also challenged muslim leaders around

the world to reject the extremist ideology that isis represents. at the same time he challenged americans not to discriminate or lash out against muslims. problem for the president is that that is not an emotionally satisfying response at a time when people are scared, many people are angry and not surprisingly republican candidates who are running for the nomination to succeed him were very tough in saying the president doesn't perceive the threat accurately and isn't taking strong enough steps to deal with it. guys? >> okay. john, thank you for that. we'll be talking to you in the coming days. in california today we should tell you the investigation continuing into last week's terror attack in san bernardino. cnbc's jane wells joins us. she's got the latest. good morning. >> reporter: andrew, even here at 3:00 in the morning we had three people who left this in prom promptu shrine. we have hundreds of candles

here. up the street from where it happened. where did these two get the thousands of dollars based on his salary needed to amass this arsenal. given the size of the arsenal and suicide vests were they planning something bigger? they raided the home of enrique marquez who purchased the semi-automatic rifles legally used in the killings. nbc news saying investigators don't think he's a suspect. they still don't know how the guns were transferred to farook. marquez is so distraught he has checked himself into a mental health facility. this as more survivors are starting to leave the hospital. the city is trying to move on. all the weapons in this killing were legally bought. one rifle was modified to be illegal under california's stricter gun standards. even so he, the president said last night more needs to be done. >> i know there are some who reject any gun safety measures, but the fact is that our intelligence and law enforcement agencies, no matter how effective they are, cannot identify every would-be mass

shooter, whether that individual was motivated by isol or some other hateful ideology. what we can do and must do is make it harder for them to kill. >> all right. we're starting to learn more about tashfeen malik who changed over the years from someone who dressed in western clothing to fully clothed and devout. former classmate who went to pharmacy school described her as a capable and driven student who laughed but was particularly unsociable. she finds it hard to believe she was air terrorist especially since she was the mother of a baby girl. >> that's a very big question what went wrong, that when she was leading a normal life she was a very happy, with her husband, with her new -- with her baby. she was very happy.

>> reporter: no direct link established yet between these two and a terrorist organization or a cell, but they are calling it terrorism and hope to get more details as both the fbi and local police will be briefing us later today. back to you. >> thank you, jane. appreciate that. joining us to talk about all this have is ben white. he's the economic correspondent and from politico. ben, i know you watched the president. >> i did. >> there's sort of a critique of what the president said. you address it this morning, but there's the gun control issue on one side. >> right. >> which he is connecting to this. >> yes. >> republicans on the other side would say, i don't know if you have to go to war against isol, but you need to approach it in that manner. >> right. >> is there any thought that actually his efforts on gun control are going to work? >> no, there's no thought that they're going to work, even his push to have people on the no fly list not be able to buy weapons is not going to work. republicans are not going to support that.

they make the argument that it's unconstitutional given that there's no due process. >> you make the argument. >> it's an easy one to make. if you're on a no fly list, oftentimes they're inaccurate. you have constitutional rights to due process. you haven't gotten that. then you infringe on a second amendment right. it's a good sound bite because nobody wants terrorists -- >> legally it's incredibly difficult. loser in court? >> loser in court. >> it's just so weird because there are many arabic men on the no fly list that aren't terrorist the. i don't know what percentage are terrorists. it's probably a minute percentage. there's no other right as a citizen that obama would ever allow to be taken away. in fact, that's all we ever do is warn against profiling these people. >> right. >> the one right that i think he'd like to take away from all-americans, he's ready to take that one away quickly. >> i wouldn't go so far he wants to confiscate everyone's guns.

>> if you have to get rid of the second amendment, the left should just go ahead if that's what they want to do, let's start the process. >> there are plenty on the left saying that. >> let's start the process. >> they know they wouldn't get re-elected. >> i think the bigger problem with obama's speech is not the gun control although that will rile conservatives. there was no new strategy. there was no new efforts to explain to people how we're going to both defeat isis and deal with the threat internally from radicalized muslims. i would say the one thing that was new was his discussion about moderate muslims and how they need to speak to the radical community and deal with that. i think there was new ground there at least to me. overall this was not -- >> the question is that plays to the muslim community. >> i think -- >> it may very well play well to the former community in the united states. >> i think it would play relatively well to the very large majority of the americans. >> started speaking out more. >> anybody who was a peace lover. >> anybody who's peace loving

say, look, we agree with you. this is not a religion. this is an absolute bastardization of islam and we'll do our best to root it out. i think that could be effective. in terms of appealing to americans who are scared and worried about this, being tough and saying we're going to deal with it, he didn't do any of that. >> it almost sounded a tad hopeless when he said, i've got lone wolves out there. >> right. >> that was polite sized. that was once again using another crisis as an opportunity to further one of his -- >> i get that. >> you mean gun control? >> right. we have seen a history of not necessarily leadership on a lot of issues but using varied and sundry crises or events and immediately saying this is an opportunity -- >> to the extent you can avoid -- >> if you know that all the solutions he suggests when it comes to gun control are not going to happen then you're left thinking, okay, we are defenseless and hopeless. >> gun control in france, you're

not allowed to have assault weapons in france. >> yet, there they are. >> i don't understand. this is not the time where that's not the issue here. and not only that, but watching the history of the way the left characterized this shooting in san bernardino from the beginning and from the beginning finally acknowledging that it's terrorism but yet saying, we don't even care that it is terrorism. we're still going back with what we started with and that's gun control. >> i say this completely a politically. why can't it be a little bit both? why can't the conversation be -- >> it's obviously a little bit of both. it's more about the former. it is. you've already got that. that's all we've talked about on the left is the shooting, gun control. hillary clinton blamed the nra. then martin o'malley blamed the nr 5. you want more? >> no, i'm not saying more. how about talking about terrorism? >> i'm saying it's turned into a bizarre -- >> no, it isn't. yeah, in fact, it wasn't about

the primary gun control for the first week. we just heard a report from jane wells still saying not really sure. >> to michelle's point it would be useful talking about what he can get done versus what he can't get done. how are we going to find these people? >> wasn't an nsa provision overturned last week? wasn't it on monday when something actually passed, monday before the shooting? >> in the u. states congress? >> yeah. that's when it took effect, new roll back of nsa -- >> oh, nsa. i thought you said nra. it's how are we going to revisit the intelligence gathering capability in the united states. >> he did not talk about that. >> we just lost major capability about a week ago in terms of meta data. >> marco rubio was talking about it quite smartly and hitting ted cruz. we need to re-establish these capabilities to monitor this kind of stuff. i think americans, the opinions will shift on this privacy issue if they think we can be kept safe by further monitoring.

>> i know a lot of people are paying attention to what happened in the elections in france but as to what happened in paris, the far right did very, very well yesterday. >> yes. >> bottom line there is, you know, internal warp within the party and terrorism. if americans are fearful, they're far more likely to vote for the right than the left. >> you did not see hillary clinton say anything positive about it. she did her own speech and was silent. she did not want to be associated with president obama on this right now because his numbers are so bad on terrorism. >> to give you an anecdote, i was up in the countryside of new york state over the weekend and sheriff's up there, various counties, have gone to the public and said, if you have permission to carry, please start carrying. >> yeah. >> because when we see these lone wolves, we may not be able to get to you. so if you are comfortable, i mean, that is so different than what you're hearing from the mainstream media about what should be happening.

>> i think you'll see that impact people nationwide. obviously we're not getting more gun control legislation. if they're worried, if they're concerned, i would imagine you would see an increase in people who want to protect themselves to defend against this kind of thing because obviously it's out there. >> bill mahr has a gun. he says it's the only way to defend himself. >> they said that gun deaths are down. >> way down. >> fallen. way down except one place where they're not down, on the streets. gun free zones. >> that's true. hard to defend yourself at that point. since 1993 the overall number of gun deaths is way down. >> doesn't get talked about a lot. >> the law abiding citizen part of this whole issue is that, okay, you want to put more restrictions on people that are law abiding. >> right. >> nothing to do with. it's a rated in california, chicago has strict gun laws. over 300 million guns in this country. you're not going to confiscate them. how are you going to deal with

it? why make it more difficult for the law abiding. that's what the other side would say, not me, but that's what the other side would is a i. >> they may have the winning side of this argument at this point. >> thank you. >> coming up -- i'm glad you were here today. you would not like those other people at politico say that. >> many great friends and colleagues. >> written on rubio water drinking habits. they got rid of scott walker. i think he got -- >> we didn't get rid of him. scott walker got rid of scott walker. >> yeah, okay. rubio's next. is the stock market missing? a big warning right now. why some on wall street are worried about junk bonds. big piece in the journal today. down. they're not usually down and it's not just the oil sector. first, as we head to break, today marks 74 years. did you see those cute guys at the football game, the guys that were at pearl harbor? i saw the math, 92, 93, god bless them. the attack on pearl harbor. japan's ariel assault killed more than 2000 people.

before 9/11, the most killed on u.s. soil. the u.s. declared war. survivors will gather for a remembrance ceremony and raise the flag at the "u.s.s. arizona" memorial.

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welcome back to "squawk box." the national association for business executives. it puts the average growth forecast at 2.6% next year. it's a bit more upbeat for employment. the jobless rate is seen dropping to 4.7%. potential warning sign for wall street. junk bonds headed since 2008. bonds lagging behind the s&p 500 which has returned more than 3% on the year including dividends. joining us now is sam kaufman, economist and jonathan mckay, senior market strategist at morgan stanley. jonathan, are you worried about the sign in the bond market? we started talking about this. we had a high yield bond manager on. they said, no, this is a buying

opportunity. i expect him to say that. what do you say? >> the credit cycle has clearly turned. we've seen a lot of stress in the energy market. you see the default rate pick up. companies are restructuring their bonds which is technically in default. that we think is going to continue. >> the core worry is the junk bond signaling something bigger about the economy and then hence the stock market. is the signal from the stock market wrong and the signal from the bond market the correct one? >> no. well, yes and no. i think we're near the end of the cycle, right? we've been saying for the end of the year we're in the late seventh inning. you're seeing some silly things at the margins happening in the consumer side. you need two of those to build up into excesses to push us into recession. i think the first sign is what's happening in the junk bond market. we think there's a trade left here but we think it's time to improve the quality of your portfolios over the next year or

two before we head into a recession the next couple of years down the road. >> any thoughts on the same question? >> we've seen banks using lending centers more quickly than they have. other imbalances, they're in pretty good shape. debt service income is at historic lows. all of that is pretty supportive for faster growth. >> so the signal doesn't worry you that there's a potential slowdown coming? >> no. that household trend is important. haven't seen spillover from weakness in manufacturing, for example, in the jobs. job numbers are looking good. you're starting to see wages come up more quickly. >> what did you do? >> so we like global equities over u.s. equities. u.s. equities can do okay. we're expects 4% earnings growth. we think you need to take a broader view of how you build your portfolios. global equities over u.s. he can witt its. from a fixed income perspective

i think it's time to start taking on duration risk. maybe not today. >> instead of two year go to five? >> yeah. basically it's been a short duration trend over the last year or so because of fears of a fed rate hike. >> we haven't seen that. everybody says that and the ten year doesn't budge. somebody's buying out there. >> guess what, the ten year is what we've all learned unfortunately to our chagrin follows normal gdp. as it's been on this trend path of 2% which we think about last year, that's where the ten year trades within 30, 40 basis points. but as the fed hikes you get that news out of the way, i think the ten year basically stays where it is. i wouldn't make that trade today. in the next month or two, maybe three we'll have a chance to take it on. >> sam, you're an economist. do you agree with where the ten year yield is going? >> yeah. we have it to 42.50 and very slowly over the next couple of years. i think the reason for that is that fed chairman yellen has convinced us all that the fed will move very, very slowly. >> are we -- is this market now

in control? for so long this market seemed to be controlled by the u.s. fed, bernanke and yellen. is it now controlled by mario draghi? he blows it last week, the market plummets. he comes back the next day and says, wait, you misunderstood me and let me say it again. now the market does a megarally? >> i think it's all about positioning. the dollar consensus trade is the most obvious trade out there. the captain obvious trade. the dollar has to go higher. >> doesn't that mean it's strong when it's the consensus trade? >> that's what we think is happening. the markets discount things. curren currency markets tend to be the highest. they're potentially down. i think the positioning last week was too far one sided. >> any final thoughts on that, sam? >> i mean, that seems about right. i think the u.s. story really is about the fed hiking at this point. it seems to be coming. >> that's what's going to drive the u.s. equity markets?

>> okay. >> thanks, gentlemen. appreciate it. when we come back we'll talk more about global security concerns. investigating a london subway stabbing and treating it as a terrorist incident. the latest from overseas. we'll talk about it next. we'll welcome roger altman. no topic off the table. stay tuned for roger and a lot more when "squawk" returns in just a moment. ♪ ♪ big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets.

what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. at ally bank no branches equals great rates. it's a fact. kind of like ordering wine equals pretending to know wine. pinot noir, which means peanut of the night.

welcome back to "squawk box" this morning. there are security concerns around the world today including in london where counter terrorism police are investigating a stabbing attack in which two people were wounded by a man with a knife. it happened at a subway station and a suspect is in custody. here's the latest from nbc's keir simmons. >> reporter: two police officers take down an assailant with a knife who had just attacked an apparently random victim in a subway station. video of the dramatic moment posted on social media. >> the victim was shouting and screaming to the police, somebody help me, somebody help me. >> reporter: with brittain on high alert for terrorism, there

was panic. the words witnesses say the attacker used spreading fear. >> i heard him saying this was for syria. >> reporter: just last week's brittain's lawmakers voted to join the u.s.-led air campaign against isis and syria. as the attacker was led away, members of the public shouted, you're no muslim, a slogan that today began trending on social media. we are treating this as a terrorist incident a police commander said in a statement. >> this subject has been arrested, he's in custody. he'll give his account and we'll examine the evidence. >> reporter: if it was terrorism, it appears to be another lone wolf attack just days after san bernardino. 56-year-old commuter suffered serious knife wounds. doctors say his injuries are not life threatening, but in these anxious times, one man with a knife caused terror. keir simmons, nbc news, london. here at home, president obama addressing the nation last night on the administration's

terror strategy. >> our success won't depend on tough talk, abandoning values or getting into fear. that's what groups like isol are hoping for. instead, we will prevail by being strong and smart, resilient and relentless and by drawing upon every aspect of american power. >> joining us now, roger altman, executive chairman and founder of evercor. i'm a doctor, jim. you're an investment banker, roger, you're not a politico. i don't know why we're introing you with that. let's talk about junk bonds. can we do that? you of all people ought to know whether this is significant. isn't it really oil related? wouldn't that account for a large part of it, and maybe the dollar, the things we know from watching manufacturing earnings? it doesn't necessarily mean we're headed into a recession next year, what's happening in junk bond.

>> first of all, i don't think we are headed into a recession next year. the good news and the bad news about the most recent jobs data and the latest data are the same. the good news is we're growing it 2 to 2.5% in real terms depending on the month, which is sluggish, but the other news is we can do that for a long time. >> best in the world? >> i don't see any -- any -- any sign among the classic ones of an incipient recession. >> what do you think it is? >> i think most of it is energy related as you said and this intrabond market -- >> but "the wall street journal" suggested it was broader than just the energy business. >> well, in terms of the question of whether i think it's signaling a recession, i think the answer to that is no. there are just no -- of all the classic signs that bring on recession, imbalances, overheating, so forth is not bad. >> the only signal that we need a recession is the fed is so i will prepared for a recession

and murphy's law would say this would be a time that it would happen. >> of course, it could always be an exogenous shock. >> let's talk about that, too. one of the things i saw from mark grant who in the past sometimes he's -- i don't know if i call him half empty all the time, but he's a worrier. he worries, okay? his worry is that because london is a knife. it happened i don't know how many people the fbi are monitoring, the united states at this point, but, you know, each day we don't know what the future's going to bring each day. it's worrisome. he says as a result risk assets in general are probably -- know what you're buying now. know what you're holding now in a new sort of an era or maybe you ought to be a little bit more defensive. >> if we tipped over in the sense that public attitudes towards going to the mall and doing the daily routine. >> to the equity markets. >> that would first of all

change the underlying economy. probably bring about a big equity market correction. let's hope that doesn't happen. american people are resilient. ab cents an exogenous shock, and by the way it wouldn't have to be terror related, it could be financial, i don't think we're going to see a recession next year. >> can you sit around as an investor in periods like this just worried that something -- probably not the best decision to make about staying in the stock market, whether there might be another terror attack next week. probably not the best way to manage a portfolio but then again, i mean, you'd have to be looking somewhere else to not think that maybe isis is going to try to do more of these things around the world. right? >> that's -- that would be the conservative assumption, no doubt about it. >> if you don't think the gdp is going to move very much, then the ten year isn't going to move very much, then you're a lot

safer in fixed income perhaps than you thought for a long time, right? whatever you do, don't hold long-term bonds but guess what, it's been a very good trade for a very long time. >> i did a piece on this actually just a couple of weeks ago when the terror attack happened in france when i looked at israel and what was happening in israel in terms of what happened to gdp in israel over the past say 20 years. from 1994 to 2003 a couple of studies looked at what happened to per capita gdp. they say it would have been 8.6% higher than if -- you know, had there been peace. >> right. >> 8.6% is spread from '94 to 2003. it's spread over ten years. if you think about that as a proxy, i don't know if you think it is an appropriate proxy. >> except that israel's default stance is always so much -- ramped up so much higher. >> i do think, look, you have to say to yourself, the base case of that, that's a poor term in this context, base case is that

the historical and let's face it admirable resilience of the american people is going to assert itself. we're going to march -- march through these risks and we won't face an event or series of events that really compromise the way americans go about their daily lives and the underlying economy, so forth. >> we might have been a little bit more ready to take maybe more aggressive action against -- like if we knew that there was a geographical location where there was an actual state, we know exactly where these guys are. we know they make a billion a year in revenue. we know they want to expand even more. i saw another piece whether isis is contained or not. it's -- we're not -- they're continuing to grow. we're not undercutting their efforts. >> the problem as so many people who really know the situation

consistently say is that what isis wants is for us to -- >> no, i know. >> it's underground over there because that allows them to portray this in effect as the crusades and a clash of civilizations and a call to arms. >> but obama is pretty feckless and not strategic because the drivers are civilians. >> yeah, the rules of engagement are so strict that we don't actually -- >> the military said the stories that they're running they're limited to, you know, a small batch of what they'd like. >> they're coming back with their pay loads still full. >> well, it's tough -- look, it's hard, right? but i think the degree to which the -- an alliance, turkey, russia, brittain as obama said last night is slowly forming. i think you're going to see more effective, at least air attacks. that would be my bet. >> all right. next year's gdp you think is more of the same? >> we're in this -- we're in this slow, steady mode.

>> across the board? >> everybody likes to talk it down. i really think that, you know, it's not bad. anybody in the rest of the world among really large countries would like to be growing at 2 to 2.5% a year, would like to be seeing a rate of 5%. >> with no major inflation? >> absolutely. >> get a return -- >> 3% year over year which is not bad, and so we're in a mode where we have to -- the possibility of continuing this for quite a while. i mean, years. and i think the outlook is reasonable from that point of view. one of the reasons -- well, i think that the most important thing to watch in terms of the fed over the next couple of weeks is not whether it moves, it's going to move. it's what the language is concerning going forward. i expect it to be dovish because of what the fed watches, the pce deflator and, you know, broader labor market strength including the under employment rate which is 9.9% and ticked up.

still arguing for slow in terms of the tightening, but fundamentally i think the picture in the united states is good. >> we have to go. but are there any ceos of any particular sectors have any conversations with you since you spend time in board rooms about the terror issue and how it affects their business? >> no. no. i don't think it's risen to that level. >> okay. >> i don't think there's an expectation as i said a moment ago that day in and day out -- >> there's no way you can underline a calm about that. okay. >> i won't say it's not a matter of discussion. >> right. >> but in terms of business decisions, i haven't seen any zblefd thank you. >> great to see you guys. >> appreciate it. we have cnbc's disrupter list. valuations of the companies on our list surging. julia bore sen is here and she'll tell us where the names are now and why regulation could be the next list. a jam packed show with newsmakers including thomas

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i'm hacking your company. grabbing your data. stealing your customers' secrets. there's an army of us. relentlessly unpicking your patchwork of security. think you'll spot us? ♪ you haven't so far. the next wave of the internet requires the next wave of security. we're ready. are you? welcome back. pictures at this hour, not by much. cnbc's annual disrupter 50 list highlighting companies leveraging technology to shake up a wide range of industries and a number of these private startups are facing a very specific kind of hurdle. regulatory challenges and big

ones. jill borgsten joins us in studio. ush will he see her far, far away on the other coast. >> good to be here in person, andrew. regulatory battles can be a sign of how disruptive a company is. that's a good thing as long as the battles don't threaten a company's existence. number 4 uber is banned in cities around the world. they have the ability to operate everywhere. take a look at this map where regulatory action has been taken against uber. number five, air bnb has been fighting regulation city by city which is a major undertaking considering it's at 34,000 around the world. growing concerns about both air bnb and uber's safety threatens to drive up their costs. now these regulatory challenges have hardly dissuaded investors who poured more than $2.5 billion into uber and air bnb. they tell me that a government push back can indicate

potential. >> if you're creating the market, if you're the one educating the market, then you're the one that's going to face the first big regulatory headlines. >> i promise you the minute you succeed at anything, take google. they've had tons of regulatory oversight because of its domination. regulation comes with success. >> a couple other disrupter examples of success drawing regulatory scrutiny. number five draft kings is with the other daily fantasy sports sites fighting to prove that its variety of gambling should be legal. then there's hampton creek which is facing off with the fda to use mayo for its eggless spread. not all disrupters are lucky enough to survive the regulatory fight. the search for the 2015 disrupter list begins in january. follow @cnbcdisrupters. >> i see uber epitomizes the battle you see all over the world between vested interests

and new technology. i mean, taxi drivers all over the world, they do the most vicious protests, et cetera, and governments will often come to their defense. is a government willing to let their society progress or not? it gets defined in that fight. london, athens, paris all over the world. >> amazing. >> the bigger the entrenched interests, the more the likelihood of regulatory challenges. >> so far fintech has remained out of the arms of washington. that's coming, i'm assuming? >> vintech companies have investors who are the traditional banks or the more traditional companies being disrupted. they're trying to invest in order to not be disrupted. maybe that helps protect them from the regulatory hurdles. >> hasn't europe already fought that? >> the mayo issue? >> yeah. they can't call it mayo, right, because it's not mayo. >> they're still fighting it. >> miracle whip is not. >> no, but this is hampden

creek. >> if it has no eggs, got to call it something else. they've already got miracle whip. they have to come up to something else. how are you going to call it mayonnaise if it's not mayonnaise? >> i'm not a mayonnaise person. >> it's a spread. >> i love mayonnaise. i make mayonnaise. >> mayonnaise has eggs. >> what if you make something that's green that doesn't taste anything like mustard. >> must starred is yellow. >> it's greenish yellow. >> if you make something that's purple, are you allowed to call it must starred? >> i am not invested in this battle. >> you just glossed over that. this battle has been fought. >> then they'll come up with another name. >> you should make mayonnaise with the kids. it's fun. >> make it from scratch? >> so easy. >> eggs and oil. >> of course you can. >> i didn't know that. coming up -- >> thank you. >> coming up, a major medical conference today focusing on blood diseases and the news from it can be market moving for individual stocks.

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♪ welcome back to "squawk box." the american society of hematology gathering in orlando for a major industry conference today. that's where we find meg. >> thank you so much. i'm joined now by the ceo of

blueberg. you had a lot of data coming out and some people call it mixed. this is in your gene therapy that seeks to cure sickle cell. is thinking about a cure the right way to think about it given the new data? >> i think it is. when you think about gene therapy and promise we bring to patients, you can put it in that category and it is early. and so you mentioned the world mixed. if you look from a patient perspective and you look at the data and ability to take the patients from a situation where they have a shortened life span to potentially having a normal life span, i'm not sure i would call those results mixed. >> we're talking about -- let's go for sickle cell first. tiny numbers of patients. a handful of patients. one of them is doing incredibly well. transfusion free. what can you tell us about the

data? >> we're studying and learning. that first patient, that's a 13-year-old boy who was dependent on transfusions to stay alive. and now is free of some of the symptoms or most of the symptoms if not all of sickle cell disease. first two patients don't look the same but as drug development, we have to sort of step back and say what are we learning from that. that's the more important take away. we're still bullish. we understand people have expectations but that's now how we think about it in terms of drug development. that's a long-term game. >> i'm seeing a divergence among patients with a specific type. they don't respond as other patients. now you are starting a new trial in those more severe patients. tell us about how that changes the development program. >> these patients are all dependent on transfusions. they're all severe. we can't forget that. we have about two-thirds of those patients that are responding to the point of 100% reduction in these transfusions which are the key piece to their

early mortality and all of the issues the disease brings. it's still early. we're working hard. by the way, that response rate is not too terrible. it's still in the gray category if you will. these are people that are either 30% reduced or close to 100% reduced. we're still feeling very bullish. over time we definitely will get to those patients. whether that's a new study or how we do it or rolled into the existing studies over time, that's to be determined. that's a discussion that we'll have with regulatory agencies when we have more data. the window is too tight right now. >> we're in a new frontier talking about curative therapies. how do you think about pricing for these and when you have this divergence and some people are cured and some people have an improvement, how do you price something like that? >> it's too early to talk about price but in concept it's not too early. it's an important question because price is the wrong word. what we should be talking about is the value. what's the value that we're bringing to a 13-year-old boy who has a dramatically shortened

life span? what's the value of sickle cell disease patient overall to the system. if we get that conversation going and we step back and say what are we as innovators of these products bringing to bear and then we have to be reasonable in our approach in that regard and cognizant of what other stake holders have to consider because the system as you said is not ready to digest a curative treatment of this nature. together we have to solve it. there will be a price certainly. maybe we can get creative. we're certainly very open to it. share risk and say if it's working or keeps working, let's make sure that dialogue works itself into the pricing and reimbursement over time because that makes sense for everybody, for us and very importantly for the patients and payers. >> i want to ask you quickly, it does seem like the response out of this weekend might be a negative one from the stock perspective. do you feel investors are missing the bigger picture? >> my job as ceo to some extent we can discuss and create expectations over time but

that's a short-term game. our view a long-term game. people are going to do what they're going to do as a company and thinking about it from a patient perspective it's a long-term game and that's the way we'll focus and build the company. >> thank you so much for joining us. >> thank you for having me. >> back over to you guys. >> coming up, this morning's top stories and we'll welcome thomas fanning and dennis lockhart and thomas friedman. you're watching cnbc, first in business worldwide. it's hard to find time to keep up on my shows.

that's why i switched from u-verse to xfinity. now i can download my dvr recordings and take them anywhere. ready or not, here i come!

(whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. while you're watching this, i'm hacking your company. grabbing your data. stealing your customers' secrets. there's an army of us. relentlessly unpicking your patchwork of security. think you'll spot us? ♪ you haven't so far. the next wave of the internet requires the next wave of security. we're ready. are you? the feds last chance to hike

rates this year is a little more than a week away. president obama defending his isis strategy in prime time. reaction to the fight against terrorism and u.s. strategy in syria from "the new york times" columnist tom friedman. it's been more than a year since clarence otis stepped down as olive garden ceo. he'll join us on the "squawk" set as the second hour of "squawk box" starts right now. live from the beating heart of business, new york city, this is "squawk box." welcome back to "squawk box" right here on cnbc first in business worldwide. i'm andrew ross sorkin along with joe kernen and michelle caruso-cabrera. becky quick is off today. crude prices are dropping.

disagreement between saudi arabia and iran and as a result there was no consensus on output targets and they didn't mention a quota, something we haven't seen in decades. analysts say this is a message that opec is willing to deal with low prices to defend market share. among our top corporate stories at this hour, look at shares of chipotle hit very hard. company slashing guidance as a result of the e. coli outbreak. chipotle sees fourth quarter earnings well below wall street consensus and scrapping sales figures saying it can't make an estimate right now. general electric terminating a deal to sell its appliance business. shares are getting hit hard on this. general electric doing just fine at this hour. in midsummer, the justice department asked a court to stop the transaction citing worries the deal would push up prices for consumers.

geopolitical news, venezuelan opposition party wins changing the balance of power and the victory comes 17 years after hugo chavez started the nation's socialist revolution. imf calls the venezuelan economy the worst in the world. president obama addressing the fight against terrorism during last night's prime time address. >> reporter: good morning. as the president tried to reassure americans about the fight against isis, he reiterated the strategy he's been pursuing which does not involve a large number of american ground troops but he included strong words for how muslim leaders around the world should deal with the problem and urged americans not to lash out against muslims. >> muslim leaders here and around the globe have to continue working with us to decisively reject the hateful ideology that groups like isil

and al qaeda promote. to speak out against not just acts of violence but also those interpretations of islam that are incompatible with values of religious tolerance, mutual respect and human dignity. just as it's responsibility of muslims around the world to rule out misguided ideals, it's the responsibility of all americans, of every faith, to reject discrimination. >> reporter: now, this is a similar message to the one that george w. bush communicated after 9/11 but this is a very different point in president obama's term than george w. bush was in 9/11 after america was hit in such a shocking fashion. the president has fueled his critics who said he's not had a strong enough response to isis and now that the campaign is in full swing for 2016, you're going to hear a lot more of that in the next few months. going to be challenging for the president to try to keep the

american people with him on this. we see that polls so far show the majority of people disapprove of the president's response to terrorism. >> thank you, john harwood. appreciate it very much. >> let's get to "squawk" news maker of the morning. we have our guest host for the next hour, tom fanning. steve liesman is also here. so you talked to him about business conditions, right? >> all the time. >> you keep inviting him back and get good info from mr. fanning about conditions. >> excellent info. tom is our chair of our board of the atlanta fed and so we meet periodically and then we talk on the phone all the time. >> mike jackson who is on this program a lot is the vice chair. clarence otis is going to be on. >> is there something that these guys indicated to you, body language or otherwise, that

caused the atlanta fed to be negative about -- was it fourth quarter gdp or next year's gdp? what was it? you guys are more negative than a lot of people, correct? >> i'll quote tom and then tom can correct what i have to say. >> we like that. >> in a recent discussion, tom has ten different industrial categories that he follows carefully and they started the year with three negative and seven positive. at this stage in the year, six or seven that are negative have gone negative and therefore three positive. so in any event, he's got an ability to track industrial sectors in the southeast and then we take that information and try to determine whether it's really relevant for the country overall. it's very valuable information. >> does that help you run southern company or are you just a nice guy? >> it's incredibly helpful. let me back up. he said it right. >> good job. >> thanks. >> there's three kind of big indicators we look at,

industrial sales is generally the leading indicator. projects ahead what's going to happen. then follows residential and follows commercial, the lagging indicator. 2014, all ten of the industrial sectors were green. they were positive. year over year growth and for some time. now as we've gone forward it's gone in the quarters this year three red, five red, seven red. what that tells you is the leading indicator, industrial sales is starting to slow down in a significant way. >> when you decide -- >> lagging indicators are going up. >> why do you need this information to decide whether to give someone electricity or not? >> one of the roles we do is work with each of our states and we do a darn good job trying to do things from a policy standpoint that grows the economy. so the union of the good work that the fed does versus what we do absolutely makes sense. >> when you're speaking, are you saying that your customers within the industrial sector are buying less or this is a survey

of much broader things? >> okay. i'm giving you sales numbers right now from us. it tracks very closely. >> i agree. so there's a decline in the amount of electricity being purchased by the industrial sector in the south? >> it's a decline in growth. >> that was my question. decline in growth. >> we have lockhart here. meeting is coming up. talk to fanning. we love this. >> is there a meeting coming up? >> i want dennis to answer the question raised by tom, which is you have seen manufacturing numbers rollover. you hear what tom is saying about weakness out there. i think by implication tom started out saying there was a better time to raise rates when you had seven positive and not the other ones. what do you think now with the weakening in the industrial sector and some of the other issues out there about the possibility of hiking into that environment? >> let me say first i can't speak for the committee. i don't really know what the

committee will decide a week from wednesday. you know, i personally am ready. i think the conditions are satisfactory and the market is well prepared. the economy is on a solid moderate path. yes, we downgraded our forecast a little bit for 2016, and the economy is growing closer to a 2% world than a 3% world at the moment. but i think nonetheless the conditions are really satisfactory for making a move. >> do you have an outlook on after the first hike, what happens next? tom really wants to know. >> you know, words like gradual have been thrown out. in my own view, there's no preset path. it will be dependent upon how the economy evolves and what we see in the economy and what developments occur.

having said that, at this juncture, i would expect more of a gradual path or going slow than i would a rapid rise in rates. >> when the fed says going slow, if we looked at how the fed approached this first rate increase, we would assume the second rate increase would be 2030? >> well, whatever. you're really over the top, joe. >> let's be reasonable. >> this keeps you guys in business. >> gainfully employed. >> i tell you, when you say it that way, we have talked about this for the last year and the market made little headway. that's one of the things that concerns me about next year because we'll do that. every single quarter point after the initial one it's going to be the most important jobs report of the year. it's going to be the most important fed report of the year. we're going to do that with every single quarter point you

do on your way back to 2% or 3%. i wonder if the market can make any headway in an environment like that. >> it's torture in a certain way. >> thank you for saying that. >> having said that, you know, we don't know exactly how the economy is going to evolve. we can't commit ourselves -- i don't think we can commit ourselves in advance to a particular pattern or schedule. we'll have to watch the economy. >> that's the important point that i think we've been talking about. a few times i've been on here. it's not so much when is liftoff. the statement isn't about the here and now. it's about what is trajectory and what is normal. >> people say uncertainty is hurting where we are when the fed will move. uncertainty won't go away when we do it once. >> that's why words that dennis was using appropriately will signal a pathway. >> can we put numbers on it, dennis? would it be reasonable to think about a 1% funds rate at the end of next year? >> first, watch the dots. >> that's what i'm doing.

trying to put initials next to the dots. >> you'll get a sense of what's in the mind of the individuals on the committee or participants in the committee. so that's probably the best indicator of what that path will look like. people have asked me what is gradual mean? it means not every meeting. beyond that i can't tell you. >> friday was a great day because we know you're going to go and job market was a good number and market went up. that's the first time that these guys that never want the punch bowl to go away, it's almost like they finally said, you know what? wage increases, jobs, it's all good for the economy. weren't you surprised it went up 370? >> i was. i thought the thursday decline was overdone as well based on the fact that there was not a lot of easing as much as market

wanted. that was a crazy reaction. >> it shows you the way the world works with expectations that get built into prices and a slight disappointment relative to expectations and prices tanks. >> can we change the subject? to the situation with terrorism in the united states. in the wake of september 11th, there were changes in consumer behavior but they were short lived. now we have lone wolves going after soft targets. nearly everything in america is a soft target. we're not israel or egypt. we don't have screeners at every single retail facility, et cetera. have you guys started to watch for this? are you hearing anything about this from the stores, the retailers, the businesses in your district about whether or not they're concerned about that and what kind of impact would that have? >> let me give you my personal view on this. we have to be watching for any effect that comes out of these

circumstances on consumer attitudes and consumer behavior. if there's a repeat god forbid of these kind of things, it's at least conceivable that consumers will get more cautious and will scale back a little bit. so we have to watch it. my own take is that it's probably not going to be a discernible effect but, you know, it bears watching. >> you two guys made an important point. that is we have a dual kind of data driven mandate that the fed follows, right? there are so many factors that are not direct to the dual mandate. it's event risk, terrorism, it's what's happening with china and you can go on and on and on. >> dennis, can you put in context the dollar and how that plays into your thinking? obviously it backed up a little bit in terms of the way it's been going. how concerned are you as essential banker of getting too

far away from where the ecb is and where other essential banks are in terms of fed policy? >> it looks like there will be divergence of some kind in policy in 2016 in all likelihood. fed and the united states in a rising rate environment and europe really pouring on a bit more quantitative easing and negative rate territory for their policy rate. i am going to be watching the dollar because the dollar's exchange value has weighed on our manufacturing sector. it's affected tom in all likelihood and so i'm treating it as a risk to my forecast at the moment and not building into my forecast a great deal of dollar appreciation. we have some assumptions but not significant appreciation. we'll see how it goes. i think there has been a fair amount of pricing in of this

divergence theme already in exchange markets but i could be wrong. >> you live in georgia? >> i live in georgia. of course i live in atlanta. >> what are gun laws like down there? i'm wondering. is there conceal carry down there? >> you know, not my department. i'm not sure. >> you don't care. >> i don't pack heat myself. >> if i were a betting person -- >> andrew, you don't want to visit georgia. i don't think you want to fly over georgia which is all you really do to any of the other states basically sort of. >> they have an airport. >> it's hard to avoid the atlanta airport. >> yeah. it's terrible. you start itching. getting a rash. atlanta. all right. thank you. >> it was great to have you. still to come this morning, reaction to president obama's prime time address and fight against isis. tom friedman is going to join us

and then former darden ceo clarence otis is going to be here and we'll get his take on changes to the restaurant industry and his read on the global economy and we'll talk about the syrian refugee crisis and war on terror with former british prime minister tony blair. "squawk box" returns in just a moment. so what's your news? i got a job! i'll be programming at ge. oh i got a job too, at zazzies. (friends gasp) the app where you put fruit hats on animals? i love that! guys, i'll be writing code that helps machines communicate. (interrupting) i just zazzied you.

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look at futures. dow looks like it will open up higher 17 points. nasdaq it up 10 points and s&p 500 up three points. let's turn back to our guest host, tom fanning, chairman and president and ceo of southern company. we were just talking during the commercial break about ted koppel. he has a new book out called "lights out." it imagines a world in which the grid goes down and what happens to the country. how realistic do you think that book is? >> so i think the book points out an important issue but i don't think it's particularly realistic. you know, i think the whole framework of the book is ted would run around and interview people and reach a conclusion that there's no plan and we're not ready, et cetera. i can assure you there's a plan and people are working it. let me give you examples. i chair one of the 16 segments of commerce that has been laid out by department of homeland

security. i chair the electricity sector. so we have been working along with something like 15 to 20 ceos that sit on my committee about harmonizie ining systems, technology and information sharing regimes and we're doing a darn good job. but i can assure you that what we are doing is skating to where the puck will be. getting there is an aspiration because the threat is a morphis. it changes constantly. we have to work like dogs to try to figure out how to great a system that's more resilient. >> you tell me that today from a cyberterrorism perspective, talking about terrorism, that nobody could take the grid down? >> no, i didn't say that. first of all, let me use definitions here. we should link together cyberand physical terrorism because when it happens, you don't know where it is. it could be a cyberattack.

could be a physical attack. all you know is the lights went out. when you say can they get in, i was dubious. i am talking about widespread grid going down. i think that would be incredibly difficult to do. >> there was a time when there was criticism about how not interconnected the grid was. it wasn't as efficient and it should all work together. wouldn't that lead to an increase in vulnerabilities. one area goes down and the other doesn't. >> michelle, that's a fascinating issue. actually being more interconnected makes you more resilient. >> doesn't make you more vulnerable? when you're all interconnected it seems to me you could get the whole thing. >> it would be incredibly difficult to get the whole thing. there was a theory put out by the federal chairman regulatory commission that was reprinted in "the wall street journal." if you take out nine substations, you could bring the electricity grid down.

that's incredibly wrong. the nature of the electric grid in america is that it is dynamic and it always changes and it self-heals. if this one goes down, i can turn that on and loop around. there are enormous advantages to the connection we have. >> nuclear power. i know you're pursuing it. >> it's a dominant solution. >> given the conversations and factors -- >> what did we talk about when this happened in paris and everything else is global warming. if you're serious about carbon, you must do nuclear. it's a dominant solution. this is the mantra i've been saying for some years. clean, safe reliable, afforda e affordable. it's not just clean or carbon. it's those issues being in balance. we must continue to build nuclear in america. frankly on the deregulated markets in america, keeping nuclear alive is a big deal.

>> as dead as a door nail is not what our nuclear is right now? >> no. in fact -- >> i thought lower energy prices was more punishing to nuclear than almost anything else. natural gas is cheap. >> so that's the t-ball question i get a lot. you want to know -- >> backhanded compliment. >> it's like you own different stocks, right? nuclear is the super low beta stock. the energy coming out of nuclear plants is still cheaper than natural gas. you're going to need the base load capacity in america to keep us going forward as an economy. >> okay. we have much more from tom throughout the hour. michelle? >> coming up, forget the grinch. there's a new christmas villain at the box office this year. we have a recap of the weekend's big hollywood winners next.

welcome back to "squawk box." the final installment of "the hunger games" series topping the box office bringing in $16.8 million pushing domestic take to above $200 million.

and "krampus" is in second. it's a freaky little story. coming up in last night's prime time address, president obama pledging that the u.s. will hunt down terrorists plotters but will not engage in ground wars in iraq or syria. we'll get reaction from "the new york times" columnist tom friedman right after a break. we're back in a moment. it's hard to find time to keep up on my shows.

that's why i switched from u-verse to xfinity. now i can download my dvr recordings and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way

you experience tv. welcome back to "squawk box" here on cnbc first in business worldwide. kacarl icahn says pep boys reta segment would be good for rival plus. gasoline prices dropping again. average price is down four cents

in the last two weeks to $2.10 a gallon. and head of iran's poli police cyber unit has arrested 53 people for running pro-isis websites. in california, the investigation continues into last week's attack in san bernardino. cnbc's jane wells joins us with the latest. jane? >> reporter: even hours before dawn and all through the night we've seen people who have come by to this impromptu shrine which has sprung up here up the street from where the massacre took place. in a little while we're going to get updated from law enforcement and perhaps learn more about the suspects and about the man who purchased the two semiautomatic rifles in this case. police got inside the house of enrique marquez this weekend. former neighbor of syed farook. he's not considered a suspect and in fact he sought mental health treatment because he's so

distraug distraught. how and when were guns transferred to the shooters? syed farook's father said his son agreed with islamic state's ideology and was "obsessed with israel." >> they are saying they have proof. they have not showed any proof that she has done this. if they say that she died, they have no proof she's the person who died. >> reporter: last night the president said there is a vain of extremism which the muslim community must confront "without excuse." he said we cannot turn on each other at the same time. he also said more needs to be done to make it difficult to get assault rifles and in response someone put a letter on the shuttered door of the killers'

door saying why don't you be the first to support your cause by taking away your private security to protect your family and their high powered weapons. until then, leave our second amendment right alone and do what is right. go after the extremists where your focus should be. back to you, guys. >> jane wells joining us from san bernardino. thanks. billionaire investor jeff green hosting a conference in florida focused on closing a gap in the american economy. robert joins us now. >> good morning. tom friedman is bestselling author and "the new york times" columnist and an expert on all things middle east and global economy. tom, thanks for joining us. >> great to be here. >> president last night mentioned this is a new phase of terrorism where it's inspired but not directed by isis. what do you make of san bernardino and his speech last night? >> you know, on april 18th, 1983, i was sitting in my apartment in beirut and a blast

happened that was so powerful that it knocked a little transiter radio i had on my desk off my desk. i scrambled downstairs and saw a mushroom cloud in the distance and chased it. the closer i got it couldn't be. i rounded the corner and there was the embassy in beirut cut in half by vast explosion, bodies hanging out the floors. i don't remember when i had the conversation but i did talk to someone at the embassy and asked what happened and they said it's amazing. a man apparently driving a pickup truck drove up the stairs of the embassy into the lobby and blew himself up. and i do remember this. i said do you mean he committed suicide? he blew himself up? that seemed like the most bizarre and unusual thing i had ever heard. >> that was a new phase then. >> it was a new phase then. what strikes me today, 32 years later, is i still don't understand this. i don't really know who does.

i thought i had seen limits in beirut when i saw suicide bombers blow up a funeral in a mosque on ramadan. i thought all of the barriers had been crossed. we just saw a couple shoot up the husband's co-workers basically at a social services agency and leave their 6-month-old baby behind. the boundaries have all been pierced here in ways that i have to say for myself leaves me speechless. >> you've seen that evolution. you say this is not the jv team. ice sis not the jv team. this is jihadist all-star team. what makes them so good and how do we stop them? >> isis is a coalition. what makes them good is they have smart sunni baathist army officers who are leftovers from saddam's regime combined with some really crazy prison hardened and depraved jihadists attracting all kind of adventure

seekers and losers and many of them young men who have never held power, a job or a girl's hand and that's a terrible cocktail. >> you talk about the fact that we do allies in the region, but we're hoping for what you called an immaculate intervention where we just bomb from the air. it's someone else's boots on the ground. where are these allies? why aren't they doing more? >> i live by that old motto that if you're in a poker game and you don't know who the sucker is, it's probably you. so the problem we have with this coalition is that everyone wants what we want as their second choice. so what we would like is a multisectarian democratic syria and iraq. what the sunnis are interested in is defeating iran. what the jordanians are concerned about is that they control damascus. so everyone has another agenda.

there is no -- every deck, every card in this deck is a joker, okay. and so we're trying to pull together a coalition where everyone says, mr. president, we want what you want as our second choice. >> the president said last night, look, the isis wants us to have a war on islam. they want americans to start saying, look, let's basically blemish all of the islamic faith with what happened in san bernardino. you lived in the muslim world and reported there for years. what is the connection with islam? >> the way i see it is this. my wife and i lived in beirut for five years. i certainly came away from that experience with the knowledge that the vast majority of muslims not only do not participate in this behavior but condemn it and they're horrified by it. at the same time we've now seen over these last 32 years that there is a minority that is taking permission and inspiration from their interpretation of this faith.

they can't get inside our judea christian narrative and we can't get inside their muslim narrative. as the president rightly said, we have to challenge them and say please explain this to us. we don't understand this. we see where majority is. there is a minority that is taking permission and inspiration from the faith and i don't understand it but we need their help in understanding it. >> andrew? >> tom, fair or unfair to bring in the debate around gun control in all of this? >> you know, it's not the central problem. these people were making homemade pipe bombs. look, having fewer guns out there, i'm all for in a world where you have so many what i call super empowered angry people. it's perfectly fair to me. it's not the central issue here. the central issue is how can a couple shoot up the husband's

co-workers in a social service agency and so hate their co-workers that they hate them more than they love their own kid and leave their kid behind. >> tom, you talked about this tension between religious extremism in the world and globalization. does this impact the economy? markets were up at the end of last week even though this was declared a terrorist act. when you look at the middle east and when you look at the connections with europe and look at the u.s., what is there, if any, economic impact from what's happening right now? >> what i worry about is what you see in europe already is because of refugee outflow from the middle east and because of what happened in paris, a desire to control borders more tightly. the eu was invented to create an open flow of people in goods and services. let's say as a byproduct of this, the eu starts constricting itself. they lose a quarter percent of growth because of that. over ten years you talk about trillions of dollars of lost

growth and jobs not created. i really believe that the eu is the united states of europe. i believe that two united states in the world are better than one. they're our partner as democratic capitalists in measuring the system. if eu is weakened, we're weaker in the world. >> i almost hate to ask this last question. where are we in the sort of phase and evolution of terrorism? is this going to be something we wake up to on a regular basis? >> i really do start to worry both because of the eu dimension of this and the fact that these guys in isis are so wicked and so wickedly smart, you do have to without being overly scary, what if they get nuclear material or biological material? these guys will use it. they burned a pilot alive. these are people who would actually use it. i think the threat has to be taken more seriously. >> joe? >> just something that i don't

quite understand at this point, three or four times you said so hated their co-workers. do you know whether the husband had talked to the wife about his dislike for his co-workers so that that was got her to the point where she was ready to do this? are you trying not to say islamic extremism. >> knock it off. don't even go there. >> did she hate her husband's co-workers? >> i have no idea. joe, i'm not going to go there. that's total nonsense. that's total and complete nonsense. i'm not even going to let you ask that stupid question. i just talked about the importance of islam to the story. take that line of argument -- i said clearly islam inspired what they did and they took

permission from islam to do it. how more clearly can i state that to you? >> i didn't understand hating co-workers. i don't think she worked there. it obviously want her motivation. >> take it somewhere else, joe. not with me, pal. >> last question -- >> read every article i've written on this subject. >> this conference is about upward mobility and about the pressures of globalization and technology. do you see any of the presidential candidates talking about those two twin threats to the middle class in an intelligent way? >> the only intelligent way to talk about threat to middle class is without more employers, you can't have more employees. ultimately it's a question of how do we inspire and nurture more job creation in this country. >> it comes from the private sector. >> more risk taking and risk takers. that doesn't strike me to be a dominant theme of either party's

candidates in this election. >> i think that was something you would like to hear, right? tom said it's about private sector job creation. >> i'm going back and reading everything. that's my assignment. >> go back and read all my articles. i'll be happy to send them to you. >> please don't make me. thank you. >> that's such bs, joe. >> coming up, clarence otis will join us to talk about healthy dining, corporate leadership and the global economy.

our next guest used to run the largest full service restaurant company. he keeps his pulse on the dining industry. clarence otis is now on the board of healthy dining among other firms. he's on the board of the atlanta federal reserve with our guest host tom fanning who brought you in. great to see you. it's been a while. >> it has been a while. >> would you be able to handle this chipotle deal? that's awful. how does it go from coast to coast, something like that.

>> it's difficult to handle. in the food industry it's always a nightmare scenario that you have, food-borne illness. it goes coast to coast because you have national distribution of product. they're trying to trace through their product change to understand and isolate what specific product it was and deal with it. >> historically how long does this take? this will be a while for chipotle to regain that loss luster. we go all of the way back to the tylenol scare and the way a ceo handles it. this is where you earn your money, isn't it? >> it is. to get consumer trust back, you have to go -- >> and fix the problem itself. >> that's the first part of getting consumer trust back. it's taking them a little bit longer than you would like to identify the source of the problem and get their arms around it. that's led to a little bit more consumer trust erosion than you might expect. >> i'm surprised.

they're a spin-off from mcdonald's. mcdonald's is famous for its control of the supply chain. they make sure that supply chain is safe. somehow that institutional knowledge transfer failed here. >> when they spun off, they were much smaller than they are today. so that increase scale begins to increase risk and you need more sophisticated systems to handle it. clearly there is an issue with tracing food to the source. they have a lot of suppliers because they have gone in a direction of local and organic and that makes it more difficult than if you have a smaller group of suppliers. >> in terms of casual dining, is it a good time to be here with gas prices where it is? overall economy is holding back growth. where are we? >> i think it's always a good time to be in casual dining

because casual dining is integrated into people's lifestyles. it's a very solid base. it's a very big base. right now sales have improved. they are continuing to grow generally. there have been months where it's been negative. but it's softer than you would have expected given history and where gas prices are. i think casual dining sales like sales in a number of consumer categories are under pressure from new spending priorities at the top of that list are digital spending priorities and so smartphones and the data plans associated with those cost a lot of money. >> that disposable income is switched out against restaurants. >> against restaurants, against apparel, against a number of different consumer categories. the average smartphone bill for the average household is $150 a month. on a household income of $50,000

a year, that's after tax money, that's a fairly significant expenditure. >> restaurants are soft targets. what do you think the industry is thinking at this point in the wake of this fear about listening to the president last night talk about the possibility that fighting lone wolves is extremely difficult and yet you don't want to have metal detectors at restaurants. what does the industry do? >> i agree. i think the industry has pushed back against some of the open carry laws. you see that across the different parts of the country. >> in that they don't want people bringing guns with them. maybe the reaction should be the opposite? wouldn't it be better if you had law abiding citizens with guns in. >> i don't think so. your customer would be more nervous with open carry. >> the shooter would know it's a gun-free zone if they went in? >> i think when it comes to soft nature of the targets in the country, we have to balance security with our lifestyles. i mean, i've been to egypt.

i heard someone mention this morning that we're not egypt. we're not israel. it may have been you with security agents on every corner. the price we pay is that we're more subject to these kinds of incidents. we've had mass shootings that are not terror related in this country. more of them than we would like. and i think the industry recognizes that's part of the landscape that we have to deal with as a society. >> clarence, different topic. you mentioned iphones and devices. do you see a day where people walk into a restaurant in a meaningful way and order on their device while they're sitting there and it actually takes jobs? do you already see that happening? >> yes. >> how far does that go? >> well, i think there's always going to be an experience part. what we're seeing with consumers is increasing interest in experience as opposed to product. that product will make that experience different but there's

an experienceal nature and that means there needs to be people. >> would that mean higher profits or lower prices because of the technology factor? >> more stable prices. less inflationary pressure. it means that casual dining and a core of casual dining is every day price accessibility will continue to be there. >> you never started the mexican chain. here you are in a position to swoop in and take all that chipotle business right now if you had listened to me on starting a mexican chain. >> yeah. casual -- >> one of the many regrets. >> that's part of the issue is that in that full service environment, we talk about cost, it's difficult to deliver

mexican at margins that make sense. >> you looked into it. >> i did. >> why are markets more difficult in mexican food? >> a limit on what people think they ought to pay for mexican food and that price ceiling is more consistent with fast food experience than with a full service experience. >> okay. >> good to see you. >> that's my favorite insight of the day. coming up, chairman and ceo of sonic restaurants will be here in the next hour. limit on burgers is higher i bet, right? we'll ask him about trends in the restaurant industry and impact of minimum wage hikes. you can pay 100 bucks in the city for a burger. music: "another sunny day" by belle and sebastian ♪

♪ ♪ such a shame it's labeled a "getaway." life should always feel like this. hampton. we go together. always get the lowest price, only when you book direct at hampton.com

>> it's been great having tom fanning joining us to talk about the key issues that we face that impact the electricity industry in a very big way. >> it's great being here. >> terrific. coming up, former british prime minister tony blair joins us to talk about the fight against isis, the refugee crisis and the global economy. stay with us.

the war on terror. new details on the san bernardino killers. a london subway stabbing being investigated as a terrorist incident and president obama outlining his plan for defeating isis. our special guest this hour, former u.k. prime minister tony blair. >> a bad taste for investors. shares of chipotle getting punished as the chain slashes guidance following a major e. coli outbreak. u2 plays paris again.

♪ >> the irish walkers return to the city of lights after its planned shows were postponed in the wake of last week's terrorist attacks. the sights and sounds of this emotional show coming up. 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" right here on cnbc first in business worldwide. we're now less than 90 minutes away from the opening bell on wall street. futures a mixed picture. they were up more earlier. nasdaq is up around six points. checking out shares in europe right now as we flip that board around, you see green arrows across the board. the dax up 2%.

kac up 2% and we'll talk about stories. a new survey finding economists trimmed their forecast for next year. oil prices dropping near their 2015 lows. crude right now looking at wti crude that we'll show you right now at 39.16 dropping under the 40 handle. the average price of gasoline is now down four cents in the last two weeks to $2.10 a gallon. lowest level since late january. a few stocks on the move this morning. chipotle slashing guidance as a result of its e. coli outbreak. chipotle is scrapping its same store sales view for the next year saying it can't reasonably make an estimate right now. look at that stock. getting hit by 9%. general electric is terminating a deal to sell its appliance business. the transaction faced a lot of

regulatory pressure from u.s. authorities. shares of blue bird bio are down sharply. the company focusing on blood disease and data on sickle cell missed its expectations. carl icahn taking a 12% stake in pep boys. it agreed to sell to bridgestone in october but pep boys retail segment would be a good fit for a company they already bone. and bbcn bancorp are joining wilshire. questions on whether the fed is ready to start raising rates. dennis lockhart joined us in the last hour.

>> i can't speak for the committee. i don't really know what the committee will decide a week from wednesday. i personally am ready.fac satis. we downgraded our forecast a little bit for 2016. we're growing -- the economy is growing closer to 2% world than a 3% world at the moment. >> joining us now is keith banks, president of u.s. trust, bank of america private wealth management. good to see you. one point that we made and we spent a lot of time talking to mr. lockhart that you have one that comes in december. what do we do next year? where are we at the end of 2016? one point we made was uncertainty when they go a

quarter, it's not going to end there. we're just going it transfer that to how quickly they get back to normalizing rates. will that make it hard for equity markets to make advances? >> we don't think so, joe. we do believe you'll see in december the 25 basis point rate hike. and then our best guest for next year is that you'll see three or four more additional 25 basis points. >> 1% or so. >> right. >> another 2017 three or four so when do we get to three, four, five? we don't in the near term. we end at two? >> our view right now is that 0% fed funds rate equals a crisis environment which we are no longer in. i think it's very appropriate. what we're seeing now is indications the economy is strong enough to stand on its own. the rates will reflect that. >> hold on. we have breaking news real quick. >> carrot green mountain was just acquired officially

announced. jab holdings paying $92 a share. that's a full cash offer we should tell you. jab holdings you might know from owning all sorts of things. they own pete's coffee. >> was up 51.65. they'll offer $92 per share. it's halted. that's a huge premium. >> total deal worth $13.9 billion in total and represents a premium of 77.9% over curing green mountain's closing price on december 4th, 2015. lots of questions over the future of keurig green mountain. >> stock traded at 146 this year on its own. you can see it right there. dropped from 141 to 50 and now being bought at 90. it's a premium from where it is. >> depending on where you bought

it, it looks great or a disappointment. >> coca-cola made an investment in this company and there's a comment from the ceo saying they are supportive of this transaction. we enjoyed a strong partnership with keurig green mountain and will continue. people have talked about whether coca-cola could transform itself through this partnership. pepsi of course had a line of soda stream on the other end. >> positive comments from the chairman and ceo weighing in on the press release reiterating very similar concept. at least suggesting they're supportive of the transaction. >> we'll dig into this and continue this conversation and come back to this transaction in just a moment. >> okay. i guess if you get 2% in two years, inflation stays where it is, we continue to grow at a reasonable rate, after all that is said and done, that makes it

pretty friendly for equities. don't get too complicated? >> we think tcloser to 3% next year. global growth 3 to 4. all of that translates in the u.s. for s&p 500 into 5% to 6% growth in earnings and that will be the order magnitude we see in the markets and dividends on top of that next year. >> what do you attribute the tough sledding all year long to for 2015? the problem with the oil stocks and s&p and also the strong dollar? why would that change for next year? >> we don't think it will. we think right now we're roughly in the mid point of the economic cycle, which is good news. it means that we have at least another two or three years or more to run. the further you get into the economic cycle, the more crosscurrents you see almost by definition. that's to your point what we saw a lot last year.

oil prices going down. the dollar spiking. we think you'll see more crosscurrents in 2016. it won't be without some interesting things. the geopolitical situation obviously getting much more challenging. you have the presidential election cycle next year in the u.s. what's going to be interesting is something we have to watch. we're pretty optimistic that wages will keep going up. we saw some good signs of that in this year and in november. we have to keep an eye on that. it could cause pressures in margins. we think next year becomes a year of two halves. first half better performance in the market. second half maybe more choppy. >> funny, because we have made the point in the past that there are market people that worry at full employment. it's counterintuitive. some guys say that's the beginning of the end of a strong stretch of stock market appreciation is when you start to see the beginnings of what

every other recession is caused by and that's when things overheat, wage price spiral. any way a wage price spiral ever comes about again? it seems like we've written that off forever. >> i wouldn't use the word spiral. >> there's globalization of the worker and everything else. difficult to imagine a period like the '70s again. >> i think what you will see is wages going up. we saw 2.3% increase in the average hourly earnings index in november. it's up 2.6% this year. what we have to be careful of is inflation has been missing in action for so long that if we get more discernible signs that inflation could be coming courtesy partly of wage increases, that would be a big negative surprise that markets would have to digest. we're not looking for a spiral. expectations are so low on inflation that you could get a negative surprise that could again move markets around but not enough to derail them next year. >> thank you. we appreciate it.

coming up, when we return, much more on the morning's big deal. keurig green mountain being acquired for $92 per share in cash. our news maker of the hour in just a moment. former u.k. prime minister tony blair will join us in talking about the war on terror. a quick check on what's happening in european markets right now. you see green arrows across the board with dax up almost 2%. you're watching "squawk box" here on cnbc, first in business worldwide.

welcome back to "squawk box." futures have gone negative for dow and s&p. they had been stronger because of the strength of the dollar helping european markets. nasdaq would open higher by two points. making headlines, security concerns around the world today including in london where counterterrorism police are investigating a subway stabbing attack in which two people were wounded by a man with a knife. these pictures caught by a cell phone camera. witnesses say they heard the attacker say "this was for syria." the air attacks in syria have been called illegal by syrian

lead leader bashar al assad. robert frank is with former u.k. prime minister tony blair. hi, robert. >> tony blair tracks extremism around the world. thank you for joining us today. >> thank you. >> you gave a speech last week before we knew that san bernardino was a terrorist attack saying that isis is being underestimated by the west. what do you see -- how bad will this get for the west, for the united states? >> i think it's going to be a long, hot struggle. it has two elements to it. it's important to distinguish between them. the first is defeating isis, not just where they are in syria and iraq but in libya and the other countries in which they have a base. and that requires us to intensify our efforts both on the ground, by air, it's important the u.k. and germany and others are joining the u.s. led initiative.

and we have to go after them with every means that we can in order to ge defeat them. we have to deal with wider ideology of extremism which is part of the culture of hatred that has a much wider weech than we presently recognize so you have education systems around the world in countries that are educating millions of young children to a close minded view of their own religion and a close minded view of the world and a view hostile to those that are different. i think we need both the short-term security and military issues addressed but also then this longer and broader ideological problem. >> san bernardino, this war of ideas so much harder to figure out. this was a case in san bernardino where it was inspired but not directed by isis. how do you fight a war of ideas? >> i think you have to say what

is the idea that you're trying to fight? what is a better idea to put alongside it. we've been here before in the 20th century ideologies and fascism and what defeated those was military strength and putting the idea of peaceful co-existence. i would say today is the idea of religious tolerance, peaceful co-existence and helping countries eradicate from their education systems the teaching of what is frankly a culture of hate. i've suggested that we have -- if you want a commitment to education part of global responsibility of all countries to promote cultural tolerance and root out religious prejudice from their education systems. if you teach millions of people that the west is fundamentally hostile to islam, people that are different are your enemy, it's not surprising you get a proportion of those that go into

fanaticism. there is hope for the future. within islam today there are voices both theological and political that are arguing this case and arguing it strongly. there are allies. they need our support. we have to get alongside them and help them. >> it's necessary for us to demonstrate that we're prepared to attack isis in syria. >> there are consequences to that. we already see that this london terrorism on the subway where there will be backlash, won't there? >> one thing we have to do is recover our own confidence in this battle. yes, of course these people will target us. you know, they will always have an excuse for what they're doing. so 9/11, that was out of the general feeling that the west was hostile to islam. and then it was wars in afghanistan and iraq. now it's the war in syria.

but how does this sell grow in belgium, which wasn't part of this military action or norway and actually it's not just in the middle east you have this. you have this in northern africa. you have it in nigeria and mali. chinese, biggest security problem chinese have is in china. i think we have to realize it's global. in point in thinking if we stay out, they'll stay back. they're not. they'll bring it to us. we have to prepare ourselves with what i say is a comprehensive strategy for the long-term. >> michelle? >> mr. prime minister, it's michelle here. thanks so much for joining us. i'm not sure if you saw president obama's address to the nation last night. when he talked about what the strategy was, it's very similar to the strategy he's already had. more air strikes. critics of the air strikes say

rules of engagement are so co constrained they haven't been effective and no boots on the ground instead you have to train individuals within syria to fight and yet that has proven to be almost impossible and generally failure at this point. did you see the president and what's your assessment of what he said and what he offered up as a solution to the problem? >> i think it's important to realize that actually over these last weeks and months, there has been an intensification of the ground campaign led by the u.s. one of the things that's interesting is no one wants to go back to deploying tens of thousands or hundreds of thousands of troops. if you actually see what's happened on the ground in the last few weeks, for example, in iraq we're able to work with the iraqi government. actually, there have been some successes. if we intensify that campaign, i think we'll bring even more success because air strikes really only work if you have also got coordination between force on the ground and the air

strikes. now, they don't always have to be our forces. our so-called boots on the ground. but you're not going to take a group like isis out that have an amount of territory equivalent to the size of the u.k. you won't take them out simply by air strikes. there is a lot we can do to help other people in the lead on the ground with our support and as i say, there has been intensification successfully in these last few weeks and we should learn from that. if possible, intensify it still farther. >> when you look at the presidential candidates -- >> has the u.k. called on the muslim community the way president obama did last night in order to help refute this ideology and are there any lessons to be learned from there? >> it's absolutely essential that we ally ourselves within to those people within islam who are also fighting to take back the reputation of their religious faith from the extremists. out in the middle east where i spent a large part of my time,

they are explicit about this now. there are people denouncing the politicalization of islam. the extremists ideology that fuels fanaticism and in the end those are the people who are going to win this fight but they need our active support and we need to realize this is a fight in which we're all intimately engaged because it's a fight about values and religious tolerance and peaceful co-ex-istiaco-ex-is co-existence. >> which presidential candidate do you think is best equipped to handle this crisiscrisis? >> i know it's early in the morning but not that early in the morning. who you choose as your president is up to you and not up to me. >> what you've hear, hillary clinton obviously you've had a relationship and worked closely with in the middle east. some of the others you know a

little bit as well. i mean, which of them do you think is addressing this problem? maybe there are several. >> i'm not going to get into individual candidates in the u.s. election campaign. i do think what is important is if it's possible in what is bound to be a very tough and combative period, if it's possible to forge some sort of consensus around what needs to happen, then this will be a good thing and the world would welcome that. it will in the end. it's obvious in the end. a combination of hard power and soft power. you need two things coming together. if you end up polarizing it so some people advocate soft power and hard power, that's unfortunate. from an outsider spe er perspec what we would like to see is america in a position where it can lead a coalition with those two component elements. >> mr. prime minister, thank you for joining us this morning. appreciate it. guys, back over to you. >> thank you, robert, and also

to you former u.k. prime minister tony blair. >> coming up, a big deal in the beverage business. keurig green mountain taken private. 78% premium to friday's closing price. shares are halted on the nasdaq right now. shares of soda stream jumping on the news. much more on this story when "squawk box" comes right back.

coming up, we'll talk about the big deal for keurig and what companies including coke have to say about it this morning and "squawk" makes a stop at the drive in. we'll talk fast food trends with the ceo of sonic. look at equity futures this hour as we go to break.

keurig green mountain agreed to be taken private in a huge transaction nearly $14 million. the deal valuing keurig at $92 a share. keurig shares halted on the nasdaq right now. that's the good news if you owned it today. having said that, in the past 12

months you can see where that stock used to trade. clearly over $140 earlier this year. lots of questions about the valuation of keurig. people questioned the future of the k-cup industry. fascinating transaction. this is going to a small family run company. i don't know if it's small because largest coffee makers in the world. this is jab. people don't know jab. it's run by -- >> they own tons of coffee companies. >> also for you, by the way, they own jimmy chews and perfume maker cody. all sorts of licenses around that. they own the swiss shoemaker. it's a huge combination. you remember by the way in terms

of coffee, there was a combination with dea masters blenders which had been owned by another company that owns 49% of that. that's why they're in this transaction. coca-cola on the other end with a quote on this transaction. they had a stake as people looked a the that transaction. >> should we look at shares of soda stream. it moved higher because there were thoughts that if they'll go after keurig, not necessarily this company but maybe this company could potentially be in play. that's a gain of 14%. >> make your own stuff in the kitchen. >> we should also say that warren buffett's favorite banker that started his own advisory and private equity firm involved in this transaction as well. there's a whole sort of fascinating back story to all of this. we'll see what happens. >> stock trading at $92 a share.

>> how can that happen? >> personally bankrupt. >> i didn't read the entire piece. something about one of the co-founders. >> maybe margins aren't good on expensive shoes. >> $400 a piece. i don't mean a pair. each shoe. do you know any of that? >> just a few. only one or two pairs. actually i don't like the way they fit. >> do you have a place to put them? >> i have a small, thin wall for my shoes. i'll take a picture this week and show you my shoe wall. >> i'm not that interested. some people are. biotech and pharmacy ceos gathering at the american society of hematology conference on blood disease. how did i miss my ticket. meg is there. obviously you were able to scalp

a few. she joins us with a special guest. good morning. >> we wish you were here with us, joe. thank you so much. thank you to the ceo for joining us. >> a pleasure to be here. >> tell us about data you presented here at the meeting on your leukemia drugs. what's the new development here? >> as you know we're developing exciting new pair of drugs that target precisely a mutation that occurs in about 25% of adults with acute leukemia which is a devastating disease. we haven't had new treatment in decades. it's exciting at this meeting where we present eed data on cle to 300 patients treated with our new investigational medicines which are pills given once a day and in very sick patients with relapse leukemia we've seen close to 40%, four out of every ten patients have a durable complete or partial response and another four out of ten that leukemia stops growing and other

blood counts are beginning to repair. and the mechanism by which this drug works is a new biology. instead of chemotherapy which kills everything, our drugs are actually repairing the leukemia cell. taking a cancer cell turning it into a normal cell. exciting to see the reaction here. >> as cancer cell it would live on and you are enabling it to live out its life and die at some point. >> it's a whole new approach. that's what makes it so exciting for us. the side effects have been very, very mild because we're not destroying everything. we're repairing it. >> we're at a blood cancer conference. i have to ask you about solid tumor data. the criticism is about translating this into solid tumors. tell us about that opportunity. >> no one ever tried to do this mechanism in a solid tumor. repairing the cell back to a normal cell. the way in which we evaluate whether a drug is effective in

helping a patient is going to have to be different. we presented data a few months ago where we are encouraged by what we're seeing this patients who carry this mutation which are brain cancers, cancers of the liver and bone. we've just in the early parts of phase one trials but we're moving rapidly and we think there's a promising future in all patients who carry these mutations which affects a large number of cancer patients. >> i want to ask you about that. you're doing cell metabolism but you are also genetically targeting and looking for specific mutations. how broad is this approach throughout cancer? >> we've known for decades that cancers bring in hundreds times more sugar and other nutrients than other cells and break them down differently. no one ever tried to exploit that. we will tackle a new area of biology and we think it's broadly applicable across a wide range of cancers. we also practice precision medicine. we're only going to bring drugs into the clinic when we know the right patients to treat based on

a genetic marker. we do that for every one of our drugs. >> with a new approach like this in combination there could be some really incredible opportunities with other mechanisms. how do you think about combining these drugs in the future? >> the beauty of what we've seen so far and what's so encouraging is our drugs because they're so highly targeted and the mechanism is so different we're not seeing typical side effects. that means not only can they be useful as single agents but they'll combine very well with all of the other different agents and again wearing my hematology hat, if we'll cure patients we need to get the cancer early. >> thank you so much for joining us. >> always a pleasure. >> back over to you guys. >> okay. thanks. one quick note by the way. we've been talking about keurig green mountain transaction this morning. $14 billion transaction being sold to jab. one loser it appears this morning and we need to do more work on this, may very well be

david einhorn. he had a short position against keurig green mountain for quite some time back in 2011. i think he originally closed it out in '14. he then apparently went back at that short again started shorting the stock at 102.08 more recently it looked like a great winner. of course you recall he's had a tough time of it this past year with returns that have been down close to 20% if not more for the year so this is not going to help his cause this morning. we'll talk more about this. >> he's up. you don't know -- >> we don't know. >> he's still making money. >> we're joined by jonathan, the analyst. good morning to you. >> good morning. >> you look at this transaction, does this make sense to you? >> it does. just because of the relatively

inexpensive entry you get to 23 million to 30 million households depending on whose numbers you believe and how many people are adopters to this. that's the strategic asset. there's nothing that's more repeat habitual purchase than coffee pods and i think that's what the buyers see here. >> you look at the price though, does it make sense from a price perspective? >> well, you know, if you break it down in terms of -- depends how much you think the system grows. i think it's a reasonable price considering you're going to have -- first of all, cost cuts but you're going to have a growing system here. people have buying two pods a day. you break it down. you only need to make five or six cents a pod to get to something like 15, 16 times free cash flow for this business if they can get in and sustain that, i think it proves to be a reasonable price with strategic options on top of that.

we watched coverage a couple days before the last quarter and we did recommend it pretty aggressively because we thought the worst possibilities were priced in. the fear in the marketplace has been that this is going to be a never ending price war down to zero as new competitors come into the system. you know, our point of view is that the guys at the very least are scale manufacturers of these pods and they have a trusted brand and a group of people going to 30 cents a cup paying 100 bucks for a new coffee maker for the privilege. my bet was going to be that group of households is not going to be the most price sensitive in the world. i think that's probably the position the buyers take as well. >> i don't know if you can see the screen. we're showing soda stream down 22.5% this year. does that look like a takeover target to you now? >> it's a very different

situation in that you already have soda available in a pretty convenient form you can take home. it's not like -- green mountain jumped into a market where people made big pots of coffee and hated wasting it. in soda they buy 12 packs and you walk by soda machines and convenience stores and it's a very different situation. i don't think there's any takeaways between the two. >> any chance that another buyer comes in? is $92 a rich price that it scared everybody off? >> it's a big premium. you look at stock where it was recently and i think that is why it happened that way. there's no -- i noticed that there's no financing provision and they want to close this in the first quarter. when you deal with a private company with no financing provision, and clearly the pockets to do it, i don't see how someone is going to come in with a more attractive offer. it looks like coca-cola is on

board. >> thank you for your perce perspecti perspective. >> ceo of sonic will join us. stay tuned. "squawk box" will be right back.

proud of you, son. ge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world.

>> the average price is down four cents in the last two weeks. lowest level since late january. potential good news for sonic. pain at the pump freeing

customers to spend more on eating out. good to have you on the set. >> thank you. happy to be here. the low gas prices are good for customers. >> this is only 32 ounces. you didn't bring me a 64 so i could break the law in new york city as i drink it on set? >> we do have route 44 as an option. we refer to the drink as route 44. it's an option. nurse it all day. >> i was charmed in this world of don't eat this and don't eat that, you do a google search for sonic and local articles come up about how excited people are that sonic is opening. there's nothing low fat, low sugar, organic, nothing about your stock and the company embraces it. >> we have 20,000 drink combinations below 60 calories. one of the most rapidly growing drinks is tea which we have on

the set peach tea. we're happy to sell the tea. nice chicken sandwich that's 450 calories. blt sandwich below 500 calories. there are options from a drink standpoint and sandwich standpoint that can fit most any diet. that's not why they come to sonic. we do over 500 million in sales in ice cream and 10% butter fat. delicious stuff. >> quick service restaurants. >> we had on earlier the head of the restaurant retailing association. we were talking about the issue of soft targets in the wake of san bernardino. sonic is a little different because people are in their cars. they are not in an enclosed room. he was against the idea of private carry, people bringing if they have permit to carry a gun to bring it with them as

we've seen sheriffs encourage people because they fear they can't get to a place on time to save people. do you have any position? >> this did come up on some of our sites a year and more ago and there were some young fellows bringing weapons onto sites of ours and competitor sites. we did adopt a public policy at the time saying don't bring concealed weapons. >> employees or customers or both? >> this is saying to customers our policy is don't bring them onsite. we received mostly positive reaction to that from customers and almost no negative reaction at the time. but it also in terms of activity, it died down pretty quickly. now in terms of the way sonic drive-in works, our customer don't come into the premises. they bring the food to the customer. it's perhaps a little lower risk

site than some might be in that kind of circumstance. >> so the two dorks, are you going to stay with them? brothers, friends? >> i think they're friends. we got pete and t.j. out of chicago. >> he's not annoying in your viewers -- i guess they remember it. >> that's the thing. >> do you write the material? >> i would love to take credit for writing it. i do review it before it's worked up. these guys do a lot of ad-libbing as you would expect. that's their forte. >> if i go, sorkin, which one would you want to be? >> the guy in the wig or without a wig? >> he doesn't always wear the wig. >> that was just for that one commercial. >> driver or passenger? >> usually you're the passenger when we drive around. you don't have a car. he says all the stupid stuff. you wouldn't have to take on a

character. >> thank you. that's very kind of you. >> you guys are doing a good job. we're off and running. this is a -- >> you're going to stick with this? >> we're going to stick with this. high awareness of customers. very high awareness across the country. only campaign in the qsr business that has higher recognition is mcdonald's. so we're sticking with it. i see all of the commercials before they run. >> the scary thing is i know what latest thing they were pitching was and i wanted to try it. did you bring over some chicken? >> yeah. there are chicken sandwiches here. premium chicken sandwich. >> that's why we like restaurant ceos. a lot of different sauces. >> we'll check it out. cliff, thank you. >> great having you on. thanks for joining us. >> cnbc's annual disruptor 50

list highlighting companies. one company on the inaugural list back in 2013 but fell off the list because of fda regulation and now it's back from the ashes and julia boorstin joins us to tell us all about it. >> thanks, andrew. 23 me offered low cost personal dna analyst to fuel healthcare decisions but the company put their tests on pause in 2013 for providing health analysis that had not been cleared. this october 23 and me returned with 35 fda approved genetic health tests telling users whether they carry genetic mutations including cystic fibrosis which could be passed to children. the company promoting the services with a big tv campaign. 23 me won the approval by convincing them that consumers don't need a health professional to understand the results but it wasn't a full victory. the company is not allowed to share with consumers more than

250 risk reports included in its original service including analysis of chances of developing diseases including alzheimer's. now, not all disruptors are so lucky. 23 meanalysis. not all disrupters are so lucky. three disrupters from our disrupter 50 list have shut down. areo shut down after the supreme court determined its business model was illegal. nebula, a once promising cloud services company closed doors in april after failing to attract new customers, and quirky declared bankruptcy in september after too many crowd source inventions proved to be unsuccessful and unprofitable. now the search for the 2016 disrupter 50 begins in january. follow @cnbcdisrupters. an exciting time for these companies. >> the foot massage didn't help. >> for ben. >> did you see that?

>> you had your sock off. >> i did. it was a great foot massage. >> something i will never forget. >> i apologize if i single handedly sent them into bankruptcy. >> i don't think you did it single handedly. there were a number of factors. >> the government should do something about that. >> oh. >> i'm sorry. >> i wouldn't touch your feet for -- that was so weird. did he rub oil on it, too? >> yeah. lotion. >> ew. >> i think you may have had a predisposition for that. i do. some people do. when we return, jim cramer. i got to talk to him about last night. any way, here are the futures right now. we'll take a quick look. not enough time to flip the board around.

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. let's get down to the new york stock exchange. jim cramer joins us now. i'm sitting here laughing, just thinking about you. were you there? >> ino, i didn't fly up. they flexed up, so that changed the whole plan there. if dallas wins tonight, there's a three-way tie for the worst

division maybe in history? >> so great that philadelphia will be in first place. i love that. jim, what it took was blocked punt returned for a touchdown. a punt returned for a touchdown and a 100-yard interception return. and then you were hanging on for absolute dear life. you must have been petrified, because brady looked like -- >> the fumble. there's de marco murray on the sideline feeling so badly. you put in a kid, kenjon. i have to tell you, i looked at that game yesterday. and i said that brady has no weapon whatsoever. he stays in the game. look, we have three games at home. there's three games against team ds teams -- well, the cardinals are good, but anybody can win this division. it's just so horrible. >> sometimes i wonder -- he just

wants to win. doesn't matter whether the patriots lose one game or two times, it's not an issue. but they were really disappointed. he was devastated to lose that game. >> jeffrey lurie went into the locker room. he's a great man. the opener of the eagles. he said, look, guys this is it. when he went face-to-face with these guys, it was like, okay, the franchise is at stake here. >> they were motivated. good to see. >> when you put the franchise at stake, you get motivated. >> we'll talk business some other day. "squawk box" will be right back. technology empowers us to achieve more.

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welcome back to "squawk box." shares of keurig green mountain soaring. the company agreeing to be taken private for nearly $14 billion. keurig valued at $92 a share, a 78% premium to friday's closing price. >> do you have one. >> i do not. >> i do not either. >> i do. i have it every day. you can put the single cup through twice. you must have been taken in by the george clooney espresso thing. >> nexpresso.

>> yeah. you got me. >> they get girls, people come up to them. it's george clooney. >> what could i tell you? coca-cola has a stake in the company. they may be doing okay. we think david eihorn may not be doing okay. he started the company. "squawk on the street" begins right now. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. pre-market soft as investors move on after draghi, yellen, opec and that jabs number. big m&a deal as keurig green mountain agrees to a take out. europe getting some green air rows. oil below