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tv   Squawk Alley  CNBC  December 24, 2015 11:00am-12:01pm EST

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is the singing of "wait until the sunshines nelly" here on the floor of the exchange. our bob pasani is on the exchange to bring us that moment. bob. >> certain things change and certain things don't. barbershop singing goes back to the 1860s. this song written in 1905 has been a staple down here every single year since the early 1930s. here's art cashin, the lead of the annual rendition of "wait until the sun shines, nelly." >> one, two, three. ♪ wait until the sun shines, nelly ♪ ♪ as the clouds go drifting by ♪ we will be happy, nellie ♪ don't you cry ♪ down lovers lane we'll wander ♪ ♪ sweetheart, you and i ♪ wait till the sun shines,
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nellie, by and by ♪ >> merry christmas, everybody. merry christmas. merry christmas, everybody. special merry christmas to art cashin. 50 years on the floor this year, and 50 years leading that. it never really changes for you, does it? >> no, it doesn't. great old tradition, and we want to hang on to it. come back new year's eve. we do it again at 2:00 in the afternoon. >> do it every year. certain things never change. we hope they never will. merry christmas, everybody, from everybody down here on the floor of the new york stock exchange. to you too, carl, and your family. >> and to you guys. thank you so much, art, and bob. good morning. it is just past 8:00 a.m. twitter headquarters in san francisco. it's 11:00 a.m. on wall street. "squawk alley" is live. ♪
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welcome to squawk alley for a thursday and christmas eve. joining us at post nine, myself, john fort, kayla on a holiday shortened session. dow is down about 35 points. joining us today as well, angel investor and entrepreneur jason callicanais. good morning to you. >> merry christmas, everybody. >> same to you, man. first up, according to the evening standard, amazon has been operating secret flights in europe carrying thousands of packages in and out of the u.k. for the past six weeks. this comes after it was reported that amazon is looking to distance itself from ups due to some of the rising shipping costs. shares of amazon are still up a staggering 113% so far this year, although down a couple of bucks today. jason, more and more this narrative builds that delivering
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goods is something they are going to try to do on their own or at least more on their own. is that going to work? >> you just have to open your eyes and take a look at what's happening. i mean, what they did with amazon web services a pretty good blueprint for what they're going to do with amazon logistics services, als. i just made that name up. it's pretty clear that bezos has no fear. he likes to go big and likes to go end to end solutions, and he is not afraid to lose money, break even for a decade or two. this is a really big issue, i think, for ups. fedex in a smaller way because they don't have a lot of amazon's business. consumers want to get their items immediately. same day is going to become the standard. amazon obviously with prime, which is a huge focus for them. tens of millions of members, have gotten used to two-day delivery for free. here in san francisco and other major cities, people are getting used to two hours for free. it's a sea change and a big problem for ups. >> it just makes sense. as we were talking about here
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yesterday, their shipping revenue is growing faster than the shipping cost because they're doing so much logistic services for third party sellers, which are going to be half of their overall volume soon, so they are logistics player. it makes sense for them to minimize that cost. especially when it comes to moving massive amounts of goods point to point within their change or the most high value delivery to the actual consumer. >> the number one cloud computing. if i told you that ten years ago, would you have laughed because shouldn't that be ibm or
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microsoft or google's business? it's not any of their business compared to amazon. that's the number one player in web services. will we see in logistics that, you know, ups and fedex become number two and three to amazon? that sounds crazy right now. it does not sound crazy to me having watched jeff bezos fearlessly, you know, go into any category, including making movies in hollywood with amazon prime and making a phone. listen, the phone failed, obviously, brutally. the search engine failed brutally, but he took big swings there. he is bold. he is crazy. he goes after this stuff. this is part of the business. >> jason, it comes -- this thread is coming at a time when some retailers are warning customers of potential delays during a holiday season when volume is picking up again. do you think maybe i'm being a skeptic, but do you think maybe some of this messaging is because amazon doesn't really want any liability? they want to be the good guy in this holiday season depending on what may happen for some customers potentially seeing
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packages from ups and fedex being delayed? >> yeah, that's a pretty good conspiracy, but i don't think you're going to start buying jets based upon wanting to place the blame on somebody else. i think they really are going to go into this business, you know, just like they went into white labelling products and making amazon basic cables. these are things that when they were a book seller or a book seller plus cd's, none of us really considered, but, you know, bezos has shown that he has a decade long, two decade long ark when he looks at a business, and he is emboldened now with the stock price and having proved that he can move businesses in decade two into profitability. i would be very, very, very nervous if i held shares of ups or fedex. i would sell them. >> i don't doubt it. the investment firm of saudi prince walid announcing it let a group of investors buying lift
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for just $250 million as lyft is looking to raise a new round of funding at $4.8 billion. always interesting to watch the prince's moves when he goes in. he tends to pretty much park and stay for a long time. what does it say to you, jason? >> well, he is no yuri millner. yuri millner did facebook. i think the prince, respectfully, sometimes picks the number two. obviously i have a horse in this race. i'm one of the early angel investors in uber. be careful if you buy the number two company in a category. it didn't work so well for twitter shareholders versus facebook, and i love twitter obviously. you really want to own the tesla, not the -- >> what? if you bought apple when windows was number one, right, you did okay. if you bought google early on --
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this high ground, this foot hold in u.s. market for all these players. you know, scale is critical in this space, and the time it takes for somebody to pick you up. the liquidity of the network, health insurance to say how many nodes or cars are on the network. it's going to be key. you bring up apple. there's always a cavat with apple, which is steve jobs. you know, you bring up google, and what we also are in google as an exception to the rule of don't buy number two is google is a better product from day one. i don't think anybody would say
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lyft is a better product from day one. just always be careful when you invest in the number two because the returns, they seem to, you know, go to the number one play. >> jason, carl icahn, which also put a big investment into lyft said just because there will be one company in any industry that is perhaps more successful, it doesn't mean that the other company is going to zero and that there's been such a seminole shift in the way that people ride in vehicles and buy vehicles, that you can't count a number two out when the shift is so large. you disagree with that generally? had. >> i generally disagree with whatever carl icahn is investing in or whatever his investment thesis is. wronk you want to follow his investment thesis, respectfully, again. i think you want to look at where the major venture capitalists and some of the other public market people are putting their money. i happen to have a little insight into this because i'm a private shareholder in uber, and i'm getting a lot of people who are -- i know who own lyft shares who are selling them or have sold them in the last couple of years, and i'm getting
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an onslaught of people trying to buy my uber shares, of which i sold zero. >> no plans to sell, i assume? >> listen, i mean, if you have a company that has, you know, dramatic growth, where else would i put that money? why would you put those shares? what company could possibly grow faster? it's a small cohort. facebook three or four years ago. google seven or eight years ago. what i learned is those guys all made more money when their companies went public, those private companies, than when they were private. the lyft sometimes as a venture investment comes after they go public. you got to be very long in the business i'm in. >> finally, jason, immediate wrum ceo and twitter co-founder joined the re/code decode this week. he talked about the future of media. his comments on jack dorsey were kind of interesting. take a listen. >> it was the stance of many people in the board when we started that it was required to
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be full-time, and as i said publicly, we wish swrak wejack full-time, and we made a compromise to put him in the role, and we made the choice. >> swrason, we heard eiger talk to the journal about whatever it takes to run two businesses, jack has them. do you agree? >> you know, we're going to find out really quick. you know, watching elan musk with spacex and with tesla and i'm personal friends with him, it's not easy, and he is elan musk. i don't think it's going to be easy for jack. the inside whisper, obviously, has been the board did not want to do this. they didn't find a better candidate. you know, two-thirds of jack's time or half-time for jack at twitter was better than the other candidates. that says something about jack's ability. i hi in the long-term jack's heart is with twitter, and i think square is going to be a grinded out business that will need a different type of leader. not necessarily a visionary
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leader. it's doing credit card transactions and processing. i think they're going to need a financial ceo and they'll find that person and put her in place, and then i think jack will go 100% on twitter which is where his heart is, and i think that it's probably the right move for twitter to compromise now for a year or two while they find somebody to run square. i think that's the back story that's going on here. >> there's a lot of hope in these charismatic leaders. marissa mayer comes to mind, coming in atta hue years ago. what are we really going to be looking for from jack, though? you say we're going to figure it out pretty quickly. is it the product cycle you think we're going to figure it out from, beyond moments in the next, say, six to 12 months, they do come out with a hit that gets growth going? >> let's be clear, marissa is charismatic, but she was never responsible for building any single product, and it turns out she may based on results from yahoo in year leand four, want
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be a great leader of people. it seems like the people she hired no longer want to work for her. there may not be a there there for -- jack is the originator and the creator of products. he created square. he created twitter. you can't say that about marissa. what i think you'll be looking for is can twitter make something new? well, they shipped moments, which was obviously in the works before jack took over the ceo slot, but i bet you that they're going to have a product cadance where jack will be releasing something significant every four months. if you look at yahoo, they had a new weather app, and some news apps. it was, you know, in the first year or so 18 months of marissa's tenure atta hue, and then we heard nothing since that time. no new products from yahoo. that's why yahoo is a disaster. it's because they cannot release new products. it's an antiquated product, and in our industry if you are not shipping, you're dying. that's why yahoo is doing. they had not shipped new product.
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look for jack to ship new product every four months in a keynote, and that's how you should judge them just like you should judge elan musk like him shipping the space model. >> never afraid to call a spade a spade. thanks for all your good work, and we'll see you soon. merry christmas. >> merry christmas, everybody. >> jason callicanis. >> meanwhile, the markets are mixed. the dow and the s&p are negative. the oil market, it drove a rally yesterday, but today it's pretty much doing the opposite. the energy names are fairing the worst. s&p energy sector is down the most of any sector. even though crude is firmer. perhaps that's because of opec comments we got yesterday. pretty bearish outlook for the price of oil going forward. you can see the nasdaq is hanging in there in a positive territory by just about a fraction of 1%. meanwhile, nike's two for one stock split takes the shares today. trading to the down side buy down 2%. a new intraday high following the company's earnings before finishing the day down more than
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2%. perhaps the sell-off going into that split. still, the best performer all year for the dow. check out shares of kroger. in the green. hitting a new record all-time high. kroger is up about 33% so far this year. stock is up just fractionally, carl. perhaps a lot of people getting their last minute grocery shopping done today. >> there may not be a buy button on twitter, but the next guest is trying to make it as easy as possible to buy directly through the social network. please record highs on the east coast and here in new york could actually end up being warr than the fourth of july. we're live in central park. then illinois joining new york saying that fan duel and draft kings are illegal under state law. we're going to look at what comes next for both of those companies when squawk alley continues. being a keen observer of the world has gotten you far, but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform,
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to discover the best shows friends together and movies with xfinity's winter watchlist. later on, we'll conspire ♪ ♪ as we dream by the fire ♪ a beautiful sight, we're happy tonight ♪ ♪ watching in a winter watchlist land, ♪ ♪ watching in a winter watchlist land! ♪ xfinity's winter watchlist. watch now with xfinity on demand- your home for the best entertainment this holiday season. cto everything from surfers welcomingto seals.ul home attracting visitors from around the world, around the year. along the coast, protected areas are set aside
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to preserve a fragile community of animals and plants. to protect these natural wonders, here's what to know before you go. stay at least 300 feet away from seals. this is their home. don't touch marine life in tide pools. take away your trash and your happy memories. always enjoy and protect our marine habitats. shows like fox's "empire" or bravo's "real housewives" may have huge fan bases, but how do you generate revenue? our next guest is trying to optimize that content creation. nbc is also a client of this company. mike fitzsimmons. how does it work? >> it's a pretty simple concept, actually. t-commerce by definition is
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enabling consumers to buy products they see while they're watching television across any internet connected device, and to be clear, this includes smartphones, tablets, pc's. >> why does a big company like fox, like hbo, like even twitter need delivery agent to create revenue off of this audience when that should be their bread and butter? that should be something they're already doing internally. >> it's an exceptionally chaotic time in the media industry. i think the industry at large is seeking new forms of monotization and new ways to generate incremental revenue from their content. what we do is not simple. we're doing this across 36 million connected devices today. that's embedded in smart tv like roku and sony and we're behind
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the button for companies like twitter and youtube. we have direct to consumer experiences for these content owners. at the end of the day these companies have been built to create great content. they've been built to sell advertising. what they haven't been built to do is to help push that viewer down the purchase funnel, and that's fundamentally what we are trying to do. we are trying to take a passive viewing audience and turn them into an active purchasing consumer. >> mike, this t-commerce idea has been big in asia. i know korea in particular for quite a while. a lot of commerce happens that way, but in the u.s., not as much. what is it that has been the incontributor here? is it just consumer habit? is it the way we control a television? is it the fact that smartphones have come around and kind of split our attention while things are on tv? >> let me say this. as a starting point, just to the point of incontributor, i mean, we have build a pretty exciting
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business. this is a company that will generate well north of nine figures of revenue this year, and i will say we are starting to see this business take off. what have been the barriers for scale historically has really been what you mentioned. it's a matter of getting that living room connected. whether getting that living room connected means connecting the television, connecting the top box. i think we all have memories of a decade ago when the cable operators were trying to figure this out and getting their legacy set top boxes, and now the mobile phenomenon as you are talking about. mobile,just to give you context for delivery agent, shop tv platform, now represents over 55% of our total engagement. we're directly drafting off of this notion that 9 on 0% of consumers have a tablet. they are using it while they're watching television. this idea of having a tethereded experience between the content you are viewing and the ability to purchase is becoming a reality. >> i'm thinking of the pepsi example as it relates to "empire" where the brand
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actually becomes a living, breathing element within the narrative of the show. is that something that the. >> building this ecosystem has not been an easy challenge. it started with content owners. our priority out of the gate was to work with a large broadcaster and the large studios to figure out a lot of those issues. both the rights issues because the rights issues are profound and complex as well as just the technology capability issues in order to facilitate this stuff. i wouldn't say kicking and screaming. i would tell you that right now there's a general openness amongst content owners, amongst marketers, amongst the overall media community that we need to partner to seek new revenue streams and things like you mentioned with pepsi and empire great example of that. we've got to look beyond the traditional 30 second linear spot, look within the content itself, and a number of these branded entertainment initiatives that you are seeing
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are reflective of that movement. >> certainly media industry is grappling with quite a few challenges and the majority of channel this is year. mike, very interesting proposition. we appreciate you joining us this morning. >> all right, guys. thanks for the time, and happy holidays to all. >> same to you. mike fitzsimmons. >> at least if you are on the east coast. the choice could be between cooking inside or breaking out the grill. how warm is it going to be? we're live in central park. we have a closer look in swromt. 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.
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it's okay though! you're going to change the world.
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. >> there's a decline. markets in germany and italy were among those closed for the entire day. most european trading will resume on monday, but london exchanges will be closed, of course, in observance of boxing day.
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>> nbc's sarah is live in central park with more. hey, sarah. >> hey, john. you know, santa will have to shed some layers before he makes his rounds tonight. we have already shattered the record for warmest christmas eve ever. previous record 63. we were already at 64 at midnight, and temperatures only climbing the high today. expected to be 74 degrees. philadelphia in the low 70s. for some people being able to wear short sleeves and be outside, dream come true in december. for others it doesn't really feel like the holiday season without that cold weather. we talked to people here in central park today about the mild temperatures. >> when you talk to your friends and family and tell them it's
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this warm, what do they say? >> they can't believe it. they normally avoid visiting because of the weather, they can't believe it. >> they should have too many this year. who knew? >> i know. who knew? >> it's christmas, and i want to see snow and snowflakes. >> she's not going to see snow. they've got a backlog to catch up on from yesterday where we had heavy fog and low visibility causing widespread delays and cancellations as well to the disappointment of travellers. now, right now la guardia is looking okay, but newark and jfk, they're already experiencing delays due to rain. back to you. >> well, that's not great news for those who are going to be trying to fly somewhere this weekend. thank you, sarah. >> the entire beatles cat lore
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now available mostly for free on basically every streaming service out there. what does it say about the future of music streaming? we're going to take a closer look in just a moment. come on in pop pop.
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happy birthday. i just had a heart attack... and now i have a choice. for her. for them. and him. a choice to take brilinta. a prescription for people who've been hospitalized for a heart attack. i take brilinta with a baby aspirin ...no more than 100 mg. as it affects how well it works. it's such an important thing to do to help
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protect against another heart attack. brilinta worked better than plavix. and even reduced the chances of dying from another one. don't stop taking brilinta without talking to doctor. since stopping it too soon increases your risk of clots in your stent, heart attack, stroke, and even death. brilinta may cause bruising or bleeding more easily or serious, sometimes fatal bleeding. don't take brilinta if you have bleeding, like stomach ulcers. a history of bleeding in the brain, or severe liver problems. tell your doctor about bleeding, new or unexpected shortness of breath, any planned surgery and all medicines you take. i will take brilinta today. tomorrow. and every day for as long as my doctor tells me. don't miss a day of brilinta. i'm scott, and here's your cnbc news update at this hour. russian president putin meeting with indian prime minister modi in moscow to discuss defense, nuclear and space cooperation. modi haling russia wra as a reliable friend who has always
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stood by india. the italian coast guard says it rescued more than 800 migrants in seven operations carried out over the last two days. they said the operations saved the lives of people who are traveling on seven over crowded rubber dingys. a strategic difference in helmand which has been under attack by the taliban for weeks remains you should under government control according to nato. for the 60th consecutive year, the north american aerospace defense command continues its tradition of telling youngsters the location of santa claus on his annual world tour. volunteers answering calls from an estimated 125,000 children who can also check santa's whereabouts at norad santa.org. that's our cnbc news update for this hour. back to squawk alley. >> thank you, scott. good to see you. moving on, some is artists have fled the fab four are
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apparently running in. starting today the beatles can be streamed across many streaming music services, including spotify's premium tier. is it this leave adele and taylor swift on the outside looking in? john kellogg is assistant chair of business and management at the berkeley college of music in boston and entertainment lawyer. you've got some songwriting credits back in the past. john, i'm curious. how much does it matter that, of course, the beatles are coming out with new albums anymore? this is about their older catalog. it's songs that many of us know. this money is going into different pockets or at least in different proportions. when you buy cd's, where do you think this is happening there? >> i think the beatles are very smart to make this move move. especially during the christmas season. you remember a couple of years ago beyonce within two days notice released a brand new album she called a christmas present to the music industry, and she sold it only on i tunes.
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it did tremendously well for her. she sold almost 700,000 copies the first week. it made a big difference. for the beatles to do this particularly at christmas time, it's very important because you're going to have people particularly their demographic and baby boomers who are going to be buying new gadgets, a new ipad, new computers, new iphones and other types of mobile devices that are finally going to be able to hear all of the -- basically all of the beatle's catalog. >> the music will be available on the free streaming tiers as well. that's sort of a surprise move. we've seen a lot of these marquee artists choose to only release their music on the premium tier. why do you think the beatles decided to do this? >> i think that's part of the story, and i think they were very smart in doing that. they want to hit the broadest audience that they can. by having it with the premier model, they know many of their fans, the baby boomers or beatle
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maniacs as they used to call them, might be new to streaming. they might want to test it out through the freemium model and then the paid subscription model. >> are the economics different for the beatles than they would be for an up and coming indy band? how are they different? are they expecting this to lift their vegas shows in the future? are they selling dvd's or blu-rays also now that they expect this to lift? >> very good point. i think that they're doing this primarily for the promotional value. i think they're going to be able to raise their merchandizing revenue from this. certainly the beatles tribute bands that perform all throughout the world might be able to get a lift in ticket sales from this, and, of course, the beatles are in the position, and they are one of the few acts that can to it. adele and tailor swift can do it as well. they can negotiate a higher royalty rate for streaming royalties with their record companies as well. >> john, i got to imagine that the complexity of contracts for
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artists, both new and established artists, has gotten so complicated, so layered, in general what do the artists want to hang on to the most, and what do the labels want to hang on to? >> well, the labels, of course, have always wanted to hold on to the master recordings, and you have a lot of new companies that are coming out and they are naming themselves management companies because many art is now are using their own recordings. so basically they own their copyrights not only in the songs but the recordings. all had he need is a company to help them manage those rights. traditional labels really want to hold on to the master recording ifs they can. >> john, what streaming service do you expect to win out the most from this move? my theory that i talked about yesterday was it could be amazon because a lot of people are already paying for prime, but not necessarily engaged in their music. now all those people can get the beatles for free approximate they start using it, but am i
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missing something? is there somebody else, spotify, apple that stands to win bigger? >> i think spotify and apple will make a move as well because i think all the publicity that's happened, especially over the past month where we're talking about streaming, you've seen a number of things. adele saying she's not going to allow her new album to be streamed. tailor swift just entered into an agreement with apple music an exclusive agreement for the 1989 world tour video. i think all of the publicity from various sources are really raising the profile of all of these services. >> and making it a better business, it appears, for all involved. at least we'll see how that shakes out. jon, always great to get your insights on the evolving music business. merry christmas. >> merry christmas eve, and happy holidays. >> up next, a massive new funding round or one of the bigge biggest unicorn companies in the world. what's coming up on the santelli
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exchange? >> you know, if i had to pick one area that we need to talk about as we get close to the end of the year, it's commodities. commodities have not had a good time. sticking with the christmas theme, sometimes it's better to give than receive. let's see how that may apply to commodity prices? all after the break.
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>> coming up on closing bell, yes, the top of the hour. we all know how crude oil has
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hit multi-year lows, but we found an analyst that says, hey, oil has not bottomed yet. we're going to look at whether that could be a turnaround stock? all coming up top of the hour. >> see you later. >> all right. we'll see you guys in just a few minutes time. thanks, bill and kelly. meanwhile, palantir raised an additional $450 million. according to the filing the data analytics company is offering up to $500 million in stocks. an additional $50 million could still come in. this would put palantin's latest valuation at $20 billion up from $15 billion just last year. it would put the company at number four among the highest valued private companies the others being uber, show me, and air bnb. there's been a suggestion as the company has now raised its 11th round of funding that has expanded due to investor interest that it doesn't want to go public, but perhaps also it
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can't go public. so much is revenue and comes from government contracts, cia, fbi. you can't really disclose with a lot of transparency where the revenue is coming from. >> have you to think so eventually, and whether it's 2016 or 2017, a hand gets forced. exits don't wait forever. >> according to the journal, the company has almost $1 billion in revenue. about half of that comes from private companies. it wouldn't even qualify for the jobs act at this point. >> to you the cme group, let's go to rick santelli, and get to the santelli exchange. rick. >> thanks, carl. i guess the best place to start, if you want to talk commodities is to show the crb index. the chart i'm showing starts in the summer of 2002 because the neighborhood we're residing in had in terms of price on that index around 175 is virtually the lowest we've been since 2002. as you look at that chart, a couple of things should jump out
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at you. we peak just under 500 in 2008. then we made a big bottom many months later at 2009. we came nowhere near getting back up to that peak, and, of course, we've taken out that 2009 bottom. why is any of this important? for much of this year my channel, myself, we've done -- tried to do a great job for you viewers and listeners to bring you as much commodity information and the reception into the global economy wasn't a pretty one. we've even got tony the point where you look at oil and you decide how you want to trade stocks, but what i'm about to talk about is mostly a lot of the other commodities, but not necessarily completely not inclusive of what's going on in the energy sector or oil as well. that is there is always another side of the ledger. okay? we talk about how china's growth is really being affected by many of these issues, the deleveraging, the fact that china in particular was so intense on the way up to that peak that we made in 2008.
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accumulation, trying to get as many leases on everything from rare earth, raw commodities like copper. they had so much copper they were using it as collateral putting it in warehouses to make loans. you know how that turned out. the other side of the ledger, what we received wasn't good news, but what commodities made given the future, well, you can decide how much offsetting there is, but ultimately businesses are going to have lower input costs. now, when it comes to oil and gas, many say, well, listen, whether it feeds into steel or agriculture, whatever it is, well, it didn't do much good for the global economy with lower gas prices, but we don't know that. these are unusual times. many families in this country have expenses that help move faster than the anticipated -- it looks like, hey, we have all this money going.
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this is a good thing. maybe outside of business proper, but alof those products and all those companies making products and even china, exporters, ultimately some of the healing will be the lower import possibility that may be better margin spz help pick up the export economy. it isn't only a negative story. i wouldn't be surprised to see in 2016 some serious bottom fishing in areas in commodity that is may prove to be highly profitable. jon, back to you and merry christmas, buddy. >> merry christmas to you, rick, and keeping the news out there in illinois. up next, another big blow for -- daily fantasy sports betting industry is illegal gambling under state law. at least until springfield lawmakers say otherwise. we're going to take a look at the daily fantasy industry's continuing legal fight when we come back.
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>> later on line shopping surging, and at the 11th hour some items are hard to get with just a click, so shoppers are opting for plan b and braving those crowds. from queen center mall at
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elmherst, new york. mary, you are brave for being there. >> the traffic has been picking up all morning here in the final hours of the pre-christmas part of the holiday shopping season. as is the case every year, i'm sure some of these shoppers here were unable to get their hands on some of this year's hot items. even if they started to shop on-line. here's why. adobe, which tracks 80% of all on-line transactions for the u.s.'s top on-line retailers, says that this year out of stock rates are 10% to 15% higher than last. reflecting the mood by many on-line retailers to offer discounts early on. among the hard to get gifts this year, star wars toys, the barbie dream house, paw patrol, and shopkins themes toys and hasbro's pac face. >> we bought everything early, like i know one of the big toys was, like, pie face and we got it, and we had the opportunity to sell it on ebay for -- and
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make a little profit on it. >> now, not being able to find gifts on-line, sending many shoppers into the stores. analysts of both namora and goingen him had traffic last saturday in stores like target, kohl's, somewhere c penny's and macy's. while on-line inventories may be an issue, here at jc penney they are saying that they are making sure they have plenty of inventory here because what happened last year is that items were picked over. there wasn't a lot of inventory, and that resulted in lost sales. squawk alley, merry christmas to all of you. back to you. >> same to you, mary. mary thompson covering the retail front for us today. meantime, illinois attorney general lisa madigan ruled daily fantasy sports are, in fact, illegal. another setback for fan dual and draft kings. with us on the phone is rick, visiting expert on sports business at harvard law school. it's fwood to have you back. merry christmas. >> merry christmas. happy new year.
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everybody go shopping, okay? let's make this quick. >> it's been said that new york state law sets some kind of precedent for state ag's around the country. is this going to snowball? >> it's snowballing now, by the way. the fantasy sports industry expanding 2006 unlawful internet gambling act changed the game, defining fantasy sports as a game of skill outlawing things like poker, but you could play for fantasy and financial gain. yet, illinois, massachusetts is looking at it. new york. fantasy is not going away, and so depending on state law, what needs to happen in the future, is the traditional way of playing social season-long fantasy that needs to evolve and daily fantasy may evolve as well. people have short attention spans. they live on their mobile phones, or social groups associated with. the game changers, the newer companies need to find ways to play into the future user.
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originally you need games prayed in groups or leagues. that's what the future will look like. 2.1 billion of us have social accounts. it needs to be a hybrid between this daily fantasy now and regular fantasy which, by the way, 57 million of us have played. it ain't going away. >> as far as daily fantasy goes, what's -- give us a hypothetical if they get regulated within states, how -- what might it look like? is it sort of a horseracing model or what? >> well, see, that's the issue. every state is going to look at different goals. the issue of making sure the social groups, the lobbying, fabt si, as i said, is a big deal. 26 billion a year. the daily stuff, it may evolve into more of this longer term situation, and, by the way, 13 leagues, 112 teams all have sponsorship deals with daily and other fantasy. 500 million dollars in ads.
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we know those numbers. >> my understanding is in illinois the attorney general has said that all types of betting, unless you are betting on your own athletic performance, your own personal performance are illegal weather it's skill or chance. the legislature is looking to perhaps considering making an exception right now for daily fantasy sports. is this now about the ground game for the daily fantasy industry going from state to state, getting their users to advocate for them and get new laws vaetd that make their businesses legal? >> if you're pete rose, you can't even bet on your own performance. that's another issue for another day, right? it's a ground game. it is a heavy lobbying game. it is basically an issue until the legislatures define the future of this.
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it's not going away. the daily probably will evolve into this fitting into mobile, into other things. you'll see all of these companies getting out ahead of that. the legislature is probably -- it's around legislation. >> a small percentage of the users. >> again, it's an issue to make sure that the other aspects -- the social connectivity oriented.
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that's emphasized in the future. it may not be daily. >> certainly very interesting. rick, the illinois decision pending. why not wait for that outcome? why are the ag's striking now? >> because they want to get out ahead of it, and they want to see what kind of tax benefits you can have. frankly, if you don't regulate it, then it gets away from you, and if you do regulate it, there's a hands to generate some tax money, which i think everybody understands over time. there should be and would be. you'll see investigations all over the country trying to get out ahead of the lawmakers to get out hfd the evolving companies. >> now are you getting to the real meat of it when the states get their piece, but that's going to be a story for another time. rick, thank you so much for your insight. we'll talk to you in the new
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year. when we come back, star wars still raking in massive amounts of money, but is success boosting bob eige re's paycheck. more on that in a moment.
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>> ceo bob eiger's pay package reaching $45 million for the fiscal year ending october, and mark saved 3.4% decline from the previous year according it a regulatory filing. his comp was down mostly from changes in the value of his pension benefits. actually essentially an accounting change. what a year he has had. >> wrau. especially the back half of the calendar year. i'm going to go out on a limb, carl, and say that 2016 will not see a decline in his pay package once the returns from stay wars and all the merchandizing are in. wron. i'm just guessing. >> $45 million. not bad for a year's work. >> yes. on the one hand, you think, well, how could you go wrong? you can go wrong with this franchise. it's been done before. so far i think the secrecy keeping these spoilers impact, the distribution, the way they
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rolled out the teasers, it's been kind of nice to watch. wouldn't you agree? >> master class. >> we got a new viewer in the franchise right here. >> sarah eisen will see you this weekend too. >> merry christmas. we'll see you next week. it's time for the closing bell. bill and kelly. >> thank you, guys. welcome to the closing bell on a noon here on the east coast. markets are closing early because it is christmas eve. i'm kelly. >> i'm bill griffith. we've had a quiet day, as you can imagine. not a lot of volatility. anywhere the vix has fallen to 15.5 where we were a couple of months ago. we're going out quietly on this christmas eve. >> well, shopping and shipping. no surprise. they are the top stories today. even last minute shoppers still trying to buy gifts on-line. we'll talk about

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