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tv   Squawk Box  CNBC  December 20, 2012 6:00am-9:00am EST

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president obama is calling it an automatic veto. should be interesting to watch, though. and bracing for draco. the named winter storm is moving across the u.s., slamming a dozen states already and threatening to disrupt holiday travel in many, many more. it's thursday, december 20th. we've got one day left. enjoy. and "squawk box" begins right now. good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. andrew, welcome back. i hope you're feeling better. >> thank you. i had a little bit of a stomach bug. >> we're all a little sick around the table here. >> i know. it's a little -- i feel like weak, you know when your bones
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feel a little something? you had that, joe, two weeks ago, right? >> exactly what you had. you didn't -- you remember -- i remember bridesmaids, right? i'm not sure what all that came out of. i had both going. you didn't have both going? you are the just -- you were hurling. >> i was, i was. in the middle of the night. i had to send an e-mail to the producers. >> it's very weird. it's not even a 24-hour thing. >> no, i will say it was going by when the show was still going on. >> we have a pro gun advocate on. >> you didn't throw up when -- okay. >> by the way, a viewer has offered to take me shooting in new jersey at a shooting club. >> i saw a lot of stuff. >> i'm taking him up on it. but we have news to get him up to. >> some people hold that second amendment thing, they actually think it means something. they took a little bit of
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offense. >> anyway, there's a lot to talk about. >> we are going to talk about the latest fiscal cliff developments out of washington. but before we get to that, why don't we start with our day anticipates top story. the i.c.e. and the nyse are in talks. the numbers put the price tag at about $8 billion. >> we watched this -- now, you said you were watching this last night with kudlow, right? >> i did. >> did you think david faber? did you think when was book ending? on this, it went up last night. i don't know why this chart is showing no movement. it went up six points. >> yeah, right. >> that wouldn't even bring those -- because we watched. faber was talking about that last night. >> maybe if we show the prior day. >> that was the prior day. >> there's a glitch or something. >> that was the prior day that didn't show the after hours trading card. it was right about 720 been i
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think, wasn't it? >> and all this followed and it's a big story. >> well, it is. it's interesting because it's nyse euronext. >> and this isn't the first time that i.c.e. did this. >> no. you will are ebb that i.c.e. made a joint unsuccessful bid for control of the nyse last year. when the two withdrew their offers, they cited regulatoregu. interesting, though, as margins get thinner and thinner, you see more of this consolidation. >> right. less of a chance -- and we can talk to david about this at 7:00, but this transaction will be stopped by regulators. interestingly, this is being driven more by the derivatives world. has nothing to do with the set that is our -- you know, the exchange. >> but why does it go back down there? that's weird.
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it shouldn't go back down. did you see, i tweeted that i would be doing kudlow and i said, apparently andrew gave something to kudlow. and people were writing in all this, you know, weird stuff. i was just saying that you were sick, maybe -- no, maybe kudlow has the same thing because it goes around where people work. but they were how did andrew give it to -- and does that kudlow is going to turn into a liberal? they were saying those really weird things. >> you did a great job, i have to say. i was drinking gatorade and chicken masa ball stew. >> you were? >> yes. i love it. >> so do i. it's carby, though, isn't it? >> yes. anyway, let's get to washington news. house speaker john boehner is calling a vote on his so-called plan b. it would block tax increases on everyone january 1st except for those making more than $1
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million. boehner hopes it will pressure the president to make concessions. >> he can call on the senate to pass that or he can be responsible for the largest tax increase in history. >> others are arguing that republics have painted themselves in a corner. >> take the deal. you are hurting people in order to give another advantage to folks who don't need help. and as of this morning, the fiscal cliff countdown, standing at 11 days. there it is on the board. we run it now even on the side of the screen during the day. it's one of the things, you say to yours, it is coming. >> theoretically. the end of the world countdown is one day. once we get through that -- >> we did pass that.
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>> we did. the journal has an interesting piece about small businesses. the president's plan would affect only 4%. but did you see how much of the income from small bess that 4% represents? 56%. >> oh, really. wow. >> and then the boehner million dollar only affects 2% of small businesses, but it's still 40% of the income and, you know, the journal is able to find some people that said, you know, i've made between -- as the guy who own is it who pays himself under that system not under the corporate system, i made over $500,000 but less than $1 million and they won't sxan. they were able to find people that even though they say only 4% or not under -- the it's dpunny because everybody on the left hates grover. and grover, now they're making fun of him for saying it's okay to do this. so they don't like it when he won't raise it and when he says
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it doesn't constitute a tax raise, they think that he backed off on his pledge or is finding a way around it. yesterday when you were asking for the leftists to start screaming and they were yesterday. did you see the pictures of president obama and nancy pelosi saying the idea that they would take the cpi is infuriating because they say it takes money away from those who are most in need. the president's plan gives a bimp to those at the lowest end of the spectrum. >> crudeman, and huffington post, we still have a long way to go to the middle. >> you think? >> we can still stay way left and be to the right of the huffington post. but the thing about the boehner -- that they vote on today, it doesn't necessarily mean it's going anywhere in the
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senate. >> the president said ty they're not taking it. >> but if it shows that boehner can corral his caucus, then it shows he can do it with the president does. which means if the president wants a deal, he sees boehner can corral his caucus. and the president said, we're only a couple hundred billion away. the stimulus was $800 billion. this is a couple hundred billion over ten years. >> but 2011 was the same story. 400 billion over ten years. >> i know. and boehner had three to one. and now boehner said suddenly one to one seems like a good idea. well, if you include the cuts that have been affected -- >> including interest, savings on interest. >> i think that's what did it. >> but the hard core guys, we're going to have harry wilson on. did you see what he says about those kutsdz? >> no. >> the deal boehner was close to clast year was so much better in terms of putting us on the right path in terms of revenue that he
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likes -- well, then they should have taken that deal the last time around. >> well, the deal on his side, but the deal went away with the 400 billion. the irs is warning more than 1100 million taxpayers could face refund delays if fiscal cliff negotiations fail to hit the emt. that number is greater than estimated. typically coming agrees to just the tax for inflation to prevent unintended taxpay herbs from being hit by it. but this year, the amt's fate is tied by the fiscal cliff negotiations. >> you can't even imagine all the consequences for how this is going to pay out. let's get a check on the markets this morning. yesterday, you did see a drop in the stock market. the dow was down by close to 90 plus points. s&p futures up by about 3 points. if you take a look right now at where things stand in europe, you'll see that the ftse is barely higher.
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but you do see a bit of a decline for germany and france and modest moves across all of these markets. the bank of japan easing monetary policy again today, announcing an increase of its asset buying and lending program by more than $118 billion. that move was widely expected as part of the reason that you had seen the yen under quite a bit of pressure, yesterday, at least. you'll see right now that in japan, the market there actually closed down by just over 1%, 1.2% almost. the hang seng and the shanghai composite were slightly higher. oil prices this morning, you'll see right now, are down by about 4 cents to $89.94, so you have things to pick up in those prices over the last couple of days. and the ten-year note at this point which yesterday was yielding above 1.8%, dropping down to 77.2%. finally, take a look at the dollar and gold. yen is at 83.99. gold prices this morning with all these movements in the
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currency markets up by about $1.10. winter storm draco is moving across the united states threatening retailers and holiday travelers. paul, we know that sometimes the storms could be a good thing for some retailers, particularly if you're selling things from home depot or the likes of those. what is the storm shaping up? and what does it mean? >> there's always a good side and a bad side to weather events during the holiday season. but i think the biggest impact is the fact that last year we had no weather. it was completely mild. we had literally no snowstorms and for a lot of retailers, they benefited that because traffic becomes a huge issue. so anytime you lose a day or two, it's not good. today is just going to be chaos and sort of the chicago area and that whole metro area. so we'll probably lose a day or two. >> and then is it moving here to the east coast for the weekend?
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>> the good news is by the time it moves through over the next day or two, the east coast will be pretty dry. so i think the last weekend of the year is going to be good from a traffic perspective. it is going to be much, much colder. and, again, that's a tailwind for retailers to the point you just made. because last year while traffic was up, demand for seasonal goods was way down. this year, that final weekend, which is a huge shopping weekend will be colder. there may even be a flake or two that falls on christmas day. so that part of it is a bit of a silver lining. although we're looking at potentially a bit of another storm that could impact that post christmas sale. >> what storm is that? >> that one, if we were to name it, it would be winter storm euclid. the forecast models are still shaky on it. but it's a storm that would
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impact chicago, potentially the snow and those kind of things. still in the fiscal month of disease which could, again, take a haircut off of traffic for the 408 day shopping season. >> so maybe good news for a pair of retailers who may have had problems trying to sell things like sweateres and coats? >> absolutely. the comparison to last year is so easy because last year was one of the warmest decembers on record. and while traffic was good for qsrs and optimal retailers benefited, the people that are the department stores and things like that that are selling seasonal items sort of were lagging as it related to selling those seasonal clothes. and this year we've had a much easier comp. november was colder. first part of december was warm, but now we're going to sort of finish the holiday season with temperatures where they should be this time of year which is going to help move those products. >> paul, thank you very much. it's good to talk to you. >> thanks, becky. >> draco was a greek legislator,
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the first legislator of athens in ancient greece. and he replaced the prevailing system at the time of oral, law and blood feud by a written code of rules that could only be enforced by a court. the first court system. so the rules, because they were written, were hard to get around so they were draconian rules, which is where draconian -- draco. >> wasn't he in harry potter, too? >> he was also in harry potter. i don't know.was he? >> i think he was the bad kid growing up. >> and, anyway, with that out of the way and the world hurdling to an end tomorrow, still to come, if you want to know whether or not you should be optimistic about a fiscal cliff deal -- >> oh, draco malfoy. >> oh, yeah, the young bad kid?
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>> the blond kid. >> he was so good he was bad. check out the markets on any given day and we're going to do just that. tell what's happening with the fiscal cliff. [ penélope ] i found the best cafe in the world. nespresso. where i never have to compromise on anything. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is only made with fresh milk. and where the staff is exceptionally friendly. ♪ nespresso. what else? you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade,
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welcome back to "squawk box" this morning. take a look at u.s. equity futures. see how we're setting up the day. dow would open up about 36 points higher. s&p would he about 3 points
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higher and the nasdaq opening up 9 points higher. toyota's 2013 camry receiving a poor crash test rating today from the insurance industry group. meantime, the insurance institute for highway safety ordered high marks to honda's redesigned accord sedan. the 2012 camry has been named a top safety pick. this year, only two cars received ratings of good in the test, the 2013 accord and the 2013 suzuki -- kashasi? is that how you say that? >> i don't know that one. the most dangerous rating was assigned to gm and it was to stakeholders. we'll have harry on to talk about that. we have to figure out how much taxes would have been paid if they didn't have the ability to never pay a tax, too.
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don't we have to add that on? >> and the same thing with aig. >> and citigroup. >> but the companies never went bankrupt. >> i happen. and they still got the -- >>. >> do you want to do that? >> i don't know. we don't have to. i was jus just thinking about it if we were worried about taxpayers. >> it probably counts up, particularly when you're looking at -- >> i don't want you to do extra. >> i'd like to know it. >> all right. >> let's get back to the winter storm pounding much of the united states. reynolds wolf joins us with the latest. is it draco, drack-o? >> whatever way you choose. it's draco. let's call it draco. this is piling up with a lot of snowfall in parts of the midwest. got rainfall in parts of the southeast. we have tornado warnings in effect for parts of arkansas. but the snow is really the big
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story where visibility is almost nonexistence in part of iowa. in des moines, i spoke with a guy at the national weather service there. he was saying visibility, couldn't see anything. it's hard to see. it's awful. imagine being out on the roadways. on parts of i-80, it's startling. could see up to 12 inches or more near green bay. southward of chicago, chicago has gone 290 days without any measurable snowfall. that could change today. later this afternoon, we expect the temperatures to drop 2 to 4 inches in chicago. neighborhood north might get more. it's rain for millions of americans, but that snow in the upper midwest is quiet. as we make our way towards the west, you'll notice dryer air moving into the central plains and out west we have another storm system affecting the pacific northwest. it could be up to a foot of snow in portions of the cascades.
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back to you guys. >> all right. reynolds, it's actually draco. i did look it up. i can't keep the two straight, but draco, traco. >> you guys make the rules and i'll just follow you. >> not relate t to the lawmaker at all. let's check on the markets and the economy. mark vitner wears suspenders and it's managing director -- oh, and it was before you came up. and all you really need, what are those things called, andrew? >> which? >> flare. flare. >> that's right. you can have them and one of them can be rise above. joining us, lou brien is joining us from chicago, a strategist at drw trading. mark, believe it or not, yesterday i watched general electric lower two straight days because apparently some people are downgrading it or at least making some negative comments. and maybe already about the fiscal cliff.
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art, do you think that's actually happening to the economy at large because we're not in 2013 yet, but because they're already cutting back? >> well, there may be some relation that growth is going to be slower in the fourth quarter, in the first half of 2013. and just about any resolution that we get on the fiscal cliff. and, you know, i think that the -- there was a lot of optimism at the start of the week and it faded a little bit. i don't think all that much has changed. they're probably not going -- not going to get a final deal done until the early days of january. and that way, they're able to -- that way they're able to say they're voting for a tax cut instead of a tax increase and everybody is happy. >> really. so who wants to go over the cliff more, then? both sides? >> i think they want to get a little bit over the cliff. >> both of them. >> both sides. technically they're a little bit over the cliff, but if they get it done before the congress ends noon on january 3rd, i wouldn't
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be surprised if they voted on the morning of january 3rd right before the congress ends. but it's going to get done and we know that taxes are going to increase. we're going to see some minor trimming around spending probably changing the adjustment of social security, maybe some eligibility requirements on medicare. but the relatively minor changes there on spending and putting off the sequester, the net result of that along with social security, the health care taxes, ending of federal funding for unemployment insurance, that's going to shade about 1.5 percentage points off of economic growth in 2013. so we're starting from a position where we didn't have all that much growth in the last year and we're going to shave 1.5%. we'll get a little bit of a payback because there's some relief that we finally got a deal. >> right. and you could unleerve some of the -- maybe analyst fears, dan, some corporate cash maybe, lou, do you think that we can offset some of the -- >> yeah. if you had a credible deal that
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puts the u.s. on a long-term plan -- >> that's a big if. >> it is a big if. >> it's not going to be a long-term plan, is it? >> i agree with you. short of that, we were going to have to come back and revisit this until there is a credible deal. i think what mark said i agree with. no matter what we come up, bl be some amount of more taxes and less spending. ahead of that, it is a longer deal for the economy. if they would to get a longer term deal, we could see over the long run the path that we're on. as it is now, we're going to react in a binary way to a result or no result on the fiscal cliff. then the reality sets in next year that there's higher taxes and lower spending. >> all right. we did have an election, lou, and the side that wants really to -- you know, people want to keep what they get from the government. and if that is what the country
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wants, that's what the country voted for, we needed enough money to pay for what the government is. people voted for more government and mow we have to pay for it. is that a problem? >> the path that we're on is probably more the problem. >> aren't we just cutting out increases? we're just lowering the increases. we're not really cutting anything, are we? >> exactly. exactly. and then on the one hand, you see the austerity that's going on in some of europe's periphery and we're often mentioned as far as the debt totals and amounts of interest that we have to pay and similar in the same breath and yet we're trying to skate around this without any sort of -- any sort of real problem. you know, we're still -- you know, if the deficits are a bear, we're still looking across the aisle and sizing up whether
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we can outrun the guys across the aisle rather than trying to slay the deficit there. >> there's another great piece in the journal today. every morning when you wake up in athens and greece, you check the weather and then check the strikes, which ones are happening on any given day. there's three things that you want to know what's happening. and i don't know, everything grinds to a halt. strikes and slowdowns happen every week. tax collectors have given up over there. but that's why we -- you know, that's the reason why we probably need to get a handle on some of them stuff. no? >> that's part of it, although i don't know how much that has changed. i was in paris a few years ago and that was the way it was over there, too, to look at where the strikes were to take the trains or the subway. but i think we're a long way off from there, but i think that brings up an important point. the fiscal cliff and the resolution of the fiscal cliff is not the end of the process. it's just the beginning. i mean, if churchill was around, he would say maybe this is the
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end of the beginning once we get a resolution. we're going to have to make further moves towards austerity. we're going to have to steadily whittle away at deductions and push taxes higher so that we get revenues of the share of gdp closer to 20%. because it's not so much that, tas are too low. it's that our tax system is inefficient. and whatever we do, whatever changes we make, they're fought likely to raise as much revenue as the government is counting on. there are all sorts of ways, when you hit the upper income households, there are all sorts of ways to avoid higher taxes. >> thanks, lou. thanks, mark. >> thank you. when we come back, i.c.e. and nyse deal talks. a merger could come as soon as this morning. [ male announcer ] you are a business pro.
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good morning, and welcome back to "squawk box" here on cnbc. i'm top story, ice and the nyse are in merger talks. the transaction is expected to be funded a third by cash, one-third by cash and the remainder by stocks. the number puts the price tag at backside 8 billion. and as this story as david was talking about last night, ended up about $6 above where it has closed yesterday. i.c.e. was indicated higher, as well, on this news. >> a few names to watch today in
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the stock market, including herbalife. he's shorting the stock calling the company a pyramid scheme. today he will be outlining his argument. herbalife's michael johnson responding on cnbc. we think they misunderstood our plan. they said we were recruiting and paying for recruiting. we don't do that. that's what a typical scheme is that we've been addressing. we don't have that issue. >> i'm going to be sitting down with bill ackman later today after his presentation for an interview that you'll be able to see during the "fast money halftime report." shares up for plaquerock unusually today. peter joins us from the jeffries trading floor today in new york. peter, you have a lot of different scenarios, but the most likely scenario that you think is that the blackberry
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fails, there is no acquisition on this and the cash firm continues? >> yeah. we think it costs about $1 billion to launch these devices. if successful, we think an access possibility goes up. if not, we see the company become much, much smaller a year from now. >> how do you measure success? and when we we know on this? >> we'll probably know around around/may next year. success would be call it 3 to 5 million units in the first quarter out of the gate and 5 million units plus after that. to us, that would be a very good launch. >> for anybody who is actually a blackberry user still, what do you say about these things? if there's a takeover, does that mean blackberry continues? what's the long-term outlook for the company? >> i would suspect that if you're a blackberry user, there's very little chance that your service is going to be cut off. that is a key cash flow driver for the company and anybody who would want to buy isn't concerned about the cash flow
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stream. if you are a user, you'll be able to upgrade to these new devices, if you're a consumer, anyway, pretty easily. for a business, it will be more difficult. >> despite all of this is thoughts, they risk/reward scenarios that don't look all that great for reading through what you're saying on this, you did upgrade rim from an underperform to a hold and you raised the price target from $10 to $5. why is that? >> well, when we first had our underperform rating, the chance of a success or the support we thought was virtually nil. and then in early november, we started doing carrier survey work around the world. was stunning. we came back with 40 or 50 carriers saying they were going to actively push this device, they were going to support it, provide comarketing dollars and really key in store placement. so me and to us, that was very, very, you know, surprising. and so that caused us to upgrade the shares and upgrade our target.
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>> shares were up 17% last week. who would be the most likely acquirer? >> samsung and microsoft would be the two most likely. microsoft because win 8 continues to struggle and samsung because they're trapped in the google ecosystem. at some point, they fear google could compete directly with them. >> what would be a likely takeover price? >> if it's successful, the takeover price will be a lot higher, call it $20 to $30. if they're under successful, we'll probably see a takingover in the under $10 range. >> if you are convinced that somehow the blackberry ten software is not up to snuff for whatever reason, why would a samsung or somebody else want to buy it and try to compete with android, which you're saying is clearly the better operating system from what i gather? >> well, no, actually, we think bb 10 is a solid operating system. what's neat about it is it can
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emulate android apps. you'll have your android apps, about 300,000, available and you'll have your 10,000 bb apps. it does provide advances that current android oss do not. >> okay. >> peter, thank you. we appreciate it. >> my pleasure. >> by the way, this programming note for you. research in motion's ceo will join us live on squawk tomorrow at 7:30 eastern to him. if you have comments, questions about anything you see here on squawk, is the address. coming up, tis the season for last-minute holiday deals. coming up, our next guests are making their way to the set and making their way in business to help you find theco founders of hockster. they're going to join us on the set. to offering you tdd#: 1-800-345-2550 low-cost investment options-- tdd#: 1-800-345-2550 like our exchange traded funds, or etfs tdd#: 1-800-345-2550 which now have the lowest
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welcome, everybody. right now you can see futures up about 45 points for the dow jones. in the headlines, bernie madoff's younger brother is expected to face a judge today for his role in the multibillion dollar ponzi scheme. apparently victims of this scheme are lining up to watch this happen today. new social media app hucsster allowing users to flag items for when they go on sale.
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explain what this is for those who haven't downloaded the app and need to go and do it right now. >> hucster is a platform that tracks specific items across your favorite retailers and let us you know when they want. >> so there's something i want, like a vitamix blender, you would put it in and it would track it at the cheapest retailer? >> well, we would track it for coupons, promotions at your favorite retailer and anytime the price drops, we would let you know about it. >> what is the hottest item of the holiday season? >> there was a vest from j. crew that recently sold out, but you probably probably 30% off or so. we had about, i don't know, a couple -- maybe a couple dozen or three dozen for a novelty item. >> men or women? >> it was for women.
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it was black and white herringbone. it was a cool vest. >> do retailers like what you all have doing or do they hate it? i would think, great, you bring in traffic, but you have people waiting like vultures until they come and get it. >> we were former retailsers ourselves. so we met at j. crew. we're helping solve for the abandon shopping cart. retailers want to sell these products to you and if it's too expensive, you're not going to get pushed into it. >> but i might buy it if i really want it, but if i know you guys are telling me when the sales are, there's no way i'm going to pay full price. >> we're not going to guarantee inventory. if you really want it within you'll have to get it. >> have we got there yet or no? >> yeah. we're gathering from really interesting data, especially around the holidays.
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certain items that we would think never go on sale, like your uggs boots, right, you can get a great deal on those. so we're starting to really understand where are the hot items that, you know, you really can wait on or there might be somewhere you just buy right away or your going to miss your chance. >> do you guys do this with help from the retailers or do you have boughts that search the sites? >> right now we're searching the sites. retails have started reaching out to us because they find it as a way to get their interested party's attention. right now, nobody is opening their e-mails so they can we get their attention about what's going on out there. >> interesting. >> hottest retailser right now or one or two is that is a loser that you didn't expect? >> there's some really cool e-commerce suppliers. >> ason is a popular online
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retailer for women's items. >> do you know about that? >> no. >> huckster, you're going to give it a good connotation with this, right? >> yeah,st huckster, we're the modern day retailers bringing this to your inbox. >> you are made for these types of interviews where there's a -- like you knew about the place where there's a place with the airline tickets where the prices go down? >> yeah. it's called forecast. >> you know about these things. >> i do. >> and you've heard of this? >> i have. and they talked about this on television. on our show. they might have talked on "the today show," as well. >> it's kind of cool, i have to admit. it reminds me sort of of groupon, but not really. >> no.
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>> no, not at all. >> do you do this for all products? >> all product across the board. it's not just retail. >> i want this. it's not specifically apparel and accessories, but we're seeing home goods, electronics. >> i like the uggs idea. i didn't know they ever went on sale. >> yeah, nordstrom's. >> good to know. >> happy holidays, guys. we're going to have you back when you get the forecasting going on. then i really want to know. >> do men's uggs ever go on sale? >> yes. >> do you have a pair? >> i wore them to the christmas party. you were in jamaica. >> you wore men's uggs. >> you wore your macrame jeans, too? >> what was left of them. making headlines, check on the uggs for me, will you? >> huckster will track them for you. >> that's what i'm talking
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about. these are getting -- i've worn them so much, tier getting worn out. making headlines this morning, google agreeing to sell set top tv boxmaker motorola home to aris group. the price tag is $2el 4 billion in stock and cash. the shares jumped on the news after hours. and a swiss newspaper reports that roach may have reached a deal to buy alumina for $66 a share. the agreement hasn't been finalized yesterday. in september's roach's $51 share bid was called woefully in adequate by the ceo of illunima. and still to come on squawk, harry washington, his advice to washington on how to rise above and settle the fiscal cliff plus, u.p.s. expected today to be one of the busiest for the year for shipping. we're going to have a live report from a package sorting nalt. then, at 8:00 eastern, aman whose name is synonymous with the flat tax.
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nespresso. what else? ♪ sleigh bells ring are you listening ♪ ♪ in the lane snow is glistening ♪ >> one of you, too? >> yeah. ♪ beautiful sight we're happy tonight ♪ >> we are still getting mileage out of kayla tausche's piece about how some companies are
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aging you visually so that you'll start -- so that you'll start saving up for plastic surgery. i guess. anyway, they did andrew yesterday. then on kudlow last night we did a benjamin, was his name benjamin button? >> yeah, yeah, yeah. >> they showed me currently already aged and then they went back and showed 20 years ago on cnbc. but then they also, which was not nice, because you were worried about the lighting. look what they did -- here's know at 107. but they did -- -- >> i can't believe you guys let them do this to you. >> i'm kind of smiling at the beginning but by the end, see, if they start casting for -- just focus on that 107 -- >> like a zombie. >> if they start casting for walking dead. >> you think you got a shot? >> absolutely. look at that. now the reason that i even bring up walking dead is in the last week, i've seen a discovery on discovery tv channel a -- >> a real -- >> the serious look at, that they do things, if there's some
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airborne virus or something got out of a lab or something that something similar to a zombie apocalypse is possible. and we've got the end of the world tomorrow so people are talking about, you know, that a zombie situation, and i just want to be -- i'm ready. because i know what i'll look like. >> andrew, did you see your pictures, too? >> i saw them briefly. >> did you hear what i asked, at 107, will you have learned anything from me by then? >> probably not. >> i still don't think -- >> probably not. >> you already know everything. >> all i know is -- >> too big to fail. >> if kayla comes near me with a camera, i'm running. >> you look distinguished. sort of a distinguished zombie. >> by 107 it's kind of tough. the skin really -- >> if i'm -- >> if i look like that when i'm 107, i'm okay. >> are you worried about how you look at 107? >> no, i'm not. >> i'm not either. i'm ready to look like anything. >> notice, by the way, we both have hair at 107. >> i will have hair. i will have hair. i will find a way. >> so funny.
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>> it's going to be this color, too. it will be. >> fun story, $18 million theft victim was a canadian mabel syrup cartel. great story in the n"the new yo times" this morning about a theft of maple syrup. >> how do you steal syrup? >> on trucks. it's an inside job. it's a huge commodity business and they've been stealing it over time, literally siphoning off syrup. >> you always pick articles in the "new york times." you always do. >> i do "the wall street journal." i do "the new york post." >> no, you -- >> you saw me looking at the cover of "the new york post" this morning. >> yeah, i did. >> for all the wrong reasons. >> leering at it. do you have a deal with ponch to continually look at -- >> to plug "the new york times" stories you're saying? >> yeah. >> no, i don't. but i thought it was a good story and it is a good paper. >> pinch? >> it's ponch. >> that's the guy on chips. okay, i'm sorry. >> all right, you know, i was looking at a story out of the "usa today" --
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>> eric estrada. >> about how the military has all of this video, and the air force is now seeking some help to go through all this video and kind of get a better idea of what they actually have and they're reaching out to espn and other experts in video analysis. >> of what? >> a flood of video footage that's been coming through and they're reaching out to people -- >> from drones and stuff? >> from drones that are flying over. so they have tons and tons of footage but they need to have better ways to analyze all this footage. nobody can figure out what it is and how do you do anything with all this intelligence. >> yeah. >> you have all this intelligence, the way of interpreting, figuring it out and taking all this video and really finding a way to scan through it. it's not like documents. >> it's amazing what we know about geography. i'm shocked at those gps devices when i see them. i mean it's -- >> how good they are? >> yes. like scary. you can almost watch people in their homes. >> you can, in fact, on our street, we've had the google truck drive down our street, matt saw it out in front when he
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was out in the driveway and the google truck comes by with the cameras, and scans everything you're doing, so you can wind up -- that's how that guy wound up like naked. >> i have a friend with a mini drone, they now sell for $280. >> what? >> it's like a helicopter thing, has two cameras, hooks up to your ipad or iphone and you can fly it in the air, fly it down the street. >> and spy on all of your neighbors? >> you can do whatever you want with it. >> you can be a peeping tom. >> that is really creepy. >> they're disrupters. we'll get them on the show. >> but you need to fly it. >> you need to fly it. because you know those helicopters that you buy to fly, they act like they're really fun and easy to use. >> no, no, no, this thing really flies. >> they're like sflieing a real helicopter. >> not easy. >> they shouldn't fly. >> we are approaching the top of the hour so we're going to slip in a quick break. this morning's top stories, including david faber on talks of an nyse eyes deal all coming up. plus he's a restructuring specialist. and a former member of the president's auto task force.
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so how would harry wilson get uncle sam to turn around the car, and keep it from plunging off the fiscal cliff? find out next. to the best vacation spot on earth. (all) the gulf! it doesn't matter which of our great states folks visit. mississippi, alabama, louisiana or florida, they're gonna love it. shaul, your alabama hospitality is incredible. thanks, karen. love your mississippi outdoors. i vote for your florida beaches, dawn. bill, this louisiana seafood is delicious. we're having such a great year on the gulf, we've decided to put aside our rivalry. now is the perfect time to visit anyone of our states. the beaches and waters couldn't be more beautiful. take a boat ride, go fishing or just lay in the sun.
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wheeling and dealing. the it least breaking news on that deal that could shake up the floor of the new york stock exchange. talking to avid the fiscal cliff at a standstill. >> i hope the president will get serious soon about providing and working with us on a balanced approach. >> right now, what the country needs is for us to compromise. >> former white house chief of staff john podesta is here on what both sides need to do to rise above. >> and joining us this morning is maeva adviser ceo harry
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wilson. get his take on the big business topics of the day as the second hour of "squawk box" begins right now. good morning, everybody, welcome back to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. in studio with us this morning, sharing his thoughts on the fiscal cliff, the economy and other topics is harry wilson. harry, by the way, is also a yahoo! board member and former auto task force member under president obama. great to have you here. >> great to see you. >> got a lot to talk about including what's been happening with the futures. yesterday we did see a downdraft in the markets. dow was down by almost 100 points. this morning the dow futures are rebounding, up by about 45 points above fair value. in our headlines this morning a deal may be announced as soon as today that would merge new york stock exchange parent nyse euronext and intercontinental exchange. our david faber reports that the
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deal on the table would value nyse and euro next at about $35 a share. david's going to have more in just a moment. and the fiscal cliff battle that is expected to escalate today with the house set to vote on speaker boehner's so-called plan "b." that would keep taxes from rising for people with incomes below $1 million in the event that no fiscal cliff deal is struck. the president has said he will veto this bill if it passes congress. >> the season's first winter storm, draco is slowly making its way across the country. it's dumped more than a foot of snow in the rockies and drivers in iowa have been told to stay off the roads until noon today. also disruptions in air service are expected in chicago today because of high winds and poor visibility. and our newsmaker of the morning, ice in talks to buy the nyse. david faber broke the story. >> thanks, andrew. late yesterday, of course, we started to get word that we might very well get a deal this morning. this morning we may be, who knows, as little as not too many
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minutes away from an official announcement based on what i'm hearing. again, to go over the terms, it would appear that ice is going to acquire the new york stock exchange in a cash and stock deal. about two-thirds of it will be shares of ice. one-third of it will be cash, if you back in to the map you more or less get something like a ratio of 0.17 or so shares of ice, throw in about 11.25 or so of cash, again, not exact science here, and that will get you to right around that $33 level that my sources indicate is the price that has been agreed to. unclear whether both boards have officially signed off on the deal. but, again, as of last night, it was very, very close to being inked and being approved by those boards of directors. then we move into questions that we don't have the full answers to as yet, until we actually see a press release, should we get one. one would anticipate that there be significant synergies between these two companies, of course, given their product mix, and how many can be taken out of the business. one cost i doubt will be taken
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out, probably right here. we all know the politicians get very, very upset if you talk about anything that has to do with the floor of 9 new york stock exchange. guesses are that will remain open. but again, we'll see in terms of management, structure. ice has been built into a larger company than the nyse. and market capital closer to $9 billion, to the $5.5 billion at the nyse and putting that company in a position to do this. it's interesting when you look at the ebitda of both companies, they're virtually identical. but it is the multiple ebitda that ice gets to put it in a position to buy the nyse. i wonder if we get the deal at 33 how shareholders will react. it's a significant premium, no doubt about that, to yesterday's price on nyx, which was right around $24 a share. but not that much above its $52-week high, and so one wonders what the take will be on the part of investors. ice shares, though, for their part, we'll see how they perform, they may go up if we get really significant cost
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synergies there. although they would seem to be taking on perhaps a lower growth business, and the multiple might come down, so that may be something of a push. again, a number of questions, andrew, that we have as we always do at this point. we're waiting. we may hear something. my guess is as soon as the next half hour but we'll just have to wait and see. of course, this will be a powerhouse across so many different products. interest rates, fixed income, equity and stock desieve riffs, commodities, energy, all of that trading united under one brand with a headquarters in atlanta? >> david, my big question, i don't know if we know the answer is, duncan, ceo of new york stock exchange euronext, what happens to him in all this? >> not scleer. not clear. you know, we know he's been committed to trying to figure out a future for this company. two years ago negotiating a deal, faced headwinds but he
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doesn't seem to have stopped doing that. not clear what his role will be. will he continue to run the new york stock exchange operations of the combined company? it's possible he'll be the chairman. from what i'm hearing he will not be ceo of the combination. that will be, my guess, is mr. spreker, as you might expect, given they are the acquirer and he's been building this company through acquisition for some time. >> david, did ice consult with you guys on the set of "squawk on the street" about whether this was -- i mean they're basically taking over the big board, right? and that's -- you know, do you get a premium for the new set down there or anything? they didn't even ask you about that. are you going to -- >> they're not going to have my seat. >> are you going to tender? are you in favor of the deal or they didn't even ask, did they? >> they have not -- >> how about carl? what about carl? does he care? >> i don't know what carl's opinion is. he is up there, getting prepared, as he always does, for the show. i didn't have a chance to ask him. carl is very focused in the morning. >> wonder if they'll change that sign behind you which says nyse euronext. >> no, they're not going to
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change that. i don't know the name of the new company. will they go with ice and have the nyse? they congress figure out a name with deutsche boras. >> ice baby. >> whatever happened to him? >> he's become a realtor, hasn't he? >> didn't -- >> he was just on cnbc. >> didn't we have him on and he talked about real estate. >> realtor. realtor. >> is he selling nuclear sites? you know. david, got twice, david, in less than 12 hours. >> you're a little punchy, i would assume. >> no. i'm all right. i look 107 but i'm all right. >> i look very pale here. i am going back to get a little -- >> talk with those guys at ice >> we're going to work with them. >> atlanta, really? >> atlanta is pretty cool. although that is where the whole zombie apocalypse started. >> wasn't worked out that well for cnn. >> it's also where vanilla ice
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started his career. >> in atlanta? >> this is all coming together. >> it's all coming together. >> all right, david. it all makes sense. >> i get it now. >> all right, faber. see you later. can washington compromise in the next 11 days to keep the country from going over the fiscal cliff? joining us this morning our guest host for the next two hours, harry wilson, chairman and ceo of naeva advisers and is a former senior adviser to president obama's auto task force. great to see you, harry. >> thanks, joe. >> good day to have you here. >> you're a genius restructuring type guy. you have nothing to do with diamonds, that's harry winston. get that out of the way first. looking at the fiscal cliff, you had some interesting comments. boehner had a much better deal for his side last year, right? >> right. >> was that really 3-1? >> remember simpson-bowles is 3-1. and the president couldn't go all the way there. the republicans north of 3-1. and i think most people think a deal could have been done in that zip code. >> what is this deal now?
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in reality because everyone's got there -- it drives me nuts when i hear one side say it's this much in cutting. one side says we are giving away so much and the other side says you haven't even begun to negotiate with us. who's telling the truth? >> i think the best case scenario is 2 1/2 to one if you include all the sequester cuts and all the cuts talked about, none of which are really enforceable. both sides have talked about scaling back the sequester. the absolute best case scenario is 2.5-1 and i don't think it gets there. >> if we go over the cliff? >> if you get the billion dollars of spending cuts which people are talking about. >> if me meet somewhere in the middle. >> plus the sequester. >> where is the president right now, 2.5-1? >> if you include the full sequester. which i think won't actually come through. >> a trillion dollars in cut? >> the trillion and a half from last year plus the trillion that he's talking about now. >> right. >> so that would be the 2.5-1. that's dependent upon all these things actually coming through. >> what is boehner -- what's his? -- >> if you look at it. they're only a couple hundred billion apart in revenue, so
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it's actually not that far apart. >> -- killed it last time. we're at least 400 apart this time. >> two different things. one is what's the probability of a deal? the other is, is it a good deal? the deal probably is pretty decent in either last week of december, more likely the first couple weeks of january. the worst part about it, my opinion, it's a bad deal. >> why is it a bad deal? >> doesn't deal enough with spending. take the absolute best case scenario we're putting between 3% and 5% of projected spending over the next ten years. >> of the future spending. which is increased spending. >> right, exactly. >> so it's all just paring back increases? >> basically, yeah. we're still growing faster than the rate of inflation on spending. and that's -- when you factor in entitlements and nonentitlement spending. i look at it and say there is so much more we could do on the spending side today, before we ever get to dealing with the increases. and so i think, you know, could you cut $4 trillion in spending over the next ten years? i think that's easily doable. i came up with a list from a bunch of sources, "the new york
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times." tom coburn, the total $2 trillion. without a lot of work and without a lot of pain. and so, the problem is that boehner's allowed himself to get into this debate where it's really defined much more about the president's agenda, which is more focused on tax increases, than really addressing the spending problem. >> you know, i can argue from the president's side. and here's the argument. we aren't coming close to raising enough money to fund the entitlements that we've already promised people. so we're going to have to cut back on the promises that we've made, and still raise revenue just to make good on -- on those scaled-back promises. >> and people want a lot of these entitlements. when you ask them, they say i want smaller government but they want all these entitlements. we voted for -- we voted for more government and bigger entitlements. >> you know -- >> i don't think we did. i think mitt romney didn't make the case, look, basic problem was we had a guy as a republican nominee who was a good person,
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and a good business person, and a terrible presidential candidate. and he, despite the fact that obama had all the economic statistics stacked against him, romney didn't make the case to the american people. >> so you don't think that -- >> how do you read an election, you can swing it any other way, but how do you ever say you have a mandate on something if you're going to say when you win the election, it doesn't mean what you thought it was going to mean. because we had a lot of people telling us ahead of time, look, this election is going to be a deciding factor. this election is going to tell us something about what the people want. >> two things. one, remember, i said i thought romney was going to lose all the way through. because i thought he was doing a terrible job making his case for his side. my side. so, that's one piece of it. so i'm not surprised by the outcome. but it was really his failure on the merit was the case. the other piece of it is, i mean, ultimately, the president did win decisively in the electoral college. republicans kept the house. they lost barely any ground, even though they picked up a huge number of seats in 2010 of freshman that should have been vulnerable in 2012. and in the senate we barely lost
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any ground despite the fact we had crazies saying terrible things in different parts of the country in seats that should have been winnable. i think the house and senate were effectively tied, and the president was a more appealing and better candidate than romney. >> but again, if the elections aren't deciding factors, what are? what is? when do you ever get to say that this is a vote in the way the country wants to go? >> when you can get two houses to vote and then sign it into law. >> but do you think there are some other issues and we talked about whether the party needs to have a bigger tent. >> even "time" magazine. >> whether that's -- whether the issues, as opposed to the person. >> see, of course, the parties would have a bigger tent. that wasn't my opinion the deciding factor. yes the parties should do a much better job of reaching out to people who aren't white men. >> how could romney have been more appealing? >> he didn't put himself out to explain his case, and the people that worked for him were, i think, totally incompetent. i had dealings with a couple of them trying to get them on here, and, like a lot of people they
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saw that first debate and said, who is this guy? never seen him before? why had no one seen romney before that, because of these people running him? >> because they had a theory of the case that the election was only about indictment of the president. only indictment of the president. that's all they need to run on and many people said, for years, that that's just not true for an incumbent president that's reasonably well liked. and so he never made the case, maybe in the first debate -- >> you don't see it as americans saying, i like what i'm getting from the government, i'm willing to pay for it? >> i think they're definitely not saying that. they might say, i like what i'm getting from government -- >> i want the 2% to pay for it. that's what i like, they brag about getting 51% want to raise taxes on the 2%. wow, you're great sales people. how did you do that? you got people to agree to raise taxes on somebody else to fund your benefit. >> right. >> that's wonderful. anyway, checking the futures. right now, and taking the markets. we had a rough session yesterday, we'll get back maybe half of it. up next, more on the possible ice nice tie-up.
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>> ice nice? >> and then the midwest getting ready for drakeo. an update on how this huge vampire -- how this huge snowstorm, sorry, will affect your holiday travel time. [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade.
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ray deal may be announced as soon as today that would urge
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the nyse euronext and intercontinental exchange. our david faber has been reporting on this deal. he has been reporting the deal on the neighbor would value nyse euro nex at about $3 a share. we are looking for news any time today. stake a look at the stock chart. joe you were on the air when it happened. >> he called in, and here it is. news pending. >> they did pulse it for news pending. >> wonder what that news might be. >> we'll see how it affects "squawk on the street." that's what i'm thinking about. how it affects us. >> harry wilson is our guest host today. harry one of the things we've been trying to figure out is the situation with gm. the news that the treasury is going to be scaling back, or getting rid of a lot of these shares over the next couple of months. that gm is saying the premium for us, but it's still not enough money to make treasury whole on these numbers again. what's your sense after someone who went through all of this on the auto task force? >> i think ultimately the
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government's goal is always to get out. and this is, in the zip code of the original -- i thought it would take up to five years. we're 3 1/2 years into it. and so i think it's a good thing net-net. the shape of it is that unfortunately it will leave a shortfall ultimately for treasury. probably when it's all said and done somewhere between $9 billion and $12 billion. the unemployment insurance costs for the people who would have been -- lost their jobs had gm not been restructured and saved would have greatly exceeded that. >> really? >> so just on that alone. >> okay, i haven't heard anybody say something like that. >> i think the most commonly accepted number is 1 million jobs for failure of the auto industry. and unemployment benefits, $300 million a week. it's about $12 billion so just that alone is the gm cost. >> but how much in future taxes don't accrue to the treasury, because --
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>> how much -- >> i saw this in your notes. >> how much do future taxes get paid by the employees? >> then you can add that back in. >> i'm not including any of that stuff. >> what did we decide the tax loss carried for? >> i don't remember. >> goes out years. >> and they can -- ford, gm gets to compete against ford without paying any taxes ever again. >> that's the nature of having. >> but they never went bankrupt. >> gm did. >> yeah, but ford was -- >> they went through this -- >> ford was smart enough to avoid it. >> this the equivalency of what is aig for example. >> yeah. >> that's a company that didn't go bankrupt. >> okay. >> but -- it was sort of government's organized bankruptcy. which is slightly different. >> i disagree. i disagree with that. >> you don't think there's any moral hazard cost to it in >> absolutely. >> and then also the senior debt holders. do we know senior debt holders actually by law are going to be protected ever again now? >> again, that's a great mix, right. there was an issue at chrysler
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and gm, got paid 117 cash. got paid in cash even though a bank trading in the 40s -- >> senior debt at gm, senior debt holders were subordinated to the union? >> no, senior security creditors were paid 117 cash in gm. bond holders with the union retiree claims -- >> the subordinated dead holders were even with who did you say? >> parapasu. >> parapasu? >> that's so rich. >> what are the calories? >> tiramisu? >> parapasu. >> i don't need that. >> but then that deal was improved. >> when would you have sold if you were in charge? >> so, if you were purely a financial investor you wouldn't have sold yet. look for the full rebound of the auto industry and great visibility in the economy. and of course the government
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wanted to get out much sooner than that. and so that was the balance of treasuries and striking ever since 2009. i think that the -- i think gm a year ago i was on. i said gm was dirt cheap. stock's up 38% since then. i still think it's really cheap. so i think you see a stock somewhere between the mid 30s. that would have been a time. >> they still got 15 months to sell, right? they got a little optionality in the time. you think it's going to run? >> this announcement unto itself creates an overhang. i think the overhang's been there since day one. >> but if you know it's coming off. >> it was up two bucks yesterday. >> but they were talking about 300 million is about 15% of the stock outstanding. >> people say that government stayed out of gm's hair but i nowakerson, which was chafing, couldn't pay anyone, couldn't bring in talent. because he had to clear the government. it was hard to manage gm. >> i think that's true. i think certainly acerson and the team would like to get -- >> they can't even say how much
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they want. >> but it wasn't so much a government getting involved in any decisions, which wasn't happening. it wasn't involved in the initial selection. what it was was t.a.r.p. related restructuring which could be -- >> a lot lower than 27 if the government was involved in the decision. >> absolutely. >> no doubt. >> let's get you a few names to watch today, including herbalife. bill acer man says he's shorting the stock calling the company a quote, pyramid scheme. ackerman plans to outline. herbalife responding. >> we think they misunderstood our plan. we don't do that. that's what a typical scheme you've been addressing and others have had concern with. we don't have that issue. >> i'm going to be sitting down with bill ackman today after his presentation today in new york city. you'll be able to see during the fast money halftime report. >> google agreeing to sell a set
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top tv boxmaker called motorola home. the price tag is $2.4 billion in cash and stock. era is a georgia based equipment maker and the shares jumped after hours. >> when we return a major winter storm wreaking havoc across the central plains. draco will make holiday travel difficult. an update right after this. and then it's your tools of the trade. oil, gold and more as we get ready for another day on trading on wall street. "squawk" will be back. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business.
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i'm meteorologist reynolds wolf. welcome back to msnbc "squawk box." you have this area of low pressure, trailing cold front. everything is going to be driving eastward. we've been seeing some scattered showers and storms, even some tornado warnings in the southern half of the storm. it's going to be the top half where you're going to see the rain showers and snow showers across parts of the corn belt.
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stay tuned here at c innocence and we'll keep you up to speed on all of this. take a look at the snow fall totals. des moines anywhere from 6 to 12 inches of snowfall. even more near green bay. i got to tell you, in chicago where they've been snow-free for quite awhile, 290 days they could finally see some snow, 3 to 6 in the northern suburbs, downtown about 2 to 4. big picture today, again the rain is going to continue for much of the eastern third of the country, with the exception of the eastern seaboard. again you can expect partly cloudy skies, new york with a high of 42 degrees. much cooler air behind the system, and snow pile up. atlanta possibly thunderstorms there. miami 83 degrees and partly cloudy skies. meanwhile for the center of the u.s., you can expect drier air in the central and southern plains and back out west, again, more snow. that's a view of what you can expect. more updates coming up. you're watching "squawk box" on cnbc.
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welcome back to "squawk box," everybody. in our headlines this morning, we have a plethora of economic numbers for investors to ponder about this morning. in about an hour we'll be
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getting the labor department's weekly report on initial jobless claims, along with the final estimate of third quarter gdp. at 10:00 eastern time we have three reports that are out. the december philadelphia fed index, the november index of leading economic indicators, and november existing home sales from the national association of realtors. and the house is set to vote today on speaker john boehner's plan "b" bill, which keeps bush era tax cuts in place for those making less than a million dollars. that is designed to keep rates from rising if no fiscal cliff deal is reached. the president has already said that he would veto that bill. obviously these talks on how to avert the fiscal cliff have at least seemed like they are stalling at this point. joining us right now to talk more about it is john podesta, former white house chief of staff and chairman of the center for american progress. our guest host today is harry wilson, he is maeva group chairman and sea. john, welcome to the program. thank you for joining us. >> good morning, becky. happy holidays. >> happy holidays to you. are we correct in our assumptions that things look to be stalling out a little bit, at
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least from all the rhetoric we've heard on both sides? >> yes, really actually quite incredible. because i think we all woke up monday and looked like there was progress being made over the weekend. continued progress being made on monday. they looked like they were coming together and all of a sudden, you know, they did a u-turn and decided to have these votes today which i think makes the whole thing much more complicated. >> you know, john, you're a former chief of staff, i'd like you to put on that hat for a moment, and if you're the person sitting in the white house, how do you salvage this at this point? >> well, look, i don't think the president can chase the republican leadership, because they've, you know, i've decided to kind of jump in to the volkswagen and race around the capitol plaza for awhile. i think they're just going to have to go through these votes and then see whether boehner is serious about coming back to the table. the president put a very serious offer on the table, one that i think has, you know, got some criticism from his own base and his own allies. but one that was quite serious
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involving entitlements and coming down on the revenue number. and now it's up to boehner to try to restart these talks, if the president chases him i think it will just reinforce bad behavior. >> john, you could say the same thing about leader boehner, though. that he has put an offer on the table that has infuriated part of his base, as well. obviously we knew that both parties were going to have to be alienating some of the people that were far left and far right to reach any sort of a compromise, because there are people in both parties who don't want to see compromise. but, was it a mistake -- >> i agree with that, becky. and that might have been a good point on monday. but that's not relevant today, when he's putting tax plan on the table that only raises $300 billion, 69% of the benefits go to people making over a million dollars. that's not a serious offer. >> but, john, it may not be a serious offer. but my question is, is it a mistake for the president to come out with his first plan, his very first plan that was something that was laughed at at the table by people who thought they were in serious talks at that point. did we start too far apart to get to a point where we can
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reach some sort of an agreement? >> well, i don't think so. if you go back to the president's first plan, it was $1.6 billion. that's against, you know, they're moving baselines. that's against the simpson-bowles target of $1. billion. so you've spent a lot of time sitting around that table talking about the quality of the simpson-bowles plan. >> sure. >> the president was below that. and now he's come even further below that. to $1.4, and now looks like $1.2. >> but the proposal didn't look like the simpson-bowles plan on both sides. the thing about simpson-bowles is it infuriated all sides because it was so steep in terms of tax increases and so steep in terms of the cuts at the same time. that is the one thing where you can bring everybody together, bring everybody something that they really, really hate. >> you know, look, you know, i obviously think the policies the president's pursuing are better than the ones boehner is pursuing. if you look at the bam of who's been more serious, i think the white house deserves the credit for having, over the weekend, put a very serious proposal on the stable. and look, boehner looked like he was moving to a serious proposal
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on his side. and then, as i said, i don't know what happened. but obviously didn't think he could bring his caucus along so he's going to these votes. i guess the charitable interpretation would be that he has to get people to sort of get over the hump of voting for a tax increase and then maybe he could do a big deal. but it is befuddling right now. right before christmas, with, you know, people are sober as a result of newtown, that they're going through these political antics today, it's crazy. >> both sides, harry's going to comment on this. one side says we're compromising more. that's what you just said. the other side says we've compromised more. john, a little whimpering from paul krugman does not make a carping from the left. >> you forgot about huffington post. social security sellout. >> you're carping from the left hasn't been close to the pressure john boehner's been under. i mean, come on. and just from that fact, we need some real outrage from, you know, patty murray, or you know, all the usual suspects before i believe that the president has
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given up as much as boehner. you take it from here, okay? >> well, john, it's harry wilson. one thing that's really interesting to me, there's been a lot made about the fact that the president's proposal is closer to the clinton era tax rates. but very little has been said about the fact that no one is close to the clinton era spending levels. so, as you know, when you were in the white house, the budget was last balanced, spending was around 19% of gdp. even under the republican proposal it's way above that. so how do you get comfortable that we'll ever get closed to a balance budget when spending is 15% to 20% higher than the last time we were in balance? >> harry, i think that's an excellent point. there are two factors there, maybe three. one, very much higher defense topline. second, the results of the recession are still being felt in the budget today. receipts are still down. and spending is still up from the high level of unemployment. that will hopefully come back to normal over the next year or two. and then third, we've got a bigger entitlement bill. and so i think you got to try to
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find restraint in all those areas to bring spending down. i don't think it's likely to be down as low as it was in the late 1990s, because of the demographics. and because, quite frankly, i don't think the defense bill is going to be at that level again. but i think that we can bring it down, we need to bring revenue up. and i think we can get on the path to a balanced budget and fiscal discipline. >> let's pick that apart, though, a second. because of the three things you mentioned. one was revenue related, not cost related, right? >> well there are costs related to the recession, yeah. >> fair enough. on the revenue side. and then at this point, at least, and on the defense side, i believe defense spending at the end of the clinton administration was not -- was around 3.5%, 4% of gdp, which is about what it is today. and so, the real issue really is the third point, entitlement spending. which was something like 9-ish percent of gdp. and now it's dramatically higher and is growing higher still. isn't that fundamentally where the emphasis needs to be on both sides of the aisle? >> i think most of that is in health care.
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most of that is in medicare. there needs to be restraint in medicare. you know, my think tank put out a plan to save $385 billion over the course of a decade in health care savings. >> how is it doing? >> we're trying to be serious about that, largely through trying to produce better delivery with more delivery reform, more accountable care, more value based medicine. more special in the health care system. we got to bring those costs down. we also kind of -- we need to expect a little bit more from wealthier medicare recipients. so i think there's got to be balance in the plan. and i think that in the end of the day, that's what the -- a big deal is all about. it's trying to get, you know, find both sides come together on that. but clearly there has to be revenue in this. >> john, if the president calls you up, and said, look, i need your advice, where can we give, right now, if we have to give a little to make this all happen, what are the -- what would you be willing to offer up? >> well, you know, i don't think -- again, i think if you'd
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asked me that question on monday, i might have had a different answer. today i think he has to just wait to see what those votes are. and then wait for boehner to see if he's ready to come back to the tail. you know, there's been some discussion about, can you move the number from, you know, he's already conup from 250 to 400. could you go to 450 or 500? >> could you? >> could i? you know, i would regret doing that but, you know, i think that the fiscal cliff consequences are, you know, are substantial and would cause a lot of pain in the economy. so i think -- >> is 39.6 locked? could you go lower? >> you know, i don't -- again, they have to put the revenue on the table. if they want to come down from 39.6, how are they going to do that? are they going to cap deductions? they are going to, you know, we, again, my -- the way i would, i think, move is to convert deductions to credit so that you
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have equal basis across the income spectrum, equal value, as it were, between the wealthy and the middle class with respect to deductions. but i think they have to come forward with some ideas at this point. if the president just keeps chasing them, i think it's a, you know, it's a hopeless and endless and you're just reinforcing what we see now, which is a stalled process, and stalling out. >> hey, john, want to thank you very much for joining us this morning. and hopefully we'll talk to you again very soon as we continue to kind of see how things play out. >> i'm sorry you guys will have to work through the holidays on this topic. >> a lot of people will be working through the holidays. but john, thank you very much. great talking to you. >> all right. okay. coming up we're going to have more on the story of the morning. the northern stock exchange euronext in talks to sell itself to intercontinental exchange. both stocks are halted this morning pending news. we're going to bring you any developments as they come to us. plus, at the top of the hour, steve forbes, of forns media, he's going to be joining us for the remainder of the show. we're coming right back. [ male announcer ] how do you trade?
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u.p.s. hub in louisville, kentucky, with more. janet? >> andrew, good morning. this is crunch time for the delivery industry. here at u.p.s., it is the busiest delivery day of the year. something like 28 million packages. the volume is phenomenal. that's almost double what they do on a standard business day. and if you break it down by the second, by the second, 300 packages a second. and it's been such a mild winter, and here all of a sudden comes a big old winter storm rolling from west to east. they've got five full-time meteorologists here in louisville who have been watching the weather. they've already made some contingency plans to ensure that all these packages get to where they're going. for example, in des moines, iowa, they are going to divert the sort there, from there, where they're expecting 8 to 12 inches of snow, to here in louisville, where they've got their massive world court hub. the whole tenor and nature of the delivery business has changed with online shopping. peak period used to be about a month or so. now it's almost compressed down to a week as shoppers who used
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to be online shoppers about 20% of the business is now 40% of the business. and they're waiting till the last minute 237 so can you still get it there? absolutely. at least for u.p.s., if you ship it by tomorrow, next-day air, it gets there on christmas eve. much different from the past few years. and all these companies like amazon and zapos are now setting up distribution hubs closer to world court here in louisville so that they can fulfill customers' needs at the last minute. it's pretty phenomenal operation we're taking a look at throughout the day today. andrew, back to you. >> thanks, janet. joining us now to talk more about the boom in e-commerce one of our very special favorites, michael rube rn. >> thanks for having me. >> you are i said say the ceo of kinateic which owns rue la la, fanatic, and shopper. >> absolutely. >> well, first of all, how is business before we get into -- i was going to start talking about packages that are rolling out? >> it's been a great holiday for
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e-commerce. and that's been the steady trend every year. each year gets bigger and bigger. it's been a little bit different this year. >> because? >> thanksgiving weekend was the biggest percentage of sales on thanksgiving weekend than any other year before. we did 7% of our sales for the year and fanatic is our largest business, thanksgiving weekend. and then the last week or so it's been incredible. in aggregate, record sales. >> what kind of discount are you doing? >> we discount at fanatics on a very limited basis. rue la la, another business that we own, gives tremendous value to customers every day and gives great restaurants. but we're really, most of the merchandise has been full-price business. >> the reason i ask you, we have these guys from hukkster in this morning, they now have a service that literally allows you to put in a product that you want, and they will then go find the cheapest version and tell you whenever anyone lowers the price and i feel like in this new world, everybody just cares about the price. they don't care about the loyalty of actually going to a
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certain shop over another. maybe amazon with the amazon prime where you're locked in, that helps them, but after that, i'm -- i worry about it. >> know, my belief is that there will be a lot less retailers on this planet in other decade than there is today. but fundamentally, if you're selling third-party merchandise, which is what most retailers do, you're in a race to the bottom. and with tools like hukkster and so many tools online it's so easy to find out where the best price is. >> so then what happens? >> many retailers will go bankrupt. amazon will capture more share. online will capture more share. if you're selling third-party merchandise you're in a battle to lose. >> what do you think about the reverse thing that's going on here, which is there are people, e-commerce sites that are deciding they have to be in bricks and mortar one way or another? >> i'm not a big believer in that. we'll be more than $1.5 billion online in our three businesses next year. growing 30% plus each year. some of the fastest growing e-commerce companies in the world. i, it's not for me. >> what do you think? you haven't bought anything online ever.
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you don't even know where the credit card goes. >> that's the thing. i try to put it in -- i got it stuck where the disk goes and it doesn't swipe. maybe it's the card. sometimes the thing on the back -- >> if you went to fanatics, got a playoff jersey >> how big is that game coming up? >> it's a big game. for uss, it's rg3, rg3 and rg3. >> are you a steeler fan? >> what's the hottest product? >> rg3 is the number one selling jersey in the history. >> what is? >> rg3. >> we could actually just change the name of the company from fanatics to rg3 jerseys. >> what's the people upon a jersey? >> we sell everything at the profit prices we don't mark things up. rg3 to put it in perspective has sold, i think, we've sold probably more than 100,000 jerseys this year just of rg3. one player. it's been insane. >> have to leave it there. mike rubin. >> what's that? >> greco is very jealous of rg3. >> is that what his problem is? >> you see what happened to the
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giants over the weekend? >> they didn't do so well. >> the producer -- we've got to go. >> you think it's all about rg3. >> he's mad. he said let's get out of this interview. >> peyton manning is also pretty big. >> andrew luck. >> thank you, being equal opportunity. >> incredible, isn't it? >> it's big. they're doing great. >> quarterbacks make a difference. andy dalton. >> they sell a lot of jerseys. >> they do. but they make a difference. i mean -- i'm not even going to say it. >> sanchez. >> say it aloud. >> i won't say who some of the worst sellers are. >> oh, please do. >> i wouldn't say that. nobody buys. i could tell you -- >> last year -- >> put them on sale? >> last year, with complete transparency, last year tim tebow was our number one selling jersey. >> how about this year? >> he would not be in the top -- there's 1500 players in the nfl, he's not in the top -- >> do those go on discount? >> he's not in the top 1400? >> i'm embellishing. he went from the top to the
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bottom which is unfortunate. but it is what it is. >> wow. >> okay. >> thank you. >> we should pick some of those up for -- >> if you like you could send them for christmas presents for everybody at your friends, family, people you're not friends with. >> you can't unload? >> we actually have 20,000 or 30,000 -- >> you ordered too many? >> we might have. >> okay. >> we'll work on it. >> thank you. >> up next, ice in talks with nyse euronext for a possible deal. we'll talk to one of the top analysts on the street about what it might mean for the exchanges. i always wait until the last minute. can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery.
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welcome back to "squawk box." we have been waiting all morning for news pending on this potential transaction between ice and new york stock exchange euronext and now we are going to turn to richard who covers the exchanges. "a," first of all, surprise for you that this is happening? >> not a complete surprise. i mean, after duncan, you know, tried to do the deutsche bourse deal a year ago you know he believes in bigger, you know, exchanges to trade of a number of different products asset class. >> our own david faber reporting that the price tag $33 a share. are you happy with that? is that a fair price? should it be higher? should it be lower? >> yeah, i think it's fair for the nyse. you know, i know you talked earlier, the nyse stock i think was closed last night, or around
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24 bucks. so it's a premium. they're facing a lot of headwinds in your honor. you know, whether it be, you know, regulatorywise with changing, you know, rules over there in trading, and taxes, as well as the economic situation. so there are more costs on clearing costs that they have to come up with, as well. so this -- the price i thought was reasonable for the nyse, if it comes true. >> and just put this in context. you know, they tried to do this a year ago, with deutsche bourse, then ice, and nasdaq came before. where does this put nasdaq? >> nasdaq, you know, the deal really everybody, or what ice is interested in, is the futures business of the nyse. everybody thinks the nyse and cash equities but it's really the futures business over in europe that the ceo of eyes wants. so in regards to nasdaq, and cash equities, there's still sort of the, let's just say, not the favorite child right now.
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so i don't really think it does anything for nasdaq. they've been pursuing their own strategy to diversify -- >> is there a transaction for them? is there a transaction for the cme. is there a game of dominoes that's going to happen as a result of this? >> no. i don't think -- i say no, because this is a special deal that is very complementary. i don't think you'll see other exchanges coming in on the nasdaq. >> not on nasdaq. but i'm just saying more broadly. because there was talk, as you remember, a year ago, just seemed like every exchange was about to merge and then all of those transactions, for one reason or another, fell apart. >> yeah, you're absolutely correct, andrew. most of them were blocked because of antitrust or a lot of the sovereign, you know, country issues. this you don't have it. but with a lot -- if someone from outside the u.s. tried to acquire nasdaq i think there could be some political pressure. here you get two exchanges that fit complementary. >> real quick, duncan niederauer, our sense is he will
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not be the ceo of the combined company, maybe he's the chairman. we'll find out when the news does cross the wire, if it crosses the wire, what's your sense on that in terms of the management of this company? >> i strongly agree with david on that. i don't think if the deal comes together, i don't think duncan would be the ceo. jeff speaker is known as probably the most innovative ceo in the exchange industry right now. i think duncan, you know, i think that the deutsche bourse deal, i think he wants to leave the nyse a better, bigger place with a -- it's his legacy. but i don't think he will be, if the deal comes, he'll be the ceo. >> okay. richard we're going to leave it there. we thank you. and we will await this news, and hope it comes soon. still to come, we've got steve forbes, the editor in chief and chairman of forbes media. he's going to give us his views on the fiscal cliff. he's in "squawk's" green room prepping for his appearance as we speak. and then, looking for a last-minute present? i know i am. how about one of these mcclarens? they start at about $225,000.
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president obama pushing for republicans to accept his debt proposal. >> take the deal. >> but the gop firing back with plan "b." >> the house will pass legislation to make permanent tax relief for nearly every american. >> we'll ask steve forbes which side will blink first in this high stakes game of political chicken. a deal that could end more than 200 years of independence for the new york stock exchange. the latest on merger talks. >> are you procrastinating on your christmas shopping? the mcclaren automotive is here with some last-minute gift ideas for that special 1%er in your life. the third hour of "squawk box" starts right now. ♪ i want to be a billionaire so bad ♪ ♪ i love the things i never had ♪ ♪ i want to be on the cover of "forbes" magazine ♪ >> welcome back to "squawk box" here on cnbc. first in business worldwide, i'm joe kernen along with becky quick and andrew ross sorkin. amazing.
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twelve hours. twelve hours. i mean as sick as you've ever been and then -- >> never felt worse. >> what would you rather have, the week of feeling sort of crappy? >> i would take the twelve hours. as someone who was ten days. >> during those twelve hours. >> actually i don't want it. now that i've gone through these last 10, 12 days. >> who would have thought i'd like pedialyte, by the way. >> our guest host this morning, who hasn't had it yet. >> shake your hands first? >> yeah. >> harry wilson. he's going to have his entire digestive system restructured. he was a member of president obama's auto task force. he's currently chairman and ceo of the maeva group, and a yahoo! board member. pretty good for yahoo! was that your idea? >> dan's idea. >> more from him in just a minute. first here's your morning headlines from becky. >> our david faber reports ice and the nyse are in merger talks with the potential deal valued at roughly $33 a share.
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for nyse. shares of nyse euronext and intercontinental exchange are halted pending news. hmm, wonder what that news might be? the transaction is expected to be funded a third by cash and the remainder by stocks. the numbers put the price tag at about $8 billion. possible merger between the new york stock exchange and intercontinental exchange brings up regulatory questions. two big exchange mergers in the last year were opposed by regular laters. joining us is former s.e.c. chairman harry pitt. the current ceo of cal rama partners. this deal is a little bit different, correct? this one might past with muster? >> yes, i think this one has a fairly high percentage of likelihood of passing. doesn't raise the same problems because of the antitrust issues that really defeated the last several efforts. >> but the interesting part here is what it really says about equities trading and how that business has really changed
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drastically over the last decade or so. >> it does. and also what's happened to the new york stock exchange, which has effectively become a wasting asset. it's kind of sad to see what was once the premiere exchange in the world now selling for what is a relatively low price compared to historic value. but it does mean that equity trading is not the wave of the profitable future. that really belongs to derivatives and futures. >> is this just something that happened because of what's come about with the machines? the rise of the machines, fewer people on the floor, how margins have been compressed? is this something you could have seen happening ten years ago no matter what, or something that could have been or should have been done to change that? >> well, i think it's a combination. technology has changed the landscape, and i think that before the regulators were able to digest all of the
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technological changes, the market it place had changed. and trading in volume for equities securities has largely left the new york stock exchange, which has become more of a forum for small transactions and dark pools have become the forum for larger transactions. >> you know, harvey, you raised some interesting questions, at least in the notes that i've seen on this, that when you look at a situation like the ice acquiring a much bigger nyse, what does this tell you and what concerns do you have about this process? >> well, i would analogize it to the conundrum of the dog that chases cars, and the question always arising, what would the dog ever do if it caught one? ice is a limited franchise. it's been growing rapidly, and it's obviously well managed. it does not appear to have any real interest in the equities
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business of the new york stock exchange, and so we will see, i think, in subsequent transactions the nyse cut down to size, and the equity business spun off. >> what do you expect to see from the s.e.c. in terms of how they would weigh in on this deal? >> i think that the s.e.c. is going to examine this in terms of ensuring that those who rely on the new york stock exchange's regulatory apparatus continue to get the value of that apparatus. but years ago, most of the regulatory functions of the nyse were spun off anyway. and at this point, i think it will likely be a fairly pro forma approval. >> harvey, i just want to go back to this idea that you're suggesting ultimately the equity business gets spun off, which means ultimately i imagine the floor gets spun off, since that's what it represents, in so many ways. if it gets spun off, what does that mean? where does it go?
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is that a merger with somebody else? how do you think about that? >> the difficulty is the most logical buyer, and the one that's been trying to acquire it is nasdaq. the question, i think, is whether the antitrust authorities are going to allow that kind of merger, because it would create a behemoth of equity trading in the u.s., on exchange markets. so i think the question's going to be, who will buy this equity business? but i think there will be a lot of buyers lining up eventually, particularly from overseas. >> the value there, though, just on the brand, and the floor, is not there. you would think that would maybe be an enhancement of some sort to somebody else like an ice? >> the value is in the name. but i think this transaction is the first step in ultimately putting the final nail in the coffin to what that value is.
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as i said earlier, it's been a wasting asset, and this transaction will make that a reality, i think. >> all right. harvey, thank you very much for joining us today. appreciate it. >> my pleasure. >> let's get a check on the markets. we've been watching u.s. equity futures and they have been indicated higher this morning after a bit of a sell-off yesterday for the dpau. you saw it down by 90-plus points yesterday after some big gains on monday and tuesday. this morning you see the dow futures indicated up by about 43 points above fair value. s&p also four points higher than fair value. overseas in asia, a little bit of a sell-off in japan. remember, though, the nikkei did see some massive gains the day above. in fact closed above 10,000 on wednesday for the first time since all the way back to march. overnight it ended up closing down by about 121 points, or make that tuesday. wednesday was the sell-off. where am i? no, no, no, wednesday was the big move up, thursday was the sell-off. they're 12 hours ahead of us. in europe at this hour you can
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see that there are barely any gains anywhere across the markets. relatively flat for both the ftse, the cac, and for the dax, saz well. again, all of these kind of waiting to see what happens in washington. >> things got derailed and boehner today is going to -- we're going to have a vote in the house on the plan "b," which would, you know what that would involve, things kind of got retailed this week. i don't think i've talked to steve forbes in quite awhile. steve, it's great to have you on. everybody knows who you are. a lot of people, you know, since november 6th. there's usually seven stages that happen to people. shock and denial and then there's a lot of pain, usually, then there's some anger, there's blame, there's depression is usually number four. but eventually, there's reconstruction, and then finally acceptance and hope. and i'm just wondering where you are in this stage right now, because i'm going to posit something to you. john roberts threw obama care
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back to the american public, said it's up to you. it's going to be the law of the land now. it's more of entitlement. it's going to be a huge, additional entitlement. all these other entitlements you could argue that people want these. and that if we're going to keep these, we're not paying for them now, even if we cut back on them, we're still not paying for them. so we need to pay for them, the election decided that. no? >> the election decided was the public doesn't know where this country should go. >> you know, steve, that's what john harwood used to tell me about obama care. that they didn't know what was good for them. and it's bad when you tell people they don't know what they're doing because they don't understand it. >> they on one hand re-elected the president. on the other hand they re-elected a house of representatives which is against tax increases. and this whole debate right now shows that the republicans lost ground from the get-go after november 6th by letting the democrats define the terms of the debate. when you have southern europe going into severe recession, france and germany about to go in recession, japan already in recession, our economy's beginning to wobble and will
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wobble early next year, putting an any kind of tax increase is absolutely preposterous. you haven't done something so foolish since the early 1930s when every country raised taxes as their economy started to decline. the republicans should change the terms of the debate. for example, they should have just throw it back at the president, how -- pass a bill in the house saying you can't use medicare money to fund obama care. love to see harry reid block a vote on that one. and how about the no changes in benefits for medicare and social security. the white house is quite willing to throw seniors under the bus under that. so the republicans should have gone on offense, joe. >> i can't tell where -- i'm going back and looking at which one of these. you're somewhere between denial and anger i think, still, steve. you have not reached acceptance. >> acceptance of hurting an economy -- >> i know. >> is not what the political -- bob novak, the great political -- >> don't the american people deserve this? they want their entitlements, we've got to pay for them. >> there are various ways you do
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entitlements. for example on the social security, you don't have to change any benefit formulas, including cost of living for those on the system, about to go on the system. for younger people you can introduce a new system where you own your own personal accounts, turn liability in to an asset. in terms of delivery of health keir. we assume the current system is going to last forever. we need a new consumer oriented approach to health care. >> the people they elected aren't going to do any of these things, steve. >> because the primary republican candidate, mitt romney, for all of his great virtues, did not put forth the way ronald reagan did sharp alternatives to what the president was proposing. so they got to define it. >> maybe we need to -- >> but does anyone really here think that it's going to help the economy -- >> no. >> -- taxes. >> maybe we need to see, once again, be reminded of what happens when certain wrong-minded policies are actually put into -- and we end up where we were in 1980. >> what it is the republican party, bob novak, great bob
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novak, great political journalist, said god put the republican party on earth to cut taxes. if they don't do that, then they cease to have a useful function. if the republican party can't have a pro-growth agenda and learn to get -- learn to put it forth in a way that -- >> boehner already gone too far in your view? he's already gone too far with what he's offered? >> since he hasn't put anything positive on the table he's stuck with what he has today, and what's going to rescue the republicans on this is the president refuses to accept their surrender. it's like, you know, on the missouri after world war ii. >> a lot of people have said that. he's refusing to accept the surrender of the -- of john boehner. >> i've heard that. is there ever a time where you think taxes are appropriate? >> not when you have a weak economy. >> so if i told you in three or four years from now the economy was getting better, would you come on this broadcast and say you know what, i'm willing to go a little higher because i see some of the issues that we have? >> the way you raise revenue is with a vibrant economy. the tax burden on the american skhe today is now too high.
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we're stuck in at best a 2% growth mode when he should be growing 3, 3.5% which we go for 200 years. we see what's happening in europe. we see what higher taxes have done there. japan's been a binge tax increaser, raising their top rate, doubling their national sales tax which is why the government got thrown out. so why should we put the same poison in our system? i mean we know from the early '80s the way to get an economy moving. and the other things that hasn't been mentioned at all, because it's such complicated subject, is monetary policy. a stable dollar. >> when you say the early '80s, and clearly the market went on a run, but if you look at some of the employment issues in this country, there are people who would argue with you, about the early eight if is and what ultimately happened. and the inequality issues that resulted, and the hourly wages that came into -- i'm just making, just putting it out there. >> the united states, the largest developed economy in the world, grew at a 50% rate higher than the developed economies of weste
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western europe. >> absolutely true. >> job creation and everything else. in terms of wages, health care is going out of control because we don't have real free markets in health care and that's taking up more and more of the wage bill that normally would have gone in to cash wages. so if you don't get consumerism back in health care, that thing is going to consume more and more. because we don't have free markets. >> so you don't think that just to say that if you want to live like europe, if that's what you want, that's what, you know, like you deserve to get it. that's -- the conclusion you can come to, with what happened in that election is, okay, you've made your mind up, american people, now here's what you're going to get? you're not willing to say that? that's the acceptance that i'm talking about. >> no. when you don't have a party that puts forth a good, stark alternative, positive optimistic alternative -- >> harry said the same thing. >> the way reagan did in the early -- >> you don't buy -- you think the country is still center right? >> -- people were confused by this campaign is that the exit polls show most americans don't believe in big government.
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>> but they don't want to give away any of their entitlements. >> they want reform of entitlements. in terms of social security -- >> they don't want to reform someone else. >> they paid and paid and paid into it -- >> they want someone else to pay the taxes. >> on social security and medicare, the deal they were told was, you put in money during your working life, you withdraw it when you retire. the fact the federal government botched the funding of it, in a scandalous way, is not the fault of the american people. >> a lot of people take a whole lot more out particularly if you look at medicare. something like four times the amount that you pay into it. >> that is the crazy way washington financed this thing. and their positive reforms of medicare would deal with that. and instead of trying to take benefits away now, let's change the health care system pep >> but nobody wants to see something like, when you ask polling, they go crazy about the idea of raising the retirement age by a year. >> but you don't have to take benefits away from anyone who's on the system. the key thing is -- >> no you don't. >> change the system for younger people. >> but that is the thing that doesn't poll well, either.
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which i can't believe. people go crazy when you say you're going to raise the retirement age by a year, 35, 40 years down the road, which is what simpson-bowles did, and people went nuts about that. it's not going to affect anybody. >> when you go before an audience of young people and ask if they think they really go to have medicare and social security. they don't think it's going to be there. so if you put reforms saying this is going to give something for you by changing the system today. >> look at aarp, though. >> aarp, yeah, they're in bed with the big government. >> yeah. >> so you won't tell me which stage you're at? i tried to bring you to my stage. my stage is acceptance. because i see what's happening. i've been through all the other ones. >> i'm staying away from psycho babble and focusing on pro-growth. >> you're in anger and denial and shock still, i think. >> oh, joe, i'm on goodwill for all men and women. merry christmas. >> okay. >> coming up, taking the pulse of holiday retailers. the ceo of chase card services going to tell us how this year's shopping season is shaping up. still ahead, "squawk" goes
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welcome back to "squawk box" everyone. take a look for shares of eloqua this morning. this is a marketing firm which is currently halted at this point. $17.92 was the last trade. a little over four months after going public this company is being bought by oracle for $23.50. the company went public on august 2nd at $11.50. total value of the deal is $871 million in cash. >> wonder why they didn't want to try to buy that company before the ipo? maybe wanted to see how it worked out. let's get a check on holiday retailers. chase holiday pulse tracks average ticket prices, transactions volumes and sales volumes each year. how is 2012 shaping up and where are people shopping? joining us chase card services ceo eileen serra.
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>> good morning. >> it's all e-commerce. that's what we keep hearing? >> that's right. it will be chase holiday pulse tracks all of the aggregated purchases from 50 of the top online retailers and look at things like average sales per day, transactions and cost per transaction. what we're seeing is continued really strong growth in the online channel. consumers love to shop, in their homes. >> and so are we seeing a specific days? we always talk about black friday. now there's something called green monday. there's cyber monday. are those the days? are we seeing it in different way now? >> i think what we're seeing is those are really strong days, but what you see is the beginning of that week, and the end of the week, it's really broadening. so just to give you an example for black friday we started seeing very big uptick in sales on thanksgiving at 6:00 p.m. so it's not just friday, it's beginning thursday. same for cyber monday. >> so bricks and mortar, big loser in all this? >> you know, not really. you still see continued strength in the brick and mortar stores. retail federation estimates 4% growth this year, versus online,
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which is about 12% growth. so i still see, you know, value in both channels. but consumers love the convenience, the ability to price shop and the great deals you get in the online channel. >> explain this to me. average ticket prices continue to go down. while sales volume and transaction volume continue to grow. what's happening? >> i think it's about one word. free shipping. if you think about it, in the past, you know, there weren't as many free shipping offers. and consumers when they start to think about their shopping, you know, a lot of people don't want to pay when they can drive to the store. and more and more retailers have both provided free shipping, but also have reduced the threshold with which you get free shipping in terms of your purchases. >> what's going on there? is that cutting into margin? is there a deal they're baking into the cake with u.p.s. and others? how is that happening? because i see it all the time. i use it in my own shopping. >> i'm not a retailer so i don't know how they thought about their economics overall. i just think there's such an incentive in creating loyalty in
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that online channel. think about it, you shop online. you know a lot of information about that consumer. so i'm sure retailers factor that into their economics. >> last piece of this. the social piece. i'm thinking of twitter and facebook and a lot of these deals that you keep seeing. i keep seeing flashing across my screen one way or another. is it actually working? >> you know, hard for me to say if it's working. what i can tell you is consumers more and more are sharing the offers that they get. so it's very common to see a consumer go to facebook or twitter, like a retailer, and then if they get the special offers they share them with their friends. that's part of the socialization of shopping. so i think, you know, i would expect we'll continue to see that. >> eileen, we're going to leave it there. thank you so much this morning. >> thank you. >> you buy stuff online? >> all the time. >> everything. >> amazon? >> amazon a lot. but, you know, i almost do almost no store-based shopping. >> wow. >> hmm. >> even this time of year. >> we have some breaking news. david faber standing by with the news that i believe he broke yesterday, now coming to
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fruition. >> we had a lot of details on it, that's right. to be fair, others as well were on top of that story. it is now official the nyse is going to be purchased by ice. that upstart, if you will, of a number of exchanges. only went public back in 2005. the deal worth about $33.12 a share if you're keeping score at home. of course that will change depending on how ice shares open this morning. it is 0.17 of those shares plus $11.27 a share in cash equating to again about $33.12. $8.2 billion deal under way the nyse will become a part of ice and nyse shareholders will own 36% of the combined company. given it is one-third cash, and two-thirds stock that will be delivered to those nyse shareholders under this agreement. an agreement, by the way, that does provide a significant premium for those shares. a bit over the 52-week high. but a lot more than stocks are
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trading in. only yesterday, as you see from it the earps that we now have for you, are on the deal. as for some other specifics, what we like to call social issues, jeffrey sprecker, the current ceo of ice will be the ceo of the new company. duncan niederauer will be president of the new company. i'm saying new company because it's still unclear, at least, according to my sources, what they're going to name this thing. duncan niederauer also i'm told will be ceo of the nyse as a part of ice. and you will have what i'm told are dual headquarters. most of the operations, my understanding, will be in atlanta. but at the end of the day you do want to appease the politicians who are very, very sentimental, of course, as you might expect, and focused on the nyse. the trading floor itself going to remain as-is. they are talking about earnings, or i should say synergies, cost synergies as much as $450 million. they expect that to be achieved
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by the second full year post-closing so that will take place over about three years. they expect to close this deal, perhaps second quarter or so of next year. again what we're hearing is 80% of synergies will release closing. of course they're talking about significant savings on technology, clearing, duplicative expenses, things of that nature. but one would have to imagine there are also going to be job losses associated with this, as well. unclear where those are going to come from. but when they talk about synergies of that size, that's what you have to believe. synergies driving a lot of the positives of the deal, as you might expect. it will be interesting to see how ice shareholders respond. because, as i pointed out earlier, this is a fast-growing company that gets a higher multiple than does the nyse. it is now going to become, perhaps, a slower-growing company than it had been. so you have those significant cost synergies, but you do wonder whether the multiple may contract as a result of slower growth, guys. >> david, real quick. it says here ice intends to
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explore an ipo of euronext as a content for european based entity following the closing acquisition of market conditions exist and european policymakers support the offering. can you explain that? >> that is, you know, euronext, those other exchanges in europe, they -- it's not an antitrust issue. it just doesn't quite fit is what i sort of picked up, andrew. and so that would be the strategy they're going to at least try and embrace if they can. taking that thing public. we have some other questions, hat happens to the nasdaq which failed in its attempt to buy the new york stock exchange after it had agreed to a deal. >> we've got ten seconds. all right. >> i'm done. >> thanks, faber. >> all right we'll see you. coming up breaking economic data. weekly jobless claims plus the final read on third quarter gdp. . mmmm tasty. and cut! very good. people are always asking me how we make these geico adverts.
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welcome back to "squawk box." yes, we have data. and yes it's a little bit old. this is our third walk around the block on third quarter gdp, and, of course, jobless claims. gdp actually gets an upgrade. even though we're finishing up the fourth quarter, and a month from today we'll have fourth quarter gdp, 3.1. 3.1 upgraded from 2.7. so we have a three handle, and i think we should all take a
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picture of it. might be awhile before we have one again. consume sun, 1.6. you know, this the consumption number is highly important, and a couple of ticks better than we were looking at on our last look. now as we look at the price index, that hasn't been revised at all. that hovers at 2.7. the personal consumption expen expenditure nailed down at 1.1 as well. jobless claims moves from 344,000 up to 361,000. so we're looking at up 17,000 on initial jobless claims from a slightly revised number originally reported at 343,000. let's look at a little bit different time reference on the continuing claims. that is 3.125 million, in essence a drop from 3.21. our last look. so that was really kind of a surprising jump on gdp. surprised me, i'm sure there's inventory issues that put it
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there. the dollar is big talk today, of course, as we actually see a day where the dollar isn't doing better against the yen. and of course, there was no target on inflation, but it's just a matter of time with regard to the bank of japan, and what they have done on the second day of their two-day meeting. back to you. >> wow. rick, i'm with you. the three handle on gdp. that is something else. >> yeah, i wish my blackberry could take better pictures because i don't know that we're going to cut this baby in half, i think, when we're looking about one month from today, you know, close to it when we get our first look at fourth quarter gdp. >> didn't know how good it was when we had it. rick, thank you. >> that's right. >> great to see you. when we come back we'll have more from our guest host harry wilson and mclaren is here with some stocking stuffers just in time for the holidays. these stocking stuffers will set you back at least $200,000 apiece. if anyone on your list has been nice enough for a mclaren 12
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spider, well, like to hear what they've done this year. we're going to talk to the company's managing director at 8:40. covered call strategies to generate income? with fidelity's new 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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it's official, nyse euronext and ice announcing a merger.
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the deal values nice at $33.12 a year. it's a cash and stock deal as we've been reporting. and ice says it's committed to preserving the nyse euronext brand and the nyse building in new york. >> well, that's good to know. let's get back to our host host this morning, harry wilson, chairman and ceo of maeva advisers. he's a former senior adviser to president obama's auto task force. we've had debate on twitter about some of the things you said earlier about gm. the idea that a million jobs could be lost, people have taken issue with that, saying there was only something like 200 something plus jobs there, even if you add up the auto parts manufacturers, it still was only 650,000 jobs at that point. excuse me. >> you don't have a cough -- >> i don't, i have a wireless mike. everybody gets to hear all of this. there have been a lot of people who have taken a lot of debate
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at this point. we're also part of this auto task group. would there have been a problem just letting them go through normal bankruptcy? >> it did go through bankruptcy. done through a chapter 11 process, which happens all the time. so that's a misunderstood concept. >> you know what the question is. >> the fundamental issue, and this is -- >> instead of government involvement. >> this is the part mitt romney really screwed up. i said this many times, there was no private capital available in 2009. >> veteran position. >> we tried everything we could, every bank we could, every equity firm we could. the hedge funds -- >> it wouldn't have been liquidated. >> it would have been liquidated. >> other car companies would have bought the facilities? >> we tried. we had conversations with potential buyers, including ford. no one was interested. no one had the capital because they didn't know where the bottom would be. >> things are worth something. once the fear of the financial crisis had papsed -- >> what you don't know is how long would that have taken. right? if we were at a point when s&p
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was at 660 and then you saw gm start to liquidate? where would s&p have gone? what would have happensed to the financing markets? no one knows the answer. the reality was in march of 2009 no one had the happen to do the financing, and only would have gotten worse. >> in a perfect world you don't do things like this. >> of course not. in a perfect world you don't end up with -- >> right. but companies, you know, you can't succeed if you can't fail. unfortunately. >> no, no, but that's the other part of the story misunderstood. people did fail at gm. all the stock holders got wiped out. entire management team got replaced. half the board got replaced. >> but the complaint that comes back is they were dealt with too generously. the loss carried forward. should they be allowed to have held those loss carried forward which puts them in a much better position competitively. >> the people who were parapasu, overwhelmingly to approve the deal. literally overwhelming.
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>> ironically no one talked about it then. because no one thought they'd ever make a profit. remember everybody said it's never going to work. the company will fail within two years. two years they had record profits. >> so it would have -- it was a situation where we didn't think about this and if we had maybe we would have taken that part off the table? >> i'm just saying, it was a side issue relative to the overall deal. >> would you have done that piece of it differently? >> out of -- i don't know. at the time treasury owned 61% of the stock. the fact that gm had a tax benefit didn't matter that much. but ultimately it's just a side issue relative to the fact that somebody's doing $15 billion. close to $15 billion of ebitda and that's really ultimately the testament to its financial wherewithal. >> hmm. >> when he says it you have to almost believe im. >> i opposed the chrysler deal. the president went forward with that.
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that was because i thought on the merits -- >> you're not a democrat. so you're not just going to rubber stamp all the -- >> right. >> in fact you're a republican. >> exactly. >> all right. harry, thank you. we'll have a little more with harry still to come. >> coming up, "squawk" goes behind the wheel with mclaren auto motive. i think leno has some of these cars. we will show you, big car guy, you know that, you heard of him, jay leno? >> i know. >> we're going to show you that the car that's been described as seven-figure technology with a six-figure price.
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i probably shouldn't even say the "f" word, ferrari.
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>> you can say it. >> i can? >> mclaren is calling one of these cars behind us the ultimate supercar. it's a concept car but i think it's almost done. it's the long-awaited -- it's an f-1 successor. >> right. >> and it's making its debut in the u.s. this week. the company showed off the p-1 to a select group of clients last night and now we have it right here at cnbc headquarters and we've put them in order. that's it there, is it not? >> that's correct. >> sneaking around. it's a total secret in there and i accidentally rolled down the window. they came running over and rolled it back up. >> this is mclaren's managing director, anthony sharif? or sheriff? >> it really is sheriff. >> tell us about the p-1. we can't buy it yet? >> no, you can't. but it's going into production next year. it's alled p-1 because when you qualify in pole position or you win a race you're in first position which is p-1. it's the successor to the
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mclaren f-1 which is a car we made 0 years ago. back then it was a million dollar car. now an f-1 is selling at auction for $5.5 million, $6 million. p-1 goes on sale now. we're talking about an order a day for people who are putting down deposits and we're soon going to be run out. >> what's it cost? >> $125,000 initially. >> you won't tell us what it costs. >> it will be over a million dollars. >> under $2 million? >> under $238. >> tell us about it. does it -- i'll ask for you. does it come with a -- an automatic transmission or is that -- >> it has a seven-speed dual clutch transmission which you can press a button and it's fully automatic. >> i can drive it. >> i'm going to go stand by it. because you can't understand how low this is to the ground. >> we're not saying how many horses. i've got a lot on my tie. >> a lot more than that. >> over 500. >> look at this. >> well over 500. >> under 1,000? >> low. >> can't say.
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>> could be 1,000 or more. does it -- how does the door open like the other ones? >> you're not allowed to open the door. i just made a big mistake. >> we can't see the interior at all then? >> you can get down here. >> it takes technology that we used in our formula one race team and brings it to the road and to the track. this car will be the quickest car around the track of any production car ever made. >> i'm amazed at how low it is to the ground. it comes up just past my knees. >> can you tell me zero to 60? >> i can't tell you any of the performance numbers. >> why the tires have no tread? >> that's just for the show car. we made those especially -- >> so i shouldn't drive that in the snow. >> the brakes that you see which look like a mirror, those are actually production brakes that have already driven about 1,000 miles. this is technology that we can't talk about but is yet to be used on an automobile. >> that's an amazing looking -- there's no back seat. >> are those windows legal? >> no, they're blocked out so you can't see the interior. >> this is one we can afford,
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probably, andrew, if the entire company were to -- >> i love this. >> this is my favorite part. >> get into it. >> sit down? >> so this is the 12-c spider. we're just launching it now. this is one of the first cars to hit the u.s. but they're coming. we've got a nice long wait list for the car. and this has all of the technology and performance that the coupe ash a has and crucially because we have a carbon fiber construction the rigidity is the same as the coupe. so there's really no difference between driving the spider as driving the coupe. that's unique. >> you can press a button and what does it look like? if you press a button, put the top -- or do you need to actually put the top on? >> no, no, no. it's fully automatic >> can i press it? >> yeah, you can try. that one -- >> which one? >> the thing that looks like a window switch. >> this? >> yeah, yeah -- >> oh, no no! >> pull it up. >> here we go. >> it's an ejection seat. >> there you go. >> wow. >> a little over 600 horses? >> now will it keep going?
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>> you've got to keep pulling. >> i'm pulling. >> it's a 616 horse power. over 200 miles an hour. >> see that is cool. because that's a convertible that doesn't look bad when you put the -- it looks like -- that's cool. >> the best thing is you can actually with the roof closed you can open the rear window, and so with the roof closed you can -- >> what is this going to cost andrew? >> this is about $260,000. >> $260,000. >> and that's -- you get everything with that? >> no, that's the base price. but it's a bargain compared to the p-1. >> it is a bargain. you call it a coupe? >> yeah. >> i was just pronouncing coupe my entire life. >> coupe, however you like. this will be on sale for just over a year. we've delivered over 600 in north america so far. it's a huge success. it's the quickest car in its segment. it has a carbon fiber construction. a lot of formula one drive technology. 0 to 60 in about three seconds and a quarter of a mile in under
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11 seconds. >> you said you can roll down the back so you can still hear the engine. must be a really cool sound, right? >> you sure can. let me finish closing up -- >> the back? >> yeah, andrew, you had to keep your finger on that thing. >> here we go. >> might open now. >> open up. >> that's okay. we can open it and start. >> yeah. >> all right. >> i'll back up with my mike back here. >> wow. >> it's pretty. >> i think you're talking to me telling me we need to go, right? >> we do need to go. >> can't hear. >> you square for the quality, not at the quality, i mean it's not going to be like some british car where you got to drop the engine to change the wiper blade, right? >> you make this car in our technology center just outside
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of london, the same place where our formula one cars are designed and built. >> great, thank you. >> thank you very much. >> great to see you. >> when we come back we're going to head down to the new york stock exchange and talk a little bit more about the ice buying nyse. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide.
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welcome back to "squawk." bill acman says he is shorting shares of herbal life, calling it a pyramid scheme. today, he will be outlining his argument at a presentation in new york. herbal life ceo michael johnson responding yesterday on cnbc. >> this is a legitimate company. mr. acman's proposition that the united states, better when herbal life was gone. the united states would be better when bill acman is gone. >> off to see bill acman's presentation after the show and sit down with him after his presentation for an interview you will see during the "fast money" "halftime report." >> ask him, honestly, bill acman for his opinion on whether any of the stuff that herbal life actually sells -- i know it doesn't hurt you, but is there anything -- i shouldn't get involved? whatever it is, it has been
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around for a long time and been could controversial the entire time but still around. so i mean -- >> i will ask. >> are there positive things -- i'm sure he will have an opinion. ask faber or cramer. >> stock exchange, jim joins us now. wanted to talk to you about the -- herbal life. >> ever taken it? what are you on, jim? you on herbal life? >> you like the ceo. >> i think michael johnson is a passionate man, the ceo, a strong case for his company. no one wants to hear a guy is going to come on tv and tell you why he is short and give you a preview of short the day before knock it down, make accusations about puts and whether acman bought puts, always good to asks. i think acman says he didn't this is a real battleground. there are people, including herb greenberg, always looking into what the company does, whether the product ends, how much ends with the consumer versus how much it ends with distributors.
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you know what look, i think this one is unless you have a smoking gun that can prove definitively this stuff does not end up with the consumers, i think it is he said/she said. >> herb greenberg. looking at herbal life a long time. >> done the best work on it, i really want to defer to him and doing a special on it. but this is really one of the most impassion deed baits i have ever seen. i thought michael johnson showed great faith when he came on our air during street signs and laid out why he thinks it's a good situation. obviously, the ceo, but his attack on acman and acman's attack on him is he said/she said. very interesting. >> the founder or owner die or something? what am i thinking of? you remember long ago? >> yes, he did. >> been around a while. johnson came from disney. he is -- david to just got here, i know the nice is probably nyx is a bigger deal. herbal life is without a doubt
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one of the truly great first day of the battleground that i have ever seen and would advise individuals, be careful, this one is too hard for anybody to navigate. >> faber is more -- more familiar with another type of herb i think. no, i'm kidding. >> whoa. >> that's the pot calling you the kettle black. >> touche. >> don't go anywhere. >> going to put a couple of cubes over ice in -- >> in my bong? >> in your bong? wow. >> that is not a bad idea either. the last word from guest host harry wilson. "squawk" is back after this. i always wait until the last minute.
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can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery.
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welcome back to "squawk," back to our guest host, harry wilson, for the last


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