Transcripts For CNBC Squawk Box 20100107

good morning. help wanted. but don't wait until tomorrow for the jobs report. we have key information today. steve bomber officially opens the consumer electronics show, exciting new products and partnerships. cold freeze, frigid temperatures gripping much of the country on this broadcast. massive amounts of money and crops are on the line in places like florida as "squawk box" begins right now. good morning, everybody. welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. as joe said, another day, another important release of that employment data. we're going to get employment data coming out today at 8:30 eastern time. polled economists out there they expect the new filings for benefits to rise slightly. maybe up 8,000 to 440,000. we are building up to tomorrow's reports. the dow jones survey is predicting that the economy lost 10,000 jobs last month. but there are some forecasters who are looking for an increase in payrolls and that's going to be a key that the markets are watching and trading on. >> so a little like the football playoff webs you know, all of these numbers sort of giving you a clue as to who might wind up in the final game and how the final game might go. >> and also people betting on both teams. yesterday we had -- everybody else was saying, look, minus 12,000, that could get positive for november. it could get more negative. >> that's right because she pointed out some of the seasonality issues and some people were worried that the good numbers we got at the end of the laugh year were seasonality issues. and they said, hey, it's been close in chicago and that means a lot of people who would have gotten these temporary jobs didn't get them. >> and the improvement in december was so drastic that maybe we spiked too high. >> if we hit a downward revision in november and a big negative number in december, that would be disappointing and i think the markets might be in for a little bit of a re -- you know, they might say this isn't -- >> unless the dollar weakness follows, it's lower for longer? there is that trade out there somewhere. >> right. that -- but you know what finally happens to drug addicts. >> we want to get out of the hospital, right? >> yeah, we do. you know, it was cold in chicago. what about st. louis? >> the city of st. louis, joe, funny you mentioned, st. louis fed president jim -- wow. >> you can't be trained for the -- >> no. says the u.s. labor market is improving, predicting the economy is close to when the unemployment rate will start to fall. bullard is a voting member of the fomc this year. he argued that housing prices are stabilizing and housing starts will soon no longer be a drag on growth. >> not everything happening just here. also on the economic agenda this morning, a rates decision from the bank of grnd. the announcement is expected right at 7:00 eastern, so about an hour from now. the central bank is seen holding rates steady at a record low of 0.5% and maintaining that country's version of quantitative easing. meantime, overnight china central bank tightened its grip on liquidity. it was a surprise move, wasn't expected. the auction yield of three-month bills for the first time since mid-august and the move is a significant step up in liquidity tightening. unlike a lot of countries, china keeps having to worry about things getting too hot, not too cold. the world has a problem being too cold, but too cold economically. >> back here in the united states, we'll get results of retailers reporting all day long. one index was sales of stores open at least a year is expected to prize by 3.2%. costco is the very first out of the gate this morning. the company's comps are up 9%, better than the 7.9% increase the street had been expected. we're going to talk to a long time retail analyst and a friend here on squawk. dana telsey, in just a few minutes, would he tell we'll get her prediction on what we can expect through wrought the morning and 2010. >> meantime, let's get a check on the markets today. the dow didn't do a lot yesterday. but you know, despite sort of the modest numbers on the headlines -- >> that's two days in a row. >> yeah, i know. but there was sector rotation going on. financials are doing pretty well. >> tech has been choppy, right? >> ces has been -- >> is that true that the adult video thing depose on at the same time? >> it did last year. >> and right across the street. >> right. >> so the geekky nerds are heading over there with their -- >> they're going over looking at these gadgets over here. and then the other place, they've got all these other gadgets. what if they got confused and they're -- they walk in the wrong -- i mean, it's just weird every year. you know, we are on. this sounds like our conversation before the show. >> that is truly when it's -- v avn, i think it's called. the all video -- >> weakness in some of the asian markets and in europe, as well. a lot of that coming out i think almost -- >> well, after talking about those -- >> you don't think there's no connection between technology and the migration to new things and -- >> you think there is. >> pornography drives technology. >> dve, blu-ray, the internet. bandwidth, on and on. >> it's darwinian, is what it is. >> but don't think there's no connection that they're out there at the same time. >> when the internet first took off, there were three big arenas where you could make money. one was sex, one was sports and one was stocks. those were the three arenas where you could charge people content. . >> but i don't think you can charge people -- i mean, it's never going to be -- okay. but it's never going to be. it isn't. even though it's side by side with ces, it's still going to be -- it's still a freak show. >> it is. it's a freak show. let's talk about some of the weakness in the markets. the dollar strength has done commodities in this morning. oil down across the board. ten straight up days, but even with bearish inventory numbers yesterday, the 10-year note, the two and the 10-year spread is once again the highest in almost 20 years. the fed minutes came out yesterday and obviously, they don't even know how to strategize some of these mbs purchases. there's a look at currencies. 92.97, dollar/yen. the new japanese finance minister says he thinks 95 is a good number. >> let me jump in to see if there's anything in the e-mail. >> we can ask for comments, questions. we'll get some. now you're going back to the ces. >> yes. >> goldman was there? i think he might be. we'll see which side of the street he's on. microsoft ceo bomber showed off a new touch screen tablet stock computer from hp. our goldman was there. hey, jim. >> hey, good morning, guys. >> which show are you at? >> they're right across the street, honestly. >> is there another show in town? i'm completely unfamiliar with everything it is you're talking about. >> you're one of the geeks walking around oblivious. >> do i look like i'm ready and primed for the important show? is it the venetian? it's at the sands, i'm told. everybody here seems to know exactly where it is, by the way. >> all the crew. >> in the meantime, yeah one mentioned steve bomber -- so amusing. you mentioned steve bomber last night kicking things off. a little embarrassing, his speech was delayed about i about 25 minutes. just as things were scheduled to get under way, the power went dead, if you can believe it. it took them 25 minutes. no jokes about rebooting the computers there on stage. probably power came back on within seconds, but then you have to reboot those microsoft computers and that probably took the real 25 minutes. let's look at the video because the most anticipated product of the night made a brief appearance. it's the new hp tablet in connection with microsoft. very few specs. it was up on the stage ever so slightly. steve bomber showing off the kindle reader software on this device. it should be out later this year. we don't have a price point or even a name for it. nonetheless, this is going to be big news for microsoft as apple prepares to release its own tablet pc later on this month. this is just a clear indication that apple will not be enjoying the tablet pc marketplace all to itself, certainly this product for microsoft and hp is going to generate a lot of buzz and it will likely have a big impact on apple in the business community as the industry seeks to adopt this new technology. >> the emerging category of pcs should take advantage of the capabilities of windows 7 and are perfect for reading, for surfing the web and for taking entertainment on the go. >> out in serious news, take a look at this. you are taking a look at something called project natal, this is the new entertainment technology initiative that basically changes the entire way you will interaction with your xbox 360. forget game controllers. you'll be able to use your entire body and gestures to control the device. this company, microsoft, says this is a quantum leap in the way we think about how to deal with technology, how we interact with technology. and as good a your as 2009 was for xbox and xbox 360, the company's president says 2010 will be that much better. >> this holiday 2010, you'll be able to experience an entire new examine completely natural way to play. and so when i told you earlier that 2010 was to be a big year for xbox, i was wrong. 2010 is going to be the biggest year in xbox history. >> yeah. so there you have it. and in front of me here, i get the latest hp computers. this is the next books to be released. the one that is getting a lot of attention is this. this is the new touch smart. it looks like your regular laptop, maybe a little smaller. but it has a cool flipback screen that turns it into a slate or tablet pc with complete touch screen on board. this is going to be available right now, under $1,000 and hp has high hopes for this, as well. this is just a taste of some of the technology that's being showcased here. all sorts of things, joe. i picked this up for you. this is the sworn pen, if you can believe it. you open it up here, there's a usb connection and right here under the top is a camera so you can record two gigs of video and audio on this thing. it's specifically made for you, joe. i know you're excited about all things technology. >> that's like secret agent -- that's like a queue. >> and becky, i've got a helmet for you. >> that will mess up my hair. >> you know, i feel like, you know, a short bus rider. i don't know. but this is from tune bug. what this is, you plug this into your ipod and it sends vibration felt through your skull. no ear buds, so it's good for snowboarders and bike riders and you get your music that way. that's kind of cool. >> you feel it through your skull, you don't hear it? >> you feel -- the vibrations are absorbed through your skull. that translates into audio and that's how you hear the music. >> michael due caccis got four votes after he wore one of those things in public. you learned nothing? >> you don't think this is good for my -- >> all you need to do is put on one of those full body suits and get on a wind surfing board and your career is over. why don't you just combine everything together. >> show off my family chest in this helmet and i am on my way. >> we're going to staurt with that and end with that. it is called an xbox. why? think about it? >> as in rated x. >> there's a lot of convergences out there, goldman. >> a lot of convergence, a lot of technology. there is a great scene in tropic thunder where they were talking about the whole idea of platforms. why the blu-ray beat out hd tv? quite honestly, it's because of what the important industry adopted. that is what dictates so much of the adoption in this business. porn sets the standard. >> it's true. if you go back and look at what causes these migrations -- >> vhs. >> exactly. >> so you are going to be on that side of the street all day today, right, jim? >> i'm going to stay on this side of the street. >> you've got breaks. don't give me that. report back. send us an e-mail. >> take the pen with you. >> yeah, bring the pen. >> yeah. >> get that usb port goc. thank you, jim. >> take the pen. >> jim goldman joining us awfully early. >> let's get overseas this morning. christine tan is in singapore with an update on what happens around the globe. but first we'll check in with geoff cutmore. good morning to you. >> can you put me on that e-mail list? i want to get those updates, as want. we're interested over here in europe, as well, joe. you know that. carl, let me pick up on the european session. we're in negative territory at the moment. we are struggling really to get out of this funk surrounding the -- just this view that we don't have good enough economic data, really, to justify keep buying the market at these levels. in terms of the gainers, what's going up, what's going down, the energy stocks seem to be hanging on in there. but everything else is looking weak right now. we did get a big downgrade on the european banking secretarier and that's having an impact on the uk banks. rbs, standard chartered down sharply at the moment. so we've got a lot of weakness. the financials, which have been the big carrier through 2009, just some doubts about whether they're going to do the same job for the market in the first part of 2010. christine, let me send it off to you in singapore. >> jay, geoff. asian markets finishing lower today on profit taking, commodities coming up to china's central bank surprised the market today by raising the yield on its three-month build for the first time since august. a lot of people are taking the central bank could be ready to start monitoring tightening. that saw the china shanghai composite down today. banks led the way lower. up 5.9%. half of what analysts were expecting. over in japan, the nikkei losing 0.5%. all eyes on japan's new finance minister now naoto kan who is believed to be less interested in restraint. bond issuance could lead to lower sovereign ratings for japan. kan said he hopes the currency would weaken and that the government would try to slow its appreciation. he's widely expected to put pressure on the central banks. >> a weak picture here in asia. on that note, let me send it back to you. >> christine, thank you very much. all eyes are on -- i think unemployment claims. i would beg to differ with christine about where all eyes are. >> where did she say all eyes are? >> i can't remember. >> or the avn if you're in las vegas. >> joining us this morning, benjamin tate from deutsche bank private wealth management and na narramen. it is thursday. i can report back to you with some certainty on that. monday, big day. tuesday and wednesday, unclear. consolidating, sort of just trying to hang on to those gains. will it be a positive week when it's all said and done in january? >> i think so, joe. we got a preview with those adp numbers yesterday. they were slightly disappointing as far as job loss goes. i think going into the year, we thought unemployment is in the process of peaking. that hopefully gets shown 20e78. if that's the case, i think you might have a big day tomorrow and a decent week. >> that means that the equity markets still care about the coincidence and in this case, the lagging sa activities that they get. yeah. i think what it would be is the confirmation. most of the statistics that we've seen over the last four to six weeks have sort of confirmed that. you need that lagging indicator to get a sense that you're not going to have any further pressure on the consumer. >> then i get what i'm looking at, if numbers continue to be relatively positive with the economic back drop, is it merely justify what the markets already done? i mean, what do we need to actually add to this 70%, 65% move? it seems like a lot of these things validate what has already happened but don't provide any emphasis to go higher. do they? >> no. you need a continuation of a stronger economic number. it's upward revisions to gdp growth estimates, the kind of things we've been seeing. it's not going to be as easy money as it was coming off the bottom. no doubt you had that big return. we're thinking that you're going to get reasonably big returns in equities. a reasonable multiple for that. which is about 10% higher than where we are now. let me go back to something we discussed earlier in the show. do we see we see november get revised one way or another? and what do you expect for the december report? >> well, the -- looking to start off by saying the adp number we discount heavily. the average miss for the adp number is 85,000 on the down side. that will suggestion the number tomorrow will be around zero. from that perspective, we are improving. we are steadily improving and we will continue to see improvement over the next few months. even if we don't go into positive territory tomorrow, we will next month. so we're on that improving trend and the claims numbers today will likely show an improvement. as you know, those numbers bounce around a lot. >> so you look for maybe -- not any net gain? >> probably not, although i wouldn't be surprised. we're getling very close to that inflexion point. if we're not at a peak in terms of the unemployment rate or to drop in terms of job losses, we're very, very close. >> and recent comments from all the fed heads, what do you make of them, naramin? 200, we stay at zero? >> theel earliest they'll do anything is probably going to be september or something like that. >> and that's not going to have an unintended consequence with the dollar or gold or mold commodities? >> it could. it's certainly not going to affect inflation in a big way and i think that's what they're more concerned about. there's not a lot they can do about investment flows going into commodities. what can they do about it? not a lot. they're not going to worry about that too much. they're going to worry about core inflation. >> do we have another shoe that's going to drop in foreclosures and real estate and housing? >> it could. i think we could get a second wave, with but it's going to be a lot smaller than that first wave. we could get a small bump up. we're not quite done with the housing crisis yet. >> that is the -- that is one of the things people worry about. and if that were to happen, then you've got more stim use will husband, more deficit problems and more commodity necessary place, no? >> you got it. >> gentlemen, thanks for your time this morning. ben case and narimin barivesh. we've got to play that. . >> nair bear, like care bear. >> there you go. >> she hasn't been on in a while. >> all right. coming up, we're going to head over to the weather channel and check in with scott williams who has cold temperatures, the story across much of the country for us today. also, as we head to a break, let's take a very quick look at yesterday's winners and losers. ♪ well, look who's here. it's ellen. hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is. completely networked. so, anything happening, suz? she's all good. oh, my gosh. is that my car? [ whirring ] [ female announcer ] the new community. see it. live it. share it. on the human network. cisco. woeb. now for your national weather forecast, let's check in with our friend, scott williams at the weather champ. >> good morning there, carl. sernl we are keeping tabs on the forecast here. look at the turts as we move into new york city. right around freezing. compare that to jacksonville, florida. just as cold. just an indication of how cold this arctic blast and how stretching the impacts are. in atlanta, you'll see snow later on this afternoon and this evening. nashville, a chance for snowfall this morning. as we go a time here, your thursday night into friday will continue to track the system, moving through charlotte, north carolina, bringing a chance for snow this evening. the nation' capital as we move into thursday night .friday, new york city and as we move into boston, you'll get in on the act. as far as current airport conditions as we move into the dallas ft. wrth area, watching for freezing drizzle to start here across the area, so we'll be watching the radar very carefully here. but then much improved temperatures topping out in the lower 30s for dallas, chicago. expect numerous delays here if you have travel plans with a green light going into the yellow and the red category. as we move into the world's busiest airport, not really expecting the wintry weather to arrive until after 3:00 this afternoon, so minimal impact to start here as we move into the world's busiest airport. but certainly, later flights this evening could be impacted due to some icing concerns. we'll continue to monitor the situation and this arctic blast for now. sending things back to you. >> warmed up for a day yesterday. in the afternoon. it wasn't too bad. but now, it's cold for this morning. >> yeah. >> more arctic wind coming in and everything else. coming up, we'll have this morning's top stories, plus the picture from the futures pits. dana telsey is here with a preview of the reports due today. and then john harwood will join us with the latest from washington. 15% or more on car insurance?e you host: did the waltons take way too long to say goodnight? mom: g'night john boy. g'night mary ellen. mary ellen: g'night mama. g'night erin. elizabeth: g'night john boy. jim bob: g'night grandpa. elizabeth: g'night ben. jim bob:'night. elizabeth: g'night jim bob. jim bob: g'night everybody, grandpa: g'night everybody. jim bob: g'night daddy. vo: geico. 15 minutes could save you 15% or more. hey, coach, seeing you really brings back some great memories. wait a minute, coach, you're the coach. you taught me everything i know. you taught me everything i know about nutrisystem. heck, i lost -- two sports legends, one simple way to lose weight and eat great: marino, shula, and nutrisystem for men. start your year off right. order now and you can get two weeks of meals free, plus, the all-new jumpstart kit, our secrets to ultimate weight loss. like i was saying, coach, with nutrisystem -- let's go to the video. dan "glam man" marino lost 22 pounds. don "blue suede" shula lost 32 pounds. and me, i did go all the way. whoop! 50 pounds thanks to nutrisystem. four out of five men say nutrisystem satisfies their hunger. just set a goal. i reached my goal: 50 pounds, gone. and i owe it all to the coach. both: thanks, boomer. start your year off right. order now and you can get two weeks of meals free, plus, the all-new nutrisystem jumpstart kit. good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and carl quintanilla. if you're just waking up this morning, we have your stop top stories for you, number one, coming up after the headlines, we're going to take a trip to the futures pits in chicago and get a preview of the trading day. then in 15 minutes, john harwood will join us from washington. he's tracking the roll call on health care. what happened? they've got some stiff movement here. they should be reconciling these things. are they almost there? i'm okay now with do this, force it through with 60. >> really? >> yeah. do they have it or not, though? >> no, they've got them all. they better because they're never going to have 60 again, ever. >> unless they get 80. 80 there and 400 in the house. >> yeah, all right, then later, the consumer electronics show, the talk of the town today. we're going to turn to a tech manager and see which stocks are likely on the move to see what is coming out of the consumer electronics show. as opposed to the other shows that might be going on there. >> also this morning, it is the biggest month of the year for retail sales. tracking the american consumer, veteran retail analyst dana telsey. dana, what are we going to be hearing through the day? is it numbers that are surprisingly positive or will we see some disappointments in there, too? >> you're seeing some disappointments, you'll see some do better than expected. you'll see retailers have lean inventories and there could be a potential for earnings revisions upward. the fourth quarter doesn't end until the end of january. it was a decent holiday season. >> it was a decent holiday season and some of the sales might come in lower. >> the basket that we surveyed, prices were down nearly 14%. >> that's my big question. can we make real analysis based on what we see just in the numbers today for sales or are we going to have to wait to see the actual earnings report next month to get a feel for what kind of shape these stores are in? >> i think it's probably a little bit of both. this would probably be the fourth month of improving same-store sales. retailers are feeling better about placing orders for the second half of 2010. i think we'll hear them begin to see the markdown rates weren't as bad as last year and earnings could go better for the fourth quarter than expected. >> what are we going to see in terms of visit warnings? if that's the trend, is there more for the discounters, as well sfp. >> yes. i think we'll begin to hear that, also, for the department stores out of kohl each, out of nordstrom. urban outfitters reported this morning, their anthropology business is better than expected and overall same-store sales were better than expected. where are these particular losers going to wind up? >> the department stores, the discount stores are better than specialty stores. although last night we had hot topic coming better than expected. that will be where some of the misses are. it will continue to dominate and continue to post same-store sales gains. >> wa about a gap, limited? >> old navy, core gap division should be decent. limited, good traffic in bath & body works. they should be able to hit flat komps given their traffic. ann taylor doesn't report this month. >> and what about 2010 overall, are we going to see any themes, really, emerging? is the consumer coming back these four months that we've seen? >> if value was the word for 2009, discretionary will be the word for 2010. i think you'll see some of the jewelers and high end do better. and we'll see restocking at some of the department stores. on especiallity, watch international, it should be a good year for guess. >> you're talking about sachs. do you think those will be good numbers? >> i think they will. their inventory was clean and they didn't have the markdowns of last year. >> tiffany, we don't get numbers today, right? >> you'll get them on tuesday for tiffany's, and they should be pretty good, too. >> thank you very much for that heads up. >> thank you very much. >> now we're going to the futures pits in chicago. jason roney, i'm trying to figure out this january thing. and i think i have a handle on why it happened in january. everybody is gone those last two weeks and we kind of abide our time before everyone gets back from miami or st. bart's or wherever the heck they go. and now they're back, aren't they? shouldn't we get some resolution? we're at 1138 on -- or 1137 on the s&p. where are we? is there support that we have to hold? is there resistance we're going to break through? do you know? he's thinking very, very hard about it. a lot of people who aren't going to give me an answer off the top of their head, i think we have to let him think about that because that was a tough question. wouldn't you rather have someone give a thoughtful response? >> if it goes higher, it could continue. >> and the question was complicated. i'm still trying to -- >> no, it wasn't. we were here, some of us weren't here. some of us were on both of those. >> and even when they were supposed to be here, they came in late. >> oh, let's go to break. >> you want to go to break? >> i do. >> are people not back now? >> yeah, they're back. >> even giddy is back from st. bart's, right? >> i don't know. you're not a fan of st. bart's. >> no, i'm not. did you see who else was down there? question stephanie and -- is the island big enough for all these shining lights? >> you don't know, though. and you had a woman -- there was a woman who is a teacher who wrote in. >> about st. bart's? >> yeah. and she had it's really nice and not as pretentious and you shouldn't knock it until you try it. >> i love the caribbean. >> just like satellite radio, which you hated. >> jason, is it good? are you there, roney? are we going to break or are we going to -- all right. >> if you've got any comments or questions not about technical stuff, drop us an e-mail. our address is squawk@cnbc.com. we will take a quick break. when we come back, we'll go to washington. senators retiring. this health care bill in limbo. welcome back. we hit something called an audio board, it melts down. i'm going to say, jason, can you hear me? >> yes. >> you don't know the question and it's a tough one. >> i wondered if you were talking to me or not. >> i was. >> you see, this is the way it works. once everyone has taken off the for the last half of december, once the new year comes in here, we need to decide whether we're going to take this market higher or lower. what are we talking about if there's a support level we break through we're going to consolidate? is there something we need to get through where people will be voting for this their feet for 2010 for the new year? >> i don't know that there's a specific level. people are waiting to see. we've got earnings that start next week and tomorrow. so there's very much a sort of complacent seen with a level of comfort currently as to where the economic conditions are today. but sometimes things are going to get better or worse and really, i think hedge fund and speculators will take their cue from what we see out of the earnings next week and tomorrow. we see conviction in a commitment to commodities. >> that has to be figured out, too, whether the market only goes up with this carry trade and the weak dollar wab even though the dollar has been strong since november and nodties have gone up, anyway. that looks like that may have left, but we have to see whether this is a commodities and equity market going up hand in hand or whether that finally breaks. but i'm looking at the vix, jason. and i can give you a five-year period where it stayed at 20 or below for most of the time. so it can stay at a low volatility level for some time. >> there's no doubt. but kwt degree of economic uncertainty, i think players will need more uncertainty to the future to make any long-term commitments. but the s&p for the year, if you look at a 6.18 retracement, you would be going up to 1220. that's roughly 8% to 9%. >> on the s&p. a lot of people are talking somewhere between 1225 and 1250. >> that's a pre-lehman number, the day we were before lehman went under, if you will. in the fourth quarter of last year, the s&p dropped to 400 points. all we've done is our fourth quarter of 2008, all we did last year was consolidate that quarter as we may do for the rest of this year, as well. >> hedge funds, you have to take 20% of something, you've got to have something. so eventually, we can't go up a point one day and down three points a next day and up one point the next day. someone is going to decide, you know, where we're headed here. that is why january is such an important month. >> it is the lead in terms of loolg out for the next 10 to 12 months. but the one place that -- >> well, i want to know, up or down. >> don't tell him. don't make him drag it out of you. >> we will see a 20% correction at some point, but my guess is that's from a higher level. so i think this month will continue to be choppy. i think in the near term we've shown very little ability to rally so the s&p will likely pull back over the next week. once you get to the 1180 to 1200 area, folks start to lighten up. >> wow. so you just said we won't -- sorry, we've got to go. but we won't go above 1220 and there will away 20% correct? >> in this year, correct. >> thank you. >> don't do that. >> oh, because i said -- >> you have used the s word. >> i think that's not bad. >> house speaker nancy pelosi says congress is close to a health care deal. we want to go to washington and check in with john harwood. we could not get you yesterday when the dodd, dorgan and ritter news was all over the place. are you more interested in how the makeup of congress is changing o or how this health care thing is going to get resolved? >> the first thing i'm interested in is that orange on joe's tie is that because he's rooting for texas in the game tonight against alabama? >> i don't have a preference. i think both of those teams play quite a bit. but i don't know. how about you? do you have a favorite? >> i have no favorite in that game. >> they're both nice, respectful red states, so it's hard for me to pick. >> listen, carl, on your question westbound -- >> do you want to talk about my tie or whatever you like, joe. other comments? football games? >> let's see. doesn't alabama have -- have you got red on that tie? >> there is a little red. i don't think it's bama red. >> he's a journalist. it's red and blue. >> look, i think the health care debate is the most important legislative thing on the agenda of congress, but we're looking right now at a very tough situation for democrats going into 2010 and those announcements yesterday underscored that. while you guys are debating the merits of st. bart, vale and those areas, but we have democrats facing tough times and that's why some of them are leaving without facing re-election. >> how is congress going to go on health care? >> the senate is going to win most disputes. i'm going to talk to senator hoyer this morning to talk about how some of that is going to go. but everybody knows the senate has most of the votes. byron dorgan announced that he's retiring yesterday. and he's likely to go republican and take the democrats below that 60 vote threshold. but the senate, they have no votes to spare. they have a plan that fits president obama's priorities better than the house plan does, although the house plan has the public option which obama is for. and on the crucial issues of cost cutting you're likely to see the senate win out. where the liberals will she most upset is that the public option, which obama is for, is not going to happen because they don't have the votes in the senate. >> but we already know that, right? it's not going to come as a surprise. >> not a surprise to me but a surprise to some of those people because they are ripping the white house on it. you may have noticed nancy pelosi said the other day, he was for a lot of things in the campaign, getting a dig at president obama. >> john, we've gotten different takes on all of this. the bill -- and probably the republicans' eyes, it's not nearly as egregious as they thought it could be. all right? so it goes through with -- in this closing of no conference, closed door, public is, you know, polls are against it. why not let it go through? >> that's a phony issue. >> phony, whatever you think, john, about whether you think the public is for this or not. >> just like that 72 things. >> no. i'm talking about the secret closed door thing. every political decision gets made -- >> talk about people in ben nelson's districts. so it goes through. the ohm time i've got 60 is right now. what happens in november? how many people walk the plank because of the way this has been hit on? you get a short-term, near term victory. what does it do to the democrats? >> it's not because of the way this has been handled. these are difficult things to do. that's why it hasn't happened for 70 dwreers. >> is it worth it for the -- for what happens? >> that's a very good question and that's what a lot of politicians are going to ask themselves. i think most democrats are going to decide that it is worth it and they're going to stick with the president. >> they will. >> but you know, that's exactly the right question because for some people, they're looking at the end of their careers in politics when you take the votes that they're going to cast for along with the agenda and double digit unemployment, that's a rough deal. so chris dodd says it's time to stead aside. byron dorgan says it's time to step aside. we're going to see more of those, too. >> you, john. >> st. barts. >> more bruised or battered than the nation's automakers. we're spending time in the fast lane. at&t's 3g network covers over 230 million americans. that's a lot of people. to prove my point i asked gary here to friend request all of them. how's it coming, gary? [ ding ] we got one! that's good. oh! ah, wow. [ dinging continues ] becoming a popular guy. [ rattling ] [ male announcer ] want 3g coverage? we've got it. 230 million people in 9,400 cities. let's get out of here. ok. [ male announcer ] at&t. get an exclusive pantech messaging phone free after mail-in rebate. only from at&t. lose weight and "jumpstart" your year. any guy any age can do this. introducing the all-new jumpstart kit from nutrisystem. i'm dan marino, and i lost 22 pounds with nutrisystem. that's me 32 pounds ago. i feel like i'm 10 years younger. order now and get the jumpstart kit, specially designed to put you on the fast track to awesome weight loss. i did go...all...the...way! i lost 50 pounds with nutrisystem for men. nutrisystem is based on the proven science of the glycemic index that helps you feel fuller longer. for about $12 a day, you'll get 28 days of fantastic meals. fifty years old and back to my playing weight. order now and you can get two weeks of meals free, plus, the all-new jumpstart kit, our secrets to put you on the fast track to ultimate weight loss, based on more than 35 years of proven science. jumpstart your weight loss with nutrisystem. order now and jumpstart your year. call or click now. what are you doing...? calling chase sapphire, seeing if we have enough points to stay longer. now? you don't have enough time... and you have to push all those buttons... no buttons, someone answers every time. yeah, right... bet you a massage... yeah, ok. hi, julie... i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire... you call. we answer. no waiting. just press right here... go to chase.com/sapphire. chase what matters. kpmg is out with its 2010 global auto executive survey. joining us is gary silver in detroit. good to see you this morning. >> good morning. >> it's good to have you, especially after what whitaker said about gm and the year it may be having. you guys are looking for a little stability in 2010, right? >> yeah, we are, actually. and if you may recall last year i was here, there was a heck of a lot of doom and gloom. this year's survey, certainly not blue skies but we're starting to see stability. when i read the announcement this morning, it was surprising but it's nice to see this sense of optimism in the automotive market, which as we've known has been very, very depressing. it's nice to see. it's coming through in the survey results also. >> when you say stability, are you talking units sold, margins, market share, what? >> all of the above. if you look at -- it's very interesting. we surveyed 200 executives throughout the world in 24 different countries. you get a different variety of responses, but the three areas that came out in the survey in terms of stability, one was the decline, the rapid decline in automotive sales is really where they've said, you know, that's stabilized and we see some potential movement in the upside. if you looked at this week's announcements and. so upward revisions -- not revisions but upward numbers, you're seeing them come through today. the survey, though, it was -- for me it was interesting in three particular areas i wanted to talk to you about. one was the negativity still in the capacity area, which was a little surprising. and if you look at that and drill down by region, north america had 88% of respondents said they're still over capacity today, today. europe was around 80%. even asia had 75%. and if you think about that, and i've been discussing this a lot with some of my clients, and i think what they're anchoring on is historically we've had automotive sales of around 16.7. you start in 1999 all the way to 2008 they've been around 17 million, drops to 13.6, and now 10.4. so i think what people are saying at 10.4, they're still over capacity. but i think the real question is, where is it going to go? how are we ever going to get back to the steady state level or are we going to have continual, you know, restructurings going on. the other incapacity to think about is europe. they really didn't do any restructuring. and yet they were lower in terms of the survey results of overcapacity. i was somewhat surprised about that. also in the survey you talk about asia eventually will have overcapacity issues. very interesting on the capacity side. >> yeah, that is a level of concern. we don't have a whole lot of time but i would encourage viewers to look for the survey, talks about how m&a and individual market share for the companies as well. gary, thanks so much for your time. coming up, we'll talk more about the january effect. we have two wall street brightest strategists speaking out. national car rental knows i'm picky. so, at national, i go right past the counter... and you get to choose any car in the aisle. choose any car? you cannot be serious! okay. seriously, you choose. go national. go like a pro. and fedex ground will get it there fast. wait. fedex has ground shipping? oh, that's right. you just woke up from a 23-year coma. yeah, it was a long one. did i miss anything? uh, the cold war ended. [ man ] pluto's no longer a planet. culture club broke up. the berlin wall came down. wait. the club broke up? i never saw them live. that was too soon. what have i done? [ male announcer ] we understand. you need it there fast. fedex ground. microsoft's plans for the new year. >> the emerging category of pcs really should take advantage of the touch and mobility and capabilities of windows 7. >> microsoft ceo ready to do battle with apple as the company unveils a windows-based tablet pc at the consumer electronic show. unwrapping holiday results. >> oh, isn't that sweet. ralph, go upstairs and try it on. >> i don't want to. >> retailers reporting december sales all morning long as we get a better read on the holiday season and how much consumers will open their wallets in 2010. >> you look like a deranged easter bunny. one day and counting until the economic roerlt. investors have been waiting for all week. we preview tomorrow's jobs number and talk markets all morning with jpmorgan stu schweitzer as the second hour of "squawk" begins right now. ♪ i'm all right, nobody worry about me ♪ ♪ ain't got to give me a fine ♪ can't you just let it be >> good morning, welcome back to "squawk box" here on cnbc. i'm becky quick along with carl quintanilla and joe kernen. we just have news out. the bank of england is leaving rates unchanged, as expected. also talking about the bond buying program, the quantitative easing program, leaving that unchanged as well. the rundown -- from google phones to the latest in microchip processing, tech is to be a hot ticket for investors in 2010. we'll look at the best bets in tech for the coming year. gm enthusiastic about opening the world's biggest lithium-ion battery product. we could be looking at a profit this year for the company. focus remains on tomorrow's jobs report. oppenheimer senior investment officer jerry webman will be here to help us preview that number. today's guest host is citi schweitzer. we'll get to him him in a moment. welcome. >> good to be back. >> first up, carl with top headlines. futures, we're a little bit negative, as we -- most of the global indices have been overnight with markets taking a breather after the dow got that big point yesterday. 1.6 points to the upside. couple headlines. microsoft ceo throwing down the gauntlet during his consumer electronics keynote speech last night. unveiled the new windows tablet computer saying microsoft has no intention to letting apple dominate the tablet market. >> the emerging category of pcs really should take advantage of the touch and mobility and capabilities of windows 7. and are perfect, perfect for reading, for surfing the web and for taking entertainment on the go. >> shares of microsoft up more than 57% in the past year. currently around $37 a share. citi executive taking the company to court to get the remainder of his multimillion dollar severance package. package that had been frozen for six months. kevin kissinger was once in charge of operations and technology at citi, now chief information officer at toronto dominion bank. december sales from nation's retailers all morning long. costco beat estimates by reporting a december number of 9%. bed, bath and beyond assist comp store sales rose more than 7% during the quarter. china central bank raising interest rate on three-month bills for the first time since mid-august. the move prompts speck lake the central bank may be ready to use more forceful measures to cool growth and fight inflation. we'll see if -- it's going to be interesting to see which central banks move in which order. some argue we might be the very last to go. >> maybe so. depends on how much -- how many natural resources you have, i guess. you watching me? i'm watching you. someone just wrote in, you bought me that cat emery board for my birthday. you did not. >> how do you know he didn't order it? dow is up 62% since march 9th when the index hit its closing -- 12-year closing low. guest host we mentioned, stu schweitzer, expert in charge of global markets for jpmorgan bank. nick kalamis, chief investment officer. stu, you've been on a lot. i'm trying to remember, and usually i can, but you've been on through this big rally we've seen. were you in the camp that it was unjustified because of the economic backdrop or were you friendly towards the market for the majority of the time? >> so if you go back a year, joe, my comment back then is it's going to get worse before it gets better. but for the past many, many months, for sure since the middle of the year, my feeling has been it's going to get better before it gets worse. >> even the equity markets. >> even the equity markets. >> you haven't been one of these guys that said that the day of reckoning is coming, this is all government stimulus, this is -- none of this is justified, you haven't been surprised by the move? >> no, not at all. i think the day of reckoning is coming but we don't know when it's coming -- >> why is there a day of reckoning coming? >> ultimately, with all of these deficit -- the government deficits around the world, with all of the demand for credit from governments, when the economy grows enough, at some point there will be a collision between public and private borrowing demands and higher interest rates. that's not today, not tomorrow. >> but is that a bond market problem or a stock market problem? >> in the beginning it's just a bond market problem. if it happens gradually, just at a moderate pace. it's a confirming sign the economy's getting better. but if rates spike, it's an economic problem and it's a stock market problem. >> i did not ask you anything about love child. as i said -- >> i know -- you promised you wouldn't and you're not. you're not. >> it's on the cover of all the papers in new york today. that's -- whatever is going on -- >> none that i know of. >> good. >> what you're saying is that as long as the music's playing, you've got dance. >> well, i wouldn't put it that way. >> you know the last guy who said that. >> yes, i don who said that. >> he's no longer dancing. >> well, i'm dance now. but i'll tell you what, i'm dancing slower than i normally would would with the amount of stimulus we've had. you know, after having had such a vicious recession and so much stimulus, normally my colleagues a and i would want a lot more equity than we have -- >> you've been a backer of the stimulus, right? >> i was a backer of the stimulus but i was disappointed with the way it came out. i was disappointed it was more about social policy and to some degree pet projects than it was about getting economic stimulus. >> you like a lot of the social policy. >> joe, you've read me wrong. but i do think we've got to be sensitive to the plight of those unemployment, for sure. >> absolutely. nick, let's get to you. we don't want to leave you out of any of this. but same kind of questions. have you been looking at this move, you know, scratching your head and sort of going against it, leaning against the 62%, or have you been friendly toward the market? >> we wrote back in january of '08 that the fix is in and that the incredible amount of stimulus will make its way into the financial markets first. and not into productive assets. so all the money that's being pumped it's going somewhere and into financial assets first. that's, in fact, how we participated last year. kind of the government reflation play. long term, wire scared, nervous about what's happening because you don't fit a debt-induced credit bubble with more debt. we're cautious long term and we've been bullish short term. >> it's been a broad rally. hasn't just been financials. there are people that all along, doinlt know whether it was in contrast to you but people have said -- jim pahlsson, someone like that, who have said this is a recovery. we've seen recoveries, we've been through these things before and the stock market recovered, eventually people get hired again, eventually corporate profits go up and this is proceeding according to plan. that's not your view? >> well-being you know, that's hair of the dog economics again, right? every time we get in trouble we just pump more debt into the economy. and hopefully it works out and we pump more money also. at some point, there is a price to be paid. and we will see that somewhere along the line. it seems like right now, though, the short term, the stimulus is working. so, what happens long term here, and with what we're doing from an investment standpoint, joe, if we're going to become europe from a socialist standpoint, then we need to think like europeans and think globally and invest globally. that's what we're doing. 50% of the re new and holdings come from outside the u.s. >> so i want to challenge this question about, well, the market's up 62%, that's such a huge amount. post-lehman the market fell from 1200, 1300 on the s&p down to 900. it stayed at 900 more or less from september -- from late september through the end of june, except for two periods. you guys can pull up a chart. except for two periods when there was armageddon fear. in the fall, around the t.a.r.p. program and then in the late winter-early spring when there was debate about what the new administration's program was really going to be. there were all these armageddon fears. we bottomed in march and came back to where, 900. we've only gone above 900 since the recession ended around the middle of the year. we're up a little more than 20% but it's not, it's not a 60% rally on the basis of the economic recovery. >> 25% rally, which a lot of people say that's a multiyear -- you're only supposed to get 8% a year from here on out. >> not from the bottom. >> but the bottom got us back to 900 -- >> wait a second. we topped out at 1500 or so. we're down a lot. we're down a lot still off the highs. i'm not saying those highs were justified. but nonetheless, the idea that we've had this 60% rally and that 60% is just too much, well, i would challenge that because i think the base from which to judge the rally is around 900. >> nick, getting nowhere in 11 years, that doesn't already reflect your worries about the debt being built up? we need to even pay the piper more than what -- we'll be down for 20 years? >> you know, they call it the lost decade for equity investors but our clients didn't lose money. >> all right. so what's going to happen this year? you say short term bullish. how would you -- what should we do if we're one of your clients, then? it's hard to say i'm going to participate if the market goes up and i'm out immediately if it starts going down. we have to make a decision here. what are you telling your clients? >> you need to stay in this. you don't fight the fed. first of all, all these unfunded liabilities we're worried about, they are promiseses country can't change. that will reduce some debt. canada was able to work out of debt problems. japan hasn't. so i think we're going to work out of this. but the question is, how much growth are we going to get? there's not going to be a lot. it's going to be a slow growth, stagnant economy, structurally higher unemployment, so you need to look beyond the u.s. for opportunities. look at global companies and non-u.s. companies to invest in. >> you know, nick, they've already become socialist -- i mean, we just have the spectre of that. do you think you'd go over there anyway even though they're already there? all we have is the threat of going there. >> well, my idea here, joe, was to invest like the europeans do. don't just look -- >> that may be -- >> except vacation. >> except wine and food. >> exactly. >> and vacation, yeah. >> but, see, i would say the u.s. looks good relative to europe and japan, but relative to emerging markets they deserve a place in portfolios as well. there you don't have those issues you were just raising, joe. >> nick, thank you. stu's going to be with us for the rest of the show. >> real quickly, limited is out with same store sales, down by 2%. that's a little weaker than the street was expecting but company is raising guidance for the quarter, probably because they were able to maintain good margins. looking for fourth quarter 2009 guidance of 92 to 97 cents a share. earlier was giving guidance of 71 to 86 cents a share. the street, it looks like, is at 83 cents. that's higher than the street was expecting as well. again, same store sales, not a great story but this is probably a trend you're going to continue to hear as comp store sales were down but they weren't offering as many discounts. that's going to mean a more profitable quarter for the company. >> i'm an optimist about the consumer, i am. >> really? >> yeah. there's going to be job growth, it's coming. >> that's not common. that's an outliar. >> i hope so. i hope i'm an outliar. >> this isn't necessarily a great sign of consumer spending. it means they were smarter -- >> they cut costs, i understand that. but also the consumer is coming back. a lot of people cut back not because they lost their job, overleveraged but because they got freaked out by the armageddon. they can start to come back as conditions stabilize. meanwhile, job growth is going to improve. look at jobless claims. we'll see you later in the show what happened in the latest week but they're down -- they're down decisively, much more than in the last two jobless recovers. >> worrying about losing your job and then not worrying about it, that's not reflected in any unemployment numbers. >> that's exactly right. >> so you could have 20% of the people worried about it and then all of a sudden they're not worried about it and those animal spirits could shift more than the actual numbers you see on -- >> i'm glad you agree with me finalingly, joe. >> you're changing a lot of your tune. >> no, no, no, i've been there all along. >> you liked the stimulus -- >> no, no. i like the stimulus because it helped to get us where we are. >> social policies, but, you know, i don't love them. i'm getting to see how -- you're an investment guy. you have to know how to switch gears quickly. >> haven't switched, haven't switched. >> whatever. no love child, right? >> definitely not. >> that you know about. >> that's right, carl. comment and questions, send us a note. our address is squawk@cnbc.com. when we come back, more options than ever for smartphone buyers and a slew of options competinging for a piece of the multibillion dollar pie. citrus growers fighting the deep freeze. talk about what the weather has done to all those fruits and vegetables. time for today's aflac trivia question. u2's 1998 track "angel of har m harlem" was written about what ledgeary jazz singer? it's so nice to have company after thaaahhhhh!!! what is it? someone paid me cash! but who? who? aflac. who pays you cash when you're hurt and missing work? aflac. ...cash to help with expenses that health insurance doesn't cover like the mortgage, gas and food. aflac! ahh!!! what now? someone's standing on my foot. all: ahhhh!!!! who could it be? now the answer to today's aflac trivia question. u2's 1998 track "angel of harlem" was written about what ledgeary jazz singer? the answer, billie holiday. welcome back. futures a little negative as we await a lot of same store sales this morning, jobless claims giving us a warm-up in a little more than an hour to the big jobs number tomorrow. one headline, st. louis fed president says the u.s. labor market is improving. he predicts the economy is close to the point where the unemployment rate will start to fall. bu bullard talked to a group in shanghai. also argued housing prices are stabilized and housing starts will soon no longer be a drag on growth. the war of the smartphones has been accelerating with the unveiling of google's nexus one, steve ballmer offering the latest microsoft technology. >> here's the new hd2, which will be available through t-mobile. sharper, brighter, and richer screen technologies really do make a difference. we will have a lot more to say about phones next month at mobile world congress. >> but can anyone take on leaders iphone and blackberry? they have a huge head start. joining us is charles wolf, analyst, and things are heating up. but can anybody take on the two leaders in the industry? >> well, my short answer is no. what we've seen in the smartphone industry is a complete flip of the pc industry in a sense that the two leaders in the industry, apple and r.i.m.m. have integrated software/hardware models. those are the two types of companies absolutely winning in this space. as opposed to, say, windows mobile, which is microsoft. and even android from google has some limitations to it. >> but you start seeing -- you start seeing some sort of new entrance like the size of a google or microsoft, what advantages would they have to potentially getting them to a position where they may down the road be able to take market share? >> well, it's -- by sheer numbers, google should gain market share. i mean, the reality is, windows mobile has almost disappeared because the operating system is so lousy. notwithstanding ballmer's comments just now. they're fading into oblivion. in that vein google's android looks like sort of the last hope of the platform guys. and my opinion is, it's probably less than it seems. i really believe that the winner right now clearly is the iphone. >> far and away. you've owned apple since the late 1990s, right? by the way, is your microphone all the way up? we're having a little trouble hearing you. i don't know if it's our fault or -- >> it's your fault. >> it's our fault. >> i'll send somebody in to fix it. >> i imagine it is our fault. you've owned apple since the late 1990s. when did you first see -- what made you think this was something that was going to take off? >> well, i clearly didn't think that in 1998, but the good news is, i didn't sell the stock. >> right. so, again, iphone being the big winner. corporate places, a lot of them still you can't use your corporate e-mail over the iphone because for some reason the security is not quite the same. that's certainly the situation here. we're not allowed to send our corporate e-mail over the iphone. is that any sort of an impediment? do you think that will be changed down the road? >> i think it will be changed down the road. what you've got to remember is that the smartphone market is 80% consumer and 20% enterprise. >> right. >> and we tend to forget that, that all the growth in this industry has taken place in the consumer market. the enterprise market where blackberry reigns is really shrinking relative to the consumer market. >> what a shock. >> charles, thank you very much for joining us. we really appreciate your time today. i'm sorry we just got those audio problems fixed. we will make sure we come back to you again very soon and talk to you again soon, okay? thanks a lot. >> thanks very much. >> we appreciate it. also, a programming note. >> you're not a lip-reader, we will -- >> be sure to tune into the premiere of cnbc's newest documentary, planet of the apps at 10:00 p.m. eastern time. >> yeah? what are you doing? >> just making sure. >> just fixing. >> i mean, at the very beginning i said -- no, no, everything's fine. everything's fine. coming up, the nation in the midst of the longest stretch of below normal temperature in about 25 years. explain that one. the models just -- i don't know. we need to fix these models and change them again. your business travel forecast coming up next. bull market or bear, traders are always hungry for ideas. trading is all about strategy. and strategy... is all about information. heat mapping shows me where the money's moving. twenty five hundred stocks... one quick look. that's where the action is. plus, this amazing gadget... it's called the telephone. i can call td ameritrade anytime and talk trades, strategy... anything. td ameritrade. built by traders, for traders. this is what i need. announcer: trade commission free for 30 days, plus get 100 dollars cash, when you open an account. (announcer) we're in the energy business. but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron. so, at national, i go right past the counter... and you get to choose any car in the aisle. choose any car? you cannot be serious! okay. seriously, you choose. go national. go like a pro. ♪ ♪ don't ever start a band a january chill continuing to grip the eastern united states. let's check if in with scott williams at the weather channel for the business travel forecast. scott, i haven't seen a single digit number yet. have we? that happens in some winters, right? >> yeah. well, we are certainly continuing to find a lot of cold temp. look at the single digits we have in kansas city and also well below zero as we move into the dakotas. more arctic air is certainly on the way into the deep south as well. today we'll deal with snowy conditions later on this afternoon and evening. atlanta, jacksonville, florida, colder right now than new york city. and it will get colder as we move into your thursday and friday here. fargo, high of only 5 below here. well below the average for this time of year. and as we move into friday, new orleans, a high temperature, this is a high temperature, not a low, of 35 degrees in the big easy. 32 will be the high temperature, freezing, in atlanta on friday. looking at some of the airport delays we're expecting across the country today, chicago, heavy delays due to some snow. even some icing problems as we move into the dallas/ft. worth area early this morning. some reports of light freezing drizzle here. much improved as the day progresses. look at chicago, upwards of 6 to 10 inches of snow before all is said and done. so enough with all of the cold weather, the icy weather. maybe you're going to the consumer electronic show in vegas. yeah, look at the warm temperatures here. topping out in the 60s as wie move into your thursday, friday and saturday. >> i'm going to throw you a big curveball. get in your catcher position. is this global -- is it a global cold spell? and if it were to last, can we start saying that the year's average temperature looks like it will be lower than normal? is that possible? is there any way a weather guy can make a climate call like that? >> well, joe, where it's cold, it is warm somewhere. that's definitely what i can say. you know, san juan, puerto rico, actually had record high temperatures earlier this week, believe it or not, in the upper 80s. >> so then we can't do that. although, not going to stop me from continuing to say that -- >> joe, it's not going to stop you. >> even though it's warm somewhere -- you're right, carl. weather is different from climate. man, it's cold. >> it's winter. >> and would north carolina type temperatures be that bad in new jersey? i mean, would that really -- is it that bad for you? or even south carolina? >> i wouldn't trade it for having to breathe through a gas mask of time i went outside. win! >> you win. >> last word to carl. let's get a check of the markets. we've been watching the futures. they've been under a little pressure. you'll see those dow futures down by just over 25 points below fair value. after monday's big kickoff rally, we have seen the markets kind of just sitting around, waiting to see what happens. we're going to be getting number at 8:30 that could really put a move on things. that's when we get the jobless claims. also the nation's retailers are rolling out december sales results. costco was the first one out of the gate reporting a 9% increase in same store sales. that was better than expected. sears says that its comp sales were up by 0.4%. the limited sales fell by 2%. that was slightly more than anticipated. but limited did raise its earning guidance for the quarter so that has that stock trading a little higher. amazon's kindle that sparked the e-reader market. barnes & noble and sony have entered as well. now texas instruments wants a piece of the pie, too. wall street journal says ti will announce today it will enter the market by supplying prosers and software for those devices. general motors chief executive says the automaker will be profitable this year, that would mark gm's first yearly profit in six years. phil lebeau will have more on gm coming up in a few minutes. a couple checks on the futures. becky told you what we're expecting. bank of england we've got. waiting on same store sales numbers. jobless claims coming out in about an hour. negative numbers around the globe. asia largely down, europe having trouble getting out of the red as well. dollar is stronger today so commodities having problems. oil is off the 15-month high, back below 83 at 82, whatever it was -- >> 50. >> the ten-year note, we're talking once again about the widespread between the twos and tens, especially after those confusing fed minutes yesterday. the dollar, as we mentioned, higher across the board. 9312, new japanese finance minister saying he wouldn't mind the yen getting weaker. gold's up six bucks to 1130 as the dollar is stronger. >> i like when they try to rush us, they take the information away. it's gone. i can't see the board. talk faster. quick question for stu schweitzer as we chat about the markets around the world. you mentioned something about the consumer and how you haven't counted them out. >> exactly. >> some argue that's not necessarily a good thing. unlike the '30s maybe they haven't absorbed the lessons of f frugality of the way we should have. any truth to that? >> i think they haven't observed the lessons of frugality on the leverage front but spending never got crazy. if you look at consumer spending growth through the last couple of decades, nominal dollar, actual dollars out of their pocket, 5% per year, pretty consistently. there was no explosion of spending. in real terms f you look at it that we, there was because there was a time when inflation was really low. but consumers didn't ramp up the dollars out of their pockets at that time. they took on more debt, mostly mortgage debt. consumer leverage is coming down. >> and will continue to come down. >> and will continue to come down. the saving rate is back up. by the way, you know, there are two measures of the saving rate. and the one that comes out of the federal reserve itself looks a lot better than the one that people conventionally look at. the consumer is not financially as strong as we'd all like. but, you know, that's not the be all and end all. if you look back, look at where the americans saving rate was in the 1970s, a terrible decade. answer? 8% to 10%. how much good did that do? >> big savers? japan. >> exactly, joe. good point. >> stu's got answers. >> we can finish each other's sentences today. >> it's a little scary. i'd worry about it. >> you've got some indoctrination recently? >> you'll come in tomorrow with a little mustache and -- >> yeah. >> i think we better stop right there. >> i'm getting wiser or as i age -- and i did have a birthday. maybe that's what it is. >> happy birthday, joe. if you have any comments or questions, our address as always is squawk@cnbc.com. when we come back, counting down to the jobs number tomorrow. making his way to the set right now, jerry webman of oppenheimer funds will give us his insights on the economy, the markets and what we might be saying. unemployment facing, one of the longest roads to recovery leaving investors anxious awaiting that jobs number tomorrow. jerry webman, chief economist at oppenheimer funds along with stu sh witss of jpmorgan private bank. nice to have you back. >> glad to be here. >> how are you feeling going in? >> i feel like we're seeing a trend that's positive. you know, we may get a shock on friday. if it's a shock, it probably gets revised. this is an employment situation gradually grinding higher. so, i'm feeling okay about it. i think we're, you know, road to eventual recovery. >> a couple schools of thought. one is that the data's improved so dramatically over the past couple of months that naturally some of these revisions, you'd think, might be going up rather than down. others say that the improvement was so dramatic that there was ought outliar, at least a short-term outliar and maybe we get disappointed tomorrow. >> yes, you could get disappointed tomorrow. but the trend f you look at all the underlying numbers, you look at the hours worked, you look at temporary employment, you look at all the stuff around it, you look at production relative to sales, all that stuff says people are going to get jobs. so, yeah, ten years from now they'll tell us what the number this friday really was. they'll come back and revise it and, you know, some of us will still be around to talk about that. stu will still be here. >> i hope so. >> yeah, i look forward to it, too, you know. >> most of us will probably be here, too. >> i hope. but -- so, i mean, this is okay. this is the gradual grinding recovery. don't be misled by any specific numbers. >> i agree. the point you've got to remember here is last year when consumers got freaked out, so did business people get freaked out. and so businesses cut back on spending both hiring and also capital spending, by the way. disproportionately to what -- to how the recession ended up being. it was terrible, severe recession, but the cut backs in hiring and in cutbacks were both disproportionate to that. so there's room to come back. >> what about the argument that all of this refilling you're seeing right now is just refilling depleted stocks. is there really demand? this will -- >> we've got to start somewhere, becky. this is where you get the virtues cycle business. i mean, if the -- and i know you guys -- joe particularly loves this. the stimulus program actually puts people to work, hired my son as a public school teacher, he bought a new pair of birkenstocks. that creates some onward momentum. even rebuilding inventories. look, you have to start some auto assembly lines again. chrysler was completely shut down a year ago. so you start those people, they get jobs, they buy stuff, pay attention to your advertisers and that's where you get a virtuous cycle. >> the idea should be you light a spark. the key problem then is, do you pull back the stimulus, do you pull back all the monetary and fiscal stimulus commensurate with the improvement in the private economy? if you don't, that's how you get severe interest rate and down the road potential inflation problems. >> so you keep your foot on the gas? >> i would for now but not as hard on the gas as it normally would be, as an investor, for this point in the cycle. >> and you're not dancing as fast, right? >> well, yeah, that was a bad use of the -- >> yeah, that was -- >> that was an age -- >> people still come in and talk about how we need principle reductions on mortgage, a second stimulus package later in the year, the regular host of suspects, commercial, another leg down in housing. how much of those are -- >> those headwinds are real, that's why we're looking at what probably is cyclical bull in a secular bear market. why it was different last time when leverage was the answer to all problems. you know, monetary policy. right now, you know, it's -- central bankers are like purple cows. i'd rather see one than be one because it's a very tough time to make this thing all work. >> you're right. >> all the negativity you talked about, carl, that's the reason i think we're going to surprise positively and why equities have the potential and likelihood of doing better. at some point down the road, it's getting better, ultimately it's getting better now. it's going to get worse later. who knows when. things always cycle, right? and if the policymakers do act in a constructive way, this whole thing could be stretched out longer and be more favorable. so for now, keep your foot on the gas, i think, but be prepared for things to change. >> last question -- do you think 10 will be the high on unemployment? >> maybe not because people will come back in the work force. the unemployment number itself is not terribly interesting. watch what happens to total household employment. that keeps ticking up. what matters is how much people have jobs, not who's in the labor force. >> i think the unemployment rate, though, is the political bellwether, needs to come down, jerry. >> you're right. >> for some relief from the pressure to keep stimulus going and growing. >> excellent point. substantively, yes. not politically. coming up, we have gm powering up for the introduction of the volt with the new lithium-ion battery plant. ed whitaker is there, so is our own phil lebeau. phil's up next when "squawk box" comes back. still to come on "squawk box" -- the leader of the last frontier sounds off to the "squawk" team. alaska's governor shawn parnell talks energy policy, health reform and job creation. plus, former federal reserve board governor rick mitch kshkis in for the rest of the show. charles needs those contracts tomorrow morning. we should send them overnight with fedex. i already sent them. i didn't use fedex. better cross your fingers. [ man ] oh, yeah, the accident. well, you better knock on wood. remember, we did a green renovation in here, there's no wood. but russ bought a rabbit's foot. it's a bear claw. you could throw salt over your shoulder. actually, that's a salt substitute. but you should find dan -- i think he's a leprechaun. what is it about me that says leprechaun? can someone tell me please, someone? you should have used fedex. [ male announcer ] we understand. you need reliable overnight shipping. fedex. i was just in town for a few days, and i was wondering if i could say hi to the doctor. is he in? he's in copenhagen. oh, well, that's nice. but you can still see him! you just said he was in... copenhagen. come on! that's pretty far. doc, look who's in town. ellen! copenhagen? cool, right? vacation. but still seeing patients. oh. [ whispering ] workaholic. i heard that. she said it. i... [ female announcer ] the new office. see it. live it. share it. on the human network. cisco. gm is opening a new lithium-ion battery plant this morning with chairman and ceo ed whitaker in attendance. phil lebeau is there and he joins us now with what to expect. good morning, phil. >> reporter: good morning, becky. this is the star attraction, aside from ed whitaker talking with us today. this is the battery pack, the lithium-ion battery pack, going inside the volt and other electric vehicles that general motors plans to be making from here on forward. production actually starts today. this is a big deal for general motors because they have sunk a lot of their future bets into this plant being a success. again, these batteries will be going into the volt. that production's going to be starting up a little bit later on this summer. when it does start up, general motors expects this plant eventually will employ about 100 people. where did they get the money for opening this plant when they were in bankruptcy? a lot of it comes from department of energy grants. gm receiving about $106 million from the d.o.e., invest another $143 million and now a battery plant. ed whitaker will be here. he said the company may release some chevy volts before the scheduled launch, which is expected to happen in november or december of this year. yesterday we had a chance to talk with him in a conference call. he said that he does expect general motors to become profitable this year. there are some hurdles but he thinks they can overcome them. ipo, not likely until late this year, more likely early 2011. and at this point, there are no lists for candidates for ceo, although i can tell you this, guys, a lot of questions yesterday about chris lidell, the new cfo from microsoft, whether or not he'd object the short list of candidates. ed whitaker says, well, i guess he could be, sort of that texas twang. we'll be talking about him later. >> yeah, that is a question. he fits a lot of the -- he's got a lot of the qualities he's looking for, doesn't he, phil? >> reporter: absolutely. >> young -- >> reporter: he's an outsider, operational experience on a global basis. he understands how to take the things to that next level in terms of technology. the question becomes, he hasn't even set foot in the office here in detroit. >> oh, you know, you always -- >> reporter: is he a good match? >> you always looking for the negative there. so he hasn't stepped into the office yet. >> we're going to speculated. >> reporter: oh, the guy hasn't started. let's give him the top job. >> exactly. all right. thanks, phil. i keep hearing about this tesla. you've driven one, right? >> reporter: i have. yeah, they're impressive. >> they're amazing, right? >> reporter: no doubt about that. >> why can't we do that? why can't we do that with one of our companies domestic? >> reporter: well, nair working towards that. that's what this is all about. it's going to take a while. >> all right. let's bring in another voice. john woconowitz from global insight joins us. close, right? >> good morning. >> good morning. >> why can't we do that? is that what whitaker is trying to do? because we used to be able to make cars like that here that everybody wanted. you think we're headed that way again? >> absolutely. i mean, that's what gm and ford, i think, are already doing a great job of. i'm not sure that the tesla is the car everybody wants right now, but certainly cars like the volt will be very important for gm as we move into the future. >> what else? ford, i think -- how far ahead, john, would you say ford is in items of just design and getting, you know, american people what they want? or globally what they want. >> i think it's actually pretty even race between ford and gm in that regard. but one area where ford is definitely ahead is in this new con ekttive they introduced called my ford touch. that's truly class leading and something that will bring a lot of people into ford motor company products. >> if it's not tesla type car for gm, what is it? is it -- i don't know. is it the volt? is it the camaro? what else have they got? >> it's a whole bunch of things. everybody want a different kind of vehicle. what it is about is providing class-leading vehicles with high quality, durability and reliability that the consumer can trust that will have high resell value. this is what both gm and ford are working towards and i think doing a good job getting there. >> go ahead, phil. >> reporter: john, i'm curious from your perspective, when you look at how general motors has come through the last year with the bankruptcy, do you believe that the goodwill, if you will, of the american public has restored to the point where people are less concerned about whether or not these guys receive government funds and went through bankruptcy and are now more focused plainly on the product? >> we're getting there, but there are still a lot of people concerned about the government funning. i mean, that's going to take a lot of longer to go away. but, you know, all gm can do about that is produce the kind of products people want to buy. >> go ahead. >> john, this is stu schweitzer, guest host. you've been talking about gm and ford, and that's great, but how about their standing relative to the imports? are these new products going to allow them to gain market share back from the import makes or is this a matter of just holding the line? >> in many cases the gm and ford products are actually better than what the imports are offering. they're more exciting, more fun to drive. but they have a long way to go still, the domestics, in convincing the american public that they've even reached parody with the imports. so now it's about a big marketing campaign, more than about the actual job of catching up technically. >> okay. we're going to end it there, john. phil, it was -- we appreciate it. i can't imagine a car that makes no soubd that goes what -- what is it, 0 to 60 in like three second? >> reporter: yeah, it's pretty impressive. we've had a chance to drive it. it will only be tweaked from here on out. >> no sound? >> reporter: no sound. >> how do you not hit people when they -- >> yeah, they have to put sound in so that pedestrians -- >> reporter: but they can. it's a chip. if you want a sound like a camaro, you can make it -- >> like my digital camera makes a sound like shutter snapping so i knew it took a picture. that's the only way you knew it took a picture. i'm trained to listen for that. >> i would like to do it without any sound. >> i like it with. >> sneak up on people. is that what you like, joe? >> people don't know you're there before you're gone. thanks, phil. in just about ten minutes' time, former fed governor rick mishkin will be joining us for an in-depth look at the fed, the economy and tomorrow jobs report. up next on "squawk box," don't make a trade until you know when stocks are making headlines. joe tellses you all the pretrade news you need to know. what are you doing...? calling chase sapphire, seeing if we have enough points to stay longer. now? you don't have enough time... and you have to push all those buttons... no buttons, someone answers every time. yeah, right... bet you a massage... yeah, ok. hi, julie... i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire... you call. we answer. no waiting. just press right here... go to chase.com/sapphire. chase what matters. ♪ there is a young cowboy who lives on the range ♪ ♪ his horse and his cattle are his only companions ♪ >> i do like him. i just don't think you should ruin james taylor with the animal -- >> i thought you liked the animal orchestra. >> oh, you wanted it. >> i wanted james taylor. >> but you didn't want the animal orchestra to ruin it, did you? >> well, i'll -- >> you'll leave musical selection to joe? that's a mistake. >> when we play yoko and then the animal orchestra, then it's an uptick. in this case, i don't -- >> james taylor is sticking with me. >> you're dressed kind of like a cowgirl today. >> well, yippee-yi-yo. >> alocoa -- those look like riding pants. >> these don't look like riding pant. >> well, you usually have a skirt, right? >> it's january, 20 degrees out. >> all right. leggings or something with it. >> just start -- tell him what he likes like. make something up. >> yeah, go ahead. alocoa downgraded from hold to buy at citigroup. i will not call it citi. citigroup. target remains 17. you can't change who you are by dropping -- you know, by changing -- >> oh, yes, you are. >> the target range 17 and the firm is noting valuation in 4x headwin headwinds. 3m was downgraded at j pmepmorg. bank of america upgraded from outperform to neutral at credit suisse, goes from 21 to 17. humana, upgraded to equal weight from underweight at barclay's. reynolds american downgraded from sell to neutral at goldman sachs. target is 53. bed, bath and beyond upgraded to neutral at piper jaffray. we are about to get a wave of retail sales numbers at the top of the hour. we'll slice and dice them with dana te dana telsey and sticking up for the last frontier, sean parnell tells us about the battle he's fighting over energy policy on the hill. we'll be right back. wow, that's a low price! wow, that's a low price! wow, that's a low price! how many products do we carry? [ man ] 7,000. wow, that's a low price! i'll get him a cart. hot diggity dog! yeah. that's a low price! [ male announcer ] staples has low prices on everything you need for your office. and we mean everything. staples. that was easy. what's going on? we ordered a gift online and we really need to do something with it... i'm just not sure what... what is it? oh just return it. returning gifts is easier than ever with priority mail flat rate boxes from the postal service. if it fits, it ships anywhere in the country for a low flat rate. plus i can pick it up for free. perfect because we have to get that outta this house. c'mon, it's not that... gahh, oh yeah that's gotta go... priority mail flat rate shipping starts at $4.95 only from the postal service. a simpler way to ship and return. host: could switching to geico 15% or more on car insurance? host: does charlie daniels play a mean fiddle? ♪ fiddle music charlie:hat's how you do it son. vo: geico. 15 minutes could save you 15% or more on car insurance. one more step. >> there's nothing to fear here. excuse me. the jobs report in sight but not before another fresh batch of numbers. we have the weekly jobless claims report at 8:30 a.m. eastern time. the decorations are gone and santa has gone home. >> ho, ho, ho. >> no! >> now it's time to durn turn in the retail report cards. find out which stores are riding high going into 2010. alaska, the last frontier. moose, care abu, mountains, king crab and, oh, yeah, oil. >> there's a whole ocean of oil under our feet. no one can get at it except for me. >> alaska governor sean parnell enjoying the balmy weather in washington. about to talk to us about energy policy spending and health care reform. >> welcome to alaska. here's $1,000. >> well, it's about time. >> "squawk box" begins right now. ♪ love to alaska ♪ go north for his home ♪ north to alaska ♪ we're going north the rush is on ♪ >> welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernen along with carl quintanilla, becky quick, elvis briefly. guest host, stu schweitzer, jpmorgan global market strategist, the elvis of stock investing and picking. >> he does dance. >> i dance. >> a lot of innovators -- >> good moves. >> never worn the white sequinned outfit -- >> do you prefer the old stu or the young stu? >> that's a good question. i like them both, don't you? >> isn't this the young stu now? >> yeah. >> young at heart, i promise you. >> joining us, another legend, i dare say, from irvington, new york, rick mishkin, columbia university professor. so much the talk to both stu and rick about the day, especially jobs. we'll get to that in a second. coming up in less than a half hour, we have to get the jobless claims report, which is -- who could believe that that has been something that honestly we tease it, talk about it, promo it. three, four years ago jobless claims went by by -- >> it's the best single cyclical indicator there is. >> for now. >> for coming out of recession. the best single indicator. >> if you wonder what economists are looking for, they expect new filings for benefits just to rise slightly, up 8,000 to 440,000. ahead of the numbers, the futures continue to be a little bit weak today. is there bad stuff happening? >> no. actually, pretty good news happening with retail sales. we're getting number out from gap and macy's. both coming out with numbers better than expected. gap's up by 5% versus the up 2.6% the street was expecting. old navy was up by a whopping 7%. that's one of gap's chains that performed very well. also macy'sous, same store sales up 1% versus 0.8% the street was expecting and raising guidance for the quarter, talking about $1.14 to $1.18 is what they're looking for when you exclude restructuring cost. the street's at $1.13. i don't know about restructuring cost, where they're in. again, talking about $1.14 to $1.18, higher guidance for macy's that comes after limited raising guidance earlier today as well and sears talking positively about its earnings for the quarter. some of them beating same store sales numbers, some not so much. let's get to dana telsey. dana, overall, these numbers look a little more positive than we may have expected heading into this day. >> it certainly goes along with the theme that holiday 2009 is a profitable holiday season. the top line was decent. we're seeing a rebound into positive same store sales. they didn't have high inventory levels. and the markdowns were pretty much on plan. that's what drove macy's and also the plan promotions of gap, that's what gave them the 2% comp number. >> the tricky part to figure out here, is this good news about the strength of the consumer or is this just really a story about the retailers being very smart in their operations? >> i think retailers played it smart. i think they reorganized their businesses in 2009. they have hunkered down. consumers, they've opened their wallet a little bit, but certainly as we go through 2010, we'll continue to see discretionary play a bigger part. >> you know, i saw a comment earlier from les, from their press release, how they're manage very conservatively some of their operations. it's served them well to this point. does that mean the retailers aren't going to be stocking back up? they're not necessarily expecting a flood of new sales? >> exactly. they're not opening that many more new stores. there's no new malls being built over the next two years. they want to be able to sell at full price instead of markdowns, so what you see now in the stores in terms of the lean inventory levels, they're not piled high and watch them fly. they're going to keep doing that. they'll play for profit rather than play for top line. >> but bottom line, so far the numbers have been better than most people expected? >> in line to slightly better. some earnings coming in better. the only earnings where the guidance was lower, is hot topic. limited better, macy's better, and gymboree raised earnings guidance. >> we'll check in with you in the next half hour, when we get more shares as well. i think target's results are expected in the next 20 minutes. thank you. >> thank you. stu? >> i think these are great numbers. >> you wanted to improve but you don't want it to blow the -- knock the -- you know, knock the lights out. you just want something in the middle that is good enough so that the companies can make more money and people can get somewhat more jobs. but you don't want to bring the fed in too soon. >> and that's the same reaction the street seems to be having right now. bid/ask on naesmacy's, it's indicated 1762 to 17.63. gap, that's up by 70 cents so that could be strength as well. quickly on shares of limited, bid/ask on all these stocks indicated quite a bit higher. limited shares indicated to open almost $1 higher, just above $20. >> i think the high-end retailers will see an improvement because a lot of people at the high end cut back disproportionately in their spending and down the road there will be more of that. >> the bid/asks are more important. that will show you the streets positive sentiment ahead of the open. >> we'll keep an eye on how the month might be coming in for retailers. meantime, it's a perfect day for our guest host to be here, rick mishkin, former federal reserve board governor, columbia university professor, along with stu schweitzer from jpmorgan. rick, it's great having you because this week has been crazy when it comes to coverage of the fed. we had the chairman give that speech earlier in the week where he basically talked about regulation being lax, blaming the bubble on that. "times" asked how could they trust the fed when they missed the bubble last time? the minutes yesterday, they continue to hem and haw about mortgage purchases. where do you think things stand with them? >> the first thing we've got to understand is nobody's going to be able to predict bubbles and be able to alleges deal with them. and the nature of what we've had happen in the past two years or so, although it's been much more severe than usual, is something we have had happen over and over again. this is part of the capitalist system where you have booms and busts. and it's very hard to get this exactly right. and one of the key things is, is to do the best job you can. what is very important is we avoided a depression. we got close and that's very important news. actually, the economic numbers coming in are indicating that the economy is recovery, the likelihood of a double-dip recession is now diminishing. we seem to be getting back to a sustained period of growth, although actually i think the situation is one where we're not going to have a v-shaped recovery. we'll have basically steady growth, but not very spectacular. that's going to present a whole set of challenges to policymakers. >> how far down do you think the odds of a double-dip have come, given the data we've gotten over the last three or four weeks? >> i think it's really gone down a whole lot. a double-dip recession is pretty damn unusual. typically when we see this happen, particularly the classic episode of when this happened was in the early 1980s. remember, that was a period where inflation had gone up to very high levels. the fed decided to deal with it, big paul volcker got out the baseball bat and hammered the economy. then inflation didn't go down and then the fed rose rates back up to 20% in the federal funds rate. of that a very unusual period. usually when you have a recession, the economy does recover. it's rare it goes into a double dip unless something really bad happens or something unusual happens. in this case, what we've seen happen is the financial markets have been steadily improving. the drag on the economy from the financial sector has weakened to a great extent. it's still there. so there's really nothing in the fundamentals that would indicate we have a double-dip recession. >> i like that. and you're saying damn a lot, too, which i totally respect. stu, do you agree with him? >> i do. first of all, we were one policy mistake away from another depression a year or so ago. we really -- the policymakers, particularly at the fed, i think, executed things really incredibly well. and i think the odds of a double-dip recession are very low. >> how low? >> 1 in 10? i just don't see a double-dip recession. i think the way you get a double-dip recession, kind of what rick said, it's that policymakers need to come in and tighten back up in a significant serious way. but inflation pressure's very, very low right now. they'll face that issue down the road but it's not today's issue, it's not tomorrow's issue. >> we'll tackle that question a lot more -- >> in fact, i think that's -- >> go ahead. >> that's the challenge going forward. the challenge going forward, right now i don't think things are that complicated that you're in a situation where the economy is starting to recover but there's a hell of a lot of slack in the economy. inflationary pressures are very well contained, inflationary expectations are fine. nothing very complicated. the fed has to keep with an accommodating policy for the time being. the real challenge is going to be down the road when the fed has to take back a lot of this accommodating policy and the political situation. we know there have been very serious attacks on the federal reserve. chairman bernanke's speech was, i think, a very important one because he countered the view, and i think did it very, very well -- in fact, i've always been very skeptical of the view that people said the federal reserve created the howing bubble as a result of too easy monetary policy. i think the evidence just doesn't indicate that. and chairman bernanke's speech was a very serious discussion of the empirical literature out there on this topic. and i think it was very important to do so. the issue -- the reason why that's so important is because when you look at what has happened, the clear problem is, what do we do in terms of making sure we don't have credit booms? that's really much less of a monetary policy issue than an issue of macro issue of regulation and that's where we need to focus in terms of making sure we don't have this kind of thing happen again. >> we talked a lot about -- not just the stangs of that speech but the timing as well. we'll get into that later. professor mishkin, stu, you are here for the rest of the show. another 48 minutes, joe, to cover all those -- >> you certainly are. >> perfect. >> all right. awesome. when we come back, when governor sarah palin left alaska for the national spotlight, our next guest stepped up to lead the last frontier. next we have alaska governor sean parnell. he's going to join us from washington, d.c., where it's colder than it is in juneau. we'll find out why he's locking heads with lawmakers on capitol hill. good news, my phoenix office... the meeting went great! they loved the presentation! judy, great job on the printing! i'm amanda. tom. james. nice job on our brochures and letterhead. louis, keep up the good work with our shipments. it's -- it's peter. great job, everybody! that's a closet. you know what, guys? take the afternoon off! we can't. that is why i hired you. world's proudest boss. [ male announcer ] we understand. you can never have too much help. fedex office. welcome back to "squawk box." the furltures are a little weak. dow futures down by just over 28 points over fair value. nation's retailers making headlines this morning. macy's posting better than expected december comps. also raising its fourth quarter guidance. you can see right now, by the way at 17.65, ask at 17.68 after closing at $17.10. gap same store sales, let me correct this right now, fell slightly short of estimates. they were up 2%. street was looking for up 2.6%. old navy performed very well, up 7%. as you can see right now, the bid/ask on this one is a little mixed. it kind of sits on both sides of where the close was yesterday. we'll keep an eye on that. also shares of american eagle and aeropostle, keeping an eye. american eagle is a little unchanged. teen retailer kompz, both ahead of expectations. abercrombie falling short and shares are under a little pressure if you take a look right now. anf, 34.99 to $35.40 after a 4:00 p.m. close of $36.21. america's last frontier drilling through washington, fighting federal policy which would hinder oil production. republican sean parnell is the governor of alaska. he's in d.c. this will morning. for a series of meetings. it's great to see you, governor. welcome. >> thank you. it's great to be here. >> we have seen -- we've seen how important oil and gas is to a country like russia. we now know from alaska, you can see russia. . we found that out during the campaign. but you are like our russia. you've got a lot of oil and gas. do you feel like you're at odds with this administration about trying to do what needs to be done? >> well, listen, the federal government is doing their best to overregulate air, land and sea. it's all going to impact investments, jobs and energy production in this country. so that's -- that's been a huge concern of mine here. >> let me -- i guess you could say, let me count the ways because let's go over them. you've got the potential for regulating co2, right? is that a problem? the epa can do that now? >> they've now said that greenhouse gas emissions constitute an endangerment and they want to now regulate that. i think congress ought to do that. talking about oceans, for those that have coastlines, they want to zone the ocean, called marine spatial planning so but boxes and squares of cu's planning in place. when it comes to our land, endangered species act, you know, species listings and critical habitat areas, it's layering just another -- adding on layers of bureaucracy to development there. >> and then we have the -- trying to do something with the outer continental shelf, right? >> well, listen, we've got companies, one has invested $3 billion in federal leases and capital related to that lease but they can't get permits to explore it, even though they've agreed to take measures to protect the species there. they can't get an air permit out of the epa. we need these jobs. 35,000 jobs at rick in the outer continental shelf. they can drill in the gulf of mexico safely. i think we can do it off the coast of alaska, too. >> people on the other side would say that 25 billion barrels of oil, 132 trillion cubic feet of gas, it's not going to solve our problem. you can't drill your way out of this, no? >> well, i think we can produce jobs and energy in greater abundance for this country. i think alaska's got the natural resources to do it. take gas, natural gas, for example. we've got 8 billion cubic feet of gas coming up out of the ground every day with the oil and pushing it back into the ground. i think america needs that natural gas. it's a great bridge to renewable and alternative fuels in the future. >> one of the largest infrastructure projects in history is your pipeline. the natural gas pipeline. that would seem like a natural for the stimulus program. does everything we're trying to do with stimulus. do you feel like you needed to be greener to get a full commitment from this administration on that? >> listen, i give the president kudos on that one. hes the natural gas pipeline from alaska is one of his five green projects. i would like to see a greater push there just as we're pushing it at the state side. because i think we need in this country more natural gas, alaska's got it in abundance, we're ready to bring it to market. >> governor, you know, just the original arguments you laid out made it sound as if you are opposed to any sort of regulation when it comes to monitoring what's happening in oil and energy production and exploration. i mean, a lot of the regulations that have been imposed were imposed because of the exxon valdez spill that affected your state directly. are there any regular layings that you think are good regulations? >> well, clearly. we have a state regulatory regime and existing federal regulatory regime. when the federal government draws critical habitat for animals they already have a marine mammal protection act that protects in our state polar bears. so they don't need another layer of protection. there are multiple layers of protection in place already. >> there are drunk driving laws for manning a ship. >> i know, but the original -- the original regulations, some of these things that were put in place, were because of that. i just wanted to clarify that you're not opposed to any and all regulations? >> absolutely not. i'm opposed to overregulation that kills jobs in our state and our country. >> i want to read from the journal today, switch gears entirely, governor. bill ritter, 53 years old, that's young, from where i'm sitting, one-termer, so fully right in the middle of his political career, not going to run again in colorado. in the journal it says that some analyst see this as an indication the democratic party is faltering, especially in the west, a region crucial to the success of '08 and counterweight to the republican strongholds in the south. you're way up there in alaska, you're not even contiguous with us, but, you know, you do talk to other governors. do you see it that way? think there's trouble out west? >> i think it's beyond that. i think it's the people of this land are not going to stand for having their freedoms taken away from them by congress. and anybody that stands with that line of policy thinking is at risk. en only in the west, but i think throughout this country. >> which freedoms are they taking away from us? guns, i assume? something like that. >> that's one. think about the health care package where they're requiring people to purchase health care insurance. from our perspective as a state, when they singled out a state like nebraska as not having to contribute to medicaid but the rest of us have to pay, that violates the general welfare clause of the constitution, which orrin hatch made such a fine argument in t"the wall street journal" recently. when congress keeps doing that, people are going to rise up and elect other people. >> do you have a democratic senator in alaska? >> we have both a republican u.s. senator and a democratic senator. >> well, you should have had your democratic senator hold out a little bit longer and you would have your medicaid paid for. >> ben nelson has said he's pafd the way for other states to hop on the band wagon for his boys. >> you have to be last. >> that's what's wrong with washington. i think the people of america see that and they'll take it out of the polls. >> we had senator conrad on yesterday, kent conrad, who said this is the tempest in a teapot because no way future congresses and senates will be held to some deal cut this time around. that nebraska can probably forget about it. they're not going to end up getting the deal ben nelson thought he was getting for them. >> i don't think people of america will forget when they go to the polls. >> suddenly, governor, one thing you have to say about sarah palin, the governor of alaska is a big deal now. sudden suddenly you've had moved into the limelight. >> i'm happy alaska is down on the map. we're not down by hawaii on the "good morning america" maps. we have potential we want to bring to the rest of america. i'm thankful that she has put alaska on the map in that way. >> exactly. not the same way blago put the illinois governorship -- >> i was going to say, do you think she's brought attention to alaska in a positive way or sour with the sweet? >> you know as well as i do there's been great. i have the greatest respect for governor palin. i think she put alaska on the map here in america and i'm happy to just pursue those opportunities that have been opened up there. >> all right. we appreciate your time, governor. keep an eye on putin. we appreciate it. >> will do. thanks. jobless claims coming out in four minutes. always hungry for ideas. they find them at td ameritrade. trading's all about strategy. and strategy... is all about information. so i start my trading day... with td ameritrade's morning perspective. that's interesting... or, look at this... i can mine their weekly webcast for ideas. this is what i need. of course, ideas are just the start. so now i can drill down. heat mapping... heat mapping shows me where the money's moving. 2,500 stocks... one quick glance. cold... cold. hot! right there. look at this-- pattern matcher... pattern matcher spots technical patterns, automatically. wow, look at that. look at that head and shoulders right there. it's like pattern radar. pattern x-ray vision. plus, this amazing gadget... called the telephone. i can call td ameritrade anytime and talk trades, strategies. anything. that's where the action is. td ameritrade. built by traders for traders. announcer: trade commission free for 30 days plus get $100 cash, when you open an account. it doesn't cover everything. and what it doesn't cover can cost you some money. that's why you should consider... an aarp medicare supplement insurance plan... insured by united healthcare insurance company. it can help cover some of what medicare doesn't... so you could save up to thousands of dollars... in out-of-pocket expenses. call now for this free information kit... and medicare guide. if you're turning 65 or you're already on medicare, you should know about this card; it's the only one of its kind... that carries the aarp name -- see if it's right for you. you choose your doctor. you choose your hospital. there are no networks and no referrals needed. help protect yourself from some of what medicare doesn't cover. save up to thousands of dollars... on potential out-of-pocket expenses... with an aarp medicare supplement insurance plan... insured by united healthcare insurance company. call now for your free information kit... and medicare guide and find out... how you could start saving. welcome back, everybody. target right now out with better than expected same store sales, up 1.8% versus down 2. -- or versus the estimate of down 0.2%. again, up 1.8%, saying it was much better than expected. we'll have more on that in a moment. up next, though, the weekly jobless claims report. another step towards tomorrow's big employment report. a man who played second base here some 45 years ago. actually, 47. ladies and gentlemen, mr. larry mccarthy. amidst today's financial turmoil, our sophisticated wealth transfer strategies... and philanthropic expertise ensure your legacy... is passed on to family or your favorite pastime. ♪ northern trust. wealth management. asset management. asset servicing. if you're wondering what the jobs number will be tomorrow, we're about to get a important clue, weekly jobless claims coming out from rick santelli. >> rick santelli is giving you some very good news in claims. they haven't moved much. well, that might not be good news for all, but certainly makes the game and keeps the game afoot. 434,000, up 1,000. 4.8 million on continuing claims. that's a little better news -- actually, a lot better news when you consider we were at 4.98. big strides on continuing claims. the issue once again, i can only give you the generic headlines. you have to go and really dig to the department of labor and dig into these categories. on the surface, obviously, continued drop in claims, which was at one point close to 7 million, has been substantial. we are transferring a lot of those into other categories. now, coming in, you have to know, it was big stories out there. again ishgly the dollar index having a big up day at the expense of -- well, let's see, the yen, it's doing great against the yen. euro's giving quite a bit back. the pound, not much off from yesterday. but it has been a laggered anyway the last week or so. some of the dynamics, the punch bowl, whether it was our minutes, the bank of england's minutes. it seems central bankers are quick to point out green shoots but not quick to pull away the kool-aid, and that is the stimulus trade. but it's going to be fascinating to see in the face of that the curveball of a strong dollar in the u.s. is going to put those very trades in the box today, just look at the price of gold. interest rates, well, yesterday we saw the curve steepen rather dramatically on the minutes. short maturities moving lower. today they're back up and long rates are up as well. we want to watch rates. in general, supply, corporate supply is everywhere. next week, treasury supply will join the heat. back to you. >> rick, thank you very much. before we get reaction to those claim numbers, steve liesman is here with some other breaking news regarding the consumer. >> yeah, real quick on the jobless claims what i want to say is we're not going to try to give you the other numbers that rick's talking about right now. we can't get them on set. we'll come back, 9:05, we've done every week now. a full breakdown, the seasonally adjusted, nonseasonal adjusted, and we'll get a full picture. bottom line, inputs to the system which are the jobless claims number are going down. let me get to the american banker association, outright now with the third quarter -- sorry, this is old data but the newest old data we have. consumer delinquencies falling to 3.3% from 3.35% in the second quart. this is the first decline since 2007 overall. home equity loans still going up. delinquencies up. credit cards were down to 4.7%. indirect auto loans down 3.15%. all of the -- seven of the eight categories were down. the eighth being homes was up again. so that's a little bit of good news. now, i want to get to the national federation of independent businesses. we have a little preview on the tuesday nfib small business report when it comes to jobs. bill dunkleberg sending a note saying job creation should take the data from the nfib report shows job creation should take us over the zero line but unemployment rate won't give up much if anything, staying in the low 10% range. that's a preview of what's in the numbers. one orbit of data shows 64% of states meeting or exceeding withholding tax. that would be a number consistent with job growth, if last year wasn't so lousy. so it's hard to know, because so many states mixed their targets last year. it's hard to know right now whether or not this is a good number or a good enough number. again, they take us over that zero line. that's the debate in the markets. >> steve, it's also taking -- also telling us that that weekly hours are going up and so people's paychecks are getting bigger. it's not just the people that are maybe going to get new jobs. but those that already have jobs that have been on shorter hours that are now going to get more hours. that's been a trend that's been developing for a while. >> there's very little in economics that is like constant, like a plank constant. but the idea that productivity is at 9% and people are either, a, not going to get more money or, b, not have more hours out there, seems to be about the truest statement you can make in the field of economics right now. >> i completely agree. the corollary to that, by the way, is that with unemployment at 9%, company profits can be really disproportionately good to whatever the growth rate of the economy is. >> then answer the 64 gazillion dollar question right now which is the last number we had, $820 billion of cash on the books of the s&p financial -- industrials, where -- where does that money go, when does it get into the system and when do they start hiring and investing? >> it's also m&a -- >> and buybacks and dividends. >> i particularly say m&a. we're starting to see that. i think that means more restructuring. it means more pain for some but also means ultimately getting more efficient. this is a great situation. for as bad as this recession was, companies were -- nonfinancial companies were in the strongest position they practically could have ever been in -- >> that's the great irony of this whole thing is how good finances and balance sheets are of the nonfinancials. >> big companies. >> well, and that's -- >> but you know why because they got hosed in the 2001 recession. they got religion, they got religion after the -- >> but we need to point out the difference between the small businesses and the big businesses. all the indications are that small business are credit-constrained where big business has the ability to go out and borrow money. >> biggest day on record, corporate bonds, earlier in the year. >> but there's not so much net issuance of corporate bonds. a lot of issuance but a lot is replacing bonds maturing. >> at longer terms and at lower rates. >> longer terms -- well, yeah, wouldn't you? >> well, no, that's what's -- >> okay. now, the other thing, small business, i get the sense that a big part of the weakness in business credit has been not just because credit was restrained in its availability but because people didn't want to take on addition ale deal de. but some increase in borrowing demand starting to develop. >> one more quick point on the aba stuff, some is because consumers are getting their act together. other parts of delinquency rates because banks write off loans. not just saying it's all the consumer getting their act together, borrowing less. it also goes away because it gets written off by the banks. >> that's the deleveraging we don't like. >> let me bring rick in addition rick santelli, rick mishkin, jim, all in. rick mishkin, that's a lot of information in a concentrated period of time. what stands out to you? >> well, i think it's just a pattern. one thing you always have to be careful about is not looking at just individual pieces of information and looking at the longer-run trends. this is a case of where the economy is self-repairing. that's what typically happens after recessions. in fact, the usual situation after recession this deep is a very, very strong bounce back. in this case it's more moderate than we've usually seen and that's exactly because of the fact the credit markets are not completely repaired. this is exactly the point that was made just a second ago. which is that there are a lot of companies and big companies that have a lot of cash on hand. they're not credit constrained. they can put their money where they want to and have no big problem. but smaller firms and less well-known firms are credit constrained. their households are credit constrained and all this means there's a somewhat of a drag on the economy. in fact, the normal tendency to have a strong bounceback is muted. in general, the news is good news that we're progressing along the lines. i think it's expected and that's very, very important. but nobody should think that everything is fantastic, that we're still going on to have a very soft economy for a period of time. >> it doesn't -- does it really matter whether the news is fantastic from a market standpoint, rick, or does it matter more whether the news is better than expected? because i agree with you, 4% gdp number, which would be, to my eye, really good right now. would still be half to two-thirds of what we would normally expect to have. if it's really good relative to dpp tag expectations that can get a lot of things going. >> absolutely. the stock market recovery we're seeing, the stock market went to incredibly low levels because there was a fear that, in fact, we could go off the edge. once you take that fear away, then, in fact, the stock market recovered a whole lot. so it's not that we're in a situation where the economy -- recovery of the markets is indicating the economy is going to be so strong it's just that things were a hell of a lot better than they thought they were a short while ago. that's very important good news. but we're not out of the woods. in fact, the really big issues are going to be in the longer term. are we going to get our fiscal situation in toe? will we get more fiscally response snibl are we going to get overregulated that hampers the fiscal responsibility of the economy? those are the really big issues from a long-run -- >> jim, tell us what it means for the next two hours. >> there's so much that's been put forth. so much to disagree right now. i'll tell you what's going to happen the next 24 hours. here's the new debate tomorrow. we'll talk about the adp number, how it disappointed and how that's focused on private services sector and nfp number that comes out tomorrow which is more focused on government jobs. it will be a good number and then the debate opens up as to how much of the recovery is smoke and mirrors painted with the government brush? i think that will probably happen -- and i really think this is going to happen, which makes me -- every time i'm so sure i have to go back to the drawing board and think about it, but tomorrow i think we'll get a decent nfp number, people flock to the stock market, we have a hard time maintaining that and that's where the correction begins. something you just said, the market and the economy don't have to move together. we're up 65% over the last six or seven months. to me, it seems like the next move is more likely down. volatility is starting to compress which means the next move will be relative. when we get to that level of complacenc complacency, i think the next level would be sharp. >> i wish we had three more minutes, but we don't. rick, rick, rick mishkin will stick around, santelli, thank you very much. stu will be here every day. you can catch jim have night on "options action". up next, we'll get more reports from the mall. we have a list of retail winners and losers, including reaction to target's december sales report. hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco. welcome back. futures really haven't moved a lot. after we got the jobless claims number. speaking of which, the number of people filing unemployment claims rising just a little bit by 1,000 after we had seen a couple weeks of very sharp drops. not a lot of reaction, joe. what are you -- >> coldplay. you love coldplay. >> coldplay's the best. >> i know you are, because you listen to coldplay. >> you know am i what? >> and you have the spinach dip. go ahead. >> breaking news out on the retail front. we've been tracking december chain store sales. dane that dana telsey, target, up 1.8% versus down 0.2%. they said it was much better than expected, better than you expected also? >> we were looking for a decline, so that is better. everyone gained shares in the month of december. profits were good. we're seeing merchandise margins. the theme of christmas '09, everyone is talking about strength in merchandise margins, higher profits. look at the off prices, ross and tj does well, too. saks and nordstroms did better. >> sears out with better than expected numbers and macy's. you mentioned department stores might see a little strength. this is what you forecast? >> we thought department stores would have a positive holiday season. they did. they played. right with lower markdowns, l n leaner inventories. >> what specifically with sears are they doing right? have you been able to dig into the numbers? >> looking at those numbers first coming out, more later, but certainly it will be interesting to see with the consumer electronic show what best buy's numbers holiday sales will be also. >> and, again, we talked about a lot of these specialty stores doing better than expected. limited raising its numbers, guidance. macy's had raised its guidance for the quarter. gap came out with numbers up 2% versus the up 2.6%. so across the whole chain, not as strong as expected. old navy was up by 7%. what's your takeaway? >> the surprise with gap was that the core gap division was stronger. the old navy division up 7%. expectation was for it to be up a little more than that. maybe 9%, 10%. but one of the things they said in their press release, merchandise margins significantly higher. so the profitable christmas season. >> so your takeaway from all this is many of the stores, whether you're looking at the department stores, some of the specialty retailers, doing a little better than expected. and we could see better than expected profits for the earnings for the retailers? >> better than expected profits for q4. this certainly doesn't say the consumer is opening their wallets wide, it's just saying they're stabilizing, getting a little better. retailers know how to work in this environment now. >> dana, thanks a lot. we appreciate all your time this morning. it's been great having you. >> thank you so much. >> don't look now, you know now the jobs report is less than 24 hours away, which is a true countdown to -- it's a final countdown to the jobs report. we have a whole trading day to go. art cashin is going to tell us if traders will stick to the sidelines ahead of tomorrow's big number. i knew it was johnny horton. that was not elvis. i've seen so many commercials on tv. north to alaska, johnny horton. it was not even -- i'm embarrassed. >> that was embarrassing. >> i am embarrassed. johnny horton. johnny horton. let's check on the dollar as we head to break. "squawk box" coming right back. o 15% or more on car insurance?e you host: did the waltons take way too long to say goodnight? mom: g'night john boy. g'night mary ellen. mary ellen: g'night mama. g'night erin. elizabeth: g'night john boy. jim bob: g'night grandpa. elizabeth: g'night ben. jim bob:'night. elizabeth: g'night jim bob. jim bob: g'night everybody, grandpa: g'night everybody. jim bob: g'night daddy. vo: geico. 15 minutes could save you 15% or more. throw all right. -time for the trader's edge and and our man art cashin is here. monday god. two days, art. felt like back in christmas woke. when can we take and look at the direction and say this is real and this is likely to continue this year? when will that happen? >> well, your return to reality ordinarily is on monday. we may find out tomorrow with the nonfarm pay roles. right now the s&p is bumping into interesting resistance at the 1137, 1140 area, seems to have slowed down. if the dollar were to weaken we'd be looking for crude oil which has resistance in breakout territory, $83 to $83.25. all that's there. one other thing, joe, in your discussion of the cold weather and the climate, you left out the sun spots. i think that's far more important than the -- >> water vapor. >> and carbon i'm exhaling, yes. >> there was a time, art, before this all got there where increased co2 they thought would generate more clouds which would reflect the sun light so there was a time when increased co2 they thought would make the planet colder but that didn't fit into the way they want things to work. anyway, i'm just wondering, art, whether, you know, with the oil going up as the dollar has strengthened, has that been broken, the dollar commodity play? >> not actually. it was somewhat more pronounced in gold in the commodities yesterday, slightly less pronounced than oil. and a good deal less pronounced in stocks but again i think with stocks it's the velocity in line with the direction so if you get a kind of muted move it's not as possible as we described months ago. the great concern is something like a geo political event and a sudden high velocity move in the dollar. that would have a very big impact on certainly stocks and other assets. >> then we have earnings next week. then you have the outlook if anyone, any companies have the, what do you call it, granularity or vision to talk about the first quarter. >> the temerity to talk about. >> exactly. >> i don't think you'll hear a lot of projections. people know we're still on a bumpy road. a lot of this is from government stimulus. the feds talking about removing some of the purchases of mortgage-backed securities and whatever so it's kind of a wide open field. >> the sun spots would explain the ice caps on mars melting, too, art, because i mean that one mars rover we left up there, i don't even think that engine is running anymore. unlikely that's spewing enough hydro carbon to do it. >> no. i thought it might be on electrical power to tell you the truth. >> exactly. it may not even be -- >> oh, sure. we're green on mars. >> right. >> we're green on the red planet. you're right. >> christmas. >> green and red. all right. thanks, art. >> okay. >> see you later. up next we've got our strategy exit session. we'll get final thoughts from our guest host when we come right back. first though check out gold prices this morning. you'll see as other commodities have dropped with the dollar, right now gold prices down by about $4.60. $1,131.90 an ounce. "squawk" will be right back. welcome back with the former federal reserve governor and columbia university professor and jp morgan's global market strategist with the private bank. rick, you are the former fed governor and stu is the money manager but i want to ask you, when people come on and tell us that we're still in a low interest rate environment, the economy is still getting a healthy dose of stimulus that in that respect things like equities are still safe, does that sound dangerous to you? >> well, you know, there's no such thing as safe equities. i mean, there's always a lot of volatility and there is risk and reward. that's the way life is. i think the key thing to understand right now is that although things are looking up there is still a lot of pain in the economy. the unemployment rate is very high and is going to stay high for a long period of time. >> that said, you still think, you said earlier in the program, the risks of the double dip have come down? >> it has come down, but remember, equity movements, stock market movements frequently are very different than what's happening to the economy. clearly, there's a lot of other factors that are very important. we sometimes see very substantial declines in equities when the economy is actually doing quite well and then sometimeth