tv Squawk Box CNBC December 24, 2012 6:00am-9:00am EST
eve? it is. it's monday, december 24th, 2012 all day. "squawk box" begins right now. ♪ run, run ru dolph santa has to make it to town ♪ ♪ santa making -- >> good morning. welcome to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernen. becky quick is off today. our best host this hour, alexander ladenthal. we have a lot to cover with her this morning. here we are, christmas eve. it's a shortened trading session for christmas eve. u.s. equity markets will close at 1:00 p.m. eastern time. bond currency and commodity trading they're going to end early. in japan, indonesia, the philippines, they were all closed in europe. only the uk, french, dutch and spanish stock markets are open and they're going to be closing early. there are now only five trading sessions left in 2012. get your act together. stocks and bonds, solid gains so
far this year. the dow has advanced 8% in total. the s&p 500 up almost 14%. the nasdaq has jumped 16%. it's been a good year. the end of the year also means we are just days away from the fiscal cliff, however, and that's the bad news. and looming tax hikes, spending cuts, all of that. both sides warning a very big deal becoming a bit more unlikely. >> and my one bit of advice to speaker boehner is this. you cannot pass a bill with just republicans. on a broad thing like this, you need both. and he has put himself with plan b and sort of an impossible position. he has to get these hard right goes to go along with him. and he and the president were going to say we're going to pass a deal with the majority of republicans and the majority of democrats in the house and senate, we would get a mainstream deal. >> i think we're going to fall out of the fiscal tree. the big deal for the big deal is at the debt ceiling. that's when we will have
leverage to turn the country around. >> congress is now out of session for the christmas holiday. but expect it to be back thursday. joe, we talked to some of the senators and congress last week saying will you come back from vacation? some of them pretend like they weren't going, but i think they really were. >> if boehner's leadership is in question now, chuck schumer, there's an angel on one shoulder and there's a devil on his other shoulder, he would lose it. chuck wants us to do a deal like obama care where you bring in both sides and you think about all the -- you know, all the ideas from the republicans, all the ideas -- and then you adopt a bipartisan plan. >> did you read "the wall street journal" over the weekends? >> i did. >> boehner says i've given you $800 billion. >> what did it remind you of? >> that's some caddie shack. where spalding walks up to the
shack and said i want a cheese birg, milkshake and fries. and his grandfather says, you'll get nothing and you will like it. you know what it reminds me of? elections have consequences. i won. it's not a nice tack to the center where i'm going to govern for all of you. are you coming back? >> i'm going to. >> the jacket is coming off, though, right? >> christmas eve and i'm celebrating. as you know, we had the tree going this weekend with the lights on. >> that's so nice. there's one other thing i sought on that thing over the weekend that you brought us that i was going do -- oh,no. did you see mitt romney did not want to run? >> i saw that. that was in the boston globe. that was a great piece worth reading. then he found out how bad things were going on his ipad. >> yeah. but maybe he didn't want to run because there were times i really kind of thought it looked like he didn't want to run. >> yeah, but towards the end, i
thought he did. >> he tried hard. thanks. >> okay. >> come over here. in other news, a dock worker strike on the atlantic and coast could be just days away. port operators have been negotiating with the long shoreman association since march. but the two sides are said to be far from closing on a deal that would cover cargo handling at 15 ports, a 9d 0-day extension to an employment contract. the union has said 15,000 long shoremen could strike a day later. rick scott sent a letter to president obama asking him to invoke federal law in order to invoke a cooling off period. i don't know what the likelihood of that is. i don't know what the president might do. do you think he would -- >> wow. that's a lot of red. >> you step out. you like to step out. you like to make statements, right? >> it's the holidays. >> i'm aware of that. >> you're wearing a red tie today. >> a shirt and a tie.
that's usually what i go with, some type of shirt, some type of tie. no bells and whistles. this is your thing. whether you have bracelets -- one of those things is measuring your heart right right now. how is it? >> it's measuring my -- >> your calorie intake? >> my pressure goes up when i'm with you. well, no, this is the jaw bone. >> is it a measure of calories? >> calories, walking, sleeping, rem sleep, how much i shept last night. >> and calories. >> calories. >> if you wore it on your left wrist, would there be less calories, do you know? >> i will test that for you. >> test it out. gasoline prices. you know what i want to ask you? do you employ lobbyists at all? >> no. >> not at all? >> no. >> but we're going to talk to you about what the prospects are. >> yeah. >> in these big deals, people are always throwing muni bonds.
and i just wonder, we'll get to that in a second. gasoline prices falling more than 10 cents in the last two weeks. the lundberg survey finds that the average price for a gallon of unleaded is $3.26. price res expected to rise from here because crude has risen slightly and refiners haven't passed all the increase he through in the wholesale gasoline. it's the season for going to the movi movies. "the hobbit" earning the top spot fokt second weekend in a row. its domestic total is over $150 million after ten days. and tom cruise's action thriller, "jack reacher" debuted in second place. he kicks a -- $15.26 million he got. >> so we went to the movies this weekend. and we saw "this is 40." >> not great reviews. >> almost dpred depressing a little bit. almost too realistic.
>> that's what happens when you return 40. you get a little depressed. then you hit 50 and then you realize 60 is the new 40. and then you realize any of the alternatives to aging are much worse than aging and you kind of come to grips with that. >> i had a mixed feeling. were the reviews actually lousy? >> yeah. >> i wish i had known that before. >> paul rudd and -- and apatose. she has to watch paul rudd make out with his wife constantly when this is all going on. i was thinking about that. and all the kids in the film are appato's kids. >> oh, really? >> yeah. he's making the film with his family and it's all about -- anyway, all with his family. >> watching -- you know, i don't know what he's into, but so he's got his wife making out with this guy a lot. >> they're married in the film so, you know, you can hope, right? >> don't bring this stuff up.
>> we do have to talk about some other films later. let's see what's going on with the futures overnight as we set up this trading day ahead of christmas. dow looks like it will open down 5 points, a little more than that, actually. nasdaq would be off 8 points, s&p 500 off 4.5 points. let's check the oil boards for a quick s.e.c. let's take a look quickly at the 10-year note. the yield, 1.768. i don't know. i don't know. i re-phied that mortgage. so i'm happy at this point. a quick look at the dollar. you can see it there against the yen. 84.42. against the euro, 1.322. and against the pound at 1.6. finally, a quick look at gold and we're at $1,663.9. >> time fou for the global markets report with louisa bojesen standing by in london.
what can you tell us, louisa? >> well, we've got light volume today as anticipated. happy holidays, everybody. what we're seeing here on our european markets map, many markets already closed. you have the euronext markets closing at 12:30. the nordic markets all closed for trades today. italy closed for trade. the smi closed for trade. we've got the ftse 1100 a couple of points higher. the cac and the ibex 35 just off marginal marginally, as well. i would like to show you what type of performance we've had on a year-to-date basis. rising somewhere in the region of 15% since the beginning of this year. you will note that we have had had a bit of a rally heading towards december. the question is whether we'll see that continue into next year. looking at a slightly broader
base, the 600 index here, year-to-date higher by 15%, as well. europe's largest economy, the german market seeing some pretty significant gains as well as the dow jones stocks 50 up by 50%. so this brings its up, can it really continue next year? that's when you want to glance at barons, indicating over the weekend you could be looking at a rally. 20% next year. they singled out a number of stocks that they mentioned next year. by the way, andrew one look like one of the little elves in denmark dressed in my parents' garden. it's very sweet. >> do you want to look like an elf? >> i think so. >> i asked you do you want to look loot like an this. >> i thought waits a good dwrd, but i don't want to look like an elf. >> you know what it is? after a while, a blue shirt is
boring. >> you don't want to wow people with the strength and insight of your ideas? >> i have to do it with my wardrobe. >> you know, i think he looks fabulous and people say i know any fashion. so you get a thims up umbs up f. >> alexander, thank you. she's focused on the fiscal cliff while many are worried about a year-end sell-off which i think you've argued is already happening a bit. >> definitely. >> so where are we? >> in the last couple of weeks, muni yields have risen. it's start to go change. but what happens is that the latest round of the proposals not only had this 28% deduction, but it would be retroactive. so all mini bonds outstanding,
which would be a sacred cow that you would never touch. throwing the market into real turmoil. >> and so what's your sense right now, in terms of what's on the table, what's not on the table? >> exactly. if there were a table right now, i think people are probably getting away from the idea that there would be this retroactive taxation, essentially. but it still is very, very likely that that 28% cap on deductions will include municipal bonds. >> and joe asked the right question off camera. this is setting up a right fight between the states and federal government. >> yes. we would prefer to sell tax exempt funds when we preferred not to have the value of our bonds go down when we're holding them. but it's real the governors, mayors and city states who are going to say, hey, this is going to increase our cost of borrowing. we're barely coming out of recession. you can't do this to us. >> is there a municipality right
now that you know is planning on an issue later in 2013 saying this is going to screw us up in a real way? >> i don't know of any specifically, but they're basically all saying it. new york city comes to market multiple times a year. >> all the old bonds will be type. is that right? >> i'm going to make the stand and say that they will. but in the last -- >> then they become more dear, won't it seems to me. >> yeah. but what had happened is that last week and the week before, all of a sudden there was this thought because it had been thrown about that it wouldn't be retroactive. on top of that -- >> why wouldn't that cause him to go up? >> because that means that the tax, the cap on deductions would be retroactive to all bonds. >> it wouldn't be retroactive. >> no. what happened two weeks ago was that had been on the table. >> that it would be retroactive? exactly. >> how can dow that when speak -- >> right. when people bought it on the expectations. on top of that sending the
market into the additional turmoil, you have all the brokerage firms saying, you have huge gains. you have more coming into the market. >> the question is, given that weakness, given all that selling, are you telling investors get in, get out? what is the message that you've got? >> there is this strange thing that happens every year called the roll. what is a ten-year maturity that becomes a nine-year maturity on january 1st. and so the yields adjust to 245 nine-year maturity. so the yields absolutely go down. basically overnight. >> is there a muni that's been stellar this year, an absolute winner? >> california. >> california? >> yeah. this is interesting. a couple of years ago, i was
coming on every show and talking to people and people weren't touching it. >> i can't tell you exact yields, but illinois is still hanging in there. they're a major issuer of debt. >> have you got a loser for us? a little coal in the stocking? >> puerto rico. >> puerto rico? >> puerto rico is just -- it's a sad situation. $67 billion in debt outstanding. their debt to gdp approaches greece-like levels. and they went so far as to bond out their debt service. issuing bonds to pay their interest and that is just a true muni bond person. that is like a knife in the heart, pain. >> don't go anywhere. stick around for the rest of the hour. thank you for being here on this holiday. >> glad to be here. >> what are you looking at? >> nothing. >> the red. >> it's like orange on camera. >> it is a little orange. >> is this a holiday?
you keep saying that. >> we've been doing all sorts of holiday things. really? >> so it is the holidays? >> yes, it is. >> i've got to get with it. anyway, coming up, how much you pay for something online could depend on where your computer is located. first, though -- >> i know. attention, boys and girls and santa fans everywhere. in a holiday tradition in north american air space defense demand or norad is ready to help you track the jolly old elf and his reindeer. the funniest line in vacation, the movie, christmas where they're at the dinner table and clark says that santa has been spotted coming across the border up north. and his cousin had to go, are you serious, clark? do you remember that part? cousin eddie, randy quaid, says, are you serious? go online and track the sleigh's progress at norad.org.
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welcome back to "squawk box." making headlines, this is pretty interesting for those who need to do last-minute christmas shopping. the amount of money you pay for an item online could depend on your location. "the wall street journal" reporting investigation this morning that it found that the staples website displayed different prices to people after
statementi i establishmenting their location. among other things, the center appeared to consider the person's distance from a rival brick and mortar store. offering different price toes different people is legal with a xu exceptions. some sites give discounts based on whether or not a person was using a mobile dwees, for example. orbitz says a person searching for hotels from a web browser or android phones would see discounts for as much as 50% off the list price. basically they're saying if you're at staples and you're 20 miles from the next guy, it's harder for you to get there, we're going to charge you more. orbitz thinks that if you have an iphone, you're going to be more willing to do discounts or less willing. >> hopefully it's whatever -- it's going to be market based, hopefully. and i think of one example would
be housing prices. there's no way that you can expect housing prices on the east coast or the new york city area. you're going to buy a $1 million house for $200,000. it's just the money -- people make a lot more money in certain areas than in other areas. >> i got laura an iphone for christmas this weekend. >> a 5? >> a 5. >> i hope she's not watching. >> no, she probably isn't. maybe she is. one of the first apps she downloads is called the amazon price checker. do you know what this is? you take your phone up to a bar tag in any store. and then they'll match it right there. it's a price match thing. >> so a price match. >> but how -- that really changes retail, right? >> and the internet has been a huge, you know, it's been a marketplace enhancer for everybody. it's driven all prices lower. and i think that will help keep down inflation.
>> there's so much online sales that we don't know it, tracking our behavior, if you're sent from a certain site, that site gets a payment for sending you there. it's kind of amazing. >> you know, andrew, i was -- do you remember last week when i said i would consider buying a blackberry 10 or whatever it was because i said i -- because i like the keyboard. >> theater. >> the guy was in waterloo. i made one joke about it. it turns out that the blackberry types now are as bad as some of the -- >> and the appleoonians, the iomegans. it was a $140 stock. so these are the people that buy like 100 shares when it drops. and if they perceive anything, they go on this concerted thing. i looked at twitter and there was this one guy who aggregated all of his friends and he has a crackberry. and then they bombard it with -- you know, and thurston was fine.
remember when he first came would be he said he wasn't going to change anything. so even though i said i'm not going to switch to an iphone, they don't take that part. they take the reference that i've said that he was coming from waterloo where no pole leeann's last -- but i sense the same type of nastiness as in the past. as they cling to -- i don't know. whatever. >> not very smart. to write in and then they've got to hear about it. i'm going back to the iphone now. are you? >> yeah. forget it. i'm not going to get a blackberry 10 now. in sports news, the baltimore ravens. man, if you saw this game. they look so good. either they look good or the giants are bad. afc champions, the ravens beating the giants, 34-14. watching eli, they're going to be getting better at this time of the season. i don't even know if he completed -- he barely completed
a pass. they were dropping passes, they were sacking him. the giants got 186 total yards. i think the ravens had like 500 yards. the giants are out of contention for the nfc east title. now they're going to need a lot of help to make the playoffs. not so with the bengals. did you see who they beat? tony fratto's team. tony will be on later for the steelers. seattle earning a playoff berth. this was interesting, routing san francisco 42-13. seattle can win the nfc with a win and a san francisco loss next week. the niners are already in the playoffs. and the indianapolis colts and rookie quarterback andrew luck will also going to the playoffs. luck broke the nfl single season rookie record for passing yards yesterday throwing fourth quarter touchdown to lift the colts over the chiefs. as i mentioned, in the most important game of the day, cincinnati earned a playoff spot with a 13-10 win in pittsburgh.
this was amazing. ben roth hisberg were just a couple of seconds left threw an interception. cincinnati got it back to where they could kick a field goal. >> can we mention the -- >> i don't know why you would. >> i went to this is games. and it was awful. awful. mackelroy was awful. >> i saw you on tv at the game because you were the only one in the stands at the game. >> it was pretty empty. >> did you get a 50% discount on the tickets? >> i do not. my friend has season tickets. >> oh, man. he's thilg thinki he's thinking what did i -- the giants looked just as bad as the jets. >> you go to a lot of jets games, don't you? >> i've been to one. but tebow -- >> i saw tebow. he was not a happy camper. >> they just won't use him. ira joins us from the cme.
when are you going home today? you'll be there until like 1:00 or something, ira? >> 12:15. >> is that a two-hour thing in chicago? >> one hour. >> i thought the markets closed at 2:00 today. >> i'm going to go home and watch kenny anderson and bob thumpy. >> and chris collinsworth. my dad had season tickets and that's who we used to see, bob trumpy and kenny anderson. great cook. remember him from university of cincinnati. it will be thin trading. what happens this week? it's all dependent on i guess now a small deal. do you feel better that it's in the hands of the senate, ira sfp. >> oh, yeah. i feel great. we're at the point, i think people realize, well, if we go over, they're going to have now a resolution, if it's in mid january, fine, it's in mid january. there are many other things going on in this world. they will come to some type of
agreement. and if they want to drive it over the cliff, okay, but then it's going to put the spending right -- that's not necessarily a bad thing. ken langone was not talking about the same thing last week. now spending will come front and center. we've got something that we've delayed for quite a while. it seems there's an agreement that they have to raise some revenue, but they're going to have to attack the spending at some point. if this gets them there faster, it's not a bad thing. >> merry christmas to you. >> merry christmas to you. coming up, why some say microsoft could be disappointed by windows 8. plus, tech sector predictions for the new year when squawk returns.
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good morning. welcome back to "squawk box" here on cnbc. . becky quick is off today. alexander lebenthal, it's a shortened trading session for christmas eve. u.s. equity markets will close at is o'clock p.m. eastern. bond, currency and commodity trading will end early in asia. exchanges in japan, indonesia and the philippines were closed. in europe, only the uk, french, dutch and spanish stock markets are open and they're all going to close early. and making headlines, in "new york times" is reporting that microsoft is not enjoying a sales boost from its new software. historically, a new operating system from the country has led to an increase in sales. as people simultaneously bought a new computer.
but the company says this hasn't been the case with windows 8. the article cites a tough consumer environment in general and strong competition from rivals apple and amazon. >> and joining us now to talk more about this and what's going on in tech land, brian white, he covers tech and capital markets and he's coming to us from hong kong this morning, i believe. good morning to you. >> yeah, good morning, andrew. >> i don't know if you had a chance to see this that "new york times" piece this morning. but i don't know what it portends not only for microsoft but for the other players and others that sell windows devices. >> well, i'll tell you what, you know, we went to taiwan and china in october and the buzz around windows 8 fell off a cliff from the june time period. so there's a lot of enthusiasm in june at the show in taipei. and by october, there was no enthusiasm. so i think a lot of the momentum
had been lost and a lot of companies told me, look, it's really a second half of 2013 story. >> so what does that mean, not only for microsoft were but for the hardwaremaker? are being buying products from dell and the like and buying the windows 7 version or are they turning to google and mac? what's happening? >> more and more consumers are turning to smartphones and tablet devices and i think a lot of the hardware vendors are saying, you know what? when we do a refresh, let's wait until a year out, second half of 2013. it's probably not worth the investment today, especially with a lot of aggressive tablets coming out, including the ipad mini. so, you know, that -- i think they were planning on doing a more aggressive ramp, probably around ultra book with windows 8. and then they decided to delay it until next year.
>> look out a little bit into 2013 for us in tech land. what are the two or three things we have to watch for? >> i think, you know, in general, it will not be a robust environment. it will be premuted, like we've seen. we initiated coverage on ibm on friday. and we think that's a great way to play kind of a muted environment, a company that i think will gain share from hewlett packard and some of their troubles and plays into the big trend. so the big trends are still there. the ramp in the mobile internet, the ramp of cloud computing and kind of the early stages of big data. and ibm plays into the cloud and big data very, very well. they've got a nice, recurring revenue base. >> before we let you go, you're getting into ibm, but given that thesis, what do you get out of it? >> well, i think hewlett packard
will still be a challenge company. i think some of the more cyclical tech plays, we covered some of the tech supply vendors. we recently put a sell on lg display. some of the ems companies we have a sell on. i think there's a lot of these companies, lower quality, that in the last couple of months have rallied at the end of the year, maybe on short covering, maybe on some profit taking on shorts. but i think you want to play into those three trends. so, you know, apple plays well into that. ibm plays well into that. companies like emc play well into these trends. so i would be very focused on strong, secular trends and not on cyclical recovery plays. >> brian, have fun in hong kong and merry christmas. >> thank you. >> if you have comments or questions about anything you see here on squawk, e-mail us at email@example.com. coming up, an american made business, the ceo of dock popcorn joins us to talk about commodity prices to the fiscal
cliff and how that affects some of the other kinds of popcorn when "squawk box" returns. rns. customer erin swenson bought so, i'm happy. today. sales go up... i'm happy. it went out today... i'm happy. what if she's not home? (together) she won't be happy. use ups! she can get a text alert, reroute... even reschedule her package. it's ups my choice. are you happy? i'm happy. i'm happy. i'm happy. i'm happy. i'm happy. happy. happy. happy. happy. (together) happy. i love logistics. time for citi price rewind. because your daughter really wants that pink castle thing. and you really don't want to pay more than you have to. only citi price rewind automatically searches for the lowest price. and if it finds one, you get refunded the difference. just use your citi card and register your purchase online. have a super sparkly day! ok.
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welcome back to squawk all week. cnbc, we are focusing on outlooks and predictions for the new year. this morning, robert frank takes a look at luxury in 2013. >> more money? more problems. the words of the late, great notorious vip perfectly sum up the fortunes and fears ahead for the wealthy in 2013. the number of millionaire households will inch toward 9 million, approaching its all-time high.
but wealth will come under attack from taxes and from politics. income taxes will likely go to 37% or 38% while capital gains and dividends will get that added health care tax. the occupy movement will not return with the same strength, but talk of fat cats and p will iticrats in the media will drive the wealthy further into hiding and reduce conspicuous consumption. the rich will put less money into u.s. stocks and more into assets. funded by the overseas rich with some homes selling for more than $100 million. luxury spending will remain weak largely because of weakness in china. bright spots will be high end luxuries and experiences like travel and entertainment. wealth will become quieter. call it stealth wealth. the big spending in big luxuries will be behind closed doors and kitchens like this could become the new status symbol.
>> du that report from your kitchen, is that how that -- >> i didn't -- no, i didn't see that. i don't remember him being there. no, our american-made company today makes what is considered to be the most popular snack food in the world. rob is cogoed founder of dock popcorn. >> hi, guys. it's actually -- >> i always thought orville reddenbacker would be hard to pass. then i thought of the pictures of orville, he had the sweater. but how did you -- if you had glasses on, you could play -- >> they both wear ties. >> orville wore a red sweater and a bow tie. >> three years, that's good. >> we left your area, moved out
to boulder, colorado, the mecca of food and started franchising just in 2009 been and in those three years, we've become the largest popcorn retailer, literally, in the world and eats just been an amazing, exciting ride. >> so you're based in boulder? >> we are based in boulder, colorado, and we have now 300 locations and development. so we're in 30 states and passing out smiles and great products to folks all over this beautiful country. >> are you out near celestial seasonings in boulder? >> our office is pretty close to there. do you know the area? >> oh, yeah. i went to school there and i took a tour of celestial seasonings. next time we're going to take a tour of doc popcorn. >> we have to get you in and popping, absolutely. hopefully you guys will be indulging a little bit later with all those flavors sitting on your desks out there.
>> i see -- i want to tell you, we have a famous former ceo, maybe the most famous one in the world, i'm not going to mention who he is who sends popcorn to some of his favorite people. and my wife loves it but the caramel popcorn, she says, if you eat that you're insane because it's -- i mean, how fattening is caramel popcorn. that's what you loved and that was your idea, to figure out a way to make it where it's just not like death, right? >> exactly right. and the idea was to make it more edible, more indull gent. ours is grab and go, quick serve. you just hit on one of the keys. there's movie theater popcorn on one end of the spectrum. then there's a heavily coated candied product on the other side. we are different from that. we use all natural products. we use corn oil. we infuse all of our popcorn with these amazing ingredients. people come to our mall stores.
they will literally buy a bag, eat it and buy another bag. so it isn't that really heavy product. it's something that's much lighter and more indull against. >> rob, just as an aside, in a big bucket, let's say you load up the butter at a movie theater. you're talking like 1500, 2,000 calories, aren't you? >> yeah. >> you might not even make it out of the theater. your heart might explode. >> for that type of popcorn, that's the issue and that's kind of what we've -- i think that's why we've exploded because we've done this so differently. and people try our product and they're like, wow, this is really different. this is really amazing, you know? >> are your franchisees having a hard time getting credit like we hear about so much? >> you know, it's a good point. we will like -- you know, the credit markets were very liberal, as everybody knows. and they really got very unbelievably constricted.
hopefully we're sitting somewhere in the middle soon. we call them pop pryors, by the way. they're out there in the field bringing our brand to folks, serving up smiles every day, giving out bags of doc popcorn. so i just want to -- they've been getting credit lately, but it has been a bit constricted. >> that's great. you're creating jobs, this is the way it's supposed to be done. and the biggest popcorn retailer in the world. >> i don't really understand how this happened. >> it's healthier popcorn. >> and it's gluten free, which is the big thing. >> i think the other part of that, it's -- if you think about what's happened in the world of food commodities, and i know you guys are talking about that, you know, in the '50s, mcdonald's came around and did hamburgers differently. and then starbucks came around and did coffee differently. we're doing the same thing with popcorn. we've made a simple business model efficient, affordable,
fun. >> did you think it could be this big when you started it? >> you know, that was the dream, but it took us six years to really figure it out. i thought it was going to happen overnight. we often say, you know, ten years to an overnight success. we've been -- we learned and explored and figured this out and then we rolled out franchising. because we had done that homework and done that learning, it happened big. but it took a little longer than we thought, to be honest. >> can we get it in inew york city? >> we're opening up all over new york. we're looking in new york city right now. we're at the palisades mall. we're dotting all around you. you can order it online at any time and hopefully we'll get it to you in the city. >> and renee, your wife's name is renee, right? >> yes. that was spot on and that was awesome.
>> you guys are great. thanks for having us and happy holidays. i just want to say, you know, america is an awesome, amazing place. i know things have been tough and there's a lot of kind of back and forth about politics. but it's pretty amazing, the opportunities that we all get here. and that we just -- we've been dreaming big and -- >> that's great. >> and it's been awesome. >> you live where there's 300 days of sunshine a year. >> not a lot of folks know that, too. snow in the mountains. boulder is heaven. >> you were smart to go to school there. i wish i did. >> it's the greatest place. we'll be out there in march. maybe we'll stop by and take a tour. >> we would love to see you and we so appreciate this opportunity to be with you guys. >> coming up, attention road warriors. are you a frequent flyer? if you think you have a lot of miles under your belt, you have not seen anything yet. wait for this. until you hear from our next guest, united airlines' top
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welcome back to "squawk box." if you're watching this show this morning from an airplane and there's a couple that you can do it, jetblue, delta and others, you might recognize our next guest, actually, though, he'd be on a different airline. tom stuker is an auto sales and management consultant who holds the title as united airlines' top flyer of the year.
over 1 million miles. >> flown. >> just this year? >> bis >> where the heck are you going? >> a lot of places. >> how many days were you in the air? >> they said if i took off january 1st, and flew the million miles i'd land somewhere on the 73rd day of the year or something like that. >> what do you get -- does united now rearrange their schedule for you? how does this work? >> no, no, no. i go to a lot -- i do a lot of work in australia. i take a lot of vacations. i took a lot of vacations. >> for free i assume now? >> no, no, no. i use my miles for family members and friends. >> how many miles do you have? >> that i've earned? >> that you've earned? >> i've earned over 50 million miles. >> wow. >> yeah. and i've earned probably 4 million miles this year or something. >> so what's the biggest perk? >> well, there's a lot of them. i'm global service on united. it's a top tier of ' leet flyers
and they take unbelievable care of their top tiers global services. just unbelievable. >> you were saying off air that they'll kick somebody off a plane for you? >> they don't kick somebody off a plane. and i don't want anybody kicked off a plane. i've had a situation where i absolutely had to get from point "a" to point "b," and somehow, there was a misunderstanding, because i do fly first to open up a seat in first class, they talked very nicely to one of the passengers, probably offered him, i don't know what, flights to hawaii or something, just to accommodate me in first class. >> you automatically get up graded now? i mean, do you have to pay for first class? or is it all coach -- >> i buy first class because it's important for me to be comfortable with all the flying i do. like i said, people say oh, how can you do it? i fly first class, and united, by the way, they have cnbc, "squawk box," on the flight this morning. >> they do. >> yes, they do. quite a few flights that show
your show. >> what do you mean you fly first class? you don't pay first class? >> i negotiate a rate because of the extreme amount of travel i do. >> does anyone really pay those first -- i mean -- >> people do. >> not as much. they -- obviously upgrades is a very popular commodity -- >> upgrade frequent flyers? >> you can upgrade with miles. you can copay. there's a lot of different ways to upgrade. the average flyer kind of ge gets -- kind of has been spoiled through, you know, before united went bankrupt -- >> spoiled? i don't think any flyer feels spoiled. >> no, no, i wouldn't say spoiled. but maybe a lot more people feel entitled because, you know, the airlines have been so competitive with double miles and triple miles and stuff like that. everybody wants to fly from coast to coast for $199. >> when you surpassed a million miles like in the movie "up in the air" did they make an
announcement? did somebody come over to you? what happened? >> actually, i fly under the radar quite a bit. you know -- >> but did they know you when you walked on the plane? >> there's certain flights. there's certain routes like, from l.a. to sydney that i take often and i know everybody on the plane. i know the whole crew and i get unbelievable service. i mean, i'll be sleeping through the night and every hour on the hour they put a fresh glass of ice water and lemon by my seat. even if i'm sleeping they'll replace it throughout the night. >> why are you selling auto products in australia? >> i do consulting. management consulting, and sales training. and back in the '80s, i was a speaker at the national convention and some australian theaters came to my talk. they said when are you coming to australia? i said when are you inviting me? they said now. i've been to australia over 250 times going back and forth. my best friend lives in australia. it's the nicest country in the world. >> any tips for mere commoner
flyers? >> what's that? >> any tips for us of how to negotiate better with the airlines? how to get better service? >> better service, you know, what goes around comes around. i think -- if people are a little more patient, you know, the people that you check in with, you know, they didn't create the snow -- i mean i've been at the counter where people are yelling at the agents because of the snow and stuff like that. so, you get along -- you go a lot further with saying nice things. >> you put your bags under? you get bags lost? a million miles. >> i've flown on united for over 6,000 -- 6,500 flights and i've never, ever lost my bag once. i've had it delayed one in awhile. >> you get like a canceled or delayed flight do they put you up in like the ritz-carlton or something? >> no, just local hotels at the airport that they accommodate me in. >> thank you for being here. happy holidays >> thanks a bunch. >> very cool story. >> thanks, guys. >> alexandra, i don't think we have time for a final word? we've got a few -- we have 40 seconds.
>> i still -- so aside from being nice, is there anything i can do? because i'm usually waiting for the upgrade, and sadly -- >> if you had any comments. >> get yourself one of the credit cards. the credit card goes a long way towards getting -- >> now that was it. thank you. >> i'm fascinated with this. >> all right, coming up, beyond -- thanks for coming intoday. political talking points. two seasoned washington strategists join forces to deal with the major sticking points on the fiscal cliff negotiations. find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying...
just republicans. on a broad thing like this, you need both. >> but will anyone rise above and get it done? a debate from both sides of the aisle. plus guest host jason trennert on the impact for the markets. >> the final details on retail. the winners and losers as last-minute shoppers make one final rush to get the latest deals. >> i got it. i got it. >> the second hour of "squawk box" starts right now. ♪ chestnuts roasting on an open fire. jack frast nipping at your nose. yuletide carols -- >> good morning. welcome to "squawk box" on cnbc. >> love that sweater. that's unbelievable. we've got to fade in and out between the fire and that sweater. >> that's joe kernen, i'm andrew ross sorkin. becky quick is probably happily
off at this point. in studios with his,000s on the market and the fiscal cliff this morning, jason trennert. >> that tie. >> he's got the red tie. >> santa tie. >> take a look at the futures, see how this half day of trading is setting up. looks like the dow will open down about 18 points, s&p 500 will be off about three points and the nasdaq off close to 10 points. let's get you through some of the quick morning headlines. it is an abbreviated trading day for u.s. stocks ahead of the christmas 408 day. trading ends at 1:00 p.m. eastern time. japanese stocks did not trade today and the german and italian markets were among those in europe taking the day off. the uk was open. mexico's grupo bimbo -- >> it's right. >> grupo bimbo reportedly considering a bid for the hostess snack take. grupo bimbo -- >> that gets you, doesn't it? you're like in fourth grade.
>> because it's -- i can't even -- >> because it says bimbo? >> i can't -- >> it's mexican, andrew. >> i know. >> you can't even get through the story because it says bimbo? >> it's been a tough morning. >> i'm going to make it tougher. >> -- considered the company an unlikely bidder because of possible -- >> as long as we're in a good mood. because you're reading grupo bimbo. i said orville redenbacher. i was wrong -- something reminded me of orville redenbach redenbacher. he did not wear -- >> it was red suspenders. >> and a red tie. >> okay. >> so we had -- did you see the popcorn guy? >> i did not see the popcorn guy. just saw the million man guy. the million mile man guy. >> i could have sworn -- i remembered a red something or other. >> i'll make you deal, how about suspenders and a bow tie on valentine's day. >> that's an idea. you're already married, right? >> i am. >> so you can't really -- doesn't really matter. >> doesn't really matter. >> i'll just -- >> you mean -- >> you're obviously not playing the field anymore because
reckless abandon what you come in here. anyway, are we down with the grupo bimbo story? >> i love that. >> i mean that is immature, is it not, jason? >> i can understand it, though. >> on national tv, a business network where we're really serious you can't get through that story. because the name is bimbo. >> tata. that's another one. >> can you handle that one? >> i'm better with that. >> let's talk quickly about gasoline prices. they've fallen to their lowest level in a year. lundberg survey showing prices falling almost 12% per gallon over the last two weeks. that's down to just under $3.26. however, analysts say that higher crude prices likely mean this trend is coming to an end. >> i'm sorry -- >> no, but, and their main product at bimbo is going to be the twinkie. which is also sort of a -- sometimes twinkie is used as a bimbo. >> a bimbo. >> i think they may have seen some synergy there. it's the day before christmas.
all through the house, no fiscal cliff resolution, joining us from pittsburgh, tony fratto, hamilton play strategy's managing director and former white house press secretary, also a cnbc contributor. and from d.c., kiki mclean, porter novelli, who had a much better outcome for the redskins, kiki, and i -- i'm sorry, i have to start with that. i already know -- >> you have to. >> i'm not a cowboys fan -- >> oh, you are? >> yeah. >> i had to do that with tony. tony is going to say something about titletown. you always do that when i say something about pittsburgh. i'm from cincinnati. how are you going to defuse this -- >> i'm not. the thing about football, joe, is that the better team always wins. and your team played a terrific game yesterday. they made fewer mistakes. didn't score an offensive touchdown in doing it but you go to the playoffs, and i wish you great luck, actually. >> you know what?
>> at least it's not baltimore. >> you know what, tony. it's obvious you're a republican strategist because you've had to give this speech a lot recently, about the better team winning, and we got to just accept defeat and everything. so you all practice up after the last couple of years, aren't you? >> maybe the last couple elections. >> that's what i mean. >> it's all about making defeat honorable. >> yeah, exactly. kiki, i want to ask both of you, because andrew brought this up earlier, is that okay, boehner says i gave the $800 billion, and you know, we were hoping for a little bit of a tax in the center and a little bit of a president that wants to be, you know, the president of everyone, and we got, i won, you get nothing. we're back to where we were. we're back to obama care. it's going through, whether you like it or not, this is the way it's going to be. >> here's the deal. i am wary of sort of reporting without context, and all of that. i don't doubt that the report is how it went down. but without context, i think
people read into a lot of things, the conversation that none of us were present for. but here's what is absolutely crucial. i think there are two things to remember out of this deal. what i heard the speaker say last week, and i think the speaker's trying. i think he's trying but he can't get this conference together, i heard him say that even on a vote he wanted he couldn't get them there because there were people who felt they would go home and it would be perceived that they had raised taxes. and i heard him shrug his shoulders and say, well there's that. there's nothing more i can do. that's governing from fear. as opposed to governing from leadership. and somebody else on a show one day said a lot of these republicans really believe, this is what they really, really believe in. that's great. but at some point one side or the other, and in fact both, are going to have to give a little. >> kiki, i would be -- i would think you would be sensitive to talking about leadership. i mean, when you say that, you don't hear irony? that's the -- maybe it's just the other side, the republicans talking about president obama, but, you in the last six, the
last five years, have you seen a president that comes together and leads both? >> yeah. >> you have? >> have you, tony? >> i've seen a president who went out and campaigned on a certain series of things that he believed were important for the country and that he wanted to do, and he went and he pursued them. and that's leadership. >> he's pursuing them. but i think everybody's pursuing what they have to pursue. you've been listening to us for the last few months. i think we've been saying that this is probably going to get done in january. i think austan goolsbee said the same thing. basically anybody who's worked in the white house has said this is probably going to get done in january and there's a lot of talk going back and forth now, on negotiating that i really don't believe is going to get anywhere fl we get, you know, into january and perhaps the fiscal cliff. it's going to be easier for both sides, not just boehner, but for both sides, to give -- >> but tony, how far into january are we talking january 2nd, 3rd, 4th? are we talking later in the month? >> i'm thinking later in the month actually. i don't think it's going to get
done very, very quickly. because it is a very complicated, negotiation. if we're going to do anything real on entitlement cuts, or do anything real to deal with some of the sequestered spending that's going to have to go into place, and we have all the tax extenders to do, too. it's possible that a deal could get done before december 31st. i just think it's very, very unlikely. it's much easier in january. >> but the challenges you have, for late january are the very same challenges you have now except for four extra weeks. and that is who's willing to look up and say -- >> but kiki, you might get the markets to actually move on this. right? right now, there's a disincentive not to negotiate in part because the market keeps saying we think you're going to get a deal to the. >> and i don't know why the markets -- >> -- through this at all. and you know that. they have -- mr. boehner's conference has disrecorded the whole conference. >> i think people should disregard, at least -- i've got
my pin on, people should disregard what the markets do in any one day or, you know, for a few days. >> you are rising above, tony. because kiki, i understand that the president has -- has constituents that are still real and a base that's still really angry about the last time that he extended the bush tax cuts. so i understand that any promise, he's going to get hammered from the left and he just won. but, i mean, tony, for you, you're unable to say that maybe he hasn't been the most bipartisan leader that's been in the white house? i mean, go back and look at some -- i mean, these two sides, this is the nastiest it's been and it's not going to get any better for the next four years. no way. >> i don't think he's been particularly bipartisan, but, you know, he started off with controlling of both houses of congress. so, you know, i'm sure he felt he didn't have to be bipartisan the first two years. >> he got nothing done. we got done the last two and now we're getting nothing done starting -- >> here's the deal -- >> joe, i'm not giving him a
pass. i'm just saying that he felt that he had control. and now there needs to be a recognition that the republicans control the house of representatives, they controlled it for two consecutive elections, and they're probably going to control it for the next election. >> kiki, there's people that love gridlock. it's great if you love gridlock. there are people that like it. >> here's the problem with gridlock. all the things that you obviously know that you don't need me on christmas eve to tell you. but in light of the challenges that our country faces, and i don't mean just economic. look at the tragedies that our people have experienced in the last few months. we can't go on and deal with those until these people get together, and deal with this basic infrastructure and the economic and global outlook for us that we have to have. and it's really unconscionable. i said last week, as members of congress were getting on planes flying home, that i hope they carry the burden on their shoulders that the american people are carrying every day. and when we talk about setting sort of everybody's comfort zone with let's settle it at the end
of january. or let's have a 90-day window, there are hundreds of thousands of people that, as individuals, will fall off the cliff over this. >> fall off the cliff, i mean basically -- >> -- for both sides. it's unacceptable for both sides. >> not just the congressional guys flying home but as the president's jetting to hawaii. you want it on his shoulders, too? >> yes, absolutely. >> all right, that's fair. >> what we're talking about, kiki, though, is returning to clinton tax rates, basically, right? >> what we're talking about -- >> that's the armageddon that we're talking about is returning to clinton -- >> you're not rising above now. now you sound a cliff jumper now, known. which are you? >> all i'm saying is that -- >> here's the deal -- >> to deal with these issues, we can deal with them in between christmas specials. >> the only problem is you're returning to president clinton tax rates, you're not returning to president clinton spending. and you have $16 trillion in debt. all of which, 60% of it matures in the next three years. so this is -- this is so much
more of a precarious position, and -- >> so that should have a less impact. >> here's what this requires -- >> -- on the markets and on the economy. >> here's what this requires, guys, ultimately. this president doesn't ever have to run for election again, for anything. right? what this requires are a group of men and women on capitol hill who will stand up and say, i'm going to go head, and i'm going to put my own political future at risk, do what will move us forward. there are husbands and wives all over the country who disagree on an issue. and they sit at their kitchen table and they say, no, i believe strongly in my point of view. but eventually one side gives and says, okay, let's try it your way. if all we do is stay at the kitchen table and neither one is willing to give, we can keep electing a new crop and they do the same thing again and again and again. at some point, we have to not allow perfection to get in the way of the good, and most importantly, these men and women have to put their own political future at risk, and be willing to take the bullet for the
decisions they make to run this country. >> that will happen in january. >> why january, tony, versus now? why january versus now? >> kiki, you need a button? >> i don't remember -- >> we've got to go. i don't remember if you've been on. we want to have you back. tony you're obviously a contributor. we'll get you a button kiki because you want us to rise above. that's what we're trying to do. >> right. >> you make a great case. happy holidays, merry christmas. >> happy holidays. >> merry christmas. >> everyone at the cliff. >> happy holidays. coming up, jason trennert's 2013 predictions for where you should be putting your money. and last-minute shoppers are going to want to stay tuned for the retail update. who has the hot items and where you can still get them. [ male announcer ] this december, remember -- you can stay in and like something... or you can get out there and actually like something.
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welcome back to "squawk." let's focus on the markets. our guest host jason trennert, so what are we going to do? you got a plan? >> i don't have a plan. because i think we're all guessing. i mean, i'll tell you my best guest, my best guess is that we're going to have -- >> what a way to start a segment. i say you have a plan, you don't have a plan. >> no, we don't have a plan. we don't have a plan in washington.
nominal gdp growth is 4% which would be something like recession in any other time over the past 50 or 60 years. so you're already recession-like types of -- >> you mean nominal levels? >> nominal is, you know, real plus inflation. >> right. >> and the fiscal cliff business is a big deal. it's a potentially big game changer. i didn't think there was a chance we would go over really until the last couple of days. now i'm thinking there could be a bungee jump where you go over for a couple days and come back. >> if you're a market timer and you believe in your bungee do you think there's going to be an opportunity? >> absolutely. because i truly believe. the good news is, is this is setting ourselves up for true entitlement and tax reform in 2013. it could be six months from now. it could be a very difficult first six months. >> you're looking for a baby deal now? >> there's probably going to have to be a baby deal, partly because of amt. you cannot retro actively fix amt. that would hit millions of people. it's a very, very big deal. very, very costly.
everyone would get blamed for it. then there's another things that are part of the deal that you could wait for. payroll tax, that's $160 million. we have obama care taxes. we know those are going through. >> the payroll tax number going up again? >> payroll tax, i think they're not going to extend it. so that goes up -- >> sooner or later they have to go up. >> that's $160 billion -- >> don't we need that money? >> funding social security. so it's very likely that that tax cut will not be extended into the new year. so there's a chance you have a mild recession, even in real terms, in the first half of next year. the good news, i think, my big prediction, i've had for awhile for whatever it's worth, i think we're developing a new nifty 50 in this country of very, very strong companies that are almost bond proxies. and i know a lot of people think they're expensive, but there's no other alternative. there's no other place to go. >> is the market priced
appropriately for your estimation -- >> no, i don't think. >> for the first half of 2013. >> if you look at bottom of analyst estimates for 2013 they're still using 113, 114 for operating earnings, an 11% increase. that's with profit margins to standard deviations above the mean. it's not going to happen. >> your recession comes irrespecti irrespective -- >> i think you have a mild recession, almost irrespective. if you go over the cliff it ices it. it's over. there's other things that are going to go on. we're going to run up against the debt ceiling. that's another biggie. likely to be part of the deal. that means more wrangling when we get into the new year. also brings the credit rating agencies into play in the next year. i mean, it's a mess. it couldn't be much worse. i mean, there will be some short-term catches here. the bottom line is there's nothing that's happening that's going to inspire business and consumer confidence in the new year. one thing that worries me, too, about the new year, is that i think most people, this issue has been really a rich person's
problem, or a business person's problem. >> you think it's -- >> it's everyone's problem, especially if the payroll tax goes away. i'm sorry, that's the way i'm looking at it. >> still to come. the political drama unfolding in italy and why the world is watching. plus investing predictions you can't afford to mix. a closer look at the energy sector and fine out how you could make money maybe in that sector in 2013. in that time there've been some good days. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history. so why should our anniversary matter to you? because for 200 years, we've been helping ideas move from ambition to achievement. and the next great idea could be yours. ♪ executor of efficiency. you can spot an amateur from a mile away...
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italy's mario monti announcing he would consider seeking a second term as italian prime minister if approached by allies that are committed to actually backing his reforms. michelle caruso-cabrera joins us on set. you can see that andrew was taking some shots. >> a new camera. >> i'm so used to it wherever i go. andrew, we've got the fire behind you. >> it's summer cute. >> the sweater. >> yeah. >> but it's an orange -- i don't understand why it's orange. it's hal weeb. >> it's a red sweater. >> look at it. i know it's coming a little bit orangey. >> on tv. >> okay. >> lovely. thank you.
love the guys in the control room. >> so here's italy. silvio berlusconi. your intro was about mario monti which is all true. silvio berlusconi, the former prime minister of italy -- >> my favorite. >> thank goodness for silvio berlusconi. >> look at his hair. what is he, 76? >> 76. he just sat down with cnbc italy over the weekend. silvio berlusconi says he does not want to run for prime minister, but, he is obligated to, because the country needs him so desperately. he is the only one that can bring together 40% of the people who vote for him, so that way the left does not control italy. >> he could not get 40%, could he? or could he? >> i don't know if he could get 40%. he thinks he can get more than anybody else. >> really? >> yes. >> now the question is, 40%
isn't enough once you're in a parliament, right, because of a parliamentary system and two other parties that used to support him no longer do. it's not clear what they would ultimately do, would they really link to the left? it's hard to say. more than italy, remember, they would never agree with this, but they're far more dramatic than southern italy. >> as someone that just likes global politics, i like him. >> oh, he's so fun. >> on the world stage. >> he was sentenced to prison last week. >> he also -- minor -- >> that's what cabrini said, don't worry about that. >> he also got -- he also got engaged last week. >> yeah, to a 27-year-old. >> he's going up in the age scale. >> he is. the last one was 17. >> the last one was 17. so now he's 27. the other thing, der spiegel the german magazine had the ten most dangerous people for the euro. and what was interesting was, silvio berlusconi, because he likes to hang out with younger people, he was the only older person -- >> younger girls. >> only older person in that
list. all the other people that are very skeptical of the euro are younger people. berlusconi stands alone as one of the older people that's skeptical of it which strikes me as something that's dangerous for the future of the euro. >> he said very specifically, do you support the euro. he said he wants more europe, not less of it. he just doesn't believe in all the austerity policies that have been put in place. and he made fun of mario monti during the interview. said mario monti has done a great job, every single economic indicator is lower. unemployment is higher, the gdp is lower, et cetera. the only thing that hasn't been dramatically is the spread between the italians and the germans bonds, and he says who cares about that. >> all right. happy holidays. >> merry christmas. >> merry christmas. >> wearing green. >> coming up -- >> you are wearing green. >> 'tis the season for last-minute shopping. procrastinators rushing to the stores. we're going to ring up the retailers, which companies and
box." this morning on this christmas eve special -- do we call it a special edition of "squawk box"? it's always special. let's get you to some of the morning headlines. it is a shortened trading day on wall street with stock markets that close at 1:00 p.m. eastern time ahead of tomorrow's christmas holiday. with 4 1/2 trading days left in 2012. the s&p 500 now up nearly 14% on track for its best performance in three years. and facebook may have something in common with starbucks. the wrath of the british government. london's sunday times reporting now that facebook was able to shield 440 million pounds from taxes last year through the use of various loopholes. starbucks had been threatened with a national boycott for similar moves. finally, the hobbit was number one at the movie box office for the second straight weekend. you haven't seen it yet. i've got to do that. the warner brothers release took in nearly $37 million in north american ticket sales. the new tom cruise movie "jack
reacher" debuted at number two. and have you seen any films? >> no. >> "lincoln"? >> nope. >> no? what's on your list? >> annie. >> annie. >> for my daughter's birthday. >> nice. >> we will definitely see the hobbit. you know, they're going to make it like the trilogy. >> the same thing. >> lord of the rings. like the lord of the rings. we'll know everything that we want to know about bilbao. we read the hobbit all together. we're reading that. and i think the first one goes to where the eagles transport them away from the wolves. >> i haven't read the hobbit. >> you haven't head the hobbit? you didn't read it in high school? yeah, i read it in high school. >> i feed a feel-good movie. >> el capitan, che guevara. >> let's talk shopping.
shoppers hit the stores for the last time before christmas today. dana telsey is the ceo and chief officer of telsey group. we saw you day after thanksgiving, you said there was going to be sort of a hot -- that weekend was going to be big, there was going to be a lull, and it was all going to come back. has it turned out that way for you, dana? >> i think some of it came back. i don't think all of it came back. i think it was a tougher season than expected. you think you had the long calendar, the hurricane sandy, the track dpi in connecticut, people had a lot on their minds this season. this weekend was a key weekend. i think it helped. i didn't see promotions being extra promotional. but it's a push till the end. >> okay, so winners and losers? >> i think some of the winners, i think you're going to see companies like tjx, macy's. i think american eagle outfitters, even gap had a very good season, along with michael kors. >> losers? >> i think you had a tough time at jcpenney. i think the traffic was tough there all the time.
i think kohl's had to be extra promotional in order to be able to drive the sales. and the whole children's sector was very promotional. from gymboree to children's place. >> so, dana, jason trennert from strat eegous. how are you doing? >> good, how are you, jason? >> good. normally retail stocks outperform in january, because i think that phenomenon that andrew was talking about is that there's a general sense that christmas gifts canceled at a certain point and then it comes back at the end and then you wind up having a big january and the stocks tend to do very, very well. would you expect the same type of pattern this year, or maybe i'm getting a sense maybe you say it might not work out as well this year because the season was a little tougher? >> i think the season was tougher. i think the inventory levels were thin, i think you're still going to have margin recovery. i think the month of january, i don't see why it would be different this year. i think 2013 game plans need to be addressed and online is what you don't see. you don't see footsteps in the store when you're talking online and that's a higher margin
business. >> when you say business plans need to be addressed? who is going to be changing their plan? and what's the plan going to have to look like? >> i think some of the plans for 2013, what are we going to see on topline sales? overall i think you should have a 2013 with same-store sales being up anywhere from 2% to 3% at best. you're not getting price increases you have to move units. i think margins. i think it will be more of a flat to slightly up year. i think two thud twelve was a better year in margins. you could have more sales growth than margin growth in 2013 with more in the back half. >> i know we harp on jcp all the time. when you think about that company you think about what's happened during this holiday season, does it suggest to you that they're going to have to change plans any quicker than they would have otherwise? was this always the plan, which is we're not going to have a lot of inventory? we're going to suck it up for the next couple months and hope that things work out later in the year? >> i think the things for jcpenney that even ron johnson would probably say the plan is a plan but it's going to shift depending on what consumer reaction is.
and being able to be certainly offer consumers deeper value, whether it's $10 off, i think there's more new things that are going to happen that we don't even know about, but price is going to have to be addressed. >> dana, obviously we can't avoid talking about the fiscal cliff. payroll tax cut looks like it's going not to be extended. so that would mean that everyone that has a job is going to probably see at least $30 or $40 every paycheck starting in january. which companies are affected the most by that? is it the low end? or is it some place in the middle? or the high end doesn't matter? what would you say? what advice are you giving? >> i think the low end to the middle. i think we've already been seeing the beginnings of some of the low end having some pressures that we didn't see earlier in the year. but look what walmart said, their ceo talked about more of their consumers beginning to feel impacts that are being aware of the fiscal cliff. look at dollar general, where they basically talked about more weekly sales volatility than
they've seen in the past. >> the gap. you keep saying it's doing better. is this -- is this a comeback story now? >> i think it was the comeback story of 2012. i think it has to be the keep on keeping on story of 2013. when you have a stock price gain of in excess of 60%, it's a very impressive number for 2012. >> okay, dana, we're going to leave it there. last question, is there something, if you wanted to run out and for the procrastinators need to get something, is there a hot item still available? >> i think the hot item -- go get a michael kors watch. that's one of the hot items out there. >> they still have them for sale? >> sunglasses are for sale. some of the coach legacy bags are still out there. and don't forget, you can always buy something at tiffany's. >> dana, happy holidays. >> happy holidays. >> thank you. >> thank you. >> coming up, fueling the new year, oil prices, natural gas exports, and alternative energy
as 2012 draws to a close cnbc is giving investors what they need to know to make money in the coming year. here is sharon epperson with a look at the energy sector. >> on the road to north american energy independence, the next decade is crucial. and in the new year, the dramatic rise in u.s. oil production will continue its extraordinary climb. at the same time, u.s. petroleum supplies will have a greater reach. in the first quarter of 2013, more of the nation will have additional pipeline capacity. helping to alleviate the abundance of domestic supply. and perhaps mitigate any meaningful price gains. after a year full of fluctuations, by the end of 2013, oil prices may not stray far from where they started the year. it's another secret we have a lot of natural gas. enough to have flooded the market with more supply than the nation could possibly have consumed this year. but those days may be coming to
an end. what will we do with all this natural gas? in the new year, the u.s. will find more ways to utilize or export this cheaper, cleaner fossil fuel, and the increase in demand will set the stage for the continuation of rising prices. >> it's been a wild ride for oil this year. oil prices fluctuating because of a lot of stuff in the middle east, also america's growing energy independence. what can we expect from energy in 2013? joining us from london is jason from european oil and gas research at mccard securities. i'm going to ask you an overall question, jason, and i don't know how you answer this, but, for investors, that are looking at a way to play energy, i mean, is it going to be basically hydro carbon based? are we back to that where it's either natural gas or oil exploration or some facet of that? >> i certainly think so. i think that did we're looking
for trends in 2013, you know, the potential re-emergence of higher natural gas prices could be there. we think it's going to take some time for that to happen. i think the trend in 2013 is going to be a continuation of the 2012 trend, a very high refining margins in the midcontinent of the u.s. and that's because of the rising u.s. crude oil production from places like the balkans. we still think that stocks like western refining and holly frontier could still be very good investments for 2013. and then those oil produces like eog resources would be another place to be putting money. >> so it's not just all we hear about, horizontal fracking, it's also, we keep ramping up oil production as well in the u.s.? >> yeah, that's right. i think that really, you know, the potential emergence of the u.s. as a self-sufficient entity over the next ten years is probably the biggest change that i've seen in the thought process in the 20 years plus i've been in the oil industry. >> okay, so you mentioned some people that will benefit from
the refining margins, staying strong. would you say that the -- even though fracking is what we often hear about, and i'm sure a lot of people would like to get in on that investment, if the prices recover for natural gas, does that mean that even though it's a well-known story, that some of these stocks are not expensive yet? >> yeah, i think especially if you can get a name that's at the low end of the cost curve like a southwestern energy, you could actually get a play on natural gas producers over the course of 2013. but we think it's going to be a long, slow go for natural gas prices. there's still an acute oversupply that we think probably will extend through 2013, so i'd actually be needing a longer investment horizon to be buying gas producers here. >> it's jason trennert. i was wondering how, obviously, politics is casting such a long shadow over everything these days. it seems like almost inevitability given the u.s.'
bountiful natural resources, that it will be a big game changer. how can politics stand in the way, do you think? i mean it seems like it's inevitable, but can it be delayed due to politics? >> i think you're right. but there are a lot of political risks that can come into play with the energy industry. i think the export of lng from the gulf coast is going to be one that will potentially become a major political issue in 2013. we've already see fracking become a local political issue, particularly in places like new york, and then i think the other one that we're going to have to face up to within the next couple of years is, will the u.s. become an exporter of crude oil? and the reason for that is, that the refining system uses different types of crude oil than what we actually produce in the u.s. so it may make sense to consider that type of an export, although i think polite kwli it's going to be very difficult to achieve. >> well, how could we play the export of either oil or natural gas? is there -- do you delve into those types of investments, or
you're just purely oil and energy? >> well, i think really, natural gas is going to be one that you can get some leverage to. exporting oil is not necessarily an investable trend in and of itself. >> who builds the infrastructure to do that with lng, and what -- who's involved with that? >> the infrastructure, air products, first of all, which manufactures the heat exchangers, you have all the engineering and construction firms like kbr, or bechtel, which unfortunately is private, they're going to be the ones who will gain the infrastructure spending benefit from all this. and i think royal dutch shell would be another one to take a look at because they actually have contracts to take lng exports from a facility called freeport which i think may be the next one that is actually approved by the u.s. government. >> yeah, because that -- that's some multiyear play, i would think. and i mean, i figure we could
power the grid with natural gas, and then run so many things off the grid. i just -- it's very exciting. it seems like it's a game changer for the u.s. economy. if we don't mess it up. >> yeah, the shell revolution is a game danger, again, if we don't mess it up. it is already making a difference and one other side benefit is that our carbon emissions are back down to roughly 1992 levels because of the replacement of coal with natural gas. >> what about solar, wind, all the alternative stuff? it gets harder and harder to see that being really profitable near-term, if gas, you know, has a slow move higher, doesn't it? >> that's not my area of expertise but if gas is cheap, i really don't know why other than for political reasons you'd move forward with that type of investment. >> that's why the government does everything for political reasons, though, and that's the favorite thing about blowing so
much money try to develop something. sounds good, right? good story. >> yeah, it sounds good. but if you have cheap natural gas, that's probably going to be your best alternative. >> i know. right. staring you in the face. anyway, jason, we appreciate your time. you already, you know, you're there -- i think even in europe, you guys, you're still developing hydro carbons, right? you're not totally -- you don't see wind turbines everywhere, right? >> no, they're still pretty popular over here, though. probably more so than in the u.s. but north sea is still moving along and shale gas is trying to make a move over here as well but it's been pretty slow. >> we appreciate it. thanks. happy holidays, merry christmas. >> thanks, guys, merry christmas. >> coming up, don't kick off the short trading day without stocks to watch. joe has his names that you need to know when we return. >> wednesday on "squawk box," christmastime's through but members of congress have lots more to do. rise above party, find cuts for
i just read what's in front of me. let's take a look at some stocks to watch this morning. fortress announcing the retirement of co-founder and principal robert kauffman. you know anything about this, gentlemen? >> no. >> in conjunction with his announced retirement fortress is going to redeem or purchase all of its shares which total $51.3 million class-a equivalent shares at $3.50 a share. yum brands has received approval from chinese food safety authorities for the level of antibiotics and steroids used in chicken that are served in kfc restaurants in china. it's a huge growth area for kfc. but high levels of a banned antiviral drug in one sample, and there are some that biotechnology related additives are not popular anywhere but
here. >> right. huge concern. and maybe that's a good idea because you know, if there ever is a zombie apocalypse, they think it could come from some of virus -- >> wouldn't be someone actually dying and coming back. but it could be like in a -- you saw i am legend, right? >> i did. >> something like that. remember emma thompson, doctor, instead of curing cancer, she created this hideous -- there was only one guy left in new york city. >> will smith. >> like there was only one person at the jets game yesterday. it was you. >> right here. okay. >> hold on. year-end pharmaceuticals, for treating hyper -- wow. hypercholesterolemia, a very rare but life threatening form of extremely elevated cholesterol levels and it's
approved a drug for that. jcpenney, oppenheimer said its visited stores in new york and new jersey and indicate that the retailers aggressive promotions are helping holiday season sales. and will aid its turnaround strategy, along with -- you know what else they cited? the button. remember those little buttons? >> i do. i do. >> and then finally, best buy mentioned positively, the new richfield remodel that thinks the new format is an upgrade apparently. >> shall we get some additional thoughts from jason trennert? >> you're not leaving us? >> no, i don't think so. >> -- i've got presents for you guys, too. >> you want to do them now? >> you want to do them now? >> sure. >> no, they want to wait. >> wait. i want to go to a different issue which is talking about the fiscal cliff all -- whole program. >> right. >> i want to go to your nifty fifty. >> right. >> give me your nifty five.
>> nifty fifty didn't work out that well last time. >> this is a different kind of nifty fifty, though, i would say. >> always is. >> the difference this time is those are one decision growth stocks in the '70s that were trading at 60, 70 times earnings. these are nifty fifty stocks, so it would be a merck, it would be a google. it would be microsoft. it would be mckesson. go on down the list. >> you just told me the whole market is overvalued. >> no, no, no, but these stocks, a lot of them are trading -- i don't think the whole market is overvalued. you have a situation now where you're going to have financial oppression, the dominant theme over the next five to ten years. you're going to get negative real returns from bonds, i think, ad infinitum, mainly because our problems are too large to deal with in any other way. the only place to go, i think, for most investors, especially that need the income, is going to be stocks that provide you what the fed is taking away through financial oppression. last year the fed bought 75% of the net new issuance of the
treasuries. >> right. >> they're keeping -- you're getting 150 from a ten-year piece of paper, inflation is two. and the plan is to keep it at 150, and get inflation to two, three, four. equities are going to wind up being your only shot. and so, in my view, you're going to wind up having companies -- right now, andrew, there are 25 companies that have credit fall swaps that are lower than uncle sam's. 25 companies where the market is saying, these are better credits. >> right. >> than the u.s. treasury. in my view that's going to be the basis for your new nifty fifty. especially as the debt gets downgraded. >> we're going to have to give you -- we may have to publish or put out the list. >> i'll be happy. >> okay, jason, stay where you are. more from jason to come. in the meantime, when the ball drops on new year's eve, we're going to be counting down the fiscal cliff disaster still? we'll ask ben white if politicians can work out a compromise by the end of the
year. we only got a couple days to go. plus how to position your portfolio to make money in 2013. "squawk" is back with a very big hour after this. [ male announcer ] this december, remember -- what starts with adding a friend... ♪ ...could end with adding a close friend. the lexus december to remember sales event is on. this is the pursuit of perfection. the lexus december to remember sales event is on. to the best vacation sp(all) the gulf! it doesn't matter which of our great states folks visit. mississippi, alabama, louisiana or florida, they're gonna love it. shaul, your alabama hospitality is incredible. thanks, karen. love your mississippi outdoors. i vote for your florida beaches, dawn. bill, this louisiana seafood is delicious. we're having such a great year on the gulf, we've decided to put aside our rivalry. now is the perfect time to visit anyone of our states. the beaches and waters couldn't be more beautiful. take a boat ride, go fishing or just lay in the sun.
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'twas the night before christmas, and in congress' chambers, still no deal to avoid the fiscal dangers. no rising above, only sinking below. the mod in the capitol's colder than snow. will drastic cuts happen? will tax cuts expire? the stakes for our future never been higher. president obama, the house, and the senate, we'll hold them accountable minute by minute. joe and andrew are spreading the holiday cheer. the third hour of "squawk box" is finally here. ♪ >> we're doing a lot of health stuff. we should run that more. you know what it's kind of like? kind of like the guys chanting o'neal or whatever his name is.
tatum o'neal. that made him the sexiest man in -- because of magic mike, the chippendales thing. we can be chippendales. let's do it. welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernen along with andrew ross sorkin, and they were talking about you don't want to be an elf. you said. that's like tony fratto wrote in that's like the elf in rudolph. his mother wanted him to be a dentist and instead he was an elf, and he did not want to be -- what was his name? >> i haven't seen it. >> herby. >> herby wanted to be a dentist. becky quick is off today and someone said it's like a -- meatless. we're like a couple of tasteless pieces of bread without anything -- >> oh, yeah. >> chopped liver. our guest host this morning, jason trennert. chief investment strategist, i
say strat eegous, because it's strategy. >> strategas, that was your firm, you used to be for years at ifi. >> that's right. 15 years. >> so you had trennert, which was a palindrome. >> isi. >> and now strategas. >> a man, a plan. >> first andrew has the morning headlines. >> it's a shortened trading session for christmas eve. u.s. equity markets will be closed at 1:00 p.m. eastern time. bond, currency and commodity training also will end early. in asia, japan, and the philippines were closed. in europe only the uk, french, dutch and spanish stock markets are open. they're also going to be closing early. u.s. equity futures, see how the market is setting up for the day. dow off by 20 points. nasdaq off by 8 points s&p 500 off as well. let's get some of the headlines. regulators are reportedly
looking into whether financially classified bad loans, "the wall street journal" citing depositions that were unsealed this morning. the s.e.c., fed, fbi alabama banking commission sig t.a.r.p. and the justice department has been questioning bank executives. regulators have warned 350 medical practices that they may have purchased potentially counterfeit botox from a network of wholesalers controlled by canada drugs. that's the problem. it's counterfeit. it's not working. >> is it no good? is it not botox? >> i'm asking a question. why it's not working. >> oh, oh, yeah. >> you are known for that razor sharp -- >> yeah. >> you're a print guy. take your time with these things. how long does it take to write a column? takes like five hours, right? >> yeah. a lot of time. >> i'm afraid of needles. i'm with you on that. but, i've thought about, have
you ever had botox? >> no! >> what do you mean? >> i see it in irforehead. you have not with that expression. >> are you kidding? >> but my question, honestly, in a business sense, is the counterfeit botox does not work? it probably isn't real botox, then. and you would like to get real botox, because it can be botulism -- >> let me ask you a question, though. are generics -- i always thought generics, and the name brand, were the same. and now, are they the same? or are they not the same? >> they don't have to be -- >> i thought they were equal. >> they have to be equal but not -- >> i think there's more things coming out now that are saying generics are inferior to the name brand. a lot of drugs, first i'm i've heard that. >> not molecule for molecule. should be awfully close. anyway, you got more. >> maybe the viewers are laughing at home. i don't know. >> they're laughing.
>> they are. >> the international supplier was linked earlier this year with fake cancer medicine. that's something you definitively don't want to take. >> yeah, that was a couple of years ago. tamoxifen or something like that. anyway, investors bracing themselves for a cliff this year. after three days of triple digit gains for the dow last week, stocks up nearly 1% on friday. on the markets, pricing in a deal on the fiscal cliff. we will ask chris sheldon chief investment officer at dreyfuss corporation who joins us from boston. don't know if you've been watching, chris, jason, i think thinks that overall the market's a little ahead of itself but there are still pockets of value. how do you view the overall markets this morning? >> not radically different. good morning, gentlemen. hello, jason, how are you? >> how you doing, chris? >> good. good to see you. i think jason's right in the sense that when we have management teams all over the world, literally, and almost
every one of these teams assumes that the fiscal cliff will be fixed, the market has rallied in anticipation of that. here we are, once again at the 11th hour, and so in that sense, if we don't get some type of a deal here in the next few days, which the clock is ticking, i think in that regard, the market may be a little bit ahead of itself. >> overall, though, the -- i guess you have to say that the price-to-earnings multiple is pretty low and reasonable, given where long-term treasuries are. but then again, that this is probably take nothing account, maybe a slowdown next year if the fiscal cliff isn't resolved. or a lot of the concerns that we have about europe or whatever. is that fair? >> i think that's fair. i think the slowdown is baked in the cake. we've already seen deceleration from the third quarter, which 3% is a distant memory for gdp growth, as we look at the fourth quarter and first quarter. so i think we're dealing with a slowdown, even if they have some resolution to the fiscal cliff. i think the difference between
next year, 2013, and this year, is if you think about what we were dealing with coming into the year in the beginning of 2012, people are concerned about the breakup of the euro, imminent u.s. recession, they were saying, china hard landing. so when some of these things didn't happen, all we needed last year, this year, was less bad in the market. i think in 2013, we're going to need to see better economic growth as the year moves forward. because, as you say, the market is reasonably valued. but it's not cheap. and i think to jason's earlier point, there are some stocks out there that are very, very attractive. but there are some stocks that look fairly expensive, and those are the ones that are the defensive, and high-income plays today. >> chris, everyone's waiting for this asset allocation shift away from fixed income, towards equities. the retail investor, for whatever reason, for a variety of reasons that we can all list, i guess, has just been very hesitant to do that. when does that happen? and does that happen in 2013?
>> well, you would think it should, given where we have a start in yields, especially on treasuries. but almost across the board in fixed income the starting yields are very unattractive depending on what you're looking at. yet all this year, almost every week, there's outflows from equities, inflows into bonds. i literally just saw the data for last week, and it was the first time that we saw even a little bit of outflows from bonds. so, but i think when we would begin to see the shift probably is not until people start to actually see themselves losing money on their bond prices. that may not be happening in the beginning of the year. so, i think the reality is you're going to need to see better growth. you're going to need to see better clarity on earnings. and only then, i think you're talking at least halfway into the year, if not beyond that. >> when you 24i about any of this, it doesn't make you feel good that $85 billion is being supplied every month by ben bernanke? >> well, certainly the underpinnings of liquidity are
important. if it was only the u.s. central bank you might say, gee, is that snuff? now they've come all in with guns blazing, maybe by itself it would be enough. on top of that they're literally in the last 12 months there have been 300 actions by central banks. most recently we've seen japan re-engage. i think that's a pretty important factor. it's not just our fed. it's global liquidity that i do think has made a difference to equity prices, whether that's anticipation or whether that's real impact on the economy, different question. but yeah, i think it is helpful. and i think that it's one factor that, if we can get some of these issues like the fiscal cliff, even modestly improved, i think that's when you see an outlook for equities next year that still could be fairly constructive. >> hmm. okay, chris. we appreciate your time today. >> enthusiast very much. >> andrew, i think one of the big headlines today was the bimbo hostess, the twinkie thing, and now we're not reporting it anymore, because of
you don't like saying bimbo. you had trouble -- but i just want to give you some history of the word. it apparently is an italian word for a little male baby. a little male baby, and all the way through up until the early 20th century, it was used, it didn't mean anything. and, in fact, in 1919 it was used to describe a masculine baby, a little baby, very young male child. and it wasn't until the late '20s that it became to be associated with females. and now it is almost only used in a derogatory term. so you are correct in that sense. but a lot of people writing in saying, it's used in mexico as not a -- >> bimbo. >> as not. like little male babies are -- it's almost like bambino. >> bambino. >> it's like a bambino. >> so you can return to that story without feeling that you're -- >> we'll do -- >> because of the bimbo. >> the hostess story is an important story. >> the bimbo twinkie story after the break.
i should also note there was a fire, a viewer just want you to know you guys are going for andrew in hell. you're pulling it off big time. so, aaron -- >> merry christmas to you. >> coming up, the latest on the fiscal cliff negotiations, will politicians rise above to get a deal? we're going to ask that question of politico's ben white. what it all will take for both sides to get together and avoid a debt disaster. plus how to position the portfolio before the clock runs out. a look at the sectors to watch in 2013, as becky, joe, and -- >> you saw becky? >> i saw a little shot. >> okay, there's you. good. >> let's get to commercial quickly. [ male announcer ] this is joe woods' first day of work.
jersey suburbs that's like l.a. in terms of traffic. everybody is out. i mean, just huge jams, trying to get to the malls. it's hideous. yeah, look at you. >> well, right now the only other person with me at the galleria is another reporter from the local nbc station. actually macy's here at the galleria is open. it has been open around the clock. but, i'm looking. i see two employees, no shoppers. and the verdict really is still out on this holiday shopping season. the lull between black friday and today keeps getting longer. and, in fact, shopper track has now lowered its holiday sales forecast from 3.3% growth to only 2.5%. but consumer reports predicts nearly one in ten of us will still be shopping today. shoppers have learned to wait, because they're rewarded with last-minute price slashing. retailers hope consumers are just procrastinating, and not, heaven forbid, stopping their shopping. >> we've seen this trend for the
last 20 years that the consumer procrastinates, waits for better pricing, and then is rewarded for waiting, finds greater discounts that last ten days or two weeks, and shops with a real fever. >> now, jaffe says names with momentum are gap. can you believe it, gap? proof that you should never give up. and urban outfitters. he remains bullish on american eagle fouth outfitters but is concerned about air postal and abercrombie. target prices have not kept pace with amazon and walmart and pricing is more important than merchandise this year, say some analysts. one in three americans have cut personal spending over fiscal cliff worries about the economy. >> i'm definitely shopping on a budget because i just wrote a book, and i had to spend a lot of money to get the book printed. so i have to be very careful. >> i guess we're always on a budget but we always exceed the budget. >> my budget is lower than last
year. but it's going okay. i'm still able to get people little gifts here and there. >> we're spending a lot of money this year. we're buying everybody gifts this year. just because i guess it's almost random. >> notice the only one blowing the budget is the woman. notice most of those people we interviewed are guys, because who else waits to the last minute? back to you, joe. >> you're right. although i was a little early this year. but i did it the right way this year, jane, i took her with me. because the humiliation of returning something, you know, four times a year, anniversary, birthday, christmas -- >> would you call my husband and tell him that? >> he should take you, right? it wasn't easy. physically i could carry her. >> any time he gets me pajamas and a robe and that's so nice, but it's never the right one. >> wow. >> and how many times has that happened? because it's humiliating to once again be told that i don't want this, and you have no idea what to get me. and finally, i mean, he should
learn. >> you know, what are you going to do? what are you going to do? >> do you appreciate the thought? do you appreciate the thought? >> i appreciate the fact that he will go out at 2:00 p.m. this afternoon and buy me another pair of pajamas that i won't like that. >> you won't want. jane, i'm going to talk to him. i'll try and get it in. thank you. >> thank you. >> does she ever go with you? >> she peeks, and i'm -- yeah, i'm -- >> you don't like what she -- >> i'm losing so many points. >> you are. are you the husband or the wife? you want to be the husband or the wife? that's an old joke. you know that joke? >> yes. >> the prisoner -- >> well congress -- this is a long -- well congress -- >> there you go. >> the clock continues to tick down towards the fiscal cliff. ben white chief economic correspondent at politico is
here with the latest on this negotiation impasse, and of course, ben white, morning money. >> you can definitely talk about morning money. >> what's it called? >> morning money. >> say it again. >> morning money. >> morning money. >> sign it for it at politico.com. >> politico? >> you've heard of that. >> but it's on morning money. >> what do you think the chances are? five days, four days? >> yeah, i mean, let's say, until new year's about five. i give it like a 70% chance we go over, 30% chance we don't. i think a lot of it depends on mitch mcconnell, the senate minority leader, if he decides to allow a bill to move forward on the floor. >> is there anything going on behind the scenes that we don't know about? >> there is. the president's playing golf in hawaii. there's nothing going on behind the scenes. >> there's not some -- >> meetings going on in the white house, there's not staff -- >> lining up a putt? >> no, which is difficult,
because there's lots of other stuff that has to go into what the president talks about before he left on friday, which is the tax rates. he didn't talk about payroll tax cut, amt, a number of things. there's a lot that has to go into a final deal and how they get that done. >> my worry is we're not talking about early january, we're talking about late january. >> i think it's probably more mid january if we go over. because i think you'll see market reaction, and you'll see a lot of people freak out, and it's a problem. >> market reaction, would you think -- >> people still think it's, you know, we get a deal. last-minute deal. i tend to be an optimist. i've been a cliff diver for the start. the alternative to allowing it to happen is so crazy and so insane and so stupid. >> here's what -- i'm not advising the president. we do want to rise above here. we try and do that. but if i were the president, and knowing the way politics is played, the chris matthews show
called "hardball" and it really is, it's hardball, and if i were the president and knew that i could get back to 39.6 on not 400, not a million, but on 250, by just waiting for the calendar to happen, and then his side introduces a tax cut bill -- why wasn't it always been that that was inevitable because it's such a good way? >> partly because the republicans actually want to get tagged with allowing the largest tax increase in history. they will get tagged with if this happens and then they're negotiating a position where all the tax rates have gone up. i thought the republicans wouldn't want that to happen. >> republicans can't stop it from happening. >> it happens with the calendar. so it's not their fault. >> i'm surprised that republicans would allow it to happen, give obama the ability -- he could veto something. but he's not going to be in a position to do that. he's not going to stop a cliff deal if he gets it and he's going to sign off on it. >> you're assuming that boehner or someone will do a bipartisan deal because they won't get, we
know that they won't get those -- democrats and republicans. >> exactly. it will have to come out of the senate and have enough republicans in the house to get half of the caucus in the house. they don't need all of the caucus. >> by going over the clifr, do you mean that there's no deal on amt. there's no dealish -- >> we either go over entirely or we don't go over at all. >> and we get a baby deal. >> we get a baby deal. i think we get a baby deal that's tax rates, amt. >> do you get a big deal if we do go over, though? >> no, probably not. the president's not going to be in the position of wanting to give up anything at that point. he's not going to want to give up entitlement cuts or social security reform. >> skept for the debt ceiling. >> except for the debt ceiling. we'll just do this all again and the president said we're not going to negotiate over entitlement programs. i'm not going to do hostage taking on the debt ceiling but what chase does he have? he doesn't have a choice. he's going to have to give up some stuff to get it. >> how politically damaged is boehner by plan "b" failure? >> he's definitely damaged. there's no question about it. he made a big play, left
negotiation with the president to take this plan "b" approach, assuming he could get his caucus on board. he failed to do that. >> he's almost like a -- >> he's got an impossible job. >> you don't remember anywhere else, might remember othello or hamlet, they're the people you remember, they're tragic, they all have fatal flaws but they're the heroes, they're the protagonists of the work. >> there's fatal flaws. the caucuses, the tea party republicans who will not do anything. >> they will. >> ever. >> but he's not going to lose the speakership i don't think over this. there's enough support for him. >> he is lear, a man more sinned against than sinning. >> did you read -- >> what did you make of the way the president approached it? some of the >> sort of a nasty tough line. i was surprised, actually. >> there was some debate over that instance where he said i get this amount of increased tax revenue for free. >> boehner says i'm getting to 800.
>> he says nothing. >> surprised to see such a partisan -- >> the white house -- >> were you, really? >> to president obama. >> i thought he was just -- the way he was appreciating it, that was what it was. >> there's been -- >> how is it -- >> that's not the quote? >> that is the quote but the context of it might have been somewhat different than was portrayed. >> but you don't know that. >> whatever the case, i mean the guy won re-election. he won -- >> and he won the first time. >> elections have consequences. >> exactly. so why would he take the same tack that he took in the summer of 2011 -- >> maybe because we might have gotten a deal? >> we might have gotten a deal. but he was moving towards a deal and then boehner pulled out. why did boehner pull out? what's the other side -- >> the other side said that he -- >> which side -- >> not last -- i don't want to relitigate that but for whatever reason boehner pulled to plan "b," thought he could get it passed, didn't deliver on it. >> what do you think happened there? >> with the republican caucus? >> there was a postmortem in the "journal," right? >> the tea party clubs said,
they would not support any tax increase, not a million, not over a million and we don't have enough spending cuts. >> why did he pull out? what was the most mortem on pulling out? >> i think he thought obama wasn't close enough. it's a couple hundred billion in revenues -- i mean in spending cuts that the president wanted and boehner said i can't believe that. neighbor he couldn't have pulled out because of the same guys that killed plan "b." >> shorter-term it looks like the republicans would feel that brunt politically of us going over the cliff. longer-term if you get into next year and you still have troubles and the economy is still weak, isn't the president taking a big chance here? i mean, do you get any sense that they're overplaying their hand because they won re-election? >> i agree with that. i think they are overplaying their hand a little bit. i think that the president doesn't want to have a second term overshadowed by a recession. which is actually an opportunity to get a few things done, completely over taken by this cliff. he does actually want a deal. i'm not sure he wants to go -- >> it's hard to be mad --
hopefully is, hard to be mad at 60 individual republicans and say i don't like this guy, this guy, this guy and you only got one guy. >> it will hurt republicans in the midterms if we go over the cliff. significantly. >> i guess -- >> will not hurt democrats at all? >> i think the polls are clear that in the current negotiations over the fiscal cliff if we go over, republicans will be overwhelming share of the blame for it. republican doesn't mind tax increases and the republican position -- >> although there's still far a lot of the public that probably doesn't want their entitlements cut but they do express that they want washington to live within its means. they do express that they're not a huge fan of big government although they do like -- >> do like social security. >> how many of the races in november, congressional races are actually close? >> not that many. >> i mean this was an interesting dynamic. because there's really, i mean, you do have a very stark choice between -- in a lot of these districts. so, the conventional wisdom is a lot of republicans, a lot of tea
party republicans are more worried about a primary slide than they are running against the democrats. >> absolutely. >> is that true? >> that's a problem that you have a house majority that believes and has as much of a mandate as the president. a lot of these guys won with a large share of the vote. some are in gerrymander districts, some of them aren't. they won on a hard line of not raising taxes. >> tony fratto was on earlier. i looked at something he wrote last week when we said the republicans are -- the president wants to try to take back the house next midterm and he points out and i looked back to find that in the '90s republicans had two government shutdowns and newt gingrich, they still didn't lose control of congress, in fact they picked up houses and kept it for the next decade. so not a slam dunk. >> not a slam dunk. >> people do like divided government, too. >> unfortunately gets nothing done, as we've seen. >> that's a fair point. it's not a slam dunk, that republicans lose the house. >> all right. >> ben while, merry christmas. happy holidays. >> same to you, guys. >> keep going for morning money. we love it. >> politico. >> -- sectors to watch in the
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shares and an options action contributor. 1:00, and -- this whole week, anything notable, really, do you think, scott, typically, and christmas week? what are the things to watch for? >> in all of these holiday shortened weeks, the market tends to have a little bit of an upward bias. i think that's just a function of the population of traders that are paying attention to weeks like this. this week we could really use an upward bayous because if the s&p gets to that 1422.70 level that was the low on friday below there i think the market's going to get really mushy, i don't think we're going to get much news on monday and on wednesday as far as the fiscal cliff is concerned. so people will be left to their own devices below that 1422 level which is probably not a really good thing for the market in general. >> and, my man rick. when was that, i probably shouldn't even bring it up, i loved it so much, corker, you had him, and rick you were
making such great points. he tried to like maintain, i don't know, i guess he's still trying to rise above or something, but he had fear in his eyes when you were talking on friday. that was a great rant you went on. >> well, i'll tell you what, i have great respect for senator corker. and the more i get to know him, and talk to him, and he tries to paint me some pictures of what's going on in the senate, what may happen, my one issue continues to be that we want to rise above, joe, but, once again, how do you rise above an 8% nonsolution? but, this is christmas eve. we should look at the bright side. >> i know. i tried to get you going. that was friday. you were on a roll on friday. you hear from anyone on that, rick? >> oh, yeah. no, very positive feedback, and i think in the end, trying to handicap so many moving parts, as to what's going on in the
house, what's going on in the senate, what's going on on a golf course somewhere in hawaii, it's hard to wrap around a strategy that is going to be difficult to get to. you know, part of me says, you know, you need to compromise. and i think some of these conservatives have compromised. the other part of me thinks, you know, thank god we didn't make the ultimate compromise with the british, or we'd have a different flag hanging over our house on the fourth of july. >> there's a lot of people that say what we need to do, we can run a 2% deficit. we need to get back to "x" amount of revenue, and "y" amount of government spending. and most people say somewhere between like 18 revenue, 20 spending, maybe 19 revenue, 21 pending. given what the democrats and the white house are offering on the spending cuts, do you feel that maybe they're thinking they want to keep it at 23, 22, 24? we're not seeing anything that gets us anywhere near 20 or 21
in terms of the offers we're seeing from them. are we? >> no. no. i mean, this would be like, you know, in 1969, we landed the first man on the moon. but it would have never happened if -- the only thing they worried about was exactly how the, you know, the lunar module was going to land, but not how they were going to leave the atmosphere of the earth. you can't worry about the little details on these tax issues. as much as the winners of the election want to punish the rich, because i can't think of any other reason that we dwell so much on that side of it, the rest of it, what did i read? senator corker was telling me before we went on air, and i wish it would have came up, and maybe the numbers aren't exact but you'll get the point. that the average person, basically, pays in $100,000, to $150,000, and they pull out about $280,000 to $300,000 on medicaid. these things can't continue. they just can't. and, to think that, you know,
hey, where do we want to put the flag once we land on the moon? if that's all that they did with nasa research, and never worried about anything else, obviously it wouldn't have turned out the same. this is a similar issue. >> there's something to be said for we won the election, we're going to keep government, you know, we're at 25 right now. let's say we get a better growth but we're okay with 22 or 23 and we want to collect 21. and it's our prerogative because we won. is that okay, scott? that seems to be what we're hearing. >> well, i want to go -- no. we obviously have to cut the size of the government. but rick said the conservatives have compromised. and that may be true. but the most conservative conservatives have not compromised. all that they did, all that they gave mr. boehner was essentially a cigarette and a blindfold, and i think that we have to realize that, i understand what they're trying to do. it's not that they don't want to raise taxes, it's they refuse to be seen raising taxes. and there's a difference there. they're already running again in
2014 and we're still in 2012 and they don't want to be blasted -- >> that's right. i think they have just -- i think they're probably going to lose their seats because -- i don't think they're going to regain their seats because of the stance they're taking. they're going to be blamed for everything. what do you think, rick? >> i think that they didn't give mr. boehner a cigarette and a blindfold. mr. boehner basically have given them lip service. and i like mr. boehner. but in the end, i don't think anybody so this day takes those fiscal conservatives as seriously as they better take them. in today's op-ed by mr. reynolds of putnam, was also disappointing. i mean i just don't think you can sequate the idea that peopl have certain beliefs. and just because you send a representative there that doesn't agree with other's beliefs, this isn't the electorate as being mean. they just want what they want. >> rick santelli, scott nation, thank you. >> merry christmas, joe. >> merry christmas. >> thanks a lot. >> merry christmas andrew ross. >> happy holidays, guys.
>> you, too. >> and coming up, andrew? >> coming up, italian prime minister mario monti stepping down to set up the february elections. could he win another term? could silvio berlusconi mount a serious challenge? that's the story. and share som. or you can get out there and actually share something. ♪ the lexus december to remember sales event is on. this is the pursuit offection.
welcome back to "squawk box" this morning. in the headlines a judge has given approval to a settlement stemming from the 2010 gulf oil spill. bp is going to be paying $7. billion to more than 100,000 individuals and businesses. the judge has yet to rule, however, on a medical settlement for cleanup workers. and foot traffic at shopping malls this past weekend appeared to be in line with last year but shoppers are spending less. npd says a variety of issues, including the fiscal cliff and possible higher taxes are dampening holiday spirits. and as we mentioned before, italy's mario monti tendered his resignation as italy's prime minister in a move that sets up a parliamentary election in february, but monti said he would consider seeking a second term if approached by allies committed to his version of austerity reforms. the former economics professor has the backing of italy's
business community, as well as international support from german chancellor merkel. recent polls show voters are far less enamored of monti's tax increases, spending cuts and reforms to entitlement programs. and the race will be complicated by former prime minister silvio berlusconi who stepped down in november two thud eleven amid sex scandals and a crumbling economy. he told cnbc italy that he doesn't want to run for prime minister but he feels obligated to do so. coming up, what do you need to know about the economy and the markets in the new year? the asset classes and sectors that will hopefully make you some money next year, right after the break. >> wednesday on "squawk box," christmastime's through, but members of congress have lots more to do. rise above party, find cuts for spending, and figure out how to keep tax cuts from ending. our leaders are angry, the speaker's perplexed, watch "squawk box" on wednesday to find out what's next.
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welcome back to "squawk box." the looming fiscal cliff means uncertainty for the economy in the new year. here is steve liesman with a preview of what he expects in 2013. >> trying to figure out what's going to happen in 2013 depends on one very important development. whether the u.s. goes over the fiscal cliff in a few days' time. and, for how long. if it's avoided, there's considerable upside for the economy. we could see at least one, and maybe two quarters of growth
above 3%. the kind of growth that would put people back to work and lower the unemployment rate. why? because business has been holding back investment under the uncertainty, unleashing business spending would add to the growth from the rebound in housing and from the consumer who has hung in there despite tough times. in fact, we could see unemployment drop below 7%. although it might first rise, and people come into the workforce will be discouraged but then it could start to fall. as for the fed i think the market may be overstating its expectation for asset purchases from the central bank in 2013. at the current pace the new round of quantitative easing will add $1 trillion to the balance sheet. i think it's likely to come in less, maybe in the $750 billion range. a lot, just not as much as markets think. so if we get the growth and the lower unemployment, that would likely mean what higher interest rates. attention will be fed asset meant to keep down long-term rates and better growth, which will push them higher. i'm predicting we end with a 2%
to 2.25% ten-year treasury so mortgage rates may already be as low as they will get. those are my predictions for 2013. >> those were steve's predictions. now let's get some more market predictions from our 2013 next guest, joining us now larry mcdonald, new edge senior vice president, and a guy who saw the bubble coming. loved your book. you know that. good to see you, larry. how are you? >> hey, andrew. thanks very much. >> so what do you think? give it to us straight here. >> well, i think joe's had it right for most of the last week. this debt ceiling issue is literally like an optionality impact on the market. so in other words, the president had a chance, the speaker offered the president a one-year extension on the debt ceiling, as well as tax increases above 500,000. those are two colossal gives. in return, the bottom, bottom line is, you can't talk about ten years. the president did not offer any
meaningful cuts in medicare in 2013, in 2014, so you have all of these newly elected 2010 house of representatives, the gop took 61 seats, the most since 1938. so you have all these new, newly elected representatives, that really boehner hasn't given them anything. so bottom line, short-term, the market upside, the next 30 days, is going to depend on what the president gives on that debt ceiling. >> one of the things we keep hearing around this table, and jason can speak to this, is this sense that no matter what happens, that the first half of the year is going to be tough. >> well, i think if you got a one-year extension on the debt ceiling, and you -- like you think about the grand bargain, we're not going to get a grand bargain, but if you accomplish 40, 50, 60% of a grand bargain in a deal, then we have meaningful upside. but i think i'm looking overseas at secular -- well i'm looking in the u.s. at secular moves,
and overseas. in the u.s. you have a secular change in natural gas. the infrastructure of the natural gas ecosystem has to be built out. that's a place to look. and i think over in asia -- >> not overpriced already? >> well, the infrastructure, in other words the companies that actually build it out, i mean, we're talking about a big secular move there, and i think if you buy the dips in that sector that's a good idea. also in asia, you're seeing a little bit of what we saw in 2003 and' '04 in asia now. there's massive credit expansion. if you look at credit as percentage of gdp in asia, it's gone from 80% in 2007 to about 100%. so in asia, in japan, all these asian economies, there's much more credit in the consumer's hands than has existed in the last five years. so that's a big plus for 2013. >> larry, it's jason trennert from strategas. can you get multiple expansions without a big deal?
you either go off the cliff or get a small deal, doesn't that just kind of keep everything in abeyance, capital spending, consumer confidence, all the rest of it? >> yeah. i mean, i think david tepper, i think one of the best interviews andrew and joe did with david tepper, i agree with david tepper in the sense that stocks are cheap. but people have nowhere to go. so, the fed, and the central banks around the world have forced people to take more risk, and the money has to go somewhere. so, in 2013, you could see stocks just go up 10% by default, because there really isn't anywhere to go with the capital. >> hmm. larry we're going to thank you for that. wish you merry christmas and happy holidays. >> larry, i appreciate it. and, joe was right, he was very happy. >> no, i'm just wondering, larry, it just seems to, like -- if you go over you get 250 at 39.6 and that's just too tempting, i think, for the president, don't you? i would do it. i mean, that's -- isn't that
sort of what's happening here? he gets everything he wants. he can't do everything. >> that's the big worry. my website, i just put up a piece, and if we go over the one thing you have to look at, joe, is you get the -- even with the small deal, like a half go over, you get 110 billion on the payroll tax cut elimination, and then you get a $60 billion tax increase probably best case. so that's $160 billion. so the target's going to have to digest that over the next couple of months. >> you know, they call it austerity over in europe and we expect anyone to just fall into line with it. but over here, we're beyond that now. we just -- we want what we want, and i don't know, we eventually got eventually got to -- we can't keep doing this at 25% of gdp. larry, thanks, appreciate it. >> thanks, guys. >> the bubble, right? >> he knew. >> you were bummed that you said that, that he was really smart when he said i had been right.
why did i say that? >> i love the book. first thing out of his mouth was i was right. >> you did a great homer. >> anyway, coming up, why the price you pay for an item online may depend on your location. i understand this, though. i don't -- you know, market prices. this is market prices. this is what you've got to do. why buying your plane tickets on a computer may cost you money, and a lot more when "squawk box" returns.
the amount of money you pay for an item online could depend on your location. a "wall street journal" investigation found the staples website displayed different prices to people after estimating their locations, among other things the office supply retailer appeared to consider the person's distance from arrival brick and mortar stores. they'll make you pay if you realize you don't want to pay 30 miles to a brick and mortar. i'm sure they're gouging all the rich people on the coast. and offering different prices to different people is legal, with
a few exceptions, of course, for race-based discrimination and other sensitive situations. the journal also looked at other retailers, some sites give discounts based on whether or not a person was using a mobile device, for example. orbitz said people searching for flights online would see discounts as much as 50% off of other prices. you know how to do that on a mobile phone. >> i do. you do, too. >> i do not. >> we need to work on that. >> i don't have apps. there's no apps on a blackberry. >> we'll get you a new blackberry because they do have apps. >> i'm going to an iphone now. because the crackberry people are rude and nasty on twitter. >> you'll get the iphone 5. >> what do you have? >> i still use a blackberry. >> so do i. i might get a blackberry 10. but that's not enough for these people. >> i like the keyboard.
for business -- >> i don't use it for anything but e-mail. we got my wife an iphone this weekend. she's been a blackberry person. >> you can do the apps for her. you can show her. doing a little instruction. >> anyway, coming up, our guest host this morning has been david trener. we'll give him the last word. christmas shines through, but members of congress have lots more to do. rise above, party, find cuts for spending and find out how to keep tax cuts from ending. our leaders are angry, the speakers perplexed, watch "squawk box" on wednesday to find out what's next.