Transcripts For CNBC Squawk Box 20121214

You do not want to miss. It is a crazy story weve been talking about for the past two weeks. John mcafee will be joining us live on camera at 8 40 a. M. Eastern. Were going to get the latest chapter in this mystery that has murder, mayhem and suspension. His life is the movie of the week, if you will, and we will have it live right here at 8 40. Please, do not miss that. Lets get you caught up on some of the other headlines this morning. House Speaker John Boehner and president obama met for the second time this week. Both parties are trying to avoid the fiscal cliff. The men had a frank discussion and the lines of communication remain open, although no specific details were released. The meeting came after frustration in washington. This was House Speaker boehner earlier in the day. Republicans want to solve this problem by getting the spending line down. The president wants to pretend the spending isnt a problem. Thats why we dont have an agreement. President obama remains hopeful that a deal will get done. He he told a cbs affiliate that hes willing to do a lot more in cuts and spending, i seas, paired up with a little more in revenue. Were going to talk more about this with john harwood in just a few minutes. Mcafee today. Today. Youre doing i cant even get over it. I think hes in florida, right . Are you going to ask him all those you know when you get a guy, you like to needle them with questions they dont want to hear . Just dont get him too mad at you, thats all im because we dont know all the facts yet, right . Im trying to get a movie deal with this guy, a book deal with this guy. It doesnt matter how someone gets fame, you will suck up to them no matter this guy is notorious, hes not famous. We still have to pick the actor for him. I want pachino, in that movie where he played the devil. He had the gotee. Sometimes he has a goatee, anyway. Hes supposed to be on at 8 40. Hes traveled through many countries. We could have come up here and been on set with us, right . Maybe he cant leave florida. I dont know. Well see. Another big facebook lock upsending today. 156 million shares are eligible for sale for earlier investores and employees. Mark zuckerberg is not included in this group. He says he wont sell any more shares until next september. The stock is quietly, i guess, rebounded after stumbling below 20 a share. Right now stobs closed at 28. 25. Off 25 , but much better. Better than ending in something with a teen. And United Technologies expects profits to rise next year. The company says growing demand for its building products, elevator and airconditioners is growing. Hes hopeful the government will read an agreement before january 11th, but hes confident. Were looking for a bit of a rebound. Ragged session yesterday, but not a lot going on with the vix. Its down a little, but no one is thinking, is it going down 7. 00 . Just probably down to 70. No volatility. Theres this preserve disincentive because everybody seems to expect that well auk about it in a real in words we thaerd it was qep. We just found out it is qep. Because we had a housing boom that wasnt real. If thats the new norm, were at 3 trillion. A couple years well be at 6 trillion. A couple years later well be at 12 trillion. Are you ready for the next . Whats a thousand trillion, do you know . No, but we do have two guest hosts on the set that may be better at math. What is a thousand trillion . I know. Quadrillion. Hopefully we dont have to go above that, do well . Thats your tax story there. All right. Lets take a look at the oil boards and see how crude is fairing. Im surprised that maybe we havent seen crude go up the. Our dollar doesnt necessarily go to zero. You figure if youre doing 8el 5 billion a month that crude would have gone up because 06 worries about the dollar. Youve got new supply partly thank to fracking. I think theres a reason why oil is where it is today, actually. Brent at about 100. So wti is its own supply but its bigger than the neighbor at this point, right . The dollar is still probably the yeah. But think about what this Global Economy has gone through and present is at 100 and wti is still 85. I mean, ten years ago, people would think thats crazy. And the tenyear, this has been like watching paint dry . Paint grow. There, put it together. I told you someone wrote in what jamie said the other day, you cant blanket all bankers with the same brush. I love that. Thats one of the classics. Its like a walk in the cake. Anyway, lets look at the dollars. Mixed metaphors are so much fun. You sound like rick kaufrd, who you never heard of. Theres theres if tedgue. Its an age thing. It is and were working to bridge this gap. We are. And so am i. The dollar euro at 1. 3092. Gold also interesting that its still below 1700. But when everyone says why isnt it going up . Well, it was at 200 and it went to 1800. Is it supposed to go immediately to 3,000 . You can still buy a well, you couldnt, but i can still get a suit for 1,700, couldnt you . No, i know you cant. You cant get the vest within you cant get all the different pockets, you cant get the lapels on the vest. Suits start at five or ten grand, dont they . Yours do. You have a guy like carlson who right before the show starts, absolutely. Who is matt crawlys fellow . I know who youre talking about. I dont know. Because hes weird. All right. So here is the question of the morning. Financial times Just Announced its person of the year. You seem like you know who it is. Ive cheated. Dont say. Barbara walters already named the person of the year. It was petraeus. There is omore than one. Say i saw the name. The honor going to do we have a camera here . Its part of the culture. Person of the year, the honor goes to ecb chief mario draghi for his efforts to deal with the financial crisis. You know who also could be the person of the year . Becky quick. She knew how important that was when he said he was going to do whatever it took to preserve the euro, that statement earlier this year sort of turning things around, at least temporarily. You showed a picture of damian hurst. No, right here. You showed the guy with the zebra and im going, draghi has a lot of style. No, right here. Up here. Oh, okay. The man with the printing press. I know who he is. I told you my latest tie that i get from those guys has bernanke with a helicopter and it has draghi, too, and euros and dollars coming out of the hell koepter. Because theyre on board. Lets go across the pond to where they print this paper. Kelly evans is standing by in london and may have some views on the man being ownered t today. I didnt know the newspapers honor people like that. Oh, you see, thats the way to hold it. Yeah. You showed damian hurst. I can hold a mean newspaper, andrew. Mario draghi is the financial person of the year. This is from the inside, its not their front cover. But this is their big spread. I thought about your comment about the tie, joe. A couple of years ago, it was ben bernanke who was suddenly on the lips of everyone in the world for coming to the rescue. Its quite clear that this year is the year of mario draghi. I wonder if Time Magazine would not decide to name him person of the year. But the fact that he is in the running tells you quite a lot about the importance of europe this year. Earlier today, we were talking about the fact that they had picked trichet on in the past. He doesnt necessarily regret it. He said oppose dollars to some of the other types of running, they look for someone who is having a positive impact. They did consider angela merkel. Thats the answers with regard to the person of the year. Let me give you a quick sense of what else has been happening in europe overnight. The big moves, were coming out of asia. 4. 3 of the shanghai composite. It just had its best day in three years. This follows some pmi data that supported the idea of domestic spending. Of course, its been this coiled Spring Market over the last couple of weeks. After we saw the shanghai fall below the 2,000 level, its in several big days. The news agency tweeted a picture of chinese stockbrokers grinning this morning to give you a sense of the mood. Compare that to the nikkei which was down this morning going into the election these weekend likely to put shinzo abe back in power. Hes seen as following up his Campaign Rhetoric with bold reforms to boost the economy and perhaps get things started on a stimulus forget and yet we see the nikkei down today. Why . Because the Tankan Business survey came out and disappointed. Export orders, a sign of weakness there and in china and in some of the pmi figures that we got across europe. So the theme that is emerging, while germany even showed some signs perhaps of strength in its service sector, theres still concern about Global Growth prospects. For that reason, all the more reason why perhaps its important for policymakers to be proactive, including mario draghi. Back over to you guys. Thank you for that. Who is going to be the squawk perpendicular of the year, joe . You mean if we pick one . If we pick one. We have to pick one thats not obvious. Like mcafee, maybe. I had an opportunity to pick business person of the year and i picked richard scrusi. Its so hard to find an honest cfo. Remember the guy that helped out . I think he was on his way up the river or something. You have to pick it so theres an edge to it. Like leo apatae or Something Like that. No, like mcafee. I didnt mention that, but he may get the squawk person of the year award today. It depends on how he answers your probing your father was a litigator, right . Thats true. What we want to see today. Thats what we want to see. Okay. I want to see him wither under your cross examination. Hes already pretty withered. Yeah, thats true, he is. I think hes dangerous looking, though, dont you . Yeah. Withered, weathered, its all weathered is much better than withered, actually. We do have our guest hosts here. Lets talk about markets for half a sec. Were going to have mr. Fisher on later. Actually, lets do it this way. What is the question you want to know from fisher . Ive been trying to think about it all morning, how to come at him. So here is one. If we get the Unemployment Rate falling to the feds new target but its because people are dropping out of the labor force so that Participation Rate is going down, then what do they do . Do they stick to the target . Do they acknowledge that theres a bad reason for the movement . Do they ignore it . I think with the targets, theyre trying to get more clarity. I think theyre genuinely trying to get more clarity. The problem is now theyre going to be watching every cpi number, every pcu number, every jobs related number for the next couple of years related to when we get there. What we could see is more volatility in fixed income markets as people try to gauge every data point. Are you surprised there hasnt been less volatility . Well, its also the end of the year and whats going on in washington has paralyzed decision making. What is that increased volatility in the marketplace . Were not talking about volatility in washington. If you are a money manager, you are under the assumption still that whether its december 28th or january 3rd, there will be a deal in washington. By the way, is everybody baking into the cake . What is the date in january at which people say, okay, maybe this whole thing is more screwed up than i thought . The market is going to force the hand of these politicians, just as it did with parts. So if its december 31st, theres no deal been january 2nd, the market is down sharply. You can be sure that in the next couple of days, there will be some sort of deal. So i dont look at a drop dead december 31st date because i know the market is going to revolt. Are we sure the market is going to revolt inspect some said the market should be revolting by now. And unless theres a deal go back to last summer. The s p was flat, it was quiet, it was summer, it was ill liquid. And then right around the end of july when everyone started saying this isnt working out, suddenly, between late july and august 8th, we fell some 17 . But it was nothing, nothing, nothing, and then, oh, theres something. And i think thats the risk today. So if youre an investor, if you had some money on the sideline now, do you put it in today or do you wait for this moment that may or may not happen . Well, i wait. To me, theres one that theres a deal and number two is what are the terms of that deal . Im of the opinion that that deal is not going to be any good in dealing with the longterm structural issues. And that is not a good deal in terms of what were facing and in the context of a slow economy. If youre a longterm investor, you should be worried about the longterm nature of that deal. You see, we have more down side than up side. Turn it around, jamie dimon said two days ago that, you know, you get a deal, then you get a 4 gdp in this country. Thats the assumption that, okay, i know the terms of what issing going on and now i can stop spending. But if im a Small Business knowing that my taxes are going up to this extent and my Health Care Costs are going up, doesnt mean im going to know it now. In fact, i may retrench even more. No. And i agree with that. If we have a deal, and we take that off the table, i think thats a different deal than if we have some Republican House members not even voting for something. So the details of what comes out, whether its december or january, will affect how corporate and American Consumers react. Becky and peter will be staying with us for the rest of the hour. Dont go anywhere. Coming up, congress is heading home. Theyre getting out of town. But Speaker Boehner took one more meeting at the white house. Are we any closer to a deal . John harwood is next. A big monday is shaping up for squawk box. Named manager david tepper of the bernanke putt. I want to know the date when he was on when he said that because none of us when he said either the economy gets better and the market goes up when was it . September of 2010. Either the economy gets better and the fed doesnt have to do anything or the economy doesnt do anything and the fed comes to the rescue. No one could have known the extraordinary steps the fed would have had to take in this economy wouldnt get better. All the way out until 2012, almost 2013. A rare interview. It will be great to hear what he has to say. We have much more ahead on this december friday. [ male announcer ] you are a business pro. Governor of getting it done. You know how to dance. With a deadline. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. This is awesome. [ male announcer ] yes, it is, business pro. Yes, it is. Go national. Go like a pro. Welcome back to squawk. House Speaker John Boehner taking a meeting with president obama thursday. Did they make any progress . Thats a question john harwood joins us now with the latest on these epic negotiations. John, gives some sense that maybe things are something happening there . If theres progress there, disguising it very, very well. They met for a little will he less than an hour. People described it at frank on both sides, described it as frank afterwards and frank is a euphemism for weve got strong dpis agreements and did not make a break through. So, you know, i still think and ive always thought, as you guys know, that the fundamentals are in place for a deal to happen. But we may have to go over the cliff for a little while before it happens once those rates go up in january. And once some of those cuts kick in before you get the kind of chasening that lawmakers need to make a deal. What do you see as the top Sticking Point at this point . Tax rates. Not attaching the debt ceiling . No, no, the debt ceiling is a second stage issue and that will be a problem if its not resolved and i expect a big fight. What about these senators that some of them are really conservative. Ron johnson is a tea party guy. He wants to give on the president before the end of the year and go ahead, i guess pass a bill that would extend the rates for everyone and that wouldnt pass in the house and say, okay, fine, well do it for 98 . Put that in the president s court, get that done and is use the debt ceiling for spending. Exactly. No, that is but hes not getting anywhere with boehner and cantor . Its because boehner so far is not willing to go along with that strategy. The way that it works for boehner is if he ultimately puts it on the floor and tells most of his members that they have a chance to vote against it and make playing their opposition to any tax rate increase. But he hasnt been willing to do that so far. He would get some republicans to join with dm democrats and it would pass the house. But he doesnt want to put something on the floor that would clear the house without at least half of the republican members. Spending is a Sticking Point, but there is an asymmetry in the negotiations. Democrats have laid out what they want on taxes, specifically theyve laid out some specifics on what they want on entitlements, not as much as what republicans want. Republicans want more, but they havent said where theyll get more. This speaks to me because i see the strategy. Once you give on taxes and then youve got the debt ceiling, the people would be much less prone to blame republicans for bringing up the debt ceiling. Once the president got his way on taxes, then it goes to spending. If the president doesnt really get serious about cutting spending, then it would be his fault if the debt ceiling is not raised. There would be no tax issue any more and you could focus it on the president. Joe, youre having a mind meld with downcorker and that sounds painful. Can i unmeld . I mean, i can get no, no, im saying that no, we agree. The smarter minds in the Republican Party are going towards the position that you just articulated. The problem is, that is very, very difficult for a speaker with a caucus as conservative has his on tax rates to permit such a strategy would happen. He actually could get fired. I dont expect that to happen. Does that speak to you, this strategy . I mean, then we could get serious on spending. Otherwise, were going to get some kick the can tax cut. I think its important that we all put these numbers into perspective. 2012 revenue wise, the omb predicts that theyll be up 130 billion. Thats without one tax increase. So just by natural growth, 130 billion of extra. So the government spent 3. 5 trillion. We took in 2. 5 trillion. We have a trillion dollar deficit and were wibling about eight to ten days of the spending. So the government spends eight to ten billion a day. Just some perspective. Wes passed your tax increase, mr. President. What do you want to do with the other 9 or ten percent or whatever it is. Im not sure what your math is telling you about this 7 versus well, if we raised tax rates to 39. 6 on the top 2 , how much of the debt are we running each year. Right now we have a 1 trillion deficit to get down to 600 billion. The president is proposing 1. 6 billion over ten. Thats 160 billion out of, you know, 800 billion. So its about a its not 160. Its a little less than a but youre assuming the economy gets going. Weve been running over a billion. Some people think were going to do a billion three this year. No, no, no. 1. 6 trillion over ten. Thats 160 of the year. No, no, im talking about other stuff. Im talking about giving him the 2 . Anyway, coming up, volatility, the fed and the impact on the dollar. Plus, nike wants oregon to go the extra mile. I wish i could talk to the governor and say i dont like these taxes. Can you change them for me . Mikey is big enough to do that. Brian shactman will tell us why it could mean thousands of jobs. 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People are always asking me how we make these geico adverts. So were taking you behind the scenes. This coffee cup, for example, is computer animated. Its not real. Geicos Customer Satisfaction is quite real though. This computeranimated coffee tastes dreadful. Geico. 15 minutes could save you 15 or more on car insurance. Someone get me a latte will ya, please . Good morning. Andrew ross sorkin along with joe kernen. The two of us are together and in our continuing broman kre. Each day, it enriches both of our lives even more, i would say, with no hypothetic of irony or sarcasm. No, we had a lot of fun this morning. We did have fun. Then they played the deliverance song for us yesterday. A line line yumm still to come on an exclusive interview. I love Richard Fisher. He may be my former democrat. Hes independent now, but he was a democrat. But hes a texas democrat. His first comments on the new fed policy. Coming up, boeing ceo jim mcmurney. Im more interested in him making sure all the plane res really good. And fixed. Wouldnt you rather have them fixed all the problems with any of the boeing jets . I mean, we can weigh in on the fiscal cliff, but im more interested in them making the greatest and safest jet possible. But then this is for you, i believe. Its like ripped from the headlines. Its like inside edition, wow. Remember that sound when bill oreiley used to do that show . You know you remember an intern. I forgot that. He invited the sound. Prefox summer of 1994, summer of o. J. Simpleson. I interviewed cato kalin. I was friends with him. He came in here president nott really. He was friends with charlie sheen. Even kato was not too small of a celebrity for you to be sort of enamored with. I was 17 years old and thrilled. You are probably entitled to yo that sound because you were on that show. If we can get it, were going to use it. Robert frank. Have you met hes a great reporter. Hes going to be on talking about mcafee. I know him fairly well. You know him fairly well. You dont know and you dont know. No. This is robert frank. Oh, my goodness gracious. It didnt even occur to me. Watching you wonder where i was going was really you were like, where am i going with that. I saw frank chasing her around and i said, you know, shes on fast money. What are you, coming to the Christmas Party and he goes, weve been married eight years. Wow, in the headlines, Manufacturing Activity, the whole show is very the whole network is everybody is married to everyone else. Activity in china hit a 14month high in december. Except for you. An encouraging sign for the worlds second largest economy. Purchasing manager index rose from 50. 9 from november aets 50. 5. Chinese consumers will be able to buy apples iphone today. That should help apple reverse the slide in china. Theyre in talks with china mobile. Its true, you can search tiananmen and nothing comes up. Its a square, but nothing about what happened actually happen. Adobe systems is one of our stocks to watch today. Its projected 2013 profits are well below street consensus as the Company Transitions more customers from Desktop Software into its cloud based Subscription Services and those services feature more Monthly Payments and fewer large up front fees. Safe haven currencies are under pressure following the Federal Reserves new bond buying program. Ben lichtenstein is the president of traders audio. Com. David, i would just i mean, dont you know, havent you forgotten more in the last minute than i know about foreign currency . Maybe, yeah. I think thats quite possible. Do you have any questions for david . Well, no. I want to talk about japan. I know our audience is carrying a lot more these days about the fiscal cliff, but weve got another cliff of sorts coming up in japan, the electrics sunday. Everyone is expecting that abe follows in the footsteps of mr. Draghi and europe and mr. Bernanke here in the u. S. We can more yen printing, that weakens the yen. Maybe american investors can make some money in japanese stocks. Id be curious where you think the election is going. Does it matter . I think the world has more possibility that your pen might change course as far as monitoring fiscal policy after the elections. But the japanese realize when you play with fire, you might end up burning down the house. Jgbs nine times tier one capital, if theyre not careful, they can trigger a run on jgb and the house base comes tumbling down. So i think actually the next government is tokyo will be a lot more cautious. I think the market is so we can get another huge disappointment. So everyone thinks the dollar yen is finally going to go up, you can make money on the yen short and on the nike long and in a couple months, we realize thats not going to be the case . No. I think much more important for japan is the outcome of the fiscal cliff resolution. I think if the fiscal cliff resolution tushs out to be more, i think the yen will be one of the best performing currencies in the first quarter. And if i can keep going take over. Im having fun warming up. This is a good. Youre a good host. Thank you. Im kicking in then. Lets talk about the dollar broadly. Weve had the fed now, what, qep as were calling it this morning. Low hates here forever for the foreseeable future. What does the dollar do here . Do we want to keep telling dollars against what . Youre saying maybe not. I think the fed is largely a spent force given at this point real yield when it comes to inflation and bonds. I think if we end up with some fiscal austerity in the u. S. , and im expecting 300 billion for fiscal tightening next year. The last time we had a major dollar basically in the up trend in the late 90s was basically the dramatic improvement at the end of the 90s. If congress decides to do the right thing, and i think they have no choice but to basically impose fiscal austerity. Thats reassuring for the u. S. Dollar. And thats one of the most Amazing Things about the dollar. When our economy does really badly, the dollar does well. People buy tee bills. Even if the government is frustrated and the fed is frustrated, theres nowhere else to go. And, peter, i feel like ive read in all of your writings somewhere there will be a Tipping Point with that. With the dollar . Yes. I think weve almost reached it. They said why is the euro at 1. 30. I said ben bernanke is the euros best friend. Were the reserve currency of the world. I think that says a lot. Will we get some Dollar Strength . Well, look at the context. Gold has gone from 250 to almost 1700. What is the dollar the going to be strong against . Its all a relative game. I think 85 billion of newly printed money in the u. S. , got is going much higher. To me, thats a ultimate treasure of the dollar. Ben, wa do you want to talk about . Do you want to weigh in on that or the markets inability to move higher . I thought this was the qeb that trades would just love. I said yesterday i thought they would be main lining that news from yesterday. But they love this stuff and it was down three points that day. Yeah, for the most part, i completely agree with what was just said. You guys know i look at the market from a much more technical perspective. The euro currently was just brought up. I think the reason its holding up above that 1. 30 handle is weve seen allout support from the european and basically the initiative or thought process that theyre willing to do whatever it takes to support that currency. But really, all these markets for the most part in my opinion are a bit of a holding pattern. Look at gold, in a year weve seen 1550 to 1800. Crude, which has been establishing value to the downside for the most part and certainly could open up to the downside, these markets right now coming into yearend, at least, considering all the uncertainty thats playing, were not really seeing that fear factor at play right now. I had a couple of clients ask me yesterday, at what point do we start to sell off in the market under the assumption that were not going to have a fiscal cliff deal . But were really not seeing that. Volatility is Still Holding at lower levels at this point. The fear factor just isnt there right now and it comes from this general overall census that the power thats be are willing to throw whatever it takes at these markets to sustain them. Calling kicking the can down the road, whatever you want to call it. But were having a hard time getting above preelection levels right now. This week, we just traded up there. Again, we rejected those levels. Were clearly rejected that lower level that we saw earlier, a few weeks ago, that 1340 level i think it was. But, again, i dont see and ive been saying this for a few months now. I dont see any real major Market Movement in anything across the board. Okay, ben, we have to leave it there. David, thank you for coming through the other day. Leave it there. Appreciate it. Thanks. If you have questions on anything you see here, mikey playing offense with big expansion plans. Big question whether oregon will play ball with one of the states biggest employers. And then at the top of the hour, dallas fed president Richard Fisher, talking fed policy, the fiscal cliff and the of course economy. You dont want to miss it. You dont want to miss it. Sfoo so, im happy. Sales go up. Im happy. It went out today. Im happy. What if shes not home . together she wont be happy. Use ups she can get a text alert, reroute. Even reschedule her package. Its ups my choice. Are you happy . Im happy. Im happy. Im happy. Im happy. Im happy. Happy. Happy. Happy. Happy. together happy. I love logistics. To the best vacation sp all the gulf it doesnt matter which of our great states folks visit. Mississippi, alabama, louisiana or florida, theyre gonna love it. Shaul, your alabama hospitality is incredible. Thanks, karen. Love your mississippi outdoors. I vote for your florida beaches, dawn. Bill, this louisiana seafood is delicious. Were having such a great year on the gulf, weve decided to put aside our rivalry. Now is the perfect time to visit anyone of our states. The beaches and waters couldnt be more beautiful. Take a boat ride, go fishing or just lay in the sun. Weve got coastline to explore and wildlife to photograph. And theres world class dining with our world famous seafood. So for a great vacation this year, come to the gulf. Its all fabulous but i give florida the edge. Right after mississippi. You mean alabama. Say louisiana or theres no dessert. This invitation is brought to you by bp and all of us who call the gulf home. Welcome back. U. S. Equity futures will get back more than half of what we gave up yesterday. Brian shactman, you set your alarm. You were out, too, a little bit late night, werent you . A little bit. Im not hung over. I have put some makeup on you . I probably need more. The governor of of oregon is calling a special session today for nike. I wish i could call the governor and say, you know, this one tax year, its not good for me. And he literally said and how high on the way up. And the truth is, he had to. Oregon only has two fortune 500 companies headquartered in the state, right . I intel is the biggest employer, no hq there. Nike impossible wants to expand, but i told the state we need some tax certainty or we are a free agent. The state called a meeting today to pass legislation to maintain the current tax sturt temperature. All mikey has to do is hire a 00 new workers over a fiveyear period. A study says this project could be a lot more, over 12,000 director indirect jobs and 2 billion a year by 2020. Its enough that the governor is taking no chances. He said, quote, this is a huge win for oregon. Its an easy call and anterior pekt fit with our strategy to attract and retain companies that create jobs and boost prosecute per capita revenue. Nike is a Global Company and their sales are based on sales in the state instead of a combination of property and payroll. Most of its sales were outside of oregon. People tell me this is the key, joe their worst state is hovering trying to post this guy. There is a new article that talks about lots of different tax benefits and other things. Mikey, a huge they have a huge campus. They have all whould they hae really left . I think they might not have left their headquarters, but they may not have expanded. Nike pays, ive been told, only about 10 mers of what they should pay under what it should be taxwise. And they just want to keep this sweet deal. You talk about certainty, but i think they would go, but they wouldnt have changed their headquarters. They are identified with beaver, oregon, forever. This sa a competitive market. Is nikes business bigger than the pop business in oregon, do you know . I dont think theres enough pot smokers that have the money to make it big. But just inside, i say the pot business is probably equal or greater. So you said two business. Theres really three. But we just dont talk about we may. Not legalizing it in oregon, which is surprising. I went to oregon about a year and a half ago and you couldnt get any there . I mean, if you have a guitar on main street, youre out of place. You have to have a case of anxiety to get it prescribed. You can be anxious about anything. Were going to do the interview of john mcafee from oregon. Thanks, brian. Coming up object, our fiscal c. Also wed like to talk about texas. Our guest host next hour, gop strategist kevin madden. Where do we start in asking him where he went wrong . Hell be here. Squawk box coming right back. Our abundant natural gas is already saving us money, producing cleaner electricity, putting us to work here in america and supporting wind and solar. Though all Energy Development comes with some risk, were committed to safely and responsibly producing natural gas. Its not a dream. Americas natural gas. Putting us in control of our energy future, now. I have obligations. Cute tobligations, but obligations. G. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. 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[ all ] im with scottrade. What i care about is reducing these deficits. Not only will we have explosive growth in the markets, well have explosive growth in this country. How high will the market go . Weve been taking advantage of volatility. Days where theres panic well have a buy list ready. I think technology is kind of interesting. The second largest customer of china, the u. S. , avoiding the fiscal cliff, will be very good for them. Defense cuts seem to be around 9. 4 . A lot of people trading on that. Welcome back to squawk. We do have a quick programming note. You can catch Rebecca Patterson on fridays on money in motion. Lets get some final thoughts from her and peter this morning. You said something during the break, i dont know if i can bring it up. You said, the level, we were talking about it in the context of taxes and Big Companies but in the context of investors. I dont know who we were talking to yesterday when you said oh, the guy from etrade, right, joe . He said do you think that Retail Investors have a chance against Institutional Investors . Do you think its is the answer that there really never will be . I think you do your best, right . I mean, if youre an Institutional Investor and you have a huge staff and youre the ten banks who want to do business with you and are giving you their research left and right compared to my mom, do they have an advantage . Of course they do. So from that perspective, no theres not a level Playing Field. If you have companies that can get tax breaks and all of us are talking about the fiscal cliff and where our taxes are going, is that a level Playing Field . Theres no ways to be nimble on this i agree. The mice running around with the big elephants. Even if its in a fence, you can even run in and out through the fence and the elephant is stuck. I mean, if your mother, i said this yesterday, if your mother watches cramer or does a little bit of, get a decent broker or something, i mean, theres advantages to not being a big institution. I dont disagree with that. I dont disagree with that. Any one who uses common sense and does their homework can do just fine. But weve been in a croppy market for twelve years. I think the markets changed. Well, it has structurally changed. Because all youve seen is the last twelve years, really. But even then when the market went from 800 to 12,000. Youve got a Global Capital flows today that are multiples what they were twelve years ago. Globalization is different. We react more to the Chinese Market today than we ever did in the past. So the market has structurally changed. But we havent been selling so many nikes over there and so many cocacolas and so much delicious kfc. Its delicious. And its like the greatest i love kfc. I can go into any of yum brands restaurants. Biscuits in particular. Taco bell. Taco bell. I can. Anyway, peter, thank you. Thanks. Keep sending us email so i know whats going on. Of course. Weve got to go. Thanks, guys. Next more of todays top stories. Plus, an extended interview with squawk newsmaker dallas fed president Richard Fisher. New fed policy, the fiscal cliff, the lone star economy. And more. Next on squawk box. You wont take our future. Aids affects us all. Even babies. Chevron is working to stop mothertochild transmission. Our employees and their families are part of the fight. And were winning. At chevron nigeria, we havent had a reported case in 12 years. Aids is strong. Aids is strong. But we are stronger. And aids. Aids is going to lose. Aids is going to lose. I heard you guys can ship ground for less than the ups store. Thats right. Ive learned the only way to get a holiday deal is to camp out. You know weve been open all night. Is this a trick to get my spot . [ male announcer ] break from the holiday stress. Save on ground shipping at fedex office. We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. Governor of getting it done. You know how to dance. With a deadline. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. This is awesome. [ male announcer ] yes, it is, business pro. Yes, it is. Go national. Go like a pro. Big fed interview. Inflation hawk and dallas fed president Richard Fisher, on the latest that happened this week, the unemployment target, the state of the economy, and getting a deal done in d. C. To avoid the fiscal cliff. Cracking the consumer code. A look at how a new bar code system is changing the way consumers shop, and how businesses think. Plus putting to the the pieces of the fiscal cliff puzzle. You used up all the glue on purpose the ceo of Buffalo Games on why there are no winners if we go over the cliff. The second hour of squawk box begins right now. Good morning and welcome to squawk box im Andrew Ross Sorkin along with joe kernen. Becky is off. In studio, helping us rise above, executive Vice President for jda front line and served as a Senior Campaign adviser on mitt romneys president ial campaign in 2008 and 2012. Were going to talk to him about that and a lot more. See how the markets looking this morning, 45 points higher the dow would open up right about now. S p 500 would open up about four points higher and the nasdaq a little over three points higher. Headlines, republicans and democrats still havent agreed on a resolution to the fiscal cliff issue but theyre still talking. House Speaker John Boehner met with president obama at the white house thursday evening, the two sides said very little about the meeting other than that it was frank, and that lines of communication remain open. Frank doesnt really sound very good. Sprints 2. 1 billion dollar offer for the ring of clearwire could be running into some resistance. Some shareholders are now said to want more than the 2. 90 per share that sprint is offering. Japans softbank which is buying 70 of sprint wants to limit how high that offer can go. And pfizer reportedly considering an early 2013 initial Public Offering for its Animal Health unit, according to the wall street journal. Which says that the final decision will depend on market conditions, of course. But puts the possible value of that ipo at about 4 billion. Frank is a frank is different than like conciliatory, right . The house ways and Means Committee chairman, when they would say he was having frank conversations, it meant that someone was looking over yeah. It means that, you know, youre slowwalking this thing with no spending and it means, you know, boehner, youre still not doing what i want to do on the revenue side. Thats frank. Its each person trying the other i think thats worst you know what i summed it up. You know when i summed it up, its your mother and the other guy says, no your mother, and the other guy says your mother and they just keep going back and forth. Thats frank. Its not conciliatory. And then you leave after saying that and say, lets do this again and the communication lines remain open. It doesnt no one should feel you saw what the market did with frank discussion, down 35. Kevin has already spoken. Hes been calling for certainty on fiscal policy and advocates limits on more stimulus programs. Oh, were going right to has been kevin madden is here. But were going to introduce you after we talk to our newsmaker of the morning, Richard Fisher, dallas fed president. Normally we look forward to having you in studio, richard. But i think maybe, given what happened this week, we need a little distance from where you are. A lot of times in the past youve struggled to maybe remain positive about some of these extraordinary moves. Can you really sell this to me . Are you on board with what we heard about on wednesday . First of all, just so you know im in a studio here in dallas, set up by Paul Volckers nephew. So interesting contrast. You said it, not me. That is interesting. Go ahead. No, i look, again, we are a team. We are a committee. There are some of us that argue against what we decide to do, i was one of them. But the Committee Makes a decision as a whole and proceeds. And ill use that as a way of saying theres a very sharp difference and contrast to the way the congress operates or the way the Congress Works with the executive. We have very frank discussions, its civil. I argued that basically we were at risk of what i call a Hotel California, Monetary Policy, going back to the eagles song which is you can check out any time you want but you can never leave. Thats what i worry about. Theoretically we can check out any time we want from this program but we practically, because were going to have an engorged Balance Sheet, we may never be able to leave this position. So i have some concerns. I was concerned about the 2. 5 mention, even, of inflation one or two years out in terms of expectations. The market becomes fixated on the unemployment target that we actually install its threshold, not a target that we put in there. But, i lost my arguments. There are others that argued similarly. Theyll let them speak for themselves. But heres the thing, the Committee Makes a decision under the leadership of ben bernanke. This is Ben Bernankes fed. Its his legacy going forward, and then we leave the table and were still friends. So, can i sell it to you . I cant sell it with passion. But i will say that this is action in a city called washington, or sometimes in texas we call it washingtonstand where people never get anything done or dont appear to be easily able to get things done. We do get things done. We make a decision and we proceed. I think thats one thing you can say about the fomc and this leaders chairmanship. Were going in new direction. The question is, is the efficacy of what were doing solid or not . Well continue to examine that. And if its not, were going to have to change course. Its the best i can tell you, joe. I understand. I understand. And youre a reasonable, calm, conciliatory, collegial, the fed is very collegial. But i would thats right. At some point wonder whether you might just snap . Because youve been on in the past, with much less significant, and much less much smaller actions were being taken that really raised your eyebrows, and i that we know you really werent behind. And maybe its the, you know, as it keeps happening nothing surprises us anymore. Its like, you know, when we were going to do another 40 billion a month, people didnt really think that was that great of an idea. And that was going to be for maybe nine months or something. But then to go to 85, basically where youre assuming the Unemployment Rate gets down to 6. 5. We dont even know if thats going to happen. Its almost like a permanent 85 billion a month. When do you just say, enough . I cannot just sit here and be collegial. Were out of control here, mr. Chairman. Well, i will always be collegial. And i think everyone at that table will always be collegial. I thought we had done enough already. Businesses are awash in liquidity. I dont know a single thats a year ago. Except for 2 of the National Federation of independent business, small, mediumsized businesses, those are the ones, its that low now, that feel they either need better access to capital, need more capital, or want more capital. And then you go to the big guys, the one thing you can say, joe, is we have led the releveraging of corporate america, public and private, the cost of funds is nil. Their Balance Sheets are much better structure. Disney issued just before our meeting a threeyear notice, 45 basis points, tied Texas Instruments for the alltime historic low. So we have a very heres my argument. Weve done enough. Mario draghi made the same argument the thursday before our meeting. Wed done much. It was now, as he said it, the head of the European Central bank, its now up to those that created the unemployment problem to solve the unemployment problem. I believe that its not Monetary Policy thats holding back employment. I believe that there is a question of efficacy about the purchase of treasuries actually leading to real economic activity. One thing i and my colleagues are certain of, the Balance Sheets are in much better shape, business is ready to roll, they need final demand and what they need is clarity and rules of the road. Who do you turn to for that . You turn to the fiscal authorities. We can print all the money imaginable. No ones going to deploy it to create new jobs, this is driven by a need to fulfill a congressionally given mandate to us that we have to work on two fronts. Price stability, which we have right now. Even by the dallas fed standards we calculate things differently, its running less than 2 . Thats not the issue. Inflation. And im a hawk. Thats not the issue right now. Right. The issue is the second mandate which Congress Gave us and we have to act under the law. As long as we have that mandate, we have to move in that direction. But, were not the obstacle. The obstacle is nobody knows what the rules are, so therefore they cant plan their investments. That goes back to the house, the senate, and the executives. The other i i think doing more, in my book, and im in a minority, but in my book, just encourages these people on the hill not to get their job done. Richard, we in the past, we worried about commodities, inflation, and we actually may have seen some in the markets. Now the fed has cover because europes week and draghi is on board and its like beggar thy neighbor, the dallas doesnt necessarily go down. But you also used to get some benefit from announcing qe. The market would do something. It was down three points after 85 its like the benefits are gone of doing it at all it seems like. And what you said thats the question. The roach motel. Youre never going to be able to check out with a 7 trillion Balance Sheet. Its actually Hotel California. Yeah, the roach motel. Not everybody else is good, don henley is a texan. The roach motel is even better because the roaches go in there and then you find like 12 of them, and none of them are reporting room service or anything. Anyway, go ahead. Look, there was a muted response. Theres a lot else thats going on right here. I mean, everybody is fixated on two things. One is the fiscal cliff. The other seemed to be susan rice. Im withdrawing my name, by the way, for nominee for whatever. But that seems to be the news cycle right now. And it was muted. You never know when people are already positioned and unwinding their positions because we either disappointed or achieved what Market Expectations were. So i dont look at things in terms of the immediate response. But i would argue, personally, that the efficacy of these programs, their impact, is declining over time. We will be, as a committee, and the staff will continue to look at this, and monitor whether or not this is actually having a positive impact. But its clear that with each new announcement, theres less of a reaction. You have to be very careful in terms of judging this reaction, because this is a relative game. The Dollar Strengthened, didnt weaken, so that would send an immediate signal that were maybe not getting the Foreign Exchange effect we would like. However, i dont think you can judge things based on two or three trading days activity. Remember the competition is much weaker than we are. We are the strongest economy in the world right now. We have the best american operating businesses ever. And were ready to roll if congress would just liberate our businesses to go out and create jobs and invest in new capex, which we can afford to do now. And part of that is, i have to admit, thanks to the Federal Reserve. You got to admit it, too. All right, i admit it. Andrew, i think were going to i think were going to take a break. I dont even want to take any breaks with you. But were going to have to take a break. I dont know. Will you stay with us and then well be back as soon as we these are great commercials to watch. You probably enjoy them, as well, richard. Thanks. Well have more with Richard Fisher and andrew, are you ready . Im ready. Checking the futures right now. And we should check them, whenever the dallas fed president talks. Later well get to kevin madden. Ghost host, former romney Campaign Adviser will react to ambassador wise withdrawing her bed to be secretary of state. We have a lot to talk about. Comments . Questions . Send them to squawkcnbc on twitter. Follow the show and look for updates from andrew, becky, joe, and the squawk staff. Squawk box on cnbc. And on twitter. Tdd 18003452550 lets talk about lowcost investing. 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The theory is that we want to signal to markets in a sufficient matter so that we dont surprise them. And very importantly, they can anticipate in a way with, again, greater certainty. The path were likely to follow. The most important thing, of course, to communicate, will happen after we begin to tighten. Well call that postliftoff. But in the same way but youre right, andrew, from the standpoint that theres a lot of verbiage hire. And i dont know if its actually well have to just watch this. I dont know if its creating more confusion or not. Im of the old volcker school. I would be communicating as little as possible. But there is a demand for greater transparency. And im sort of torn on this issue. Its not clear that its terribly effective. Theoretically, and this is, of course, pretty widely embraced economic theory, again you never really know the difference between theory and practice what really works. But theoretically its a wise thing to do and were driven heavily by theory. This is a heavily academic Market Committee. Probably the most academic in history. Driven by a theory that makes sense. But well have to see whether it makes sense practically. It may lock into positions that may give you a little bit less flexibility in the future. Im selling everything at 6. 6 unemployment, i tell you that much, because i know its ending. Getting out of everything. Heres one of the questions about these are thresholds, joe. You have to look at that wording extremely carefully. If we ever get there. We may never get there again anyway. First of all, one of the questions about 6. 5 . What happens if you get to that rate as a function of the Participation Rate going down . Thats a very good question. We actually talk a great deal about that. All of us are concerned about it. And thats why if you look at the wording in the statement, theres a lot of conditionality around that. I will point out, by the way, because you know i love to talk about my own state, were already at 6. 5 unemployment in texas so i dont think we have to do much more in terms of monetary spending . Yeah. But your sense is is there flexibility around that in terms of a change in psychology on the board if, for example, the rate does come down but not in a way that you you would be happy with . I think the chairman addressed that during his press conference. Theres yeah, i could see members of the open Market Committee saying yeah, were there, but, look, its not dont think this as a hard fixed number from that standpoint. Think of it as a threshold as we approach it and as we see things proceeding. What worries me here, and you ask for the differences is, this is fiscal policy. Were getting closer and closer to fiscal policy, discerning whether we get the right kind of employment and so on. I dont believe thats the Federal Reserves job. However, what i believe is not whats important here. We have this dual mandate. This is a further refinement of that dual mandate of trading monetary conditions to unemployment. Im a little worried were getting tangled up in our own nickers here in terms of trying to make that a very specific thing. Qualitative as well as quantitative and i do worry that by trying to discern whether its the right kind of employment or not the right kind of employment, i dont think thats the job of the central bank. But, again, im in a minority. But so heres the question but ill keep arguing that point. The obvious followup is if we do go over the cliff, if we see markets respond in a very negative manner, what then is the role of the Federal Reserve, going to be or should it be . Well, what it is right now, were the only people who get things done. I would agree with, i think the majority of the committee. Weve been Holding Things up. But, we, again, ben bernanke says we cannot substitute for a proper solution to the fiscal cliff. And i hope theres not a Single Person in congress who believes that Monetary Policy will bail us out. Theres a limit to our effectiveness. And if they dont get something done, and it cant be a temporary fix, joe. It has to be a much longer, more dependable, businesses can plan around, consumers can plan around, and you dont plan around a temporary fix. You plan around where you think things are going. We have competition, a globalized world. There are other countries where we know they say taxes are going to be x for 15, 20 years. Its a golden handshake and their capital goes in that direction and jobs go there. Our problem here is we have these temporary fixes, and if you have temporary fixes, i dont think businesses can plan capex or pay roll expansion. These are longterm investments. Less jobs would be created. Consumers cannot plan around that. And were beginning to see, now, this fiscal imbroglio as really impacting consumer behavior. Weve seen it in the last few data points. We need something thats more important, more convincing. Its a tough job because congress and the executives have abused their powers for so long on this front. We cannot possibly substitute that. Its not just my opinion. Ben bernankes argued that himself. Richard, what say we get to january . Is there a plan in place . Have you had discussions about steps that the fed might take if, in fact, we go over this cliff, and, in fact, the markets do fall precipitously . I dont think its my role to say what we talk about in terms of contingency planning. I think what you see is what you get right here. We have a very, very hyperaccommodative Monetary Policy. We have a chairman who has prepped, in fact coined the term fiscal cliff. Pressing, pressing, pressing, which he did in the conference. You have people like me who are less polite and accuse the congress of misfeasance, and we just have to get this done. Theres no other solution here. Its up to the congress to deal with this and do it in a way, this is the most important point, joe, do it in a way that incensed people, consumers and businesses, to take advantage of the cheap and abundant money that we, the central bank, have made widely available. If they dont do that, thats the key thing. Its not just, where do you cut, and you know, how much you raise taxes, its how do we incentivize the american people, consumers and businesses, to put that money to work to create additional demand, and to create additional jobs . If they dont get that done through this and they get away from all the slots and the numbers and the kind of political posturing that theyre doing right now. Focus on what is best for creating jobs for americans and increasing final demand for our company so that they will hire more people, invest more money, put more people back to work. Thats what this is all about. And not do it with a shortterm fix. It has to be a longterm incentive. And one more thing i want to argue very quickly, our businesses are better equipped now to compete in the world than ever before, theyve driven down their costs. Theyre hyperefficient. Theyre hyperproductive, they have mastered i. T. And they have very strong and well financed and cheap debt on their Balance Sheets. So they are in great positions, and i really do believe, you know my old joke we are the best thing in the horse factory, were the thoroughbred of the Global Economy right now. Unleash that power. Thats what Congress Needs to do. If things all work out perfectly richard, i could see it how the fed providing a bridge allowing congress to get its act together to where we can do the longterm structural things we need to do to really grow the economy from the ground up, instead of all these enabling but it just worries me that you might be an enabler for these guys, in this, you know, the fed becomes the permanent enabler and the training wheels never come off because, you know, thats the scariest thing, you know . Well, im totally against i cant speak for my colleagues, i dont think any of my colleagues want to serve that role. Thats not what central bankers should do, and it would be every time thats happened in history weve had an economic disast disaster. And we all know the history. We cannot count on the central bank to carry an economy. There has to be incentives to take what the Central Banks do, provide monetary stability, provide just the right amount of liquidity to the economy, incentives to put all that to work, a stable financial system, and grow the economy. You depend on us entirely. And were going to end up going down that road. I keep talking about the road to perdition. And destroying our economy. So, im begging members of congress, and the executive, to please get something done here that reassures consumers, reassures business operations, most important of all, to create the jobs in america, and these are permanent jobs that we want to have created. Please provide them with the incentive to use the monetary wherewithal, whether its the right amount or an excessive amount which i would argue, but thats not the issue. The issue is, they need to be incentives to use widely available liquidity, the lowest Interest Rates in american history, put it to work, to create more american jobs, and increase american prosperity. If were really arguing unless they do that they will have failed the american people. The fiscal cliff brings a lot of austerity very quickly. But we all think that, you know, sooner or later we need some type of austerity, whether its on a scale, you know, like the fiscal cliff is a 10, we dont want a deal that is a 1, that just, you know, that doesnt cut spending, that doesnt raise revenue. So i just worry that, you know, we seem like we dont want it, we never want any pain in this country anymore, and we know what happens when you dont clear the system. We just seem to muddle along. Well, this is the issue. This is what leadership is all about. And weve had congresses that literally for decades have kicked the can down the road. You look at eisenhowers final speech, his departing speech, remember eisenhower, you may not have been alive then, but i was alive. Andrew wasnt. One of the great president s of all time. Okay, andrew wasnt, he was just a boy, but heres what eisenhower said. We cannot mortgage the future assets of our children and grandchildren. That was ike. Since eisenhowers Administration Congress has practiced greater and greater degrees of misfeasance and theyve completely ignored their fiduciary responsibility. I wish that people had listened to that great man. Now weve got to a point where were deep in the hole, something has to be done, these Congress People have to reach deep into their souls and provide leadership, not just do whats popular. But again, we have the monetary wherewithal right now. Its huge. It needs to be taken advantage of. And you talk about us as rich. I referred to this years ago when we went down this path, the best way i could justify is rich financing to a sane and rational fiscal policy. You know, we have to be careful, not a bridge too far. You cannot depend on the central bank. You must love our rise above you should have a button, we got to sent you one, because we keep telling these people rise above. They need to do that, dont they, richard . They do. They do. I dont want you to conclude this interview until i brag on texas for just one minute. Not the long horns . Give me that opportunity. You got 20 seconds. So we know about that. We had perry on for two hours. He did a little bragging. Just so you know i think well close this year with our own what we consider our texas gdp growing 3. 5 . Job growth a little over 3. 2 . Awesome. We got good place to come. Im going to say goodbye and well be right back. Thank you very much fed president Richard Fisher. Well be right back. 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Fed president jeffrey lacquer, the lone dissenter in the meeting this past wednesday and hes issued what has become now a pretty normal statement on his dissent. Saying that a single Economic Indicator does not show the complete labor market picture. That in opposition to the 6. 5 unemployment figure in the statement. Tying the fed funds rate to the Unemployment Rate he says is not appropriate and he prefers to describe unemployment in qualitative terms. He also objects, as he has in the past, to purchasing additional mortgagebacked securities. Thats also part of the feds program. He is saying that doing so tilts the flow of credit from one sector of the economy to another, and particularly says nonconforming mortgages to those that are conforming. He did agree with the decision, though, to drop the datebased forward guidance. Thats something he has talked about in the past, along with others. Thats one of the reasons why they did move from that calendar date, that mid 2015 promise to Something Else. But apparently the Something Else was not to his liking. He also says, as he has in the past that further monetary stimulus runs the risk of raising inflation and destabilizing inflation expectations. Andrew . So, steven, we got lots of input from different sides so collegial. Bernanke reminds me more and more of like bloomberg. I mean, what he says i i asked Richard Fisher, why dont you just snap . A year ago he didnt like what was happening. And then you do with what happened on wednesday and theres still collegial and hes still like, yeah, i really dont agree with this. But sooner or later these guys might just snap. I mean, its good to be king if youre ben bernanke, right . I think so. Maybe we could all learn a little bit and get along that way, joe. You know, i mean, have our arguments, keep it on the point, dont let it get personal. And then maybe you could make some progress, like what fisher said was sort of interesting in that regard. Thats when he told us last time, hey, congress, look at how we do business. Its a good way for us to do business. I also think that there are, though, real serious objections here. However, what i think you find is that fisher and lacquer are pretty much in the solid minority. And that was one of the surprises from the wednesday meeting was that bernanke had enough consensus to go ahead with moving from the calendar date to the economic do you Like Hotel California for the Balance Sheet or roach motel . What do you think i was afraid you were going to ask that question. I havent had a chance to consider those very eloquent metaphors yet, joe. The roaches die and rot you know being a rock n roller myself i would prefer the don henley. But the roach motel one is pretty graphic so i kind of like that one, too. Because they all go in. You cant even believe how many roaches can fit into one. Youve had some experience, joe, with that . Everybody has seen a roach. I thought this whole thing did get a little personal. When richard said when he said this is going to be bernankes legacy, right . Right. Were going to he did he did disassociate itself. One thing interesting was he said, look, one of the reasons weve come back is because of the fed. Well, guess what . Fisher has pretty much dissented from all those things he just gave the fed credit for doing. He said thats why rates weve gotten rid of some of our debt. What did he say, weve re you know, that weve been able to save a little bit and pay off some of our but he didnt really take too much. I dont think he thought anything in the last year and a half, really, has been necessary. Did you hear how he started with, im in volckers place . And how ironic. In volckers place, thats right. Steve, thank you for this. Appreciate it. Bringing us some extra fed news this morning. Lets talk about some other headlines this morning. Were going to get another fresh batch of Economic Data in just about an hour. The november Consumer Price index expected to show a drop of 0. 2 . Core rate which excludes food and energy is seen rising 0. 2 . Later this morning, we can get november Industrial Production figures. Also greek leaders are proposing a new tax reform bill with a top tax rate of 42 . That would hit people making more than 42,000 euros a year. The equivalent of about 55,000. The current top tax rate in greece is 45 for those earning more than 100,000 euros. Finally, Business Sentiment in europe is slumping in part due to Economic Uncertainty ahead of this weekends election. The bank of japan Sentiment Index dropping to minus 12 from minus 3 in the prior quarter. That was a bigger drop than economists were expecting. Mr. Kernen . All right. Getting all these things. So you like hes like bloomberg . No 16 ounce guy runs you know. No 16 ounce anything over that in sugared drinks. Comments, questions about anything you see here on squawk, email us at squawk c in. Com. You can also follow us on twitter squawkcnbc. Still to come this morning, john mcafee. In the flesh. Well he wont be here but on camera. In his first interview since arriving back in the states. An interview youve got to see. Plus. Have you seen these . Want to know how to use them . One of the new ways retailers are hoping to win over consumers. Were going to explain qr codes. The bar code guy died yesterday. Can i help you . I heard you guys can ship ground for less than the ups store. Thats right. Ive learned the only way to get a holiday deal is to camp out. You know weve been open all night. Is this a trick to get my spot . [ male announcer ] break from the holiday stress. Save on grounipping at fedex office. Its a final countdown to the fiscal cliff, both sides are still accusing the other of not moving toward a compromise. Kevin madden is executive Vice President for jda front line and served as a Senior Campaign adviser on mitt romneys president ial campaign. In 2008 and 2012, its been long enough to where we just we dont need to do any postmortems. Youve done weve talked off camera about some of that. But, the as weve seen this new proposal from some of the senators, like ron johnson, about go ahead, lets go ahead and have the house pass a tax cut just for the 98 and let it go up on the 2 , then move on and put it back to the president s court, and go with the debt ceiling for spending cuts. Ive seen some of that. Will that happen . What i think is a lot of these republicans right now are trying to use the leverage of the fact that the president knows, and the media knows, people in the audience know, its a public audience knows that or at least theyre trying to make the argument to the public, that even that top 2 is not going to solve the problems. And what they really want is the white house and others, the democrats, to come to the table on the entitlement cuts, and on the on some of the spending problems that we have. And that thats the real heart of addressing this problem. Right. But what would the president because all were doing right now. But if the president didnt have that 2 argument to talk about what would he be talking about . Thats right. And oddly enough i think republicans get more leverage every day even though theres been this sort of washington devotion to looking at the polls and whos going to win in the short term and longterm. I think, you know, having worked for john boehner as well, i think hes very disciplined in that sense. I dont think hes going to be moved to sudden Movement Just because polls are saying one thing or the other. That is a real, you know, sort of fulcrum i think right now on the negotiating side for republicans. Do you think any republicans are starting to think, if we start doing mortgage expense, we start doing state and local taxes, we start doing, really getting into the charitable deductions, and that is a thats the really hard part. And the same job creators are going to be influenced by that, are they just fine with saying okay, twopoint, what is it 4. 9, lets just do it . It has to get done. I think thats the problem with the Campaign Part of it, right . We avoided a lot of these specifics, i think on both sides, because nobody wanted to get pigeonholed in, or boxed in on any of the deductions, and the political popularity, unpopularity of some of the polls. Thats why these negotiations in washington, they take so long. Theres a couple things that really move people which is the deadline passing in washington, and the smell of jet fuel around christmastime, or around august. They like to go home . They like to go home. Jet fuel usually gets a close vote done and the deadline. I think right now its interesting. Two weeks ago the same conversations that we were having about revenues and who was up and who was down and who had the leverage are the same ones were having today. I expect in two weeks how do you handicap it . Handicap it how. What happens . The last minute . What day . Whats the Tipping Point in all this . I tend to think, i tend to give a lot of credence to the smart people who think that this is theres a difference between going over the cliff and staying over the cliff. I think that we may so were into january . We may be hanging onto the cliff, and thats where the deal gets done. And were looking at right into early part of january. Where that pressure, both from the constituents back home, and just the overall pressure of leaders in washington. Well be back and talk more. But up next. How technology is changing the way shoppers shop and retailers think on squawk box will be back after this quick break. When he speaks, markets listen. David tepper joins us for a special interview. Whats on his mind list for 2013 . Find out at 8 00 a. M. Eastern time monday. To the best vacation spot on earth. all the gulf it doesnt matter which of our great states folks visit. Mississippi, alabama, louisiana or florida, theyre gonna love it. Shaul, your alabama hospitality is incredible. Thanks, karen. Love your mississippi outdoors. I vote for your florida beaches, dawn. Bill, this louisiana seafood is delicious. Were having such a great year on the gulf, weve decided to put aside our rivalry. Now is the perfect time to visit anyone of our states. 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Tdd 18003452550 open an account with a 50,000 deposit, tdd 18003452550 and get 6 months commissionfree trades. Tdd 18003452550 call 18008368799. Welcome back to squawk. Becky couldnt be here today. But she did want me to pass along this note about a fundraising event for First Responders who lost their own home while working to save others on the jersey shore when the storm hit. The Long Island Beach area of new jersey tomorrow, go to buckalews between 5 00 and 7 00 p. M. One of the first businesses on the island to completely rebuild and reopen for business. All proceeds will go to the cause. Long beach island. Retailers are betting big on new instore technologies to change the way consumers shop this Holiday Season. One of the technologies invading store shelves is the qr code. Cnbcs Courtney Reagan is here with more on how this new bar code is helping retailers. Courtny . Hi, good morning, andrew. Youve probably seen those little jigsaw puzzlelike pieces popping up all over when you shop in store, even in catalogs. If youve glanced over them so far this Holiday Season you might want to take another look. More and more retailers are banking on these little square codes to give them a Competitive Edge and change the way you shop. Theyre called qr, or Quick Response codes. And theyre invading store shelves and advertisements. A recent study found that there was a 1,253 increase in qr codes from 2010 to 2011. The codes arent new, but what retailers can do with them is. How do they work . After downloading a code reader app to your smart phone, you can scan qr codes and instantly access additional material online. But now, targets taking it a step further. Hoping the codes will make buying more convenient. Scan a code on one of targets top toys this Holiday Season, and instantly buy it online with free shipping. Targets not the only retailer in the game. Macys and best buy use qr codes and walmart is using the codes to freeze virtual stores. In a partnership with mattel the retailer created a virtual popup shop. Commuters can scan a code and buy the toy on the go, catering to the new generation of gift givers as santa goes mobile. So Retail Marketing directors are spending quite a lot of money on this. A lot of analysts are confused as to why. Because it seems to be a mixed picture as far as reaction to actually using those codes. Some of them were confusing. You dont exactly know what they do and how they work. I tried to go to a target to use one. Actually couldnt find them in that target location yesterday. So it seems to be a little inconsistent as well. Thanks. Saying the bar code the guy who created bar codes, 91 years old, mr. Woodland is his name, he died yesterday. I was in a supermarket yesterday and they can just pass an item over this thing and the price goes up. Have you seen that . That is true. Youve seen heard about that. You use qr codes . No, i dont need to know. I dont. Qr codes are great. Really . If youre going through magazines now, you can barely go through one of these magazines without seeing the little qr codes. And you do it . You have your iphone or whatever your droid with you and take a picture of it and it literally takes you right to a website and you have all this information on it. I know about it, and i know how to do it but i just dont. Im starting to use them more and more. Lets get to this. Holiday shopping season the most important time of year for our American Made company today. Paul dedrick is ceo of Buffalo Games. He joins us now. I was thinking about this. Theyre adult games and its fun to do these, but, you need to convince people that its still fun to do these things, sit around the table with adults and do it. I think theres a huge market for this, because its hard to people are still playing board games. Yeah. We did a survey just after thanksgiving holiday, and 58 of the people said they played a board game over thanksgiving. Families . With a family, yeah. So theyre still relevant. People are still playing board games. Not just puzzles, and not trivial pursuit, things like that. What do you make . We make a line of Jigsaw Puzzles and board games to the teen and adult market. We have about 200 titles in the puzzles, and then we have about six or eight party games. We call them party games. Games that are really easy to learn. For teens, young adults, adults. Theyre parties out of a box. You dont have to put a lot of effort in. Its a type of product that allows people to escape from the pressures of the world. You know, like including technology. You know, youre talking thats what i was saying. Because the games that we play, mostly involved zombies and guns and things like that. Right. You dont kill any zombies . No. Theyre really fun. Theyre traditional board games. But the content is geared towards todays consumer. They find it fun. They find it relaxing. They find it a way to kick back with their friends and family and just get away from the pressures of the world. Whats the most our best is a party game where you basically are trying to take a subject like maybe its favorite or flavors of ice cream and the letter will say c. So everyone starts yelling out flavors of ice cream that starts with c. Of course someone is going to yell chocolate. But its the last word. You have the timer, it lasts about ten seconds, whoever gets the last flavor in, they win the round. Theyre easy to learn. Theyre very popular to get away from the stress of the world. Thats our bestselling game. How do you explain growth . In a hightech world where everybody is going more online, downloading games, how do you explain . One of the strategies we use. We sell through Retail Partners like walmart, target, toys r us. We built a domestic manufacturing ten years ago after outsourcing our products for years and years. We decided we could build this facility, be closer to our Retail Partners. We could service their needs within, you know, basically hours, versus weeks and months, if we were doing it overseas. So thats a big part of our growth strategy, is being close to our Retail Partners. Were in over 22,000 Retail Markets across the country. Growing up we didnt have the video games on tv. They didnt even allow it. Remember board games. Sort of market toward that nostalgia of days where families used to sit around playing monopoly and chutes and ladders . Sure. You get together with friends and family. Six or eight of you, you kind of set technology aside but are you adding technology . We just talk about qr codes. Are people doing Old School Games but adding these little there are some games out there where theyve added technology. Our gamers are asking not to have that. They really want to escape from the pressures of technology, not be on the clock all the time. Always in context with somebody. They want to relax. Kick back, have some fun. Have you solved the problem of never losing pieces . You know, that is we have a stateoftheart manufacturing facility. We just invested 2 million this last quarter on our puzzle technology. So we really have a great facility. Its probably the best facility in the world. Paul, we appreciate it. This looks like fun chronology. Yes. A puzzle. Made here, not made in china . Right here in the states. Great. Okay. Lets take a look at whats still to come this morning. At 8 15 eastern weve got hedgery blodget to discuss facebook. The stocks recent move. And then at 8 30 eastern boeing chairman and ceo jim mcinerny is going to join us. And at 8 40, john mcafee live for the First Time Since arriving back in the u. S. And avoiding extradition to belize for a murder he says he did not commit. Twins. I didnt see them coming. I have obligations. Cute obligations, but obligations. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Coming up, flying over the fiscal cliff. Boeing chairman and ceo jim mcnerney is going to join us to discuss our nations debt and his business. And then, its one of the most craziest stories out there you have ever seen. Weve got john mcafee. Hes going to be joining us in the 8 00 hour. And squawk taking flight. Roger. Huh . Request vector. Over. What . Boeing chairman and ceo jim mcnerney on the problems with the dreamliner and the companies plans for the fiscal cliff. Want to tell you both good luck. Were all counting on you. And its a strange tale of murder, escape, and international intrigue. John mcafee, wanted for questioning in connection with the murder of his neighbor in belize, feared for his life, escaped to guatemala, faked a heart attack, and was deported to the united states. Hes going to join us live at 8 40 a. M. Eastern. The third hour of squawk box starts right now. Welcome back to squawk box here on cnbc. First in business worldwide. Im joe kernen along with Andrew Ross Sorkin, who has not been to belize. Ive not been to belize. Our guest host is kevin, who has been. I have been. And its apparently difficult youve got to fly in and take a little Puddle Jumper out to an area. Nice, though. The reason were talking about this . John mcafee. John mcafee. Going to be on. And we also have another huge lineup. Henry blodget is going to be on to talk facebook. The lockup on about 156 million shares head by insiders expires today. I wasnt trying to put henry in the same category as john mcafee. Not like a rhodes scholar. Then at 8 30, the chairman and ceo of dow component boeing, jim mcnerney is going to join us to talk about, we want to talk about boeing and the dreamliner. Well also, he does talk to the politicians about how were going to fix this. But we really do want to talk about boeing, how the company is positioned at the end of the year. And then, as weve been alluding to, one of the most bizarre stories of the year, we will be speaking to Internet Security Software Pioneer john mcafee. Who, it says here, on the run from authorities in belize. But, he didnt get arrested here, and they actually, the authorities escorted him to his hotel room in south beach. 8 40 a. M. First, though, andrew, you have this mornings headlines . But i could just we could just talk about john mcafee probably for the rest of the hour if you like. And its going to be robert frank. Got this interview. Hes going to be on set and its going to be interesting thing. President obama and house Speaker John Boehner, they met for about an hour at the white house last night. Boehner departed the white house without comment. Both sides are trying to break an impasse, in budget talks to avoid the fiscal cliff. Aides say the men had a frank discussion. I dont know if thats a positive. And the likes of communication, they say, remain open. Although no specific details were released. The meeting came after a day of frustration. Both sides criticized each other for a lack of progress. This was House Speaker boehner earlier in the day. Republicans must solve this problem by getting the spending line down. The president wants to pretend the spending isnt the problem. Thats why we dont have an agreement. President obama remains hopeful that a deal will get done. He told a cbs affiliate hes willing to do a lot more in cuts and spending with a little more in revenue. Well see where it goes. United technologies expects profit to rise 13 next year, even if the economy goes over the fiscal cliff. The company now saying that growing demand for its building products, elevators and air conditioners is offsetting lower u. S. Defense spending. United tech ceo says hes hopeful congress can reach a budget deal by december 31st. But cautions the company has held off on some spending due to uncertainty. Lets take a quick check on markets ahead of the opening bell, in about an hour and a half. If i take a look at futures, dow jones looks like it will open up about 25 points higher, s p 500, about a point and a half higher. And the nasdaq will be off a little over four points. Overseas in asia, check out what just closed up over there, hang sang up marginally. Shanghai composite up a lot, 4. 32 . And nikkei off. And take a quick swing over to europe, see whats going on there. The ftse 100 off slightly. Cac off slightly. And the dax up slightly. Joe . Thanks, andrew. Dallas fed president Richard Fisher spoke out earlier on squawk box about the feds latest move. He likened the new link between Interest Rates and unemployment and the growing of the fed Balance Sheet to a Hotel California situation. We have very frank discussions, its civil. I argued that basically we were at risk of what i call a Hotel California Monetary Policy, going back to the eagles song, which is you can check out any time you want, but you can never leave. Thats what i worry about, theoretically we can check out any time we want from this program, but we practically, since were going to have an engorged Balance Sheet, we may never be able to leave this position. Fisher said that he argued against the new policy. We also asked him about the looming fiscal cliff. Im begging members of congress, and the executive, to please get something done here that reassures consumers, reassures business operators, most important of all, to create the jobs in america. Now were going to have more from our guest host, gop strategist kevin madden. That quote that we just saw not from Richard Fisher but the one where the president said i want a little more revenue and im willing to do a lot in spending cuts. Taken at face value . You know, he hasnt laid it out. What weve seen from geithner and others and talking to folks up on the hill is that hes basically reproposed his budget from last year that didnt get any votes. And i think theres probably a reluctance from the republican side in the conversations that they have with their colleagues on the democrat side that theyre not willing that the president hasnt really built the support that hes going to need up on capitol hill with democrats an what revenue should look like and what entitlement reforms should look like and some of the spending cuts. I continue to think that were where we are today, the same way where we were two weeks ago but theyre talking with a little bit more frequency. I sometimes wonder, and now i am doing a little postmortem, if your candidate, if governor romney had just said, you know what . Im running on simpsonbowles. And i want to do whenever you ask him about simpsonbowles, i have my own plan. I sound like bush. I cant do a romney. You probably could because you look like him. But he didnt. He didnt. He had his own plan. Not simpson boat and then you got into the problem with the 20 and the president was able to say about the 5 trillion tax cut for the wealthy. Should we do simpsonbowles . I think simpsonbowles offer a closer framework than the president s budget did. I mean thats the thing that many people are frustrated with, which is that the president appointed this commission, and then bypassed all of its recommendations and didnt do anything serious on the entitlement side or on the revenue side. That cures the fiscal cliff and the fiscal abyss. I think, look, forget about what romney said as far as what he would have done, i think what is more apparent is, the change, the volume and the tenor of the conversations in washington, d. C. , the president has to be much more engaged. I think thats something that that hasnt happened to this point right now. He hasnt built up the Political Capital that hes going to need within his own caucus, in either the senate or the house. I want to ask you a question. Whats that . Because youre a host. If you anecdotally, the Business Leaders that ive spoken to said that theres been a marked shift in tone from the white house when they meet with them now. Yes. And theyre much more theyre listening more, theyre getting back to them, theyre saying, what about this . Theres a lot more interaction, and theres you were at your conference i would say well, let me say this, i think theyre doing a much better job it sounds like in outreach. Pretending to listen . But to the followup question, and i was with somebody you know well at lunch yesterday im talking the same thing. We were having a conversation about this, and this person was saying, great outreach, were hearing, the followup is, are they listening . Are they taking suggestions . No, not necessarily. Theres a low bar. I will say that. I definitely decide, lets engage but it sounds like, this is one of the points that they made yesterday, to me was, this idea that theyre engaging the Business Community perhaps more than theyre engaging boehner and the Republican Party. That is sure. But i will say this about the president and i dont mean this as partisan criticism, sort of a political observation. Hes been very good, always very good at mastering the pageantry of it. Which is making sure people know hes talking to boehner before he goes back to ohio. Making sure that everybody sees the symbolism of meeting with the Business Community and trying to be inclusive. But hes been very good at executing it on capitol hill, and the practice of really forging the bipartisan compromises and putting the details together. And then going up to his own caucus and fighting for it. I mean thats the thing. Over the last four years, if you listened, really wanted to hear people criticize the president , and his approach to capitol hill, the people who were probably most animated in their criticism, capitol hill democrats. Right. I mean if you at least no one wants the president to turn into Milton Freeman with the private sector, but if you just, for his legacy, and for the growth of the economy, and growth of jobs, it really is a partnership between the white house and business and the private sector. Be a really good thing. It was really not that apparent, i dont think, and maybe he had different goals than the first administration. Theres a fundamental difference. Most president s do eventually do that. Theyre saying theres a different philosophy about what gets you there. Right . Thats the distinction, right . Yes, and no. But i mean, even if you do have a different way of doing it, you dont want you dont want to constantly be sort of making Business People feel like theyre the bad guys. Right. And by the way, i think that is the big distinction. The past three weeks they dont feel that they are the bad guys in the way that they felt. Thats right. And look, they have an south centr central electoral judgment. Youve even seen this from some republicans maybe its legacy, not reelection. And thats that will be interesting to see. This is going to be a really big part of any eventual legacy. I think on the republican side, which is, okay what you have is a lot of people start to talk about taxes, because they thought the election gave them the judgment that they had to listen to. But now i think youre starting to increasingly see many republicans are seeing this not as an event. But they lost the battle, perhaps, but theyre losing the battle on taxes and the way to get it back is to dig in. Im watching you. I still think you might be one of romneys sons. Did you change your name to ill tell you what you swear youre not . Im telling you, i checked i asked him to check his will and apparently im not in the trust fund. That is not a negative thing for me to call you one of his sons, by the way. You think theyre good looking . I think all of them are. Theyre all very handsome men. And so are you. You know what . Its crazy, if you see us up close i actually have more gray hair. Do you really . Which is scary. He looks like a 35yearold. Whats he going to do . Know, i think hes going to take some time, first with his family. But i think hes going to get more involved. Not mayor . No, no. I think hes going to play a role with his church. I think that was one of the great things that came out of this election, was a lot of the negative stereotypes that you heard about the lds church, that sort of changed. A lot of people are looking at it differently now. And people are more informed about it, educated about it. Will ge in the Investment Business again . He went back on the board of marriott. He did . Yeah. I think hell be involved with business somewhere. More from kevin still to come. Okay, coming up weve got 156 million facebook shares held by insiders. Theyre going to be released from a lockup today. Will investors sell off . Thats the question. Or will the stock continue to climb . Henry blodget is going to join us next. In the next half hour, two interviews you do not want to miss. I promise you you do not want to miss these. The first, boeing chairman ceo jim mcnerney. Problems about the dreamliner, orders, and the fiscal cliff. And here it is the moment on squawk. John mcafee on the run there authorities in belize in the connection with the murder of his neighbor, a story weve been following for weeks. Were going to talk with john mcafee live at the bottom of the hour on squawk box. Monday on squawk box, his comments on fed easing in 2010 sparked a market rally. The economys not going to pick up in the next three months and the feds going to come in with qe. Everything to the nearterm. Well get David Teppers take on the feds latest move on the looming fiscal cliff. Its an interview you cant afford to miss. Squawk box starts monday. Tdd 18003452550 when im trading, im totally focused. Tdd 18003452550 tdd 18003452550 and the streetsmart edge Trading Platform from charles schwab. Tdd 18003452550 gives me tools that help me find opportunities more easily. Tdd 18003452550 i can even access it from the cloud and trade on any computer. Tdd 18003452550 and with schwab mobile, tdd 18003452550 i can focus on trading anyplace, anytime. 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So for a great vacation this year, come to the gulf. Its all fabulous but i give florida the edge. Right after mississippi. You mean alabama. Say louisiana or theres no dessert. This invitation is brought to you by bp and all of us who call the gulf home. Welcome back to squawk box. The futures now up about 23 points or so. That it will get back maybe a third of what we lost yesterday. In china today, Manufacturing Activity hit a 14month high in december. Thats an encouraging sign for the worlds second largest economy. Hsbcs preliminary monthly purchasing manager index rose 50. 9 from novembers 50. 5. Also, china story. Apples iphone is officially on sale in china starting today. That should help apple reverse a slide in its market share in that really important area. But analysts say the key to apples future in china is a tieup with the Telecom Operator china mobile. The two have been in talks for years but havent yet come to any agreement. And you wonder how much china, how much do they want . How much do you have to give up to get a part over there . Almost everything, right . Pretty much. All of your data, everything their way, they get your technology. Do they get the lions share of do they split anything down the middle . Anyway lets talk about facebook. A major facebook lockup expiration is happening today. Early employees investors will get their first chance to sell about 156 million facebook shares since the ipo back in may. And joining us now on the squawk newsline, henry blodget, the ceo and editor in chief at business insider. Good morning. Good morning, thanks for having me. A little prognostication here. Does this matter . We thought it mattered the last time, and not only didnt it matter, it tilely pushed the stock up. The first one of these, everyone said oh, it wont matter, its in the market, but peter thiel suddenly sold his whole stake and the stock tanked. The second one everyone said its going to be huge and the stock went up sharply. The main point is were getting through these lockups. This is the last big one. So this will very quickly cease to be a concern. Henry, the cfo of facebook, he was in part behind the number of shares that did go out on the market. Heavily criticized, including in a column that i wrote several months ago, for the way they approached this ipo. But part of the reason that they put all these shares out was because they knew these lockups were coming. How do you think about it . Look, i think that if you use the idea it was a financing event, and adults are stepping up and deciding to buy at a particular price, facebook handled it perfectly fairly. And if going down the road over the next couple of years the stock recovers and goes higher, this will all be forgotten. If the ipo is a High Water Mark forever, facebook will have made a mistake. Theres no question about it. But how long does the honeymoon last . Does it have to get back to that 38 within 12 months . Do you give them two years . Do you give them six months . Do you say look at all the people who already lost a fortune and got out of the stock after the stock was virtually, you know, down by 50 . Well, i think the whole shareholder base, a lot of it has really turned over, at least the folks who bought it from flip are all gone and so forth. The stocks had a great run here from the high teens. If that continues, i think people will quickly forget about it. But the big concern to me still remains the multiples, being driven by momentum now. Its not sudden valuation. Thats what i was going to say. When you look at the price now, does this make sense to you . So right now its trading at about 40, 45 times next years earnings. The only thing im highly confident of is at some point facebook will trade at the 15 times earnings that google and apple are trading for. The question is when, and how big the earnings are, what investors are focused on right now, that they have an exciting new mobile story, sponsored stories. Everyones excited about the new ad exchange. The idea is that that will reaccelerate revenue. If it does youve got momentum players who will keep playing that. But youve got more and more risk as we get out at much higher multiples. Did you see, there was a blogger a couple days ago who wrote a very interesting piece about the likes, the number of likes that are on facebook on the time, and this is a huge part of the database that facebook is creating, people who had passed away, who still had accounts on facebook and there were still likes popping up. And people were questioning the likes and the liking system. They did that after they voted in the election. They actually then liked certain you can answer that, henry. But i heard instagram, that that was a steal now. It looked really like it was out of control, and now watching my kids and stuff, was that that was a pretty good move, wasnt it . Thats right. People said this is further confirmation that youve got a 27yearold fool running the company. And yes, instagram has over 100 Million People using it. A lot of people quitting facebook because its no longer cool like your kids are going to instagram. Its very visual. They will begin to have advertising on it. People are looking at that as a green field that could be a huge advertising growth story. So, yes, its looking brilliant. What about the instagram fight with twitter . Because twitter now, if youre using twitter you cant use an Instagram Photo . Yep. Hows that going to i think its overstated. I completely understand why instagram did that. Because effectively their assets were being harvested by twitter. And people were staying at twitter. Now you have to click through to the instagram site. So you can still see the stuff from twitter. So i think the actual controversy has been overplayed. Probably end up getting more users as a result . Folks that are on twitter but havent used instagram now introduced through a new absolutely. A new portal. Henry, last question on terms of advertising and mobile, is there anybody out there that youve seen where you go, wow, theyve figured it out . Facebook is figuring it out. The mobile stories, the new ad unit that they have, that is a native unit, you consume it easily, its not annoying on your smartphone. That will be a big multibillion dollar deal in relatively short order. Search works. What doesnt work are the banners that are overlaying your smartphone and driving you crazy. Before we let you go, totally off topic, you may not know about it but ill ask anyway. Yahoo theres a report on all things d that theyre looking at sumly. Remember the 16yearold kid he came in and now theres a rumor that Marissa Maier may want to buy that company. What do you know . She is incredibly dedicated to engineering and product and hes got a very cool product at 17 years old. 500,000 people have downloaded it, talk of silicon valley. Another very aggressive move by marissa meyer. Henry were going to leave it there. Appreciate your time this morning. Thank you for having me. Coming up the governments read on Consumer Prices in the month of november. The cpi at 8 30 a. M. And two big interviews still to come, boeing chairman and ceo jim mcnerney. Were going to talk to him about the dreamline enand how his company is planning if there is a move over the fiscal cliff without a resolution. And then john mcafee will join us live. Hes been evading belize authorities for weeks. Well get his side of the story, in just a couple of minutes. Icae in charge of their own future. How theyll live tomorrow. For more than 116 years, Ameriprise Financial has worked for their clients futures. Helping millions of americans retire on their terms. When they want. 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Of course Nbc Universal is the Parent Company of this very network. Coming up we have a lot to talk about. The governments latest read on inflation. Just a few minutes away from cpi numbers for november and then boeing chairman and ceo jim mcnerney. And after that the big interview of the morning, john mcafee. Nno] this is karen and jeremiah. They dont know it yet, but theyre gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, theyll find some retirement people who are paid on salary, not commission. Theyll get straightforward guidance and be able to focus on other things, like each other, which isnt rocket science. Its just common sense. From td ameritrade. So as you can see, geicos Customer Satisfaction is at 97 . Mmmm tasty. And cut very good. People are always asking me how we make these geico adverts. So were taking you behind the scenes. This coffee cup, for example, is computer animated. Its not real. Geicos Customer Satisfaction is quite real though. This computeranimated coffee tastes dreadful. Geico. 15 minutes could save you 15 or more on car insurance. Someone get me a latte will ya, please . Welcome back to squawk box. Were just seconds away from cpi numbers for november. Weve also got a number of things on the plate this morning. Weve got jim mcnerney from boeing. Got to talk to him about fiscal cliff issues. He is a simpsonbowles guy . Because, a lot of defense cuts in that. I wonder what that would mean for boeing. Probably not a sequestration guy. Exactly. And then the second piece at 8 45 or 8 40, we have john mcafee on the run, but not on the run from squawk box. In any event, Rick Santelli is now standing by at the cme in chicago, weve got Steve Liesman in the studio. Rick, you have the numbers. Survey says november cpi headline, up 0. 1 . If we look at the year over year number its up 1. 8 . Up 1. 8 . Im sorry, that actually is excluding energy up 0. 1 . Dont hey, tony. Sorry, guys, they chopped off my last headline. So i dont see the actual. Now look at year over year 1. 8. If you look at year over year core its 1. 9. Do you see what the headline read is on cpi . Down what . Looks like were down. Minus 0. 3. Down 0. 3. I apologize. Sometimes these things scroll so fast. So very similar to yesterdays cousin the ppi, we dont see a whole lot of pricing pressure right now. I remember some of the emails i was getting when we saw import prices which were all very weak, as well. You know, is this an issue of demand . Is this an extent of fiscal cliff . Is this, you know, going to be something were going to be in tune with, as Energy Prices have mod rated . I cant tell you that. But what i can tell you is right now inflation doesnt seem to be a huge concern outside of the core. Back to you. Okay. Thanks, rick. For more on the numbers, mr. Liesman has been sorting through im having the same trouble rick is having with the data. I dont know how he does it every day when i gets that data as it scrolls across. One interesting tidbit is that real earnings for private workers was actually up in november. Up 0. 5 . The consensus was 0. 1 . And that followed 5. 5 . These are inflation adjusted earnings. We get that with the cpi. Overall, cpi remains tame i think as far as the Federal Reserve is concerned. Youll note that the Federal Reserve uses the ece which is a different indicator. Rents are a smaller percentage in the pce so rents have gone up, as essentially the rental market has really taken off in the wake of the housing crisis. So thats something the fed is a little less interested in. And the Labor Department also saying that Superstorm Sandy impact of that. On Data Collection for the month of november. Interesting. One thing we have seen in the wake of the hurricane is a rise in prices. But apparently not happening this time around. Mr. Liesman, thank you. Mr. Santelli, thank you. Thank you. All right. Our next guest is a member of the fix the Debt Campaign and while hes trying to get washington to avoid the fiscal cliff, hes also running Aerospace Giant boeing and joining us now from chicago is jim mcnerney, boeing chairman and ceo. Mr. Mcnerney. Great to see you. Earlier we said we do want you to fix the fiscal cliff, obviously, if you have time. But we also want you to make great airplanes and make sure youve got those totally perfect before you really start. You know, we cant put everything on you at this point. Are you asking about the 787, joe . No. Just in general, we want the safest planes, but you know what . I do have to ask you about that eventually with the generator and the qatar stuff. But just in general we dont expect you to fix the nations ills. Just make the, you know, continue to make the greatest planes in the world. But this generator thing, is it it happened what, twice or something . Or is that a a fault make at the generator if that does happen twice . Well, were investigating it right now, joe. I mean, i think were having what we would consider the normal number of squawks on a new airplane consistent with other new airplanes weve introduced. This is an issue were chasing down. We regret the impact on our customers, obviously. But, i would put this overall in the normal introductory squawk kind of level. Yeah. Were working through it. I mean, we have mentioned time and time and again, and we always do it when we worry about verbalizing it, but the definite record over the last, i dont know how many years its been, for not just boeing jets but the airline industry, its beyond belief almost. And i know you were a gechlt guy with sic sigma but its like 1 out of 10 million or something for takeoffs and landings . Yeah, yeah, its been pretty good combination of the technology, improved training, procedures at the airlines. You always have your fingers crossed but we are feeling good about the record. Lets talk a little bit about the fiscal cliff and not just how you think we should fix it but whether youre such a longterm business. I would imagine that even if some ceos have changed plans for 2013, nothing at boeing has changed yet, because of these negotiations. Has it . I would say that were a little bit of an outlier on that case. If you surveyed all the members of the brt, for example, i would say 90 of them would say their Investment Decisions and Employment Decisions will be impacted by the fiscal cliff. And eventually, ours will, too. But were in a longer cycle environment where it will take a little longer. Theres some latency in the lag. But we had a show of hands the other day on this very question. And 90 of the hands went up. Negative impact on investment and employment, if you go over the fiscal cliff. I mean, it is a huge event that is to be avoided, and this is why the Business Community is trying to weigh in prague matically here. And our paint of view here is all things on the table. Fiscally responsible solution. Yeah there are going to be some revenues involved but there needs to be multiples of that in entitlement cuts. And so ive taken enough flak on both the right and the left in this equation to know that im in the right place. Jim, when you think about, im curious, are you a supporter of simpsonbowles . I ask because i believe that plan calls for 1. 4 trillion in defense cut spending which i have to imagine would impact your company. Yes, both sequestration and simpsonbowles would be negative from where we are today. But, again, im not sitting here in front of you on this issue as the leader of the Worlds Largest aerospace company. Im sitting worried about the u. S. Economy, worried about our political ability to function and the impact on our country if we dont. Its a big deal. Well deal with the defense cuts as they come. More important is the environment that every company in this country has to operate in. And it is scary if we dont deal with it. And jim, let me ask you a question, i hear what youre saying and i hear you saying this publicly on the air and were thrilled to have you talking about this, you also have teams lobbyists in washington. What are they saying to legislators and lawmakers right now . Well, i wearing their boeing hat, of course, theyre advocating for boeing solutions to some of our defense and aerospace problems. As jamie pointed out to you the other day, the right to position does extend itself even to Big Companies. Im glad you saw that. That was andrew. I said its not even in like the eighth amendment. I think its in like the first amendment. And unions have some pretty good lobbyists, too, dont they . Yeah, they got tons of them. And we all get to have voice. We are in a democracy. But, i would also say, and i would also say to andrews question, that you know, were in the thick of this whole fiscal cliff discussion. I mean, because it does impact every company. It is as important as any Single Program or advocacy that boeing has. Far more important. So you would urge both sides to do simpsonbowles, then . Would you urge that because the fiscal cliff, we get over that. If we just delayed things or did some patchwork so that we get through that period, Everything Else is still just the way it was before that. Were not advocating for a specific solution. Were advocating for a fiscally responsible solution that recognizes the political reality that revenues are going to be part of it. But costs need to be a multiple of that. And its it is something weve got to get done and whether the shape is simpsonbowles, whether the shape is Something Else, there has to be a fiscally responsible element to it. Our politicians just need to spend time talking to each other. I mean i think i was heartened last night that the president and Speaker Boehner spent some quality time together. Im also heartened by the fact that not a lot came out of it. Have you noticed this shift in tone with your meetings with Administration Officials in terms of their attitude toward business . I would say that the engagement, particularly as it relates to this issue, has gone up a notch. I think the president has gone out of his way to spend time with us. Quality time with us. As have has the republican leadership. And so i think the proof is in the pudding, though. I mean, at the end of the day, theres lots of discussions we have with the administration, and with the leadership. But there is one huge elephant in the room. And that is this fiscal cliff issue. All the other ones, when you add them all up, total to about a third of what that is. Well just real quick, what about moving past the fiscal cliff . I think because a lot of people are doing that because theres shortterm, immediate pressure on it. What about the longerterm solutions that we need . And fundamental tax reform, as it relates to our u. S. Competitiveness around the globe . Well, i think those are big issues. And i hope that a fiscal cliff resolution does not impede our ability to get to tax reform. Because i think fax reform really is agreed to on a bipartisan basis and should flow naturally from what comes of these current discussions. I think that can get done. The fundamental issue, though, is that weve got to restrain longterm spending in this country. We cannot afford where were going. I get the argument that some revenues have to be part of that. But i think confidence can be restored both in the Business Community and in the political environment if we get to some kind of agreement over the next couple of weeks. And i think confidence has a chance to snow ball from there. Jim mcnirnny, thank you very much for your time today. Its a story that gets stranger by the day. Internet Security Pioneer john mcafee wanted in connection with the murder of a neighbor in belize. Evades authorities, ends up in south beach. Hes going to join us live right after the break. Male announcer ] you are a business pro. Monarch of marketing analysis. With the ability to improve roi through seo all by cob. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Im going big. [ male announcer ] good choice business pro. Good choice. Go national. Go like a pro. Welcome back to squawk box this morning. Robert frank joins us on set for a very special interview. Weve been talking about it all morning. Robert . Thats probably a little strange, too. You know, the global game of hide and seek with john mcafee has riveted the country for weeks. Hes wanted for questioning for a murder in belize. He is now in miami, we think. He joins us first on cnbc to tell us where this bizarre story goes next. John, thanks so much for joining us. You are in miami, arent you . I was just playing around. Yes, i am in miami. Okay. Now, we i speak with the Belize Police yesterday and they said this investigation is ongoing, they could charge you with this murder if they do they have an extradition treaty with the u. S. Where you would have to go back to belize to answer these charges. What will you do if you are charged with this murder and the u. S. Forces you to go back to belize . Will you disappear . Will you go to answer those charges . I would certainly go to answer those charges. But there will be no charges. This is like every other charge they have leveled against me since the 30th of april of this year. The first one being running a meth lab. Then running an antibiotics lab without a license. Which is a serious crime in the third world. And on and on and on. This is about the eleventh attempt to charge me with something. I will not be charged with this. I will certainly answer any questions and ive offered to answer them in a neutral country. If i am, im certainly going to answer them. But it will not happen. So if you are asked to answer questions would you do it with u. S. Law enforcement there . And did you think that will satisfy the Belize Police . And is there any plans for you to answer those questions, either by phone or video, with u. S. Police . Ive offered it many times. In fact, ive said in any neutral country i will meet and answer any questions you want. Im certainly not going to turn myself in to the authorities whove been trying to lay hands on me for months now. So, no. But i will not go back to belize to do it. If im charged, of course, well go through the process. Theyre not going to charge me. Let me be clear. I had nothing to do with the murder of Gregory Faull. The authorities know that. And i think our viewers just want to understand it. If you had nothing to do with it, why go into hiding for the past month . Ive actually been in hiding for the past 2 1 2 months. The Gregory Faull occurred in the middle of that. It started on the 30th of april when they raided my property in orange walk. They 134i9ed me to a kind of torture where they put my hands behind my back, handcuffed me and kept me there for 14 hours. You should try this sometime. After about the sixth hour that the agony becomes unbearable. They didnt charge me, let me go. And the next day came back and said, now would you donate the 2 million . This has been my ongoing struggle. Instead of donating them the money i went to the International Press and told my story. When that happened they began in earnest to go after me. Finally, i, you know, i gave up, and escaped and here i am. John, there have been those that have said that you love elaborate hoaxes. Just a week ago you staged your own heart attack, from what i understand. That is correct. You have sold a book and perhaps a movie project related to whats happened over the past couple of months. This to those who are watching this saying, this doesnt make sense, this whole thing is crazy, what do you say . It certainly feels crazy to me. And i do love hoaxes and i love elaborate hoaxes. But not ones that involve my detention in gouatemalan jails, the shooting of my dogs, the harm to people. This is not a hoax. If it is, its the worst hoax in the world. How could it be a hoax . I was minding my own business in april, when 42 armed soldiers stormed my property, shot my dog in front of my eyes, and just to show me that they were serious, destroyed a half a Million Dollars worth of property. Tortured me in the sun by keeping my hands handcuffed behind my back with no relief for 14 hours. Again i suggest you try this, people. Take me to a jail, release me with no charges. And then from that point on they have been harassing me. If its a hoch, i certainly did not invent it, sir. So, john, as a hoaxer, we dont that makes it hard for us to know whether youre just playing us or whether youre eccentric or crazy or whatever. What sir, let me what about the bath salt stuff, then i heard you hadnt done any drugs in 30 years. You are known, just google it, a bath salts enthusiast. Is this kind of part of the hoax . Well i did a hoax on bath salts once, absolutely. But lets okay. Bath salts are used by people that dont have a lot of money in order to get high in a way that makes you want to eat peoples faces. You know, if i decided to start doing drugs again, i have the resources to do good drugs. Absolutely. I did a hoax on a website called blue light where a drug called mtpb10. Eleven years ago there was a hoax by a couple of british people who claim to have discovered this drug that had irrational properties, got you high, made you sexual, increased your intelligence, and then it disappeared. It was not real. So i made a hoax to pretend that i in the jungle of belize had discovered the formula for it. It was a fun joke. It went on for months, and got to be the largest in blue line. That hurt no one. Ive been jailed. I have been, my dogs have been killed. And i didnt start this. How would i get a hoax to have 42 soldiers come and destroy my property, arrest me and torture me . Get real, sir. That cannot be a joke that i created. John, one of the reasons that i think people are fascinated by your story is your wealth and more importantly your former wealth. You started mcafeeassociates, you were at one point worth over 100 billion. Reports say you were worth around 4 million. Now we hear youre worth 20 million, and all of that money, or most of it is in belize. What are you worth and where is your money right now . You know, my accountant may know what im worth. I have not asked him recently. Im 67 years old. I eat well and have enough money for food. And clothes. I really dont have a clue, sir. Just a ballpark. You know, less than 5 million, certainly. And where is that money, or is it in investments, or is it in property . Well, i believe its in the pockets of the politicians in belize now. I think theyre in the process of doing an acquisition of my resources like they acquired the Lord Ashcroft telephone company. They just took it away from him. And i think thats going to happen to me. John, do you consider yourself right now to be on the run, if you will . Do i look like im on the run . Im sitting comfortably with a cup of coffee. Im not on the run. I stopped being on the run as soon as i arrived in miami. I was met by a number of police officers. I had a moment hesitation. But they were all smiling and said, sir, we are here to help you, come with us. We will take you to safety. Yes, sir. The authorities in belize, there was prior history with your neighbor, i guess. Not Everybody Knows what that was. How long had there been some, i dont know, animosity or bad blood, and is that why people think maybe i mean, he was murdered, right . It happened somehow. And if there was some bad blood, maybe thats how all this got misconstrued. I love how the press sort of creates the reality and then feeds on that reality until theres a history of bad blood. Ive spoken 50 words to that man in five years. As a neighbor, i mean, you should see the neighborhood. There are two vacant lots between us. Hundreds of yards down the beach. I barely saw him. The last time i saw the man was months ago. He did not like my dogs. And he liked many of the residents that drank heavily. I dont associate with people who drink. I dont allow them in my house. I dont go to houses of people who drink. Maybe thats why the neighborhood didnt know much about me. I didnt have a history with him. He complained about my dogs. But every neighbor complained about my dogs. I complained about my dogs. They kept me awake, too. I was trying to fix the problem. If i had to take action against everybody who complained about my dogs, there would be no people left in san pedro. So we had no history. Sir. John, i understand youre trying to get your girlfriend, samantha, whos 20 years old and her friend amy, who i guess used to be a girlfriend but tried to kill you at one point, youre trying to get them back to america. Can you explain this a little bit and why theyre important to what youre doing in the u. S. Right now . I did used to live with amy. And i currently live with samantha. Amy escaped from belize the day before yesterday on foot. She met up with samantha, and they are in hiding in guatemala, legally. They have their passports are stamped. So the guatemalan authority has no reason to ex tra drit them. When i got into guatemala, i was arrested at 10 00 at night. At 4 00 in the morning, a press release was issued saying i was going to be exported back to belize at 8 00 a. M. It was only the action of my attorney at 5 00 a. M. Who brought a judge in to stay that move until we could file an appeal that kept me from going back. So you know that they can kidnap a couple of young girls and bring them back. If that happens, i wouldnt have any choice, i would have to go back and turn myself in to prevent them from being tortured. I know it sounds mad. But this happens. Im sorry, people get tortured in belize. This happens. Im sorry. It happens in mexico, and no one says anything. It happens in honduras, but you say belize, and they say, youre paranoid. No, im not. There are reports and pictures of you on the internet often, holding weapons, holding guns. Reports of you shooting your guns inside your home, on your property regularly. Are those reports accurate . Its certainly accurate that i had lots of guns, but they were in the hands of my security guards. I live in a country, sir, that has the highest murder rate in the world. Check it out on the internet. Its populated by numerous gangs. The gangs suppression unit was created ostensibly to control gangs. So of course i have guns. I have security guards. The reason i had ten dogs is they bark if someone tries to break in. I did. This shooting, thats complete nonsense. There was shooting the night my dogs were poisoned. Thats complete nonsense. This is the press picking something up. This is like cnn. For example, head of the gsu put out a press report the day the body was discovered before the body was discovered saying, john mcafee is the prime suspect. Cnn was the only one that published it because they didnt check it out. The San Pedro Police who were in charge, they said, no, we dont have a clue yet. We havent even started an investigation. The gsu is not involved. Once cnn reported it, everybody reported it. So now youre reporting somebody elses news. If i dont put a stop to it here and now with this one question, then someone else will report it again. John, just a quick question. People know you as an entrepreneur. Youre 67, you have about 5 million left. What will you do now . Will you start another business . Will you try to get those assets back to the stusmt . What are you going to do to make a living, or to get your fortune back in the coming months . Making money is easy. It is. The difficult thing in life is not making it, its keeping it. Any idiot can make money. Keeping money, very few can do. I had five businesses in belize. I owned the a water taxi business, a water sports thing for tourists. I own a bar in carmelitya that ive never been in, because i dont drink. Ill do something. Ill shine shoes. Im 67 and im still breathing. John, thank you very much for joining us. Please stay with us in the coming months and let us know what youre up to. Thank you, sir. Coming up, weve got stocks to watch ahead. The opening bell will be back in a moment. Ogies allow natural gs to supply affordable, cleaner energy, while protecting our environment. Across america, these technologies protect air by monitoring air quality and reducing emissions. Protect water through conservation and selfcontained recycling systems. And protect land by reducing our footprint and respecting wildlife. Americas natural gas. Domestic, abundant, clean energy to power our lives. Thats smarter power today. Can i still ship a gift in time for christmas . 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