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tv   Squawk on the Street  CNBC  December 10, 2013 9:00am-12:01pm EST

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we got to go. ken langone, thanks for joining us. >> merry christmas and happy holiday. merry christmas. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. the automaker gm to name mary bb barra. if february of 2011 she became basically the highest ranking
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woman and will be gm's first female ceo ever. >> i like the fact that she did a lot of what al mulally did, she's rationalizing production, that's important when you have gm, a lot of brands, make a lot of different cars. one of the thing great about the great american manufacturing companies, they rapidly realized you have to make the same thing in europe, same thing in asia, same thing in the united states, nobody's that good to have that many fractured brands. she was the one quoted as saying gm, no more crappy cars. >> that's a good mantra. >> right. >> certainly ackerman's tenure has been a successful one. >> yeah. >> when she takes over, not clear at this point. at least i haven't heard it in the various news reports. i don't know if it's immediate or --
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>> is it timed to coincide with the government's announcement yesterday? >> i imagine so. this is the beginning of what could be a big dividend cycle. gm has done so many right things. they have such momentum around the globe, in china, in the united states, europe coming back. that's terrific news for gm. gm has been a fantastic pension story. you revealed that, david, when you spoke to call bass. they're the single biggest beneficiary of rates going up. >> takes down the discount rate so to speak and pension costs decline. there are a lot of other reasons you have investors piling into these shares. not the least of which the government is gone now, having sold the 2% it still owned. losing 10 billion, unlike a lot of t.a.r.p. investments. >> the t.a.r.p. has broke a little bit better. the banks, i was looking at the numbers for the most recent run, bank program, 245 billion
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disbursed, got back 233 billion. not bad. >> studies out of the centers for research saying it saved about 2 million jobs. for barra, her dad was a dye maker, a native of waterford, michigan, interned at gm before getting a job there and she does not the company from its dark time to its good times up. >> ever bought a car, it's a very joint venture when you go buy a car. a lot of woman input. i'm not being sexist. we all know when it comes to 401(k) investing, women pull the trigger. i always wondered why aren't women more powerful at the -- it's not a one-person decision.
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>> there's no lack of women, meg whitman, ibm. >> everyone knew this was an old boy's club. one of my best friends out of college want to gm. it's like gm was a famous country club for men, famous. and that's obviously no longer the case. >> phil lebeau helped break the news before we got on the air. he joins us on the newsline. when do we expect some sort of official announcement, phil? can you hear me, phil? apparently not yet. hope i didn't jump the gun. we'll talk to phil as soon as he can. >> reporter: can you hear me? >> we hear you, phil. go ahead. >> reporter: we just talked to general motors, we have official confirmation about the story we broke. there's a broader one here. mary barra will take over as ceo
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january 15th. it might be having people say that's a really quick announcement and quick transition. it's been brought on by the decision of dan ackerman to leave as ceo virtually immediately. his wife has been diagnosed with advanced stage cancer. he has made the decision to take some personal time. so the succession has been moved up dramatically, and that has mary barra moving in january 15th. the president of the company will now become dan ammand, who was cfo. this is a day of transition. employees will hear from dan
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ak akerson and mary barra. >> what was their previous plan that you were aware of in terms of akerson stepping down at some point next year? >> i got the impression last time i talked with him -- obviously they kept everything quiet, but i got the impression we were looking at something toward the end of next year, that he wanted them to get out of government ownership and really moving along a path for the next year and then he would step aside. >> phil, we know she knows the product side. i guess some people will begin to ask how much she knows about the operation side. your thoughts on that? >> reporter: i think she probably knows the operation side better than the product
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side, carl. you cannot overstate that she's had a number of jobs and roles at general motors, but she's succeeded at them. on the operation side, the work she did in terms of streamlining operations, i don't have to tell you guys what a mess this company was for years operationally. and they've done a heck of a job streamlining their operations worldwide. still have a ways to go. they're not perfectly any stretch but mary barra was a key player in making that happen over the last three, four years. >> phil, do you think that akerson will get any recognition? he did a remarkable job getting as much money as possible back for the government. >> reporter: i don't think, jim, he'll ever get the recognition he's due, mainly because this became such a political story. on top of that, i think a lot of people look at the job he did as sort of a caretaker role, which is completely inaccurate.
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general motors is a far different company now than what it was when it went into bankruptcy. even more important, dan akerson realizes they're nowhere close to where they need to be or can be. unfortunately i don't think he'll get the recognition he probably is due. >> that's terrible. another positive on mary barra, she is the one who oversees the chevy volt. >> reporter: i don't know that we can call her the overseer but she was involved with it. >> congratulations to mary barra and our thoughts with the akerson family. >> it was ed whitaker ran that
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for a while, too. this is the first ceo they'll have had in some time who clearly has been in the auto industry her entire career. >> a lot of these companies, the first thing you do is get the balance sheet right. that's what we know at hewlett packard,s that what meg whitman did. once that's right, you can start turning to product development. ford, mulally did that joint bond offering and got the models right. i think because the fact that gm took a lot of tough firing, a lot of tough streamlining, gm is a better stock today. >> as it was pointed out last night, now freed of the shackles of pay caps and other business limitations because of that government motors label and the ownership of those shares. >> buy back stock. gm used to have this huge dividend. my late grandfather when he died
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hereby had gm stock and it was because that's what you owned. you owned utilities and gm. >> and that's a key underpinning to people buying at this level and also put in an executive compensation plan that will make it more competitive with its competitors. freed up because of no government ownership and a new ceo coming in in a month. >> legislators are set to vote to the on the volcker rule, details set to be released in an hour. the snow having an impact on this. it looks like it's going to happen. the questions involve deadline. will it be pushed back because of this delay and whether legal or legislative challenges happen in the months to come.
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>> i know this is against the prevailing wisdom for every reporter on this story, if you're a major break and you do a lot of prop trading, not only that the really good ceos knew that prop trading had become a sucker's debt. what you really want a a steady stream of encome and proprietary trading is anything but. when i worked at goldman sachs, you hedge. guys wake up and smell the coffee. they stopped doing this a couple years ago. they all saw the writing on the wall. >> so those banks that saw the writing, which ones are best positioned -- >> morgan stanley. it got out of this business. it's one of the reasons its stock has done so much better than goldman sachs.
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they've moved on, too, but the notion is this is going to kill the profitability. morgan stanley has been the best at these and they got out. did it kill their profitability or the fact that they're gone from -- >> but they're a different company from others -- >> for many years they were competing head to head. and jpmorgan, they made sure they've become a bank with a very good corporate finance arm. >> it didn't stop them from losing $6 billion when they were supposed to be hedging. probably one of the reasons they they're getting this volcker rule was because of the whale. >> yeah, if jpmorgan had had better rules in place with better compliance, that stock would be up dramatically. had they had the volcker rule and this guy couldn't be a rogue. but remember, rogues have always been in the business and no law
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is going to keep a rogue -- articles are all like this is the end of banking. i want to buy every bank stop, first because of the yield curve and second because of the volcker rule. no one wants to write a story saying the banks welcome the volcker rule because maybe legal costs will be high. but morgan stanley embraces things hook, line and sinker and that's why it's the best acting bank stock. morgan stanley understood the volcker rule, embraced it and -- >> you are praying to the church of -- holy cow! >> hey, i am about -- sorry about your son's fantasy league. i'm still in. >> he woke up very upset. >> beyond fantasy what i care about is the fact that the volcker rule is something
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journalists like to write about but any company that embraced the volcker rule two years ago, stocks are dramatically higher. ones that haven't, their stocks have treaded water. there, i rest my case! prosecution rests! >> all rise. when we come back this morning, in the new year there will be a new ceo at lululemon and the company's chairman is stepping down. more on those changes coming up. also ahead, high tech menus. we'll talk with julia stewart, ceo of dineequity. more "squawk on the street" live from post 9 when we come back. a. they always have. they always will. that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one.
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♪ time, time, time, see what's become of me ♪ while i look around for my possibilities ♪ lululemon will have a new chief executive come january. lau
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laura potdevin. wilson found themselves in hot water suggesting women's bodies shapes were to blame for their pants. he said "frankly some women's bodies just don't actually work for the pants. it's really about the rubbing through the thighs, how much pressure is there over a period of time, how much they use it" the board said you have to go. >> i think jefferies ought to go form app ad firm that says if you're not attractive, go home, something like that. right? >> we've known day is leaving, she is leaving. >> she's fabulous. >> apparently she has one kid left in terms of not having yet gone to college and really wants to spend the time. >> transition quarter, not sure,
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apparel has been incredibly strong when it comes to sports appar apparel, g-3 tonight on "mad money." the first year of a transition of new ceo, my work -- my work. but it's true, empirically, has not been a good year to buy. they come in, has to clean things up. >> hasn't worked at ibm. gm we should keep that in mind also. >> i find first year is very -- >> marissa meyer would argue -- >> alibaba. >> she'll just say that it's her, nothing to do with the investment. >> when you come into a situation where it's entrenched, people have been there a long time, you may discover some things you don't like. the company clearly has momentum. if you think lulu is good,
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nike's a better stock. nike's one of my favorite stocks. >> and it's stood through this controversy. >> that's right. nike was a real welcome addition because it is what we make world wide. >> we'll talk about what manny tirico told you last night, jcpenney. when we return, we'll get cramer's "mad dash" after the break. we failed to take out the intra day high yesterday of 18355. a lot more from "squawk on the street" still ahead. capital to make it happen? without the thinking that makes it real? what's a vision without the expertise to execute it... and the financing to make it grow?
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♪ so glad we've almost made it, so sad they had to make it, everybody wants to rule the world ♪ about seven minutes before the opening bell. want to start out with housinho. >> toll brothers. you read the commentary. washington hurt sales this quarter and the rate increase hurt sales this quarter. all that said, they talk about pent-up demand being really good for 2014. these are becoming 2014 stories as the calendar goes. $651,000 was the average house being sold before. now it's up to $700,000. so rich people are spending, toll brothers doing better, making more money per house and expanding into california in a more expansive fashion. this could be an umbrella for a
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whole bunch of stocks, whirlpool, lowe's, lennar has good momentum, too. >> and with morgan creeping up. >> it's kind of interesting. we talked about the 10-year when interest rates were going up. 2.8, kind of amazing it doidn't bunch through where it was earlier, even though the economy was strong in the spring and summer. dollar coming down versus the euro. >> take a look at another stock, azio. >> auto zone, i've said here is the way it happens, they reported a decent number. then the stock treads water. then the buyback comes in, david. it's the most aggressive of any
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stock i follow. >> really? >> yes. number one. >> that is certainly one of the leading stories of 2013. >> and autozone is a better buyer back of stock. >> that always helps. weep g we got the opening bell a few minutes away. a lot more trading and a lot more "squawk on the street" after this. (vo) you are a business pro.
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a research tool on thinkorswim. from td ameritrade. it's 9:30. you're watching "squawk on the street," live from the financial capital of the world. the opening bell in a couple of minutes and a very busy morning. a new ceo at general motors, a new ceo at lululemon. steve liesman on the tape saying a taper in december is increasingly likely in his view after some comments that bullard made yesterday and the argument that certain tests for the fed have been essentially met here, jim. >> well, i don't know. 2.8 2 on the 10-year. maybe the economy is a little weaker. that's certainly not saying taper. >> neither is the dollar or gold. >> i'm not going to get involved in taper. i don't care anymore. to me it's earning, no earnings. that's what's going on, that's
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how the market has changed. i see ge down, ford down, europe is down and these companies are now regarded as international companies. i think gm is a great opportunity to buy. the taper/no taper i've been saying on "mad money," taper/no taper. you want to try to make money? focus on companies. bob olsteen, excellent interview. >> some companies giving guidance. texan did narrow their guidance. they saw 44 to 48 new guidance, previous 42-50. >> micron, a quarter ahead. cypress, it a situation people criticized for sticking with t.j. rogers, i've seen that stock starting to percolate. i like the personal computer space but i like tech very much.
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>> we'll talk a lot more about the volcker rule vote today and mary barra, the new ceo of general motors. let's get a look at the opening bell at the exchange. the s&p at the top of your screen. on the big board, natural company southcross energy company and at the nasdaq, syntel, outsourcing. our eamon javers is outside the white house today. >> reporter: good morning. it's been a long awaited volcker rule. it bans proprietary trading by banks but there are several major exemptions. just the preamble to this rule was more than 800 pages. this morning in a briefing given to reporters by staffers from this major agency. let me walk you through the five
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exemptions. they are fairly complicated. first of all, underwriting. positions must not exceed what regulators are calling reasonably expected demands of customers. there's an exemption for market making in here. the trading desk inventory may not exceed, again, reasonably expected demands of customers. there's that phrase again. risk-mitigated hedging, an exemption under the volcker rule. bankers will be required to turn over their rationale to regulators. if you're going to hedge as a bank you have to explain why and what it is you're hedging. and trading in government obligations will be allowed, u.s., state and muni debt and some certain trading activities of foreign banking entities. foreign entities generally will be allowed to trade as long as the risks are held outside of the united states. that's an interesting exemption as well. a couple of other things wall
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street was looking for here. ceo attestation. the ceos will have to sign a document every year saying that in fact their bank does have a compliance program in place that is robust, but the ceos will not be required to sign a document that says there's into prop trading going on anywhere inside their institution. they will have to say there is a robust compliance program in place. and finally the conformance period here is extended until july 21st, 2015, but there a variety of deadlines for the roll out of the rule depending on the size of the financial institution here. a lot to digest this morning. there's the outline this morning. >> our eamon javers outside the white house, where it is snowing today. that is interesting, especially the part about the ceo
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attestation. >> isn't that what we learned from dodd-frank? all of these, really from the days of when they did the resolution from enron, the ceo had to sign. there's only been one -- how many prosecutions have there been? >> very few, cfo, ceo. >> again, i don't mean to disparage anyone reporting on this. forget about it. it doesn't matter. we keep act like banks will lose return on equity. no. it great parlor game like taper/no taper. it's like fantasy football except fantasy football can make you more money in the stock market. there, i said it, okay? i broke the orthodox. hey, you know, what risk on/risk off. if rogers comes back, that's risk off. >> is that a ten-bagger if rogers come back? >> i'm sorry to be so abject.
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i want to know earnings per share and i don't want to know taper/no taper and i don't want to know volcker rule because these are distracting me from earning money. >> the volcker rule is not until the end of july 2015. you've got a while to not think about it. >> good. let's decide whether jpmorgan is going higher than morgan stanley. you want to play that game? >> the only game you play is fantasy. you are obsessed with fantasy football. >> i'm in the semifinals. i got a 185. >> you won last year. >> i could come back and i could do the assume bowsuper bowl. espn is more important than the volcker rule. i want to make it so it's what
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we talk about. i think our viewers want to make money. but i can make it. you want to talk about it? i can talk about c-3, 16-e, i can do that. i can do 14-a, i can do proxy. what do you need? i can do dodd-frank, i can do anything you want. >> you can do it all. that's why we have you here. >> i can do all of it. i studied it, i went to school for it. i was good at it! >> it was our holiday party last night and you were out late and you still have that energy. >> gm is naming mary barra to succeed dan akerson as ceo. becky work little overtime this morning. >> first of all, i want some of what jim's got. >> i may have a cup of coffee after the show to maintain it. >> i'm not sure about that.
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>> i did sit down with mary barra in october as fortune's most powerful women's conference. at this point she was being mentioned as one of three potential candidates who could take over the top job. just a few things about mary barra. general motors is in her dna. her father worked t 39 years and she's worked there since she was 18. it's how she paid her way through college, where she earned her engineering degree. she got her degree at stanford. she ran an assembly plant there and worked as the head of human resources. some critics tried to use that as a point against her but while she was in h.r., she was responsible for helping the company shake up its corporate structure. she got rid of a lot of forms and processes and scrapped the company's ten-page dress code. that was complicated. a lot of managers said, wait a
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second, what am i supposed to tell my employees to wear? she tell them to tell them to dress appropriately. she'd say what can you do? you can make decisions about a $10 billion budget but you can't tell them what to wear? she said it was about shaking them out of the old gm ways and coming to the current light. that's a job analysts call the toughest job in the business. she was responsible for slashing development costs but still making cars people want to drive. here's how she described that job. >> we're on a journey and we want to make sure we're engaging our employees and really tapping into their innovation and their ingenuity and the vehicles we develop. in the responsibilities i have now weeks have over 35,000 people connected to either designing, selling or buying the parts associated with our vehicles. we really want to get them
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involved. they know how to do their job better than anyone else and we need to support them and able them to be creative and get their great ideas. >> as recently as a couple of months ago, the questions surrounding the people in the know were saying can you really put a woman in a car guy's job? but one thing to know about mary is she likes fast cars. she said the corvette is her favorite but she also like the come arr camaro. >> she had a difficult time getting credibility because she was in h.r. but she was an engineer. >> she was an engineer and ran an assembly plant. she had to turn h.r. upside down, she was responsible for changing this evenings and kind releasing people, letting them do their own thing, making sure they could do their jobs and that they didn't have this crazy
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structure getting in their way. >> becky, when health care costs were the largest single input to autos, wasn't someone from h.r. more important than engineering? >> yeah. that's an excellent point. sheep said it's a really great r.r., it h.r. she said there were too many roles and too many guides and let people show up on auto pilot and not having to think when they showed up to their jobs every day. >> becky, thank you for joining us today. >> all the coverage comes back that i'm reading was becky's interview at that conference. >> let's get to bob pisani and see what's moving on the floor. >> reporter: all happy tuesday. we see industrials down,
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financial staples. home building on the down side. good heavens, everybody was sort of unhappy, they weren't happy that the s&p 500 didn't hit an intra day high. everybody thought the tape was boring. when we were at 1,800, folks, people were saying we can't get over 1,800. now we're at 1808, 1807 and everybody says this tape is boring. i'll take boring every day. 1 or 2 point gains every day, i'll take that anymore time. a lot of people are now talking about whether we're going to do something next year. i think the key is we'll have a -- if janet yellen can -- the market can go higher. toll brothers had a very
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interesting report. earnings and revenues above expectations but orders only up 6%. they apologized said and that's because we raised prices and that contributed to a leveling of demand. that's their phrase, they used the phrase "leveling of demand." they noted in the last five weeks contracts had been flat year over year. so raising prices is putting pressure on the sales overall for the company. the homebuilding surge we saw in the middle of the year has slowed down. hilton people asked me what's going to go on with hilton. 112 million shares, this is a huge company, hi to check this twice, 4,000 hotels, 6,072 rooms the company has got. this is very typical, float of
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13%, huge stock overhang will remain. it very interesting, earnings are so concentrated. about eight, nine hotels contribute 50% of the ebidta of the country. a small group contribute a very big part of the ebidta. if anything happens to those hotels, there's a little bit of earnings risk floating around overall. the dow jones index is up this year outperforming the s&p. i asked people down here what they wanted to see next. how about a dividend. that's the number one issue for the company at this point. see if they can start paying some kind of dividend. >> that is an expectation of those buying the stock here, given there is no longer government ownership of any kind. >> let head over to the bond pits, rick santelli at cmi in
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chicago. >> many of the big traders were paying attention to the big stock indexes under a bit of pressure in you're. as i look at what we're trading, we're down a little bit in the dow. that may be a partial region, knee-jerk reaction on interest rates last friday on the jobs report. it giving up ground. maybe more importantly open the chart up to the beginning of last month, can you clearly see the area to 282, 2 to pay attention to continues to be on the left side of that chart, that was basically 2 3/4. flattening of the yeefrld curve? you could argue it just profit taking on the steepeners, maybe more. the 2s, the 10s, they're all showing it. that chart is 5s to 10s. the play continues to be foreign
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exchange. let keep it simple. today as i look up on the board, no matter what futures contract you're looking at, the yen, the mexican pace, the euro, they're all doing better against the greenback. look at a two-day chart. we're under 80. let me remind you, it been a good year for the dollar. i read three articles today talking about the strength. we are less than a quarter of a cent away from going down on the year. carl, back to you. >> thank you very much, rick santelli. kelly evans at post nine. we can use her to explain what's going on with the dollar index and, most importantly -- >> right now the dollar index is lagging. what's going on? is it all relative? yes. there's to some, te extent comm out of europe how the ecb may
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not be super aggressive to do anything on the front. the dollar index gives up another 0.2%, which is just huge. the question is how lasting this weakness is going to be because even if it's relative u.s. versus europe, it has real implications if you look at what's happening, for example, with the price of oil. to the extent the price of crude might have an upward bias in the weeks ahead in time for the holiday season, kind of another headache potentially for retailers and consumers. >> is this not just the most counter intuitive situation? sends the europe stock market down as it should. >> the dax is weakening and the s&p follows the dax. >> the market can be stupid. there's no reason why it can't. it missing the point. the weak dollar is fabulous for
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exporters. >> oh, fabulous for exporters. the question is is it enough of a been fit for exporters to offset the numbers at the pump. >> i think it is. i think a lot of our companies are thinking about what's forecast for 2014. if you go back, all the reports that we had of the international companies, whether it be coca-cola, ingersoll rand, they all say, okay, we hit a 5-cent hit tore currency when you get the reports, they don't have to send you the number. >> and by the way, when on friday when you had the -- if you're sitting in europe, unless you're germany, and the euro is at 1.37? the market may be trying to force the ecb's hand here to be much more reactive, especially
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at a time when the fed is tapering. >> google, that's a european stock and that's a huge help. >> some have said online that your notion about taper/no taper, it about earnings, is exactly the kind of thing the fed is listening for. >> maybe what the dollar is also trying to tell us is things aren't quite as great as it seemed when we added 200,000 jobs on friday. >> thank you. yes! that's what the 10-year is saying. >> 2.8%. it's going all the way back down. >> exactly. these are the things that party. >> maybe it's just mrs. wantabe bailing out uncle sam. >> that's a good one. >> you always come up with a good one. >> when we come back, a live interview with former fdic chair
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sheila bair and what she has to say about the banks. "squawk on the street" will be back in a minute. the dow now down 18. over the next 40 years the united states population is going to grow by over 90 million people, and almost all that growth is going to be in cities. what's the healthiest and best way for them to grow so that they really become cauldrons of prosperity and cities of opportunity? what we have found is that if that family is moved into safe, clean affordable housing, places that have access to great school systems, access to jobs and multiple transportation modes then the neighborhood begins to thrive and then really really take off.
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i'm sharon epperson at the nymex. we're seeing some short covering helping to boost prices above a key technical low that traders have been watching. we'll watch to see if prices settle up here. that could help gold going forward. oil prices getting a lift. we get a report from the energy department on wednesday and the gulf coast pipeline getting its start for its fill for that pipeline is another factor. natural gas, keep an eye on that with the winter storm because nat gas continues to surge higher. we've seen a 30 cent gain in nat
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gas in the past week and we're seeing some freeze-offs on some of those pipelines impacting supply. back to you. >> sharon, thank you so much. jim's "six in 60" after the break. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. every weekend worked, every idea sold... ♪ you deserve a cadillac, the fastest growing full-line luxury brand in the united states. including the all new 2014 cadillac cts, motor trend's 2014 car of the year. now during our season's best event,
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there are so many stocks to talk about. we only have time for "six in 60." fedex. >> i say suups is cheaper. >> pbh. >> stock went down to 123. i've been saying this the whole time. 2014 is the year. he's so bankable. look at that stock. you own pbh, you don't sell it. >> twitter is at the highest level since the ipo. >> people are lapping up twitter. there was a firm -- it's like hang yourself, my friend. >> it's snowing outside but burlington is getting crushed. >> when you don't give guidance out of the shoot, people want nothing to do with you.
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>> up on celgene. >> go buy celgene deep on money calls. >> pinnacle. >> they had a couple great quarters, be on the secondary. cleanse up the balance sheet, gives them opportunity to buy a lot more companies. >> you are all business today, jim. what's coming up tonight? >> a little less than business. one of the things we're looking into is the smokeless tobacco, njoy, i want to know more about it. and ski apparel, morris goldfarb is blowing out the numbers, i think sports apparel, giii, undera underarmour, nike. this is not rg3 where the controversy has gotten so bad. >> of course you must be happy with the way the bears acquitted themselves in the cold last night.
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philly leads -- >> we have to come to philadelphia to play chicago and then we play dallas. the dallas game is a silver linings play book moment. go watch the movie. it will be repeated in real life. i don't get the girl. just a little heads up. i've seen the movie. >> simon is here with what's coming up at 10:00. >> good morning, carl. we'll look at what gm will look like under its new ceo mary bar barra. the volcker rule is through. we'll have the latest. and dine-equity ceo julia stewart will join us on "squawk on the street." tdd#: 1-800-345-2550 trading inspires your life.
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welcome back to "squawk on the street." we are awaiting job openings and labor turnover and wholesale inventories. don't see them on the screen yet. an important safety tip with janet yellen coming on board potentially to be the new fed chairman, this is one of her better, if not favorite, employment numbers to pay attention to. we are expecting a number around 3.89 million.
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we haven't been at 4 million job openings since march of 2008. so a long stretch. but they nonetheless are snugging up to thathighest they. i do apologize the number doesn't seem to be cooperating with us at 10:00 eastern. so we're going to continue to wait, if control wants to go back to the boys at the desk, can you come back when we see the number. as i said, wholesale inventories -- here we go, 3.925 million, a bit better than expected. last month 3.91 million was downgraded just a bit to 3.88. and inventories, four times what we were looking for and last
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month slightly move up. let's go to kayla tausche. >> reporter: we're here at the goldman sachs financial services conference. they haven't seen the volcker rule yet so we haven't had any actionable comments on that but we are getting data from bank of america on remaining legal reserves they have outstanding. in 2011 the company disclosed it had $20 billion in its reserves for reps and warranties. currently it's $14.1 billion. can't also disclosing it could see losses up to $9.1 billion, above that figure, about $4 billion above that just on the reps and warranties. we're not getting numbers for litigation reserves, that's what jpmorgan gave us in total last quarter to basically cover the field and say this is all the money we have in our treasure chest to pay for all of the outstanding legal issues that might come toward us.
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bank of america has put similar language in some of its filings about federal investigations and potential lawsuits from the government's mortgage fraud working group. there is a fear from investors they could see similar action like jpmorgan. we're not getting that litigation reserve number, carl, but we are getting $14.1 billion reserves for reps and warranties which will cover gses like fannie, freddie and other issues. back to you. >> breaking news, any moment regulators from the fdic and federal reserve are supposed to vote to approve the volcker rule. eamon javers is live at the white house with more on that. this is two of five agencies, correct? >> reporter: that's right, simon. there are five involved all together. banks have been waiting literally years to find out
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what's actually in the final draft of the volcker rule, which bans proprietary trading by banks. more than 800 pages in just the preamble to this 70-page rule just for today. first is underwriting. positions must not exceed what's called reasonably expected demands of customers here. there's an exception for prop trading for market making. trading desk inventory may not exceed reasonably expected demands of customers. also an exemption for risk mitigated hedging. banks can hedge but will be required to document the hedging rationale and explain to regulators what they're hedging and why they're hedging it. trading in government debt will be allowed in the u.s. a u.s. government, state and muni debt all allowed under the rule and also allowed is some prop trading in foreign
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sovereigns as well under certain conditions and certain trading activities of foreign banking entities are an exemption here, generally allowed to trade as long as risks are held outside the u.s. ceo attestations, ceos will be required to sign an attestation saying their bank has a robust compliance program. and also the conformance period here has been extended to july 21st, 2015, a variety of deadlines here for banks based on their size to roll this thing out. guys, a lot of subjectivity here for regulators, a lot of things that need to be defined and they're going to have to work this out as they go along in terms of regulating what it is the banks are doing but those are the highlights. >> eamon javers, thank you so much for that. i want to stay with the volcker rule and look at some of the
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winners and losers. kate kelly joins us. >> reporter: this is a far less draconian final rule than many feared on wall street. here's why i consider it to be a win overall for banks. there are many loopholes to the proprietary trading curves that eamon ran through. there's also not a hard and fast time frame for length of time a bank can hold a position. there will be time limits determined but that will be in consultation with the regulators. there are, as noted, exception for trading of government bonds, commodities and certain other this evenin things. those are wins for banks. the teeth of the rule will be in the reporting requirement, which are extensive. there's a lot that banks need to think about and share with regulators. every trading desk has to have a
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mission, something they're supposed to do and result in positions they can take, risks they can take, strategies, particular clients, et cetera, the ceo certification that they're in compliance with the rules. they're going to have to put a great deal of thought into why they're trading, what they're trading and defend it in many cases to these regulators. that alone will be costly, time consuming, et cetera, which may explain why it's a two-year phase-in with the key date being july of 2015. >> it's still hundreds of pages to work our way through. let bring in jeffrey hart, principal with sandler o'neill and anton schultz, president of mendon capital. gentlemen, welcome to the program. >> good morning. >> anton, let me kick off with you. do you agree with kate kelly this is less draconian than perhaps the banks had feared?
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anton? do you think this is less draconian than the banks had feared? >> yes. i think the trading of foreign debt is certainly going to alout banks -- allow the banks to continue it on balance sheets. i think that's very important, i think the timeline is important, too. i think the banks will be generally pleased with how this has all come out from the timeline and allowing to continue to make markets in a lot of things. there will be devils in the details four sure. >> jeffrey, do you agree with that? >> yeah, i think it's in line with expectations. there were fears it would be worse. i think the volcker rule is misguided. it's targeting prop trading when what caused the financial crisis was really residential mortgage lending, not prop trading. i don't really agree with the rule but it set up as manageable
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as we could have expected, looking back at the draft we got a couple years ago. >> where does it leave us with investors? i know fdr put out a note they would favor morgan stanley over goldman sachs but they remain neutral on others on the basis of what we have so far. >> at the end of the day morgan stanley has a larger preponderance of retail, a lot of their revenue comes from at that business now. a little less exposed. at the end of the day, this is actually good news for the entire industry and it's less draconian and it gives them time. i think it's a win and i totally agree with jeff that none of these things had anything to do with the financial crisis. i think mortgage was a much bigger issue and, you know, i think this is attaching a name to something that had nothing to do with the crisis. >> jeff, people are still talking about would-be legal challenges to the rule. some hold out hope that house republicans draw up limits.
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is that a realistic dream? >> legal challenges will continue. this is far from done. admittedly it's a thousand page document. from what i've seen so far, i think this is kind of in line with expectations. i think the banks can handle this. some of the less liquid, distressed debt. at the look like they're still going to be okay here. i mean, with the thought in mind that i don't think the industry needed this, i'd rather not see it, i think the way it's played out is manageable enough. the real issue now i think will be kind of on the compliance and monitoring front. the amount of extra reporting the banks have to do will be the next hurdle to face. >> we know it's already extremely burdensome and the red tape gets greater. just on the court challenge specifically, jeff, i see that barney frank is quoted in today's "financial times," "it
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would appear part of the juggle until the last minute may be in response to the filibuster rule last month and belief basically that obama could get more of his judges, those that would be more left leaning, perhaps more circumspect of the banks and that may be critical here. would you agree with that? >> ultimately the challenges are going to -- probably i guess in general to the extent that there may be courts leaning to the left, it would imply stricter volcker rules. even looking at the regulators involved, the ftc and ctfc understand the liquidity of markets and they're pushing for rules here. i don't think the banks are going to be horribly disappointed with what they see here. >> jeffrey hart and anton
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schutz. >> thank you. >> is it type for a deeper? steve liesman says a december taper is increasingly more likely than ever before. it's been said liesman put his cards on the table today. >> you look at the number and you make a call. a taper by the fed at its next meeting looks more likely than not. the economic data, and the mashmas market as reaction and the fed's reaction to it. the fed offered three tests and now they're near to being met. confidence in the economic outlook. three months average job growth. that's improved quite a bit. job growth and the unemployment rate is down 0.2% from the
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september meeting. there's a budget deal in the works and in addition, interest rates. the june 15th fed funds is down from 90 basis points in september. you could read that as almost full four quarter rate hikes to unchanged 27 basis points on jobs friday with that stronger-than-expected numbers. it tells the fed they've been successful so far convincing the market will remain lower for longer and tapering is not tightening. they can reduce the amount of stimulus in the economy but not say anything about raising rates. predicting the fed has been tough. they could wait another month since they don't think it matters a whole lot if they start now or next month in the grand scheme of things. but comments by centrists point to an early move. james bullard talked about a
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small move and dennis lockhart. ben bernanke began with dovish talk about how the committee can react once it hits its 6.5% rate, unemployment rate, for raising rates. the fed can pivot from quantitative guidance to forward guidance on rate. >> still we managed to close at a record high on the s&p. >> the 10-year is actually down a little bit. it was 2.81 before i came on and that kind of reaction on the long end i think is going to be encouraging to the federal reserve. >> we will see. thank you very much. steve liesman within al s ii ii
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analysis on the fed. >> and mary barra the new ceo of general motors. we'll talk to bob lutz when we come back. [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account. ♪ ♪ so you can get out of your element. so you can explore a new frontier and a different discipline. get two times the points on travel and dining at restaurants from chase sapphire preferred.
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. i want to get back to the big executive change at general motors this morning, the automaker naming mary barra as
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ceo, the first woman ceo in history. bob, glad you're with us. >> thanks for having me. >> before we get to what she'll bring to the company, i want to ask you about having a female ceo. you're a veteran. did you ever think this day would come? >> i sort of thought it was inevitable. we've had female heads of state, like golda maiier. i'm the father of four daughters. i sort of welcome the collapse of the glass ceilings. >> that's a beautiful thing as a dad of two daughters here on set, too. what does she bring to the position? >> she's got over 30 years experience, she's an excellent engineer, then she had some staff jobs and her last job was my old job, global product
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development and that raised a lot of eyebrows. a lot of people were wondering can she do this, does she have the right focus on excellence? i'll tell you, she did a brilliant job. if you look at the success of new gm products and all of the awards that the recent gm products are getting, she's obviously done a fantastic job there, too. so she's well rounded. >> bob, how do you stop the executives who didn't get the job from leaving? and how important would those departures be. >> i think they did a clever thing, dan eamon was named chief financial officer. he's a good guy and also very enthusiastic about product. and mark rice i think is probably mildly disappointed, but he replaced mary and got my old job, which is kind of the job he always wanted. he's a huge automotive enthusiast and i think -- i
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honestly think he'll be happy for a while. and, you know, mary -- she's polite, she's smooth, she's pleasant to talk to but she's very tough. she knows what she wants and she'll go after it relentlessly but she doesn't ruffle feathers. i think she'll be an excellent team captain without alienating anybody. >> hey, bob, let's talk about the company broadly now that the government has sold its shares. they're going to be free of some of these rules, these shackles we've talked about for so many years. is that going to change the culture? is it going to change execution? >> well, yes and no. the gm culture is the gm culture. it was never as bad as people said, and despite the fact that gm is so successful now, it's still basically the same culture, which is a bunch of talented people doing an excellent job. and sometimes they're led better
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and sometimes they're led less well. i think all in all they're going to be led better. the one thing that's been missing these past few years is the ability to compensate people properly. and when you look at the derisery compensation that dan akerson was getting, it amazing we kept some of these people. i'm making this up but i think his comp was something like 1.5 million and you look at alan mull l mulally, who is north of 20 million, it's just ridiculous. now the company will be able to attract and retain better talent, which long term is upon for the company. >> huge news today, bob. we're glad you were able to make it to the phone. we'll see you soon. bob lutz talking about mary barra. >> winter as arrived on the east
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coast. a winter storm warning for most of the eastern seaboard. the weather channel's mike seidel is live in virginia with more on that for us. mike, welcome to the program. >> thank you, simon, for having me on. good morning from leesburg, 45 minutes north and west of virginia. we've had two to three inches here. the top number, only about four inches. we knew it wasn't a huge storm but a quick hitter. in fact, we're almost done. rolled in here around 6:00 a.m. roadways, remember, a lot of these roads were salted on sunday with the snow and ice. they've resalted this morning and we've had traffic and daylight. all the schools are closed, the federal government is closed. the airport, another horrible day. newark airport, five and a half hours, laguardia, already five. 240 cancelled in newark.
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in d.c. a little better, about 100 outbound flights in reagan and dulles. the airlines know everything is going to wind down so everybody is deicing. the key here is temperatures plummet tonight. we're heading out at about 15. whatever doesn't evaporate or dry off or get shoveled is going to be hard as a rock. and another storm thursday in the air. the weekend storm right now we're thinking at the weather channel rain in philadelphia, new york city down to d.c. but you get just west and north of the cities toward poughkeepsie, albany, worcester, new england, this could be a very big storm. we'll keep you updated, it's a few days away. the snowfall rate is not snowing hard enough for jim cramer to tweet pictures. that's how i'll describe it. >> that is an important line to cross, as we saw last sunday,
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mike. >> thanks a lot. the next time you go out to eat, you might be able to order an app with an app. are tablets good for business? we'll ask the chairman of dineequity? just a moment. americans take care of business. they always have. they always will. that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one. to help you retire your way... with confidence.
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so when my moderate to severe chronic plaque psoriasis them. was also on display, i'd had it. i finally had a serious talk with my dermatologist. this time, he prescribed humira-adalimumab. humira helps to clear the surface of my skin by actually working inside my body. in clinical trials, most adults with moderate to severe plaque psoriasis saw 75% skin clearance. and the majority of people were clear or almost clear in just 4 months. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores.
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you should not start humira if you have any kind of infection. make the most of every moment. ask your dermatologist about humira, today. clearer skin is possible. restaurant giant applebiapp planning to put a tablet on every table to order food and play games. why did they opt for tablets
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rather than ipads? julia joins today. good to have you back. we had you on not too long ago. >> that's right. >> you must have some research that told you this was something customers would respond to. >> absolutely. customers have been telling us for some time, even myself i know i don't like to way for the check. so that was the first sort of pain point we had heard about and we had this unique opportunity with the technology to make a real difference. >> good morning, julia. can you actually pay on the tablet that's on the table? is that possible? and if it is, how does the staff know somebody has paid as they're leaving the restaurant? that was the difficulty with open table. >> right. i have it here. this is the actual technology, right. and so you literally can pay on screen and you can order, you
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can -- it's a whole way to create sort of interactive communication between us and the guests on a regular basis, but absolutely. >> someone might ask why not an ipad. i'm sure you had to give due diligence to both. what went into that decision? >> there was a lot of technology discussion about what was the absolute best way to interact. and we felt that this technology, which is called ela carte presto tablet gave us the best opportunity tou interact with the customer and have it on every table. we'll have it on every applebee's bar and table across america. >> is this going to increase labor costs? >> no, this isn't a labor play. obviously it's an option. people don't have to use it. it's not about saving labor.
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this is really about creating an opportunity to talk to our guest, have an interactive conversation with our guest and give you aour guests a lot more opportunities to literally either play games, order, communicate. we have all kinds of opportunity here. >> julia, you are right on the cutting edge, they want to amazonize the experience, that you can check in with a hotel before you arrive at the location. against that desire, you'll be aware a that the studies are clear, that the more time a customer gets a smile from a member of staff, the higher the satisfaction rate will be, the more likely they are to repeat without you having to advertise to get them back in and your margins will be higher. you have two competing forces. talk about the judgment you make in light of those.
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>> right. i never viewed this as a replacement to the food server. that interaction, that smile that, talking about what's going on in the neighborhood is critically important and frankly is at the core of who we're at applebees. this gives us an opportunity to get at the pinch points and make a difference but have a deeper, richer interaction going on. it creates a one-on-one experience that we can create a whole other way of talking to our guests that we don't have today. >> i don't know if you've heard the news, gm has announced its first female ceo, mary barra. bob lutz said it's a big shattering of the glass ceiling. i assume you have to agree. >> absolutely. i just saw the interview. i couldn't agree more. >> i tell my kids who are 4
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years old, no tablets at the table. people wonder, are these going to be clean, sanitary? have you put these concerns on the table? >> we tested this for a lengthy period of time, not only in our r & d restaurants in kansas city but several other places across the country and all the protocol to make sure that they were clean and sanitized and that they worked and the guests saw it as a positive. guest loved it and not everybody use it is so that's okay as well. but it creates a unique opportunity and we believe a competitive advantage. >> 100,000 tablets, man. thanks for coming on. we'll see you soon. >> they're saying -- absolutely. thank you so much. >> julia stewart, ceo of dine equities. speaking of movinmoving, you're
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headed up to the conference today. >> yes. time warren, their stock is up today. going to be purely networks and a cable studio in the not too far future. ceo of cbs, enormous capital, things to get updated there including the ipo and international. looking forward to both of those. >> snowing out there. better use the subway. >> i already do. >> the founder of lululemon is stepping down after he got in hot water over the body types of potential customers. is this now good news for the future of lululemon and its shareholders? we've got the answer next. ♪ american woman stay away from me ♪ business inside and out t.
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at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. to help secure retirements and protect financial futures. to help communities recover and rebuild. for companies going from garage to global. on the ground, in the air, even into space. we repaid every dollar america lent us. and gave america back a profit. we're here to keep our promises. to help you realize a better tomorrow. from the families of aig, happy holidays.
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the new volcker rule is currently being voted on in washington. not as tough as some of the banks had expected, according it our own kate kelly, who joins us live with more. >> reporter: i think in terms of the hardline rules some of the banks were expecting, you don't see the sort of bright lines and tougher curbs that might have been expected there. however, i think the teeth of this rule may be in some of the new reporting requirements, which are quite detailed and are
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going to require banks to think creatively about what they do and how. some of the reports they'll have to think about is value-at-risk, something they'll have to get into more detail on. profit and loss ek peacekeepxpe what do you expect it to do in the market, if that happens, what about that? and frequency of transactions, inventory aging lengths of time, that's been a key thing the v t street was focused and finally the of time that positions are held and the ratio of client transactions to internal transactions. if you have any doubt whether it's having a tougher or looser
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effects on stocks, goldman sachs is seeing a nice little upturn today. some relief this those stocks. you had analysts sounding those tunes earlier in the broadcast. i do think there's a sigh of relief given wall street's reaction today. >> we will see, kate. thanks a lot. kate kelly in washington. it is slowing in washington but believe it or not, congress is hard at work. lawmakers moving closer to a deal that would avoid a shutdown, undo some of the sequester cuts that are set to begin with nut year. john harwood joins us. >> reporter: the key word is moving closer slowly. this is a situation that's been hung up over the last few days, they're on the verge of a deal,
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have the outlines, looking at $90 billion over two years, some deficit reduction, maybe $20 billion of deficit reduction, but we're not at the goal line yet. members have been meeting, their staff has been meeting. a lot of members have gone to south africa for the mandela funeral as president obama and president bush did. you have the snow day in washington where because of that relatively modest snowstorm by the standards of many people in the midwest and other parts that get a lot of snow, it nevertheless shut down the federal government. talks are going on. we're in a last-minute posturing phase where republicans are saying you've got to have this amount of deficit reduction in order for us to agree to the deal and democrats are saying, including people like steny hoyer saying you can't take as much out of retirement as you're
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going to take. i do think it will get done. they had originally planned to announce the deal today and vote on it on thursday. i think that time frame could slip a little bit, at least on the announcement part. we'll see whether they can get it done by the end of the week and go home and tell their constituents they actually did something positive. >> john, keep us posted. thanks very much. >> shares of liululemon trading higher after changes in the company. perhaps more importantly for some, the billionaire founder chip wilson will step down as nonexecutive chairman. how will it impact your future as a shareholder? sam has an underperform rating.
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thank you for joining us. >> thank you for having me. >> why is it that the founder quit? is it because of his comments about women's bodies? >> i think his creative juices are probably needed but need to be controlled. i think when christine had backed off of some of her duties, i guess, she wasn't there sort of to monitor that. and i think the board felt and he probably did after the backlash that probably a little less exposed position might be a better thing for everybody. i do think that he has a lot of creative thoughts that got the company where it is. if those can be harnessed correctly, it might be a good thing having him around still. >> stan, strategically what
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could change? store opening strategy? seasonal promotion strategy? will the character of how they sell their goods change as a result of the new ceo? >> we don't know. that won't happen until he starts digging himself in on january 1st. he doesn't have a retail background nor a public company background. i think everything is in the air. my impression listening to the conference call is he is prepared to invest heavily in infrastructure from an operational perspective, logistics so they don't have the kind of issues they had in the past. but the other issues about timing of store openings and stuff, i think we shall see there. >> you know, sam, i'm looking at we're trading at $70, your call
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for $56 and an underperform rating is very stark. where are you on that now? >> i'm right where i was. look, i man, the stock is trading at about 29 times the street's estimates white ririgh. my estimates are at 24 times. 24 times is not a bad company. but i think with the unknowns here and the risks involved, i just don't think it's worth that kind of a premium multiple at this time. i hope i prove to be right and wrong. i hope that he gets it together and i hope the company can continue its growth prospect. but you have to remember that christine day had a great retail sensibility, and i think did a fabulous job doing that but didn't have the background from an operational perspective. in the case of laurent, the new ceo, he has a great operational background but may not have the retail perspective. so i really think the jury's
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still out. and i think this kind of multiple is just unwarranted. >> good to see you, sam. thank you for your time. sam poser joining us. >> we've been talking about the volcker rule all morning long. the board of directors of the fdic has approved the final volcker rule the fed and cftc have to vote, the public meeting closed because of the snow in washington but we think they can still vote. we'll see if that happens later today. >> we'll have much more coverage on the volcker rule and what it means for the banks and for you as an investor later this morning. the former fdic director sheila bair will join us in just a few minutes. thrusters at 30%! i can't get her to warp. losing thrusters. i need more power.
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is caused by people looking fore warp traffic parking.y that's remarkable that so much energy is, is wasted. streetline has looked at the problem of parking, which has not been looked at for the last 30, 40 years, we wanted to rethink that whole industry, so we go and put out these sensors in each parking spot and then there's a mesh network that takes this information sends it over the internet so you can go find exactly where those open parking spots are. the collaboration with citi was important for providing us the necessary financing; allow this small start-up to go provide a service to municipalities. citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally, citi is there every step of the way. so the end result is you reduce congestion, you reduce pollution and you provide a service to merchants, and that certainly is huge.
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welcome back to "squawk on the street." starbucks is moving lower, that after a bearish note by itg investment research. the firm is saying the chain's
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momentum may be slowing down and coming in below estimates for early 2014. so down by 3% in the early trading. >> let's go to rick santelli with the santelli exchange. good morning, rick. >> i'm glad you're hopping over because today's a big day. today is "the" day. we're voting on the volcker rule. it's going to pass. let's walk down memory lane. it was 2010 when dodd-frank was passed. what was the main objective? to take out the moral hazard of too big to fail. now, a lot has happened between then and now, and even if it gets passed today, as many have said, including bart chilton, we've had him on the floor many times, cftc commissioner, at least he was until recently, implementation probably doesn't
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occur until 2015. so let's really consider is this going to address too big to fail? is it going to address some of the issues of the revered paul volcker? paul volcker was head of the cftc in my early days of trading. not only is he a very tall man, who really carries a big stick, of course he has great respect in the market and i think that's why president obama put him on the stage and why this rule is named after him. but is too big to fail going to give way to too big to succeed, too complex to understand? you know, about a year after dodd-frank passed in a "fortune" article, sheila bair basically called what was then and is more complicated now, she called the many pages of dodd fra-frank, specifically the volcker rule, a
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rube gold contraption. it was convoluted. in the end it's the complexity i have a problem with. i have no love loss for large institutions but the institutions are bigger today than they were in the crisis let's take it a step farther. look at the gray areas regulators have to deal with, underwriting, market making, hedging, i think too complex. but let's take one issue that isn't complex, one thing that these institutions are allowed to trade -- treasuries. gsa agency securities. munys. like there's no risk in any of those? seriously. most of my professional career was dealing with large institutional clients trading the very asset subclasses in the fixed-income market. and at a time when the fed has a $4 trillion balance sheet, if interest rates ever did spike, how would that impact the fed if many of the institutions were in
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the allowed category of having positions in some of the securities? all of these are questions that i'm not sure i can answer yet. but! but! we have sheila bair at the top of the hour, and we'll ask her, is it too complex? how will it affect underwriting? how will it affect loans? how much is the compliance cost? what will smaller-type neighborhood banks? we're going to ask her all these questions, so don't want to miss it. carl, back to you. >> okay, thank you very much, rick. let's face it, if your company isn't named netflix, tesla, amazon or apple, it's quite difficult to get attention. but whilst the companies are stealing a lot of headlines, a lot of other stocks are making moves of their own. we'll bring you some of the big winners that have maybe gone under your radar when "squawk on the street" returns. [ bagpipes and drums playing over ]
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visit to learn more, and find a retailer near you. some of america's best-known companies have been making stealthy, discrete moves, if you like, to the upside. but they've not managed to stay under the radar of our own dominic chu, who brings us more on them now. dom, over to you. good morning. >> well, good morning, simon. we wanted to take a look at some of the big-name stocks that are out there that haven't been the momentum names we've been
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talking about, so we picked out three of them to give you an idea that there are other big-name stocks making moves that you should put on your radar if they're under your radar right now. the first one is archer daniels midland, one of the biggest food companies in america. the stock is up 55% year to date. and if you look at just this month in december, it's had a pretty decent move in the last week and a half or so. it's up about 5%. not too shabby for just the first couple of weeks, so adm. another one is the world's biggest making of computer chips, intel, up about 20% year to date. yeah, it's lagging the market. but if you take a look at what it's done for the past week or so, it was the best-performing stock in the dow jones industrials average, and some analysts/investors are getting more bullish on the company's prospects in the pc market, believe it or not. so that's something to watch for sure. also one we want to highlight is general motors, of course. it was under the radar for us up until this morning when they're getting the new ceo in mary
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berra, but it's a $57 billion company, going up some 20% since the ipo and november car sales are still showing signs that the company has sales momentum. so the stocks, all big names, large-cap companies making good moves of their own. of course, stay tuned, because later on this afternoon in "street signs, reque signs," wer big companies, not just in time for tax season, but one you'll want to put on your radar. back to you. >> all right. one stock to watch is clearly twitter. we're looking at the highest levels since the company went public. $52.59, off slightly from the level. but we'll talk more about why twitter is behaving so well in just a moment. the american dream is of a better future,
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enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting and increase in psa. ask your doctor about axiron. we mentioned twitter before the break, obviously, people are watching it very closely here, simon. of course, it hit 50 the day it went public, then actually fell below the $40 level. now $51.63, intraday high, the highest level it's seen since becoming a public company. >> and breaking the rule. remember, the rule of thumb is the internet ipos fall away for
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quite a considerable amount of time, and that was the time to pick them up. this instance, they seem to be able, surprise notwithstanding, they're able to monetize, where othe others have not. >> yeah, simon, we'll see new a little bit. if you're just joining us this morning, here's what you missed earlier on. >> announcer: welcome to "squawk on the street." here's what's happened so far -- >> guy, this is huge news from general motors. the company has designated mary berra, the next ceo succeeding dan acker son. >> remember, she is the one who was quoted as saying gm, no more crappy cars. >> hey, that's a good mantra. [ bell sounds ] >> here are the five major financial regulators, finally
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releasing details on the volcker rule, which bans proprietary trading by banks. >> i want to know oil. i want to know dollar. i want to know copper. i want to do bowling crate. i don't want to know taper/no taper and vogue irrule. -- volcker rule. with the thought in mind, i'd rather not see it. the way it's played out is manageable enough. the real issue now, i think, will be kind of the compliance and monitoring front. >> sure. >> she did a brilliant job, because if you look at the success of the new gm products and all of the awards the gm products are getting, she's done a fantastic job. >> announcer: the "squawk on the street countdown to christmas" is in full swing. ♪ christmas good morning. if you haven't heard by now,
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general motors names mary barra to succeed dan ackerson. our phil lebeau joins us with more on that. hello again, phil. >> the call has not started yet. we are on it, as soon as it begins, if there's any developments, any quotes that come from mr. ackerson or ms. barra, we'll give you the a number of major announcements including mary barra being elevated to the role of ceo of general motors. she will take over the top spot on january 15th. there may be some people who are saying, who is mary barra? she's a 33-year veteran of general motors. if you're in the auto industry, you know who she is. her background is in general motors operations. that's really her strength in terms of coming up through the auto industry. and why is she replacing dan ackerson as ceo of general motors? he has said for some time there was a succession plan in place,
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but most of us thought it would happen late last year. akerson asked for the advancement, because his wife has been diagnosed with late-stage cancer. he wants to step down to spend time with his wife. we'll have more throughout the morning from ms. akerson and ms. barra, regarding the huge, huge change. back to you. >> all right. phil lebeau in chicago, thank you very much. the gm shares now, just slightly higher on the day. barra will be the first woman to lead a global automaker. our own becky quick spoke with her at the "fortune" all women's -- >> we're on a journey and we want to make sure we're engaging our employees and tapping into
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the ingenuities, and the responsibility we have now, we have 35,000 people connected to designing, selling, or buying the parts. and we want to get them involved. they know how to do their job better than anyone else, and we need to support them as they do that, and enable them to be creative and get their great ideas. >> big news, and we'll talk about mary barra a lot later on in the hour. the fdic has approved the volcker rule, one of the five agencies that needs to give the okay. eamon jabbers has been going through that all morning long. hey, eamon. >> reporter: hey, we're just across the street from the fdic, and they gave us a brief on what's in this thing. let me drill down. they're really focusing on the trading desks inside each one of the major banks. that's the focus of the regulation, not necessarily on a per-trade basis but on a
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desk-by-desk basis. one of the requirements they'll have here is that each trading desk come up with his own mission statement. they're going to have to declare what it is that trading desk exists to do, and turn that document over to regulators. also, the company board is going to have to approve a compliance program for the entire company to make sure that they're complying with the volcker rule, that everybody knows what they are and are not allowed to buy on each of the desks throughout the institution. and, also, we've talked about this before, but the ceos are going to have to certify that they are following their compliance program, that there is a robust compliance program, but the ceos won't have to necessarily sign a document that says there's no prop trading anywhere in this bank. they'll have to attest to the existence and robustness of this compliance program. kelly? >> all right, eamon jabbers in washington for us. thank you very much. on a day, we should mention, goldman sachs up 1.4%, having the most positive impact on the dow, keeping an eye on markets here. for more on the volcker rule,
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let's get to rick santelli in chicago with a very special guest. rick? >> yes, thank you, kelly. i'd like to welcome sheila bair, used to run the fdic for five years, her institution be as carl pointed out, one of five that needed to vote on the volcker rule, and indeed they did, unanimously. she's on the cnbc newsline due to inclement weather. thank you for taking the time. >> sure, rick. how are you? >> very well. i can't help but remember the wonderful article in december 2011 in "fortune" telling us your thoughts on the volcker rule, and at that point, many hundreds of pages ago, you said the problem is it's like a rube goldberg contraption. do you still feel that way? [ laughter ] >> well, i thought we were going to talk about banks providing payday loans, but we can talk about this a little bit. i have not had a chance to read the rule, which is why i don't
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want to provide too many in-depth comments, but by all accounts, what i've been able to review, it's gotten simpler, and stronger. so those are directionally the right way. i was glad that they tightened up on the hedging exemption. i'm not sure why there's controversy about this. i think they're just saying when banks put on hedges they should understand the specific risk they're hedging and why the particular hedge will reduce the risks. that's the kind of things banks should be doing, monitoring those to make sure they're still correlated over time. you know, i think, again, the very initial impression is it's gotten simpler, a little stronger. but it is very difficult to distinguish market making in particular from proprietary trading. it would be easier to reinstate glass steagall, than the dividing lines. it took a long time to get agreement on this. this is a big victory for jack lew, as well. he really pushed hard to get this done before the end of the
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year, and they have done so. >> now, i know we're going to talk about payday loans, and we will eventually get there. >> okay. [ laughter ] >> one more generic idea, the one major exemption, especially on a floor that trades futures for treasuries, you know, the exemption is you can trade treasuries, munys, agencies, you know, i don't know, am i crazy, sheila, or is this probably the largest optimum period of risk in that area -- right now as we speak? [ laughter ] what do you think? >> i will disagree with that. look, i think this is the capital rules, a lot of the bank regulations give special, favorable treatment to government-backed securities. you're seeing it with the money fund reforms that the s.e.c. has proposed, too. it absolutely creates the herd mentality, to buy more and more into the asset classes, and so long as the fed keeps buying them and keeping the prices up that way, yeah, you have to wonder whether it will end badly at some point.
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you know, i don't disagree with you on that. but i think the pressures to maintain liquidity in those markets and the perception there's no credit risk, at least, an interest rate, no credit risk, led them to that conclusion, but that's certainly not the only place where bank regulations and financial regulations favor government-backed securities. >> all right. on payday loans, you've written great pieces that, you know, this is a place that banks should go. they may clean it up a bit. the current scenario is probably not fair for many that use it. but i have to tell you, especially on today with the issues of the volcker rule and dodd-frank, can banks stand the public relations aspects of moving into that space? doesn't that send a message, whether it's a good thing or a bad thing, i just think -- i can't imagine banks bragging, yeah, we'll take this space over, because it has such a neglect tev connotation associated with it. >> right.
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i think some offer variation, which really wasn't much better. it was 260% apr as opposed to about 400% annualized interest rate for the nonbank payday loan typical product. so there's a lot of space to get the interest rates way down, get the costs way down, and still make money. when i was at the fdic, and this still holds with the current leadership, we offered to provide cra credit if they could keep it below 36%, which would give them a lot of cover if the regulators are saying that that's, you know, warning of credit under cra. so i do think there is a way to do this right. it protects the reputation and enhances the reputation. it's terrible, you know, for people facing a short-term cash problem, and need to go borrow on an unsecured basis for a dollar amount, the options are not good. the banks with the pre-existing
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infrastructure, the ability to do direct deposit, automatic deduct to get repaid, they're very well positioned to provide a much lower cost product than the traditional payday loan, and still make money at it. >> listen, sheila, thank you for taking the time. didn't mean to put a bait and switch. >> no, that's okay, i expected it. >> the next time you're on chicago, come on the floor, so we can do this face to face. >> we'll be out there for christmas, so maybe i'll do that. thanks a lot. >> great. thank you. carl, back to you. >> all right. >> people love that interview on twitter. thanks a lot. dow's down about 31. dominic is watching the drugstore stocks. hey, dom. >> so cvs, caremark, and cardinal health are forming a joint venture to create the largest generic drug-sourcing company in the united states, basically. separately, extending a three-year agreement, a deal for cardinal health to distribute cvs pharmaceutical products. both stocks are higher on this news sharply. so again, cah and cvs both to the upside. over to you.
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>> all right, dom, thank you. the s&p has outperformed europe's broader markets, what does goldman sachs see in the year ahead? they offer the outlook for 2014. also ahead, kenneth jacobs interview. how might the volcker rule impact his firm? i'm beth... and i'm michelle. and we own the paper cottage. it's a stationery and gifts store. anything we purchase for the paper cottage goes on our ink card. so you can manage your business expenses and access them online instantly with the game changing app from ink. we didn't get into business to spend time managing receipts, that's why we have ink. we like being in business because we like being creative, we like interacting with people. so you have time to focus on the things you love.
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along with the fdic, still waiting on a few other issues, the occ, fcc, ftc, and we'll keep you posted on the progress. looking at materials, one of today's winners. dominic chu has a "sector sort" back at hq. >> getting a boost from the likes of the miners. newmont and freeport among the biggest gainers. gold surges $30 an ounce, and this is on news of the fed beginning the tapering program this month. so the gold, precious metals, certainly in focus, and that's why materials are the standout to the upside. back over to you, kelly. >> an interesting read on growth expectations. thank you, dom. the imf out with the outlook for europe, and a slightly better tone, saying the region seems to be turning a corner and there are signs -- we should say -- that growth has begun to
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emerge after several years of declining activity. goldman sachs says similar reviews remain cautious for 2014. and here with the lookout is hugh, and peter, here at post 9. welcome. >> you know, peter, it was interesting, there was a note you famously put out, 18 months ago, the long good-bye, the case for equities, and at a time when people are rolling their eyes, we're not so sure. look where we are today. what is the case from here? are you still as bullish on equities both for europe and generally speaking worldwide? >> well, we're pretty optimis c optimistic, because actually markets still -- clearly there's been a big period of outperformance sectors relative to government bonds. we expect that to continue. we believe the re-rating has been completed and we expect profits to be the main driver of returns looking forward. we think despite the relatively weak economic outlook, european companies can see pretty good
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profit growth. >> is the case to some extent a valuation story? how cheap is europe relative to the u.s., and how important is that for investors who might be looking at gains here and saying, should i be rotating? >> yeah. i think europe was very cheap, and that was one of the things that's attracted quite a lot of foreign inflows into the equity market this year. but europe is re-rated quite a bit. and it's now pretty much in line with the typical modest discount relative to the u.s. so we don't think really valuation is the key. but we do think that europe is behind the u.s. in margin expansion, in revenue growth. and that will pick up over the next year, and it's really that fundamental growth that should keep europe outperforming for a bit. >> hugh, production numbers today. interesting. smallest decline for italy in almost two years. when you look at the countries that needed reform, who did it best? who is doing it best right now? >> well, i think amongst the bigger countries, we take the most positive view of spain, who i think quite a lot of reform has been made, quite a lot of
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restructuring is going on. that's weighed very heavily on growth and employment in spain. so we're not that optimistic about the short-term outlook for growth in spain. but we do think because of the reforms, quite a lot of opportunities are being created beneath the surface, and looking 18 months down the road, that's a country where there is more optimism. france and italy, it's a mixed story. we see less progress there with reform, and even though the shorter-term outlook might be more positive, without that reform, without the consolidations, without the deleveraging, there's reason for concerns over the medium term. >> you know, some guys on the credit side who within the last couple of months who said, if anything, there could be a melt-up into the end of the year for europe as a region. you know, people start to get optimistic and pile in. are you seeing any evidence of that on the equity side? and is that -- does that bring forward or temper to some extent the positive story over the next 12 months or so? >> we certainly have seen a palpable change in sponsorship for the european equity market,
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and a lot of it has come from outside of europe. if you look at the net buying, for example, from u.s. investors into europe, after several years of net selling, you have seen a very sharp increase in buying over the course of the last few months, particularly since the summer when you really started to hit the inflection point of better economic data. people are really buying europe from a very, very underweighted base. and that really has some way to reverse. and we expect to see more buying coming through into the equity market over the course of the next few months. and particularly, some switching some form of into credit, we think the profits and dividends will start growing and a lot of companies where the equity is cheaper than the credit. >> how about the u.k.? would you have expected them to be where they are if i'd asked you this question two years ago? and who gets the credit? >> well, i think we are optimistic about the u.k.
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we have been for sometime. the optimism is being borne out in the most recent data. i mean, i think when you look for credit, it's probably various people should take some. what we have seen of late, i think, is the considerable stimulus on the monetary size, which is being built up over a long period, actually have an influence on the economy, because the financial sector, which is the blockage in that process through various initiatives that have been taken by the bank of england, but also by the government, the blockage has been somewhat removed, and it's led to this dramatic pickup in growth over the last few quarters and something we expect to continue into 2014. >> as someone who just moved from there, you know what they -- >> i'm glad i was there when the sterling was below $1.50. peter, speaking of currency, for investors looking to pile into europe, how big that the currency drops 10%, 15% over there? >> if anything, the strength of the you're ro euro is a be proi.
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it's true for euro zone and u.k. companies. given the relative tightness of the policy in europe compared to the u.s., u.k., and other central banks, the euro is still pretty strong. >> for better or worse, if you are italy, for example. we have to leave it think, guys, but thank you for coming by. >> thank you. with about two weeks to go before christmas, which gadgets will make the best gifts this holiday season? cnet's brian cooley has made his list and checked it twice. ♪
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would make a hot gift idea, you'd be so wrong. that's what cnet's editor at large brian cooley is here. by the way, jon fortt joins us at post 9, as well. good morning, brian. >> good to see you guys. home entertainment. you like the panasonic plasma. >> if you go to the cnet television editor's homes, we do it out of our labs in new york, you go to all of their actual homes and see what they bought with their own money, it will be a plasma tv, not an l.e.d., lcd, any newer technology, and probably a panasonic. the story is interesting because panasonic is getting out of the plasma business. i think it's march of next year, is the report. and that is tragic to us, because the best value, best quality tv out there is plasma, but the consumer shift has been newer, shiny object technologies, mostly l.e.d., lcd, very thin, the new thing. but they're not the best tvs, as
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a class, the way plasma are. >> are you recommending buying this on the bargain? it will be hard to get it fixed if anything goes wrong. is it mainly the price point? >> there's a -- it's the quality and value point. so let's say $1,250 for 55 inch, what we think is the best tv, period. that's not a super cheap price, but incredible value. and the tv is going to work as long as it works. in other words, the technology's never going to be obsolete, and these are extremely well-made, because they're not bargain televisions. >> you like xbox one and the hoku 3. >> yeah, the playstation, xbox one, the new big story. extremely big category for this current quarter and going through next year. the xbox one plays more toward a television hub. the ps 4 is leaning toward gaming. >> tablet, the ipad air, the nexus 7, the kindle fire. >> i didn't narrow it down. they go in different slots. if money is no object, it's ipad
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air. it's so stunningly light and thin. apple does everything really well. if you want something that won't cost that much, a half or less, it will be the google nexus 7. if you use a lot of amazon media and the kindle fire hdx, the 8.9, the bigger one, with the live help they've been talking about, and absolute dna tied into amazon's media empire, that's a great bet. i've given people tablets who don't know how to use them. the amazon one is simpler. >> brian, i was going to ask, my family's secret santa has a $35 price limit on it. is there anything in the gadget world that fits the bill here? >> totally. totally. google chromecast, that is basically a roku box on a stick, a streaming television device. you stick it into an hdmi port on your television, an overgrown thumb drive, $35, and you get a variety, though not all, of the streaming tv services out there, and movie downloads. you could also look at a belkin
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wireless music receiver, plugs into the home entertainment, and stream music from the home or tablet without any wires, from anywhere within, say, 100, 150 feet. >> of all of the wearables, you like the fit bit sdwlchlt yeah, one of the fitness bands, and it's become just this year, as tech editors, we thought they were niche, triathlete, that most people didn't care. now, the companies that make the devices are getting it right. they're talking to the person who wants to maybe lose 10 pounds, sleep a little better. they reveal your health on really good apps. that's been the magic sauce for them. >> brian, you haven't mentioned any pcs or chrome laptops. >> we hit the chrome book, really simple chrome browser-based laptop, and while they're a forward idea, they're still too fast for most
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consumers, and some are extre extremely expensive. there's a weird striation of the pricing. and as far as computers, we have to kiss them good-bye, at least as being the bull's-eye. sales were be off 15% year over year, and that's the whole pc market. apple is doing okay, but pcs are maybe a sixth or an eighth of our universe of computing devices in the next couple of years. they're becoming peripheral. the smartphone is the new computer. >> you say skip google glass. >> yeah, too early -- yeah, google glass isn't really in retail yet. apple tv, we're still waiting for. and smartwatches are way too green. you have a couple of them out there. the samsung galaxy gear is the best known. a number of other upstarts we think are interesting, but in january, at the consumer electronics show, we will see the other shoe drop, and it will be smartwatch palooza, and that will be the time to see how the market shapes up. not right now. >> brian, can you come shopping with us personally, each and every one of us?
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>> i'd love to. >> we'll see you next time. >> all right, thanks a lot. >> brian cooley joining us from cnet. what do silicon valley and bitcoin have in common? you'll want to hear the answer to that. also, ahead, the european close. keep it right here. "squawk on the street" will be right back. on the trading flr in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being get live squawks right in your trading platform with think or swim from td ameritrade. [ male announcer ] if we could see energy... what would we see? ♪ the billions of gallons of fuel that get us to work. ♪
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>> announcer: the european markets are closing now. welcome back. we have the big picture earlier, simon. what's happening today? >> negative, as you can see. it's not fallen out of bed. but we've broken the two-day winning streak, certainly.
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and we're extended the losses on the major markets through the sessions, of course, here we opened into negative territory. it's individual analysts' calls that are moving the stocks today in that general downtrend. i do want to highlight one area of grave concern for an awful lot of people. and that's the inability of the european central bank to signal it has further moves up its sleeve. today, mario draghi, the president of the ecb, was in rome giving a speech, and it was all about basically the need for banking union, structural reform, dismissing the idea that europe is on any type of deflationary cycle. that basically means of all of the major banks it is the tightest of the banks at the moment. it's not engaged in qe. in fact, the balance sheet of the ecb has shrunk by 8% over the past years as the banks have paid back some of the 1 trillion
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euro cheap money they borrowed. the effect on the euro is to send it higher, and the dollar, back up to the october lows. at a five-year high to the yen, because the bank of japan is doing the exact opposite. one of the big questions for 2014 will be whether these moves on the euro ultimately force the european central bank into some major additional policy moves. guys, back to you. >> all right, simon, thank you very much. simon hobbs. bob pisani is here watching what's moving on the floor. the dow is down, but the homebuilders are doing okay. >> yes, a very good point. i'll lead with that. the important thing is the bond market is behave, and that's what's stabilizing stocks now. the homebuilders. we had great comments overall from toll brothers, doing really well in their numbers. but the orders are slowing down. they made it clear, higher prices are slowing down orders, some of the building product companies are doing well on top of that today. hd supply beat expectations, so some of the companies in the building product sectors.
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put up building products, and they're doing better hds up 3.7%, now up 5% in the last hour. we got a cold snap, higher gas prices, and they still couldn't move. today, they're finally moving. the stocks have been down about 10% in the last six weeks. the problem is oversupply, oil and natural gas. the last push for ipos, the final week for it. set the price tonight, auto home, chinese online auto site. what? i know, everybody loves it. the price was 12 to 14, and then suddenly, 14 to $16. valero energy, obviously associated with the refiner, going public. that's a big pipeline terminal operator. tomorrow, of course, hilton. we keep emphasizing the point about hilton, 4,000 hotels. not rooms, but 4,000 hotels, coming wednesday and thursday. they'll be pricing, a limited partnership in cheniere, liquid
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gas, oil, and look at talking sports lotteries in china. huh? but they priced at $13? it's $25. one month later. the ipo market in china is heating up, definitely. look at the other one. sunji mobile, they manage apps in china. priced at $5.4 million, i think $12 three weeks ago, and it was almost as high as $18, just a couple of days ago, now at $15. of course, the big one, next, too, we'll be waiting for large ones, including ali baba. >> yeah, that'll be a huge one. bob pisani, thank you, sir. between silicon valley's open letter to president obama this week to curb the government surveillance program and media rise of bitcoin is something that buzzfeed's john steinberg
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says will be big next year. john, good morning. >> good to be here. >> is there a 17-weight thing you need to worry about with -- >> we had a great post. all people on bitcoin, on webo, talking about bitcoin. some of the top comments. it's a trend i missed. in '99, scott mcneilly, at sun, says you have zero privacy, get over it. that was the sentiment in '99 and spoke to the times. i didn't agree with it then. but people are shocked how little privacy we have, and the rise of bitcoin, snapchat, whisper, it's definitely an investable trend. >> what should the policy response be in washington? >> there has to be more transparency, and not only the policy response in washington, what you're seeing in the established companies, the response to washington, they realize now it's a competitive trend they need to seize on, right? yahoo! google, facebook, the next wage of internet competition will be fought on privacy and who stands up for the users.
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>> were you surprised that the gathering could coordinate cohesively around a mission? >> it's an easy issue. i wish we had been invited. to cast a broader net, you see the ebb stastablished companies think we would have wanted to be in the tent, too. they could have gone broader. >> and what would you say -- so the interesting thing about it, to the point about the quote from '99, is this something that people just need to acknowledge or embrace, or is there a sense that really the pendulum has swung entirely one direction, and with things like bitcoin, they're looking for something to bring it back to some semblance of normally, if that's possible in today's world? >> i think the cat is out of the bag. we've asked for transparency. the government hasn't been clear on it. i think the idea it will be ever be clear isn't going to be, especially young people.
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crypto currencies will arise. >> different topic. twitter. 51.84. we had you on shortly after the ipo. we know you were long-term bullish on the notion of twitter as a self-sustaining company. is this too rich? >> it's too rich. it's too rich. the reason why it's running now is retargeting, which is basically twitter can let an advertiser take an e-mail address, or a cookie, if you shop on a site, and you look at something, don't buy it, the advertiser can find you again on twitter. that's built into the price, right? this is why facebook ran the last time, you know, this re-targeting, the lowest hanging fruit of advertising. >> wait a minute. why is it too high, then, if what you're pointing to is a business model that has done well for facebook, could do well for twiter? >> if you look at the multiples, revenue to e.v., next year's numbers, twitter is at 25. facebook is half of that. google is 5 1/2 -- google is dramatically underpriced. youtube is a facebook or twitter hiding inside of google. it's great. i love twitter.
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i love the ad product, but it's so rich. >> well, i guess, that's -- that's going to be a push-and-pull. >> yeah. >> a tug of war with the longs and the shorts over the next 12 months. >> yeah. >> that's where you're hearing some guys on the desk saying the real money, long money, whatever you want to call it, was on the short side of the twitter and facebook -- >> the other possibility is doing $1.1 billion, $1.2 billion, it's a slam dunk. you go to major brands, throw down another 25 million, another 50 million, we're not talking 20 or 50 billion, and it's an easy revenue beat. go deeper and explain the profits. >> just a word, to go back to the earlier point, this is all coming, a couple of investable names would be -- >> i think they're all private right now. >> okay. >> that's why there's so much silicon excitement around snapchat. beyond the fact it's captivated
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young people, it answers the privacy concerns. i think google will go into it, facebook. >> wow. >> whoa, jon, people are responding to the -- they really do want to know what you think about valuations, business models, long term. come back soon. >> great, thank you. love being here. been talking about the volcker rule this morning and what it could mean for the banks. up next, we'll go to lazard ceo kenneth jacobs. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
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coming up on the "halftime report," is the crisis trade finally over? signs point to yes, so we're finding out how to play the post-crisis environment. twitter and facebook both hovering around 50 bucks, and making more gains today. but which is a better buy right here, right now? and the fed approves the volcker rule. we'll get instant reaction from suntrust ceo william rogers, and it is all straight ahead at the top of the hour on "the half." kelly, we'll see you in about 15 minutes. >> all right. thank you, scott. from rising interest rates to stricter regulation, wall street is facing a barrage of headlines, but one smaller firm is finding a way to give some of the bigger beige banks a run for money. and kayla tausche is joined by the ceo of lazard, kenneth jacobs. take it away. >> you said it. i'm here with ken jacobs. you took the helm of lazard
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following the late bruce, and the world was a different place, both for your company and the overall economy. talk about then and now and what's changed. >> well, a lot. first, i think we're finally seeing the light at the end of the tunnel on the financial crisis, and the impact it's had on the world economy. probably for the first time in about eight years, i think we feel confident about 2014. the macroenvironment is improving in the united states. it feels like it's stabilized in europe. the tail risk associated with markets, disruption in europe seems to be diminished. and we have the makings of an improvement overall globally. >> lazard is perhaps best known as a marquee advisory to big companies, multinational companies, you're talking to ceos every day. what's their level of confidence at a time when there are almost no deals out there? >> well, the deal market is usually, we believe, driven by
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three factors -- valuation, finance -- availability of financing, and ceo confidence -- and really, since the beginning of the crisis, we've had financing. once the crisis resolved, there's been plenty of financing. valuations in the last year or so are probably richer than they've been. but for the first time, it feels like the macroenvironment by and large is improving in the united states and stabilizing in europe. and ceo confidence is a factor of the overall economy. what is really happening in the economy drives ceo board room confidence, and we think the macro outlook is improving, it will improve confidence and the environment. >> you mentioned valuations being rich. do you think there needs to be a stock market correction? >> not necessarily. i think it will be a function of how the macroenvironment plays out. if it is about what is expected, it's probably they're a little rich. if it's better than expected, then they're probably okay. >> you are not a bank-holding company, so the volcker rule, as
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it was released today, doesn't affect lazard as much. but i imagine there are some unintended effects you're preparing for. what are some of those? >> well, for us, we're largely unaffected directly by volcker, but for some of the competitors, there clearly will be some impact. it's a long document. it's hard to know exactly how this will play out. but in all likelihood, the -- many of the profitable activities, proprietary trading, will be available to the banks, and continue to put pressure on roes, profitability, and that means people will have to be better with the compensation, and able to retain the people, and the availability of the talent improves. >> i imagine bank employees are sending resumes to boutique like lazard, but to attract them and retain them, you have to pay them, like you said. you had an activist in your stock, nelson pelt, he's still there, he wanted compensation to be lower, lower than it is right now.
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i'd be interested if you could comment on what some of the discussions looked like and how your camaraderie with peltz right now. >> well, we've been very -- we've been very active in terms of our efforts to better manage the company. we've put out targets both in regard -- with regard to margin both for interim targets for 2013 and a target for 2014. we've been an active allocator of capital back to shareholders over this period of time. mr. peltz today is a 13-g investor. he's been a 13-g investor for quite sometime. we have a good relationship with him, and the firm is on a good track. >> no split, no sale, nothing immediate we should be preparing for? >> no, i think we're doing quite well at the moment. >> all right, ken jacobs, chairman and ceo of lazard. kelly and carl, back to you. >> kayla, thank you very much. big move in icon
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down about 9%. so they're raising more cash by selling partnership units, carl. that's why the shares are down in the session. back over to you. >> all right, dom, thank you so much for that. big news this morning if you haven't heard. mary barra becoming the ceo of general motors, the first-ever female ceo of a major automaker. so how about mary barra run gm? more on that when "squawk on the street" comes back. how could a s protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. with investment information, risks, fees and expenses the united states population is going to grow by over 90 ovemillion people,ears and almost all that growth is going to be in cities.
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as we've been reporting all morning, general motors has picked a woman as its next ceo, naming product development chief mary barra as the first female head of a major automotive company. now, we're joined by harvard business school professor bill george, who i believe knows mary personally. bill, thanks so much for being here. >> thank you. yes, mary came to our course at harvard business school for global leaders this summer. she's a terrific choice. she's an inspired choice, because she has great car experience. she's been there 32 years, joined the company at 18. of course went on and got her education. a team leade eleader, consensus builder. so she'll be a great team at
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general motors, and an inside choice. i'm very pleased that they paid off their final investment from the u.s. treasury, and thanks to the cars married's been turning out, they've been up in double digits all overlong, up, i think, 14%, in united states sales in november. you'll see this is the general motors of the future, not the general motors of the past. and i'm very encouraged -- it's great for america, because they're bringing manufacturing back to the u.s. they're expeanding in china, an winning in their market. i'm pleased to see general motors is back and probably the best u.s. investment the obama administration has made. i'm very pleased. >> let's talk about what this means for women, and i'm looking at a profile from this past summer where they mentioned her time in hr at gm, and in the words of one consultant, she had a difficult time getting credibility, because she was in hr before, even though she is obviously an electrical engineer. are we done with that are we out
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of that phase for good now? >> boy, i sure hope so. the fact that she's a great people leader, what's wrong with that she knows finance, but particularly because she's an engineer and she knows cars, and that's what general motors has lacked for, like, 30 years, they haven't had anyone at the top, other than bob stimple, and we're getting the operators coming into the top job, like ursa labernes, and, of course, people like meg whitman, and indra newy, so there's a lot of female lion of executives, and i don't like the pejorative stuff as hr being a negative. i look add at as a positive. >> we have janet yellen taking over for the fed, hillary clinton in the mix for 2016. there's one glaring sector where
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there's not a prominent top female executive, and if anything, we've seen some top female executives really leaving that industry over the last couple of years. >> yeah, that's a worry. and i'd like to see more females on top of major financial organizations. we're certainly working on it in the organizations i'm with. but i think we have a ways to go in the financial community. but among the corporations now, it's happening, and we need more. we're not there yet by a long shot, but we see fantastic women coming through the programs at harvard. so i'd like to see more of them ascend to the c suite and ultimately to the top job, and it would be good for building teams and american business for the long term. >> bill, not to say she won't have challenges, although i do see barclays adds gm to their top pick list, and in their words, bill, for the first time in a very long time, gm has a -- is being run by an engineer. what does she have to worry about? we know her competition's not going to sit still. >> well, first of all, she's got
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to continue to turn out great cars, carl. i've been driving a lot of the cars as rental cars when i travel all over the country. they are much better cars. she's got to continue to be cost competitive. she has to build the relationship with the uaw, because they made a lot of progress with bob king, but they have to create win-win solutions to be competitive, and they have to have the cars that americans want to buy. that's what the old finance guys in the previous generations forgot about, is they were playing the short-term game. that's the key. and she has to build globally. europe is a challenge, building in china, making progress, they're way ahead of others in china, but i think that will continue to be a big challenge but a great opportunity. so i'm very -- i think this is the new gm, and thanks to ed whitaker and dann akerson, we can't forget what they did. whitaker brought it out of bankruptcy, and akerson has been there a little over three years, done an outstanding job and really got the house in order, and groomed successors.
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>> yeah. >> so i'm optimistic. >> bill, always good to get your insight. thanks so much. bill george, talking about the story that did dominate the discussion today. >> and incredible 24 hours for the company, just last night, word that the government had sold the rest of its stake, and here we are. >> let's see what the afternoon brings, wapner and the "halftime." >> thanks so much. here's what we're tomming today. nifty fifty as twitter retakes the key level. are shares now poised for a bigger breako out. -- now the man compared to some, compared by some to buffett, tells you where he's investing next. we start today with this question. is the so-called crisis trade officially over? five years after the meltdown, stocks sit at historic highs, europe appears to have stabilized, a budget deal is looming, and according to our own steve liesman, the taper is increasingly likely this


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