Transcripts For CNBC Squawk Box 20131230

Covering the games will be covering that. Well go to kayla with some of the top stories. Dangerous element six weeks before the winter games are set to begin. Elsewhere in corporate america, apple is just saying no. The company urging shareholders to vote against carl icahns 50 billion stock buy back proposal. No word yet from the billionaire investor. Apple releasing details of tim can cooks pay. He took home 4. 25 million which is on par with what he made a year ago. He gave up 7100 shares tied to an annual performance award. That was based on august 2012 to 2013. The stock in that time lost a quarter of its value. Those options set to vest worth just about 4 million. So a drop in the bucket for tim cook but, nonetheless, there are some repercussions for the apple stock price. To anyone else thats money but chump change. He m us must have had a big payoff. 2004. Two waves, five years and ten years. He actually asked the board himself, can these vest on an annual basis equally and that way every year you can actually reevaluate whether i deserve these, which i thought was a pretty proactive way to go about this. Obviously the board has decided that for that most recent years some of those should not vest. When you get to that point and you wonder, you know, you already have three or 400 million in the bank from the company that you didnt even found, then you wonder i guess at that point its about almost pay for performance. Youre going to give your mona way eventually anyway. At that point youre adding to what you already have. What is it about . I think its about being paid for doing a job. Heres the question though. If you remember steve jobs who did found the company when he came back, i think he took a dollar a year. He had some stock. That was it. Most of his wealth was in pixar which was sold to disney. Anything he did was goldplated and oh, well, its steve jobs. He had how much finally . What do you think he was worth . When it was all said and done . Yeah. I at this it was about 7 to 10 billion. A lot of that was from pixar shares as well. Most of it was from pixar. Had he held on to his shares of apple from the beginning because he sold when he got booted, the number would have been he had a right to sell based on what the stock did in the 90ed. If he held on, it was astronomical. Done skully, down to where it looked like it was going to go the way of so Many Technology companies that didnt keep up the pace with the technology and then here we are. Then theres a deal that almost happened and bought apple and got cold feet. We cant take this risk. Its too big of a risk. That was not when steve was there, was it . No. Did you see this new thing, its got more than a million the advertising is working on me. Got more than 1 million pixels, got a better screen, it costs less. The kindle youre talking about . It weighs less. I dont know. I keep seeing it advertised. The advertising is working in that you want to buy one, you did buy one . No, is it really better than the latest ipad air . Go forth air. Go for the air. I was at the apple store yesterday. Go for the air. Clear picture. Costs 379 359 versus 4 . 59. Its 20 lighter. I cant believe that. Thats what theyre saying . Youre not watching tv . Not enough, clearly. Im watching movies. Oh, we have to have a conversation. You like zblsh we dont have to do it now. Im the unfortunate move of seeing the wolf of wall street with my family. That was my fault for not bringing them to the movies. Do you like seeing excess. Did you see the guy is shopping a reality show. Okay. So let me just say i want to make two comments. One is jordan belfort, terrible guy. Hes the main character in the movie. What hes done in real life we can all sit here and condemn it. Nothing to do with wall street. Aluminum skies with aluminum siding. Just another scammer. Just another scammer i agree. The context in this case is that hes running a mutt ton shop. Absolutely. We should note that jane wells did a profile on him in 2007, invited him to come back and didnt want to come back because of the way that we discussed him because we called him a crook. Then again everything in that story is true. When he came in and the movie, you know, this was like a year and a half ago or so and it was wolf of i didnt know stratton oakman was the most obvious bucket shop operation. Im trying to separate two things. You want to watch first jersey securities watch a movie about robert brennan. How many mob movies do you watch . I think you know what youre getting. Parents dont go and say, im so proud of my son. Hold it. For the premiere. Can you do me a favor . No. Separate this guy from the movie. So you like those movies. It was an awesome, entertaining movie. Did you not like it . I thought it was entertaining but i think i watched most of it like this . Because . It was just so raunchy . Thats why andrew loved it. I dont believe his life was that interesting either. Pure entertainment. Take it as entertainment. Now i will say this on friday when we were on the show talking about this movie, someone emailed in and said hes giving the profits of the book and the movie to the victims. Not true apparently. Because i looked into this. There is a lawsuit ongoing where the government is trying to get 50 of the profits from him and hes not paying. Shame on him. Thats a question of enforcement though. And im not suggesting for a second he should get success with any of that unless, by the way, he can use the proceeds to pay the victims back. If he can, god bless him. Thats a question of enforcement. Hes supposed to pay 110 million in restitution. Hes only paid 12 so far. Right. Who is going after him to get that difference that obviously has not been paid and did not get paid . Did you see him i did not. I saw catching fire. Hunger games, catching fire. And . I havent seen wolf of wall street. I dont know which movie you have to suspend more disbelief. I would think wolf of wall street you have to suspend more disbelief than hunger games which is ludicrously out there. Some of us who think hunger games is a true story will be crushed. I would say its about the same, the suspension of belief of disbelief that you need to operate on. Lets talk about obamacare and a ceo. They already said theyre totally against this. The administration is reportedly under pressure to name a chief executive to run the federal Health Insurance marketplace. According to rigeuters, they wa him to appoint a ceo. Thats not we need editorial at the bottom. Especially after the rocky rollout of healthcare. Gov. The ceo would set rules and coordinate with insurers and state regulators. White house officials, however, say the idea is not being considered by the white house. Were going to keep this running as a government program. They dont want any type of private sector operation that would perhaps need to come in under budget and in line with estimates and things like that. Regardless of the way that you think about this politically, its been a disastrous cooperation with the private sector. The deadline got extended by a day last week. They didnt tell the Insurance Companies. The Insurance Brokers that were going to take off for the holidays all of a sudden had to race to get some of these accounts set up. You think about the fact that theyre letting some of those Insurance Programs that were not going to be grandfathered in, theyre letting them keep them. The Insurance Companies are saying, wait, that creates red tape. I saw the Mainstream Media covered the Medicare Advantage story one way. Uhhuh. You look at the way everything is set up. It was designed to put these Medicare Advantage programs out of business anyway. Then so the companys offering the Medicare Advantage do what they needed to do because reimbursement went down so much. They said, okay, we are to get rid of the doctors. Then they get blamed for it when all along democrats wanted the private its sort of a private sector its an outsourcing of Medicare Advantage. Right. Very popular. People want it. It will go away. Thats what they want it to do. Its going to fall by the way side. Part of the whole intention of obamacare. Veer off on a tangent. Do you have a view, we didnt talk about this on friday, unemployment insurance. Unemployment insurance. Where do you stand . The reason i ask is most of the economists who have estimated whats going to happen as a result will argue that 200 to 300,000 new jobs ultimately will be lost in the private sector. I was reading about the sort of the you have to connect a lot of dots to understand what people argue on both sides of that. Now im hearing that what is it, if you you can wait around for okay. If you get the insurance if youre in a state now im hearing if you get the insurance youre able to wait for a better job. Job, yes. So that you dont go into a crappy job where you end up leaving the work force anyway. So in some kind of perverse way the side that wants the unemployment is arguing that you actually its actually better. Then theres a whole site that will cite studies right. That more people, the longer youre away from the job force, the less likely youre ever going to get back into it, the less likely youll be hired. Almost like minimum wage studies. Whats your side . Whats your side of this . I dont think about unemployment insurance. Id rather give people a job than unemployment insurance. I dont see a lot of a lot of the things that the democrats at this point, you see what theyre the wedge issue is going to be to try to right. Do you see what its going to be to take back 2014 will be minimum wage. Obama care. Theyll work on populus income. All i know is for five years, one side, maybe both sides have been trying to be divisive. For five years i feel like one side is governing for 50 of the country. Its been the most divisive person. One side is governing for 50 of the country. I dont think obama is governing for the haves at all at this point. Yeah. Okay. And you heard it here first. As we mentioned at the top of the show, the second suicide bombing attack in two days is leaving dozens dead and injured in russia. Lets get to jim aceda in moscow for the latest. Good morning, jim. Reporter good morning, joe. Investigators in sorry. Ive got you in my ear. Ill keep going. Investigators in volgograd which is a major rail and bus hub for southern russia, its a city, by the way, which you can pass through to or on your way from sochi, its really a Major Railroad hub, investigators have issued a statement saying that this mornings bus bomb was carried out, in fact, by a male suicide bomber. Now no one, joe, has yet claimed responsibility for either todays or sundays attacks which have now killed at least 30 and wounded more than 60, but the strong suspicion, of course, is that this is the work of islamist insurgents from the very rest of north caucuss area. People in volgograd are terrified. Its a city of 1 million people. Residents are afraid to go outside and go about their daily lives. Police are calling it an act of terror. Theyre connecting the two attacks, yesterdays and todays, and theyre connecting both of those to the publica peel by the chechnyian warlord. Youll recall his appeal to his men to kill civilians and disrupt the upcoming winter games in sochi. Of course, president putin has staked his reputation on these games. The wave of bombings is getting closer and closer to sochi. Volgograd just 400 miles from that olympic venue. Joe, to sum up, russian people are afraid today. Putin and Russian Security forces are certainly worried as well. Back to you. Its more than coincidence that its only a little you know, its weeks away to the olympics, jim, and you would have to think that that was totally in the thinking of some of the people that were perpetrating this act. How far is sochi from where you are . Reporter youre right. Were about 550 miles from sochi but the actual volgogard, which is where all of this is happening, is only about 400 miles. On friday there was an attack in a town only 170 miles from sochi also committed by jihadists. So, yes, theres no coincidence. Were 38 days away from those olympic games. Putin has invested already a fortune, we know. From a Security Point of view, some 40,000 special forces, police, agents have created a fort knox, if you will, around sochi to make it safe but the militants are showing that it can strike. They can strike at will, they can strike anywhere in russia. People worry. Back to you. Okay. All right. Jim aceda, thank you for that report this morning. Were going to stay global and go to the Global Market report with Ross Westgate is standing by in london. That was a tough story, ross. We are in football just like on we are so juiced after this weekend and then its just the beginning of whats going to happen in terms of all of our bowl games over here. Are you watching that other football over there instead of the real football here . Let me see. Im not sure what he said. Are you . Did you hear that . Im trying to read lips unsuccessful unsuccessfully. I think he was saying what i hope he was saying was of course not, joe, we are now deferring to you on what the real football is and i think he brought up last nights game. Cramer is going to be sky high this morning. You know why . No. Anyway, u. S. Stocks any idea why . Any idea why cramer would be sky high today . Did the eagles play . I think the eagles must have won. Did you see it . There you go, im a packers fan. Wasnt that unbelievable. The way we eked out the win against the bears. He got away. There were 40 seconds. He got away and that guy was so wide open. Did you see that the cornerback stayed cutler had a couple of hail marys with a few seconds left on the clock. Could have turned it around. But the play that the cornerbacks were staying at the first down. They had no idea he was going. That was amazing. U. S. Stocks are wrapping up their best year from the 90s. Joining us, mark vittner, wells fargo. James lee, theres the braces looking good, mark. And tom, next year, youre one of the few people how long have you been bullish, three, four years . Yes, four years. Are you going to make it five . Are you still bullish . Yeah, were still bullish. I think a lot of things that were still supporting stocks this year are going to support equities next year. We dont see any reason why we wont have double digit gains. Double digit gains . Yes. What about equal gains . What would you put the probability of that at at this point . You know, weve looked at some classic bull markets, which this is really tracking closely in the sixth year. There are maybe 1 3 of the time you actually match the gains of the fifth year. So i think theres a one in three chance were up 30 . From your lips. Thats been my dream, the mid 90s once again, which would you know, if you went back and it would get us way above the mean again for the longterm average that stocks are supposed to give us, but its not impossible given that we havent seen sort of the euphoric part of this bull market yet. Thats exactly right. I mean, i think one thing the viewers have to keep in mind, equities may be one of your best real return vehicles in 2014 and, you know, its possible for markets to post big twoyear gains. Look at what happened with japan in the past 12 months. Yeah, over 50 points three Straight Years in the 90s. Vittner, is the economy going to cooperate in terms of is that all we need is to just get the government sort of out of sight, out of mind and get a twoyear budget deal and the economy can do what it wants to do and throw off the shackles of what weve seen in the past couple of years . Well, that would help. I dont know that the government would get out of the way if we just get the budget deal as we still have the debt ceiling lets assume that they dont do that the debt ceiling goes through. Is that enough without any just not being negative versus doing something positive with tax reform or something . I think that helps a lot. We dont have to have the tax reform if theres just not the negative pull from government. Right. The economy is getting better. Were a lot more optimistic about the economy than any point since the recession ended and the last few years havent been great. For the first time i think the risks are to the up side and that should be very helpful for the stock market. The valuations arent its not like were going into 2014 over valued. Were kind of appropriately valued. You get a little bit stronger economy and maybe some expansion from there. What is the bond market going to trade . Youre saying the economy can be much better. Will it trade off that or do we need to see inflation before theres a problem with Interest Rates starting to actually be negative . Well, when i said the economy is going to be better next year, we have 2. 5 gdp. On the low end. Were on the low end but weve been on the low end. Were closer to the middle now. On a Fourth Quarter to Fourth Quarter basis its probably closer to 2. 7. It looks a little bit better that way. If you get 2. 5 real Economic Growth, you get 2 inflation, thats 4. 5. Thats revenues up 5 and earnings probably up 6 or 7. So, i mean, that thats a pretty good environment. I think that and thats our base case. If things fall into place and we get a little better behavior out of washington, housing comes back a little bit stronger. In the last few data points, theyve been encouraging, then we might be closer to 3 so that we can be a little bit higher than that. Mark, do you think earnings and profits are going to rise because of cost cutting or do you think they will be plugging more money into the economy, hiring, expanding capex, the like . The quality of job growth should be better. Housing will be stronger so you can get more construction jobs. Could be Even Stronger than were expecting. The Manufacturing Sector seems to be coming back. International trade is going to go from being a slight drag last year to being a positive so we should see more expansion in the Manufacturing Sector and transportation distribution. I think the quality of job growth would be better so we get stronger income growth. We get a little bit even though the numbers are modestly higher in 2014 than they were in 2013, i think the quality of growth will be better. Tom, you said about a year ago on squawk box when the dow was near 14,000 that you thought 20,000 on the dow, 2400 on the s p was the levels to watch within the next four years. Do you still hold that . Were at 16. 4 now. 18. 37. Do you think we have three more years to get to that point or do you think well get there quicker . You know, i still feel comfortable that weve got a couple years at least a couple years of very good markets and its going to be driven by, you know, Profit Growth and economic surprise. I think its possible for the s p and the dow to really peak at much higher levels than what i may have said a year ago but it really depends on it really depends on the quality and the type of growth were expecting. Were hoping its going to be quite good. Okay, gentlemen. Time will tell. Were in that weird period between its like i feel like 2013 is finished with all the markets but its really not. Were not really talking about january yet. The first week of january, so goes the month, so goes the month, so goes the year and were sort of right in this nether world. Theres a lot of people, theyre not in saint bartz. Theyre in moscow. Theyre in switzerland. Aspen. Aspen. What happened to saint bartz . Im finally getting to where i think maybe ill go there to try to be with all of these people. Squawk should probably do an investigative report from saint bartz. Aspen . Aspen . Yeah. Snow coming down. Who did i see youre going skiing out there. I saw a couple of people walk along shopping. I cant remember who it was. They were out there. Jacks probably there. Whole crew is out there. Gold leaf, right . Jack . Welch. No, nicholson. Thats what i thought. Anyway, coming up, were going to talk about this. Very interesting story. The way you tip about to change in 2014. Joe, are you a good tipper by the way . Yes. You are . Okay. But first lets get the National Forecast from the weather you write little notes about lifestyle. Reynolds . Reporter hey, guys. Lets give you a weather tip for today. Were going to see some scattered snow showers across parts of the Northern Plains and moving into the northeast. Temperatures in the 30s in both boston and new york. In terms of travel today, youll have possibly some delays in the twin cities. Backups there. New york city looks good. Denver. No major issues to report. Hey, folks, sit tight. Got more coming up on squawk box in just a few moments. How about the eagles . They managed to beat the cowboys to win the nfc east title. I think this might be the fourth Straight Year the cowboys had a setback in the most important game. 2010, the eagles are there. Theyre going to host the saints next saturday. They hired the coach from the ducks. Their coach went out and did well with k. C. Then the bengals did all that they could do for the four star cross steelers. That kills me with our director and everything what happened when that guy missed that field goal from k. C. Paul, im sorry. Im yeah, im just really sorry. Yeah, yeah, yeah. Bengals clinched their own title a couple weeks ago. Its worth mentioning they are hosting the San Diego Chargers who they already beat a couple of weeks ago. I was worried about the steelers because we just lost to the steelers. If the steelers had been coming into town, that was the one you should have seen, andrew, because kansas city had none of their first string in because they were sort of saving them. This is where the guy from philadelphia went. Hes out there now and he has one of the best records. They had a chance to win it with what was not a long field goal. It missed literally by this much. Can we go out there next sunday . Out to cincinnati . Yeah. You could show me around. I hear its great this time of year. Yeah. The whole midwest you could show me around. Youre supposed to pay off harwood that way and you welched. I have not welched. Im waiting for the invitation. Ive been sitting next to the phone on friday evenings waiting for him to call. Not easy to get playoff tickets. Not like we can walk in there. Joe, you know people in cincinnati. You dont know people in cincinnati . No, very closed. Cincinnati, if you leave, they dont have anything to do with you anymore. Okay. Its like, why would you leave all of this. Do you have tickets . No. Paul, what about the steelers . Were you watching that . Is this broadcasting. Fratto is a huge steelers fan. Is nbc broadcasting. I dont know if they were broadcasting. If they were, maybe they could help us. Coming up, well talk about predictions for 2014. From the debt ceiling to what we can expect in the new year. You know who has the answer, john harwood has the answer. Good. As we head to the break, take a look at last weeks winners and holiday losers. The winner takes it all until it breaks the fall the ocean gets warmer. The peruvian anchovy harvest suffers. It raises the price of fishmeal, cattle feed and beef. Bny mellon turns insights like these into powerful investment strategies. For a university endowment. It funds a marine biologist. Who studies the peruvian anchovy. Invested in the world. Bny mellon. [ male announcer ] what kind of energy is so abundant, it can help provide the power for all this . Natural gas. More than ever before, americas electricity is generated by it. Exxonmobil uses advanced visualization and Drilling Technologies to produce natural gas. Powering our lives. While reducing emissions by up to 60 . Energy lives here. That your mouth is under attack, from food particles and bacteria. Try fixodent. It helps create a food seal defense for a clean mouth and kills bacteria for fresh breath. Fixodent, and forget it. [ male announcer ] this december, experience the gift of unsurpassed craftsmanship and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. So i got the windows nokia tablet. Its, well, impressive. Its got the brightest hd screen, superfast 4g lte, so my son can play games and movies almost anywhere, and its got office for school stuff. But the best part . I got the lumia 928 for my daughter for free, with the best lowlight Smartphone Camera this side of the north pole. Dad for the win. Mm mm mm honestly, i want to see you be brave back to squawk box here on cnbc. Im joe kiernan, Andrew Sorkin and kayla tauschi. How was it, unsettling, discombobulating or exciting . She didnt sleep all night because she was excited to be here. In anticipation. I flew back from atlanta so i took a nap but it was probably all i could do to contain my excitement. You were down there for christmas . Advice thing my families. And the weather was a little better. Little better. Mid to high 50s. Lot of rain. Its monsoon season. It was wonderful. It was monsoon season up here. What did we get, about two inches of rain. Miserable. 38 degrees and rain. It was gross. At least we had 55 and rainey. If i had to choose one of those, id rather choose the higher end of that. Yeah. Do people, were they hoping for the falcons to win or they didnt care at this point . Its been a rough year . Well, i think they were really hoping for the falcons to win. Its a funny city because the falcons were bad for so long that no one really claimed them. They were good last year. But as of last year all of a sudden all these former fair weather falcons fans that happens. Are huge fans. Riseup. People who would never have known what a football was were dye ha die hard fans. It was everybody in the south, either florida or carolina. Right. Anyway, a rough one in russia today. In the headlines, at least 14 people killed, not the rail bomb. This was a trolly bomb. Yeah, two. Another blast that was in the russian city of volgograd this morning. The second deadly attack in that city in the past two days. On sunday, which is whats the headline of most of the papers are still on the sunday attack, the late edition, at least 17 died in a blast at a Railway Station and all of this is raising fears about the upcoming Winter Olympics which are going to begin in sochi in less than six weeks and our Michelle Cabrera will be covering the olympics for us. Shell have more on the story later in the show. Will that impact the number of people who go . Not at this point. Well see. Two in two days. Suicide bombings are scary because those bombers obviously are really committed, right . Theyre really hard to thwart because since they are so submitted, just get on a bus, get on a trolly. Yeah, exactly. Volgograd i read somewhere is in contention for the 2018 world cup of all places. Really . Even though it might not have an impact on the sochi olympics people who have already bought their tickets and plan to go, theyre in t but for some of these others, other prestige pursuits of Vladimir Putin, you know, it actually piet have a pretty big effect on whether russia can claim their spot. Theyre not expecting a huge turnout. Theyre expecting a huge turnout in sochi but relative to other olympics, not so much from what im told. Sponsors, others are not going in droves that theyve gone to other games. Interesting. Thats the word. Complicated. Volgograd. Thats like st. Petersberg used to be leningrad. Volgograd used to be stalingrad. I dont know if id leave a city named after stalin at this point, either, but now its if youre wondering because you havent heard of that city, the former stalingrad. Jim maceda said it was 450 miles northeast. 500 northeast from moscow. Bad weather delaying the rescue of a Russian Research ship. Its summer down there. Yes, it is a ship studying Global Warming. Several ice breaker ships have been deployed to the area. Some of them have gotten stuck because theres so much ice. Theyve been unable to complete the rescue. Snow, showers, poor visibility. The stranded ship was chartered by a team of scientists with 74 people aboard. They have a couple of weeks of fresh food and a lot of freeze dried food. This 84 years ago a guy got in there easily, malfsin theyre talking about, not easily, had similar problems. Made it all the way there 84 years ago when, in fact, there was less ice than there is today. In corporate news, apple is recommending that shareholders vote against carl icahns proposal that the company buy back 50 billion in stock. Apple says its already returned 43 billion in dividends and buy backs during the First Six Months of 100 billion capital return program. Thats just a part of how much they have. Do you know . Do you remember . Whats the total number . I dont know. Over 150 billion. I would imagine. Even the 50 billion figure that icahn was pushing for was still less than half of what he had originally been pushing them to do. Right. So even that was, you know, seating some of that victory there. Apple saying dont vote for this. We should go buy some stuff. I dont think theyre going to do that. Lets talk a little politics. 2013 a challenging year for the white house, from the Health Care Glitches to the National Security agency. The president ends 2013 with his Approval Rating at record lows. John harwood has predictions for 2014. Before we do that, lets check in on his predictions from last year. First, john predicted that tax reform was unlikely to happen. Whew. Bingo. That was correct. Really went out on a limb on that one. Did hasnt moved in either house or senate. Prediction number two, Immigration Reform likely to pass. Now were saying this is incomplete. Its passed the senate but hasnt been addressed by the house. I wont say its can we say wrong . Yes. Lets just go with wrong. And finally john predicted modest gun control steps likely to past post newtown. Neither laws were passed in either chamber. Lets take a look at what john has to say about 2014. Think of 2014 as a year of diminished expectations and then youll see the pattern in my predictions for the next 12 months. Start with the budget where republicans and democrats have struck a deal replacing parts of the budget sequester with savings they like better. Look for them in early 2014 to follow up with spending bills that throw scraps to defense and domestic priorities congress has neglected but make little fundamental change. Lawmakers will avoid both a Government Shutdown and another debt crisis. Been there, already burned by that. While that happens, the Obama Administration will grind along to the end next spring of signups for those troubled new Health Care Exchanges that americans without insurance must buy from. Even if enrollment comes up short of their 7 million person goal, white house allies will sign up enough young people to keep the exchanges financially viable for 2015. Obamacare will still have Health Problems but will get the chance to survive and grow. By the fall the voters will go to the polls for another round of midterm elections. With little faith in either party, theyll start no revolutions this time. Republicans will hold their majority in the house, democrats will hold theirs in the senate and then the status quo will start limping along to 2016. John joins us now from washington this morning. Good morning, john. Good morning. So, i just want to go back. Can we go back to 2013 for a second because on the second question we had written that it was incomplete and i thought it was we gave him an x. We gave him an x. Okay. Where do you stand on that issue . I mean, what could actually bring that back . Fear by republicans that theyre going to hurt themselves not just in 2014 but in 2016. So i think theres a real chance that they decide to do something large enough that democrats think its worth passing. You know, theyve taken a piece ma meal approach. Theres a very, very powerful selfinterest within the Republican Party to do something and, you know, it doesnt always translate because the concern is greater at the National Level for president ial candidates and house members, of course, theyre only elected to a single constituency. I think theres still a chance. When does the 2016 campaign really begin . We were talking about that during the break here about the benghazi story in the times over the weekend and whether hillary when does all of that happen in earnest and do we actually see some of that in 2014 . Sure, youll see some of it. Youre already seeing some. I think if youre talking about going in a serious way, you know, look at november 2014 once we get through the mid terms and everybodys then going to, in terms of the candidates, whether its Hillary Clinton or Chris Christie or scott walker, theyre going to lay their jeb bush, theyre going to lay their cards on the table and let us know if theyre going to go. The field will really become i think when we get to january 1, 2015, the field will be known and theyll be off and, you know, theyll be a winnowing process through 2015 when people figure out whether theyre viable and ka raise tcan raise. Im happy that hillary has stepped up. The whole benghazi, at least shes thats resolved. Thats resolved now. Thank god. That block is off her record and now we can maybe just focus on her record in the senate. Do you have anything there, john, for me . Her record in the senate . Yeah. Any legislation or i mean, give me something. Have you got what have we got . She voted for the iraq war. Let me ask you this. Was it a rougher year for a fan of the president or for a fan of the redskins . For the redskins. Rougher for the redskins . Yes. I mean, all the promise of rg3 and suddenly that that and he was he did come back from the injury. Did they say anything on shanahan zblyet . Is it ton . Lets expect it . Puts it this way, president obama got 4 growth in the year. We didnt even get 4 wins in a 16game season. Painful. I like morris, i like rg3. I like a lot of teams, but that was very a very frustrating year. Very close games that went the wrong way. Id like to have marvin lewis back as our coach. Did you have him for a while . Hes been at the bengs he was our defensive coordinator. Hes been there for 12 years. Sorry. Bill clinton, i dont know if you saw this, is going to be swearing in bill de blasio on wednesday on new years. I forgot he was impeached. What do you think thats about . I think thats, one, about bill clintons relevance. He likes the spotlight. You might have noticed that. Secondly, its not a bad thing for Hillary Clinton to have her husband be standing alongside swearing in somebody who is a leading urban liberal politician in the country when so much of the Democratic Party is urban and liberal. I heard two things. One is this is a suggestion that the party is moving even more left and then another suggestion that actually by putting bill in there with de blasio, this will give a little bit of cover to push back on that. I mean, that sounds like somebodys overthinking it. Party moving left . You know, to some degree if you look at the president s focus on income inequality, you could say thats moving left. Bill clinton was concerned about that issue when he was the president as well so i wouldnt read a whole lot of high nuance into this. Hes a big liberal politician and this is a good thing for the clintons to be associated with. Someone told me as long as hes popular. Someone told me last night he let people go to the opening of an nfl. I envelope. He likes positive reinforcement. He likes to be liked. Well have more politics. Id go to the opening of any envelope, manila envelope. What . Im not going to say it. Coming up on squawk box are you still going . No. No . Surpris surprises, predictions and the Market Outlook and a peek into what will drive the tech sector. Heres jim sharing his wish for 2014. My economic wish for 2014 is that the financial prosperity of 2013 turns into Economic Prosperity for everyone in 2014. That and that my stocks go down. [ male announcer ] this store knows how to handle a saturday crowd. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. [ female announcer ] but with less energy, moodiness, theand a low sex drive,ing. I had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about axiron. Welcome back. U. S. Equities futures so far this morning, you never know because without everybody there, it gets a little bit thin and things can happen. Some big moves. Its unbelievable. Up again. Up another 28 points. We have other things coming before. Were going to go back to break, i think. We are. I will take you there. Still to come this morning. You dont want to mix it, stock picks from david darst. Find out what names hes going to ride from 2014. Plus the hot buzz about google glass, well talk about the tech stories that dominated the news this year and ask which trends you need to watch for next year. Were back in just a moment. [ male announcer ] heres a question for you the energy in one gallon of gas is also enough to keep your smartphone running for how long . 30 days . 300 days . 3,000 days . The answer is. 3,000 days. Because of gasolines high energy density, your car doesnt have to carry as much fuel compared to other energy sources. Take the energy quiz. Energy lives here. At bny mellon, our business is investments. Take the energy quiz. Managing them, moving them, making them work. We oversee 20 of the worlds financial assets. And that gives us scale and insight no one else has. Investment management combined with investment servicing. Bringing the power of investments to peoples lives. Invested in the world. Bny mellon. So you can see like right here i can just. You know, check my policy here, add a car, ah speak to customer service, check on a claim. You know, all with the ah, tap of my geico app. Oh, thats so cool. Well, i would disagree with you but, ah, that would make me a liar. No dude, youre on the jumbotron whoa. Ah. Yeah, pretty much walked into that one. Geico anywhere anytime. Just a tap away on the geico app. Among the stocks were going to be watching, sony has reportedly abandoned plans to sell its unit that makes lithium ion batteries. According to the nikkei business daily, talks to sell the unit stalled and sony believes it can turn that business around because of the weak yen. As well as increasing demand from smartphone makers. And blackstone is investing 200 million in crocks in shoe maker crocks. Itll get two board seats as well as preferred stock. Dont do it . Its a 6 dividend, yeah . I told you this. I own crocs, my wife wont bet let outside of the building wearing them. Cargo pants and crocs. Doctors love to wear crocs, and this is early to be saying this, but because theyre operating, et cetera, they can wipe the blood off them. And mario batali, hes got those orange crocs. I wear these gray canvas with a white bottom. They look like Gilligans Island kind of shoes. Are they crocs . Yeah. Theyre slipon sneakers, basically. Not the conventional ones. Look them up. Im going to. You got me nothing for christmas, i guess. U. P. S. , its still somewhere. My birthdays coming up, too. I know. Ive got it on the calendar. Its ready to go. Ive also put in the for birthday, already. Ive got to depend on u. P. S. To get it here. My birthdays another a lot of people buying a lot of stuff for that. You can borrow my car and drive to the store and get something for joe. Its not a stick, obviously. Separately crocs says the ceo is retiring in april and stepping down from the board. The company will recruit a new ceo between now and then. Coming up, this mornings top stories. Plus, were going to welcome guest host david darst, the Morgan Stanley Wealth Management chief strategist. Youve got five themes . I cant wait, david darst is here. I really wish that there are more opportunities for people to get work. Less income inequality. My wish that people would be employed and poverty, you know, would diminish. My wish would be that wall street would turn into main street and start spreading money around to little stores. Crohns, and it feels like your life revolves around your symptoms, ask your gastroenterologist about humira adalimumab. Humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohns disease. In clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira, your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your gastroenterologist about humira today. Remission is possible. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Another deadly bombing in russia, were going to get the latest details from moscow. Just two more days before 2013 is in the books. Predictions for the new year for wall street and washington. And megaMillion Dollar homes, this battle for real estate supremacy, squawk box begins right now. Good morning, and welcome to squawk box on cnbc. Im joe kernan along with andrew ross sorkin. And kayla touche, i think should be your name. Because whenever ive tried to get the better of you, you always get the better of me. I like that. Its like touche. Because youre young and very with it. You are. A lot of my friends thought that was how my name was pronounced when they first met me. And i let them think that. Its like when you say touche, that means someone got you much better than you just got them. And youre a social media expert and use it very well. I thought you were going to say junkie, addict. No, the way you use it is the way itll be properly used by Business People trying to wow, joe. The synergies involved. A compliment. Is it happy hour yet . Can i hang it up, drop the mike and walk off . Look how important it is to media assets right now. And if you dont know, like a dinosaur, im not going to mention any names, but youre actually at a disadvantage with your younger peers in terms of the media world. But you have a good you have a good way to interact with your viewer on twitter. Yeah. Dont i . The way i make them feel so special . Its really couth. I dont even use block, i report them for spam for the slightest insult. Becky quick is off today, kaylas here. And the futures are indicated higher. Check out the tenyear, which im okay with three. It stays at three for a while, its fine. Remember, before we knew it was official, the beginning of the taper, it was at 2. 87 . So were up, what is that . 13 basis points or something. Which is pretty orderly if you look at the right side of that. We moved a little bit higher, but we can deal with that. In world news, there was another deadly bombing in the russian city, the second in two days. Lets get an update. Another one from jim mesada of nbc news who is in moscow. Jim . Reporter good morning. Well, investigators in a major rail and bus hub for southern russia, a city youd normally pass through on your way to or from sochi, investigators have issued a statement now saying that this mornings bus bomb was carried out by a male suicide bomber. No one or a group has yet claimed responsibility for either todays or sundays attacks which have now killed at least 30 and wounded more than 60 according to russian investigators. But the strong suspicion, of course, is that this is the work of islamist insurgents from that very restive area in southern russia. And people are extremely upset. Theyre terrified in the city of over 1 million. Today there are reports that residents are staying inside. Theyre too afraid to go out now and go about their daily lives. Police are calling these two attacks acts of terror and connecting them to a Public Appeal. Several months ago, this was made by the war lord on the list of terrorists. His appeal to men to kill civilians and disrupt the sochi olympics. Thats an event that Vladimir Putin has staked his prestige and reputation on. This latest wave of bombings, though, is getting very close to sochi, volgograd only miles away. And another car bombing on friday, only 170 miles from sochi. So russian people are worried, Vladimir Putin and his Security Forces are extremely worried, as well. Hes employed some 40,000 special agents and police around sochi to make it as safe as possible. But the militants have shown they can strike elsewhere, they can strike often, and at will. Back to you. Thanks for that report. We should also say a Russian Research ship remains stranded in arctic ice. Its still there. The ship has been stuck since Christmas Day with several ice breaking rescue ships not arctic ice, its antarctic ice. We should say the rescue efforts hampered by snow showers and poor visibility. The 74 passengers are said, however, to be doing well and continuing their research while they wait to be rescued. And the lead researcher is actually attributing all this summer ice to Global Warming even though its the most ice. And theres been no warming since 1979, zero. But Global Warming its not called Global Warming, can we call it Climate Change. But thats unlikely that this is one of the things i have a problem with. They have also changed, they dont call co2, they call it carbon because of the connotation of but carbon is an element, carbon is the would you be more comfortable if it was called Climate Change . No. Im not more comfortable its called carbon either because it conjures up black soot. It just becomes such a long phrase. Carbon footprint, youve got to keep it a very intellectual, a feminist said technician religious dogma at this point. Im quoting her. You sent me the email. Im quoting her, she sent the email. I thought that was a great piece in the weekend wall street journal. Ive got it bookmarked on my laptop, but i havent gotten to it yet. Next commercial break. One of our guys said, i dont see what Prince Charles saw in her, actually. No, camilla, this is camille. Theyre totally different. Different people. Im told. Anyway. Meanwhile, apple is urging shareholders to vote against carl icahns buyback proposal. Icahn wants the company to buy back 50 billion in shares. Apple says its already returned 43 billion to shareholders in buybacks and dividends over the First Six Months of a 100 billion capital return program. You can see apple shares in the premarket down by. 5 on that news. And separately, the Company Revealed tim cook earned 4. 25 million this year. Its about the same as it was in 2012. Tied to the companys annual performance. Thats because apple shares lost about a quarter of their value between august and 2012 and august of this year. We were talking about this last hour, this is your classic pay for performance. These restricted stock units so they vest on a schedule where your board can reevaluate. What irritates me a little bit, this is a very politically correct number for him. You would think that Everybody Knows about, its been knocking the cover off the ball. So he makes 4. 25, and bob iger makes 40. And he watches. And im just you know, if you want to, okay, he just made 400 million a couple of years ago. Dont lull us into thinking youre one of the people that is he a european ceo . Is that what he is . What do you think he shouldve done . I would think youd make more than 4 million as a ceo of apple. Unless youre trying to pretend unless youre trying to pretend you dont. Right . I know. And he given how well the company is performing. Its the largest corporate buyback in history, and this year total buybacks will be 420 billion. How much did he make a couple of years ago . Looks like he makes 4 million a year. If you analyze what he makes in stock, its probably closer to 50 million a year based on his term of service. But doesnt look like that for people so it doesnt raise the the New York Times is not going to do an article. Theyre starting to calculate realized pay versus the salary. Were not doing the math. Were using a silly number when the silly numbers not the real number. But you have made the point, too. And you dont like what media ceos have paid. Why do they make so much more than everybody else, right . No, ive suggested at the moment media ceos seem to be more on the eyes out liers than other industries. That seems to be the case. And is that the right number or not . And i dont know what the right answer is. Well, you have a feeling what the answer is, i think. They dont get paid theyre horrific. Totally over im looking right now for this. And if any of our viewers have this number handy and could send it in, i would welcome that. So they calculate realized pay, which is what an executive takes home, including stock, including options, including everything in a 12month period. There it is. In general i would think the ceo of apple would be commensurate with other ceos. Isnt the average ceo 10 million . His 2011 compensation according to our good friends at ecolar, that was the number. Okay. Good. Im fine with it. Im fine with it. I just dont want to make it look like like i said, 4. 5 anyway, lets get to our guest host this morning. And im interested, david darst at Morgan Stanley Wealth Management, hes going to do an imitation of me imitating hill with his five investment themes. Will you do that . David, give it to me now, david, five, four, three, two, one. Give it to me now. Dont you have five . Thats you. Dont you have five . I do. What is it . Five reasons five transitions that need to take place this year. For what . For the financial markets. To do what . For them to continue. Lets go. Number one. Dont conflate. Do it one through five. Number one, the United States needs to be able to wean itself off of the quantitative easing and go to Forward Guidance is the main prop to the market. That looks good so far. Japan needs to switch from deflation to inflation. The most shocking number of our economists, joe, we have. 3 for the total of the year in japan for this year. Next year, 2. 4 . If that happens, thats a big victory for the people at the bank of japan. This is what your economists are predicting . Thats right. Robert feldman in tokyo. Okay. Number three, europe needs to transition from a fragmented Financial System into a credible banking union. And part one is a unified bank supervisor, which the germans have signed off for. Itll be 130 banks. 6,000 banks will still be regulated locally within each country. Number four, okay, you need china to switch from leverage driven growth to reform driven growth. China five years ago chinas total credit market debt was 9 trillion. Tod today its 23 trillion. Every year, every two years china grows another india. China grows a trillion a year, india is 2 trillion. Well, when we grow, we almost grow we grow 4 times 16 is 640 billion. Okay. 17, we grow almost a new india every two years. All right. And the last one is the emerging markets need to transition from the traditional export driven and Foreign Investment driven to a new model. That focuses on internal markets and they need to and reform. All this needs to happen in 2014 . For each one of those areas, for japan to do well, thats got to happen. For the u. S. To do well, thats got to happen. And for china and the emerging markets, thats got to happen. Also, the emerging markets also need to deal with the taper, as well. One of the things, the problems in turkey, they mentioned all these internal things and also the country had to deal with the taper. Are you kidding me . It was expected to be one of the hardest hit the 10 billion bernanke cut off a couple of weeks ago, thats part of the turbulence in turkey. Its down 21 this year. Its one of the fragiles. South africas down 24, brazils down 17, against the dollar. Its been very, very another factor thats caused this upset in turkey. No question about it. Yeah. I think thats one youve got to keep on your radar screen geopolitically is the situation in the ukraine, the situation in turkey and thailand. Thats different than syria, lebanon do you have other things you have five of that we can do . I know you do. Do you yes, i do. Get them ready, i want you to go through it the same way. One, two three. My favorite is doing you imitating doing me. He knows. Its very clear this is the power point. He gives us stuff. Give it to your sales force, too, at morgan oh, yes. Because i couldnt be there this morning, monday morning as usual, i taped it on friday and hoped nothing crazy went on during the weekend. See, its good to give a sales force things you can easily understand and easily tell your clients, and thats what he does. All right. Coming up next, the new year in technology, which companies will lead the way in 2014 . And weve been debating this this morning. Are you a good tipper . There are changes coming up in the new year. Thats next. Check out the price of gold hovering just at 1,200. Squawk box coming right back. Were going to be watching shares of cooper tire today. A deal it struck, cooper says it became clear that the deal will not be consummated by apollo and financing apparently no longer available. Apollo agreed to pay 35 per share for cooper but subsequently demanded the price be cut because of union demands. Restaurants may stop adding automatic tips for larger parties because of a new i. R. S. Rule that will require such tips to be classified as taxable wages. That means the servers wont be able to take the tips directly home with them. And payroll taxes for restaurants that keep such tips in place may increase. Early indications are that many restaurants will simply drop the practice of adding those automatic tips for large parties. Darden, which, of course, is the parent of red lobster has already dropped the practice in some market. You know, its interesting because weve all gone to a group dinner where you have 10 or 20 people. And you automatically have to pay 20 . You dont get your own discretion over the tip. But then again, in a lot of these markets, restaurant servers and people in the Hospitality Industry dont make even minimum wage federally because theres, you know, the adding of their tips built in. Well, if its part of payroll, you figure its weird that it wasnt subject to payroll taxes, wasnt it . If you know its going to be its almost the price of the meal. Its not a tip anymore. I dont believe that this is going to result in restaurants hiring fewer people, though. As more people start going out to eat and the business gets better. The issue, i think, is that the cost of compliance becomes much higher because you have this variable cost thats going to keep changing. You dont take the tips directly home, but arent they supposed to declare the tips anyway . They are. Cash and credit cards, of course. But nobody does. But i dont believe they put it in the wages category. Anyway, weve got a lot more to talk about. It was quite a year from the tech sector. What can we expect in 2014 . Or could investors be let in for a little bit of a letdown next on squawk box as we head to a break. Check out the performance in the nasdaq. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Where does the United States get most of its energy . Is it africa . The middle east . Canada . Or the u. S. . The answer is. The u. S. Most of Americas Energy comes from right here at home. Take the energy quiz. Energy lives here. To help secure retirements and protect financial futures. To help communities recover and rebuild. For Companies Going from garage to global. On the ground, in the air, even into space. We repaid every dollar america lent us. And gave america back a profit. Were here to keep our promises. To help you realize a better tomorrow. From the families of aig, happy holidays. Bny mellon combines Investment Management investment giving us unique insights which help us attract the industrys brightest minds who create powerful strategies for a countrys investments which are used to build new schools to build more bright minds. Invested in the world. Bny mellon. Welcome back to squawk box. Its time to talk tech. Joining us to talk about what was hot in 2013 and which stocks are poised to benefit in the new year. Thank you for coming in this morning. I have one question before we even get to any of this, which is weve been talking around the table this morning about tim cooks compensation. I dont know if you saw the new number, 4. 25 million. Does that make sense to you as an analyst . Do you have views on compensation . Its a question well above my pay grade as they say. Apple is a tech stock, and at the end of the day, the only thing people care about whether hes compensated 40 million, 4. 2 million, is whether the company is growing. And in 2012, apples earnings grew 60 yearoveryear. Thats a tiny little company, right . But in 2013, earnings declined 7 . So youre in a car going 60 miles an hour, all of a sudden going reverse seven, and that is why, nothing else mattered really for tech stocks and thats why apple stock went from 700 to 400. But as were seeing signs of life and the company seeing growth again coming back, i think this quarter might be the first time theyve had positive yearoveryear earnings in five quarters. That is that kind of reacceleration is very positive for stocks. So, actually, apple is probably among certainly the large Cap Tech Companies in our world. Probably the best positioned in 2014 because really just for that simple fact. Going from negative 7 we think probably positive 10 , maybe 15 . Other big story of the year was twitter. It was worth 40 billion on thursday and came down, what, 5 billion on friday . Is that the number . Yeah. Where does this thing stand for you next year . Whether were in a hash tag bubble or not, twitter definitely is. Twitter decoupled from fundamentals the moment they priced the shares. It is even after fridays rise, trading at 860 times current years ebitda, facebook is 30 times. This is not p e ratio, this is ebitda, google at 15 times ebitda. So there is no growth rate that twitter can post. And by the way, the consensus estimates are far too low. And theyve set it up very nicely. It was the antiipo which played better than the hype ipo. It was very well played. Im looking at the New York Times in front of the business day section today and theres a story about a High School Junior in scarsdale, reminiscent of a young Andrew Sorkin, doubled his money and if you doubted the twitter was in bubble territory before, i think this story probably firmly plants it there. But the underwriters say it wont be profitable until 2015. What happens to twitter stock between now and then . This is when you have bubbles, is when the valuation of a company decouples from fundamentals. And you have sentiment driving stock. What you have is a stock that has 8 of its total shares outstanding available to trade. So really the stock itself is a very limited resource that people want. And so it has nothing to do with how well the companys doing. What is the Morgan Stanley view on twitter . And by the way, you guys were not you did not underwrite twitter. We would not involve no. Our view on twitter right now is the entire sector, okay, this is not twitter specific. The entire sector is showing certain of these characteristics of the old 1999 where youre trading in multiples of sales. I saw over the weekend 200 times sales for revenues for this company. So to me, its disconnected from any reality. On that topic, can you give us your thoughts on apples introduction in china, with the china mobile. What are we supposed to make of this . Before we go back to am, im actually relatively bearish on tech and media going into 2014. The top tech stocks in hardware, software in the internet. And those stocks, about 12 of them up 43 this year. But their Earnings Growth is only up 6 because you have a 36 rise in multiples. So you take facebook, they went from 51 times current year to 71. Google went from 18 to 26 times. The rise in the stocks came from multiple expansion. Unless you have growth back filling that in 2014, i think youre going to see a lot of these stocks fade. Daniel, thank you for coming in. Sounds like we should sell this stuff. But well see in the new year. Appreciate it. Thanks. Coming up, politics for 2014. Whats ahead for capitol hill in the new year. And cnbcs Million Dollar home series is going supersized. Were upping the ante from 1 million to 25 million homes. Squawk box coming right back. Just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. [ female announcer ] today cisco is connecting the internet of everything. That its given me time toabout reflect on some of lifeseen biggest questions. Like, if you could save hundreds on Car Insurance by making one simple call, why wouldnt you make that call . See, the only thing i can think of is that you cant get any. Bars. Ah, thats better. Its a beautiful view. I wonder if i can see mt. Rushmore from here. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance. [ male announcer ] what kind of energy is so abundant, it can help provide the power for all this . Natural gas. More than ever before, americas electricity is generated by it. Exxonmobil uses advanced visualization and Drilling Technologies to produce natural gas. Powering our lives. While reducing emissions by up to 60 . Energy lives here. Welcome back to squawk box this morning. One economic report ahead. As this week gets underway on wall street, the National Association of realtors, thats at 10 00 eastern time. Also, a fire in zurich over the weekend may have a Significant Impact on the watch industry. The fire destroyed one workshop and damaged another at a factory thats operated by swatch. That makes watch mechanisms. Now swatch makes those mechanisms for nearly every watch maker in the world. The Company Plans to full assess the impact later on today. The latest hobt movie topped the Weekend Box Office for the Third Straight week. Disneys frozen was second at 28. 8 million. The budget crisis, Government Shutdown and the rollout of obamacare dominated the headlines in 2013. What will be the Political Landscape look like in 2014 . Joe watkins, a republican strategist and former aide to president george h. W. Bush. And howard dean is the former chairman of the Democratic National committee, and the pinnacle of his career a cnbc contributor. Governor dean, i dont know, youre on you go on some other networks and the slightest thing you say becomes almost gospel. You were bashing obamacare, you said its going to get worse . What happened . Why did you say that . What did you mean . Well, it was actually fox. So it wasnt exactly accurate. It was a sunday show. By definition hes saying. Yeah. Thats right. No, look, i think there are going to be some more bumps. And i do think ultimately this is going to get better, not worse. Were now in the phase where the website is reasonably in good shape. They need more work, but its getting there. And now weve got to deal with the back end insurance problem. And the confusion that happens when people switch Insurance Programs, all of which, of course, is going to get blamed on obamacare, which is not accurate. Were not out of the woods. And i think by march we will be and people have have more insurance. For people who love Medicare Advantage, you saw the news over the weekend. Your party has tried, basically, to put that whole sector out of business. And now, youre blaming it on the Insurance Companies themselves, not on obamacare. Thats not because of obamacare that Medicare Advantage is no longer probably going to be that feasible . Well, no, the problem is when you switch systems, its always rough. Im not blaming the Insurance Industry. How they deliberately earmarked the Medicare Advantage for something that, i dont know, was it the plans were not government run or there were two private sector oriented that was earmarked to try to get rid of it in this law . I dont view obamacare that way, i think it was a plan written mostly by the Insurance Company for the insurance industries. Not for Medicare Advantage. Well, their Insurance Companies, United Healthcare that run those programs. This is not an argument about whether the Insurance Companies are good or bad. This is a how it all works. A private Insurance Scheme. Thats what it was. Designed in the Senate Finance committee by others who worked for the Insurance Industry previously and still do now again. And thats where the decision that congress has made to do it through the private insurance sector. And they have. Im not blaming the Insurance Companies. These are the kinds of things that happen. You call obamacare, a private Insurance Scheme . Youre talking about obamacare . Thats correct. Wow. So youre even left youre supposed to that would be something watkins would say. Im actually im actually, joe, im actually telling the truth. Private insurance are the people who are thats right. One of these people its a private Insurance Scheme. Scheme in the british sense, plan. A plan. Beautys in the eye of the beholder, of course. I have the highest regard for governor dean, hes a smart guy. And he always he does know what hes talking about. I would say this from the standpoint of the Affordable Care act, youve got to consider the fact that politically its going to be tough sledding for democrats. If republicans have our way in 2014, the Affordable Care act is going to end up being the gift that keeps on giving. Its a federal mandate, americans are not happy, were going to continue to see gross dissatisfaction with it across the board. By average working americans who were promised they were able to keep their policies and finding out theyre going to have to buy new policies that are more expensive and provide less coverage, less care, higher deductibles, all the things they fear. And its going to have, i think, a huge backlash. Youll find the republicans will work with democrats on the debt reduction. I mean on the debt limit deal. Although, they will republicans will exact something from democrats to get that done. But not enough to stop it from happening because republicans dont want anything to get in the way of what the Affordable Care act could mean for republicans, which is maybe a pick up of four to six house seats and maybe as many as 51 seats of the senate for republicans. Yeah. Thats how republicans are looking at it. Howard, youre also expressing concern about i guess we know that young people, Young Healthy people, youre probably not getting enough of them at this point, right . It doesnt really matter that much. Honestly, the actuarial data, that is going to hurt the democrats because people dont like to be told what to do by the government no matter what party theyre in. But the truth is, that wasnt necessary, and the Insurance Companies like it because it does bring young, Healthy People who arent likely to get sick into the system. But in our experience here, although its with young people under 18, not with everybody is that, individual mandate is really not that necessary. And the actual data is does not lead to the conclusion that youre going to have huge cost overruns for the Insurance Companies. Howard, in general, the way that the party is sort of the wedge issues that we hear are going to be front and center. And, you know, you were from vermont. So a Vermont Democrat is different than a texas democrat. Youve got the only socialist, thats your guy and the governor . Bernie sanders. Yeah, i understand its a different type of place and im saying that in the nicest possible way. Its beautiful. I can tell youre working hard at that. Beautiful. I love woodstock. I do, i love vermont, but your politics tend, you know, a little bit out of mainstream. Do you like these wedge issues of, were going to use minimum wage, were going to use populism, income disparity, were going to set one group of people against another and make them feel bad. I dont know, sometimes i think youd even like to bring everybody else if we could meet at 70,000 a year, that would be the way to do it. Who needs more than that . Bring it down, bring it up. In defense of vermont, we have all of our children have Health Insurance in texas. That great republican free enterprise, 22 of children have no insurance. They have the lowest Graduation Rate in the country in terms of high school graduations. Theyre doing pretty well in texas in terms of wealth creation, arent they . Well, if youre not at that 22 , i suppose you are. Thats true. So, i think the wedge issues are going to be and furthermore, look, i dont think we ought to necessarily set people against each other. But the other side sets people against each other, too. They do it based on Sexual Orientation and race and gender and things like that. So, you know, thats politics, its bad politics. But it might be bad but all of this discussion about minimum wage and income disparity may not help us grow. At least, you know, it may be detrimental to help people were trying to help. Well, lets get serious about that for a second. I do think the gap between the top and the bottom is serious. Not because im a left wing socialist. But the way to do it i agree, growing is great and the question is how you can grow. There is a debate between the parties about whether cutting tax rates and stimulating the top is enough will work in terms of trickle downs so the bottom will benefit, as well. And that hasnt actually been true under either democratic or republican president s in the last 20 years. It didnt work under clinton, didnt work under bush and it hasnt worked under obama. Whats the last word, joe . Im right, arent i . Well, the last word is that this is going to be a very, very interesting year. This potentially could be a very strong year for republicans. They have a number of issues to talk about to americans where i think americans will agree with them. And on the issue of the minimum wage, obviously nobody wants to see the rate of employment go back up, the Small Business owners take a hit. And at the same time, you want to continue to encourage workers at the lowest end to get the most education they can get so they can have a skill to share with the marketplace. So we dont want people just running in there and saying im going to grab 15 an hour and i have no skills to offer the marketplace. That doesnt benefit the country going forward. I think these are going to be the debates held. I dont think theres any significant legislation, Significant Movement on any of the significant policies we talked about in 2013. Well see a debt ceiling agreement. And well see Affordable Care act front and center. All right. Good. All right, thank you. I dont know why you go on fox, howard. You said to me once i need to go to fox because i dont know, why did you say . Youre too conservative for fox. All right. Actually. Just fiscally. Its hard to leave you speechless. No, im not speechless about that. Its really not true. On social issues its not true at all. I think its the ultimate Big Government versus small government. Private enterprise versus its earn success versus learned helplessness. You wear it on your sleeve. The latest on two deadly bombings in russia. Well get a live report from moscow coming up next. Stamps. Com is the best. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. So i got the windows nokia tablet. Its, well, impressive. Its got the brightest hd screen, superfast 4g lte, so my son can play games and movies almost anywhere, and its got office for school stuff. But the best part . I got the lumia 928 for my daughter for free, with the best lowlight Smartphone Camera this side of the north pole. Dad for the win. Mm mm mm honestly, i want to see you be brave a violent weekend in russia, the second suicide bombing attack in two days left dozens dead and injured in russia. Jim . Reporter hi, good morning. Well, the latest is that investigators in volgograd said this mornings bus bombing was carried out by a male suicide bomber. No one has claimed responsibility for todays or sundays attacks, which according to our latest figures have killed at least 30 and wounded more than 60. But the strong suspicion, of course, is that this was the work of islamist insurgents from that very rest of north area. People going to work this morning when the bomb struck. And now the whole city of 1 million is terrified. There are reports that residents are afraid to go outside, to go about their daily lives. Police are calling these latest attacks acts of terror. Theyre connecting them to each other and both of them to the Public Appeal by the war lord, an appeal to his men to kill civilians and disrupt the upcoming sochi Winter Olympics. The event, of course, that Vladimir Putin has staked his reputation on. Back to you. Thank you, jim, for that report. Appreciate it. Well see you very soon. And coming up on squawk box, the super sized version of the Million Dollar home series. Well also reveal the home with the biggest bang for your buck. My 2014 wish, is that investment in the United States picks up. In the private sector and the Public Sector whether its infrastructure or investment in technology, its investment that is lacking. We basically as an economy we dont save enough of our seed corn. Dont save enough nuts in the wintertime. We need to invest money in order to grow on a longterm basis. Im only in my 60s. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare Insurance Company. Like all standardized Medicare Supplement insurance plans, it could save you in outofpocket medical costs. Call now to request your free decision guide. Ive been with my doctor for 12 years. Now i know ill be able to stick with him. [ male announcer ] youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. See why millions of people have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. Dont wait. Call now. Cnbcs popular Million Dollar home competition is back all day today. But this time with a tiny twist. We raise the stakes and now showing you properties with a list price of at least 25 million. Weve got six of these mega homes in different markets across the country. And heres how it works. Two mansions go head to head and only one moves forward. But to make it more interesting, we dont tell you the location or the exact price. Well reveal that after we get a look. In our first round here on squawk box, we have island time going up against peak pleasure. Take a look. Luxury and privacy await on this island minutes from the neon glamor of a major city. This trilevel beach front mansion has ten bedrooms, ten bathrooms and more than 21,000 square feet of living space including the chefs kitchen. Located on more than 1. 5 acres, this water front mega home includes an elevator, infinity pool and Movie Theater. Live the ultimate mountain lifestyle. This ranch is set on 876 acres nestled in the Rocky Mountains. 18,000 square feet craftsman style mega home with seven bedrooms, six full baths and a true chefs kitchen complete with a custom stove valued at more than 250,000. With stunning views from every room, this feels more like a private resort, hike the 15 plus miles of trails, relax at your own private beach or enjoy the Movie Theater or indoor outdoor pool. Wow. Joining us now to reveal where these mega homes are located and which is the better bang for your buck, we have the one and only Real Estate Broker to the super rich. Okay, im going to take a guess here. The first one, because there was a line that said it was close to the neon lights of a big city, im going to go with star island, miami. Close. Very good. What do you say . I say alan creek, miami. Any other guesses . Boca or something, i dont know, its an island. Well go with florida. And peak pleasure, should we say aspen . Well, youre right on both counts. The first is coral gables, florida, close. And the second one is the Rocky Mountains right near aspen. Both homes are amazing. Okay, the Rocky Mountain is one of the most beautiful settings ive ever seen. 876 pristine acres, of course if you need that. And a 250,000 stove. Exactly. Exactly. Of course for all of us who cook. And the coral gables home is equally beautiful. But almost a third of the price. Were talking about 25 million versus 65 million. More value in florida . More value in florida. And 25 millions getting to be a normal number in florida. They have quite a few sales between 20 and 45 where in aspen, we couldnt find any sales above 49 which was 2012 and 2013 only had one sale of 44 and one of 41. Otherwise nothing in the 40s. Its going to be a tough go to get 65 million for that house. So i say all day long, island time. What is peak pleasure ultimately get . What do you think it goes for . It has to find that one person to come and buy it. And then it could get, i think, in the 40s, but i think 65s a really tough go. If hes watching, i bet his ears perked up. Heres a different question. Because you go to people and say to them, look, i want to sell your house for you and you have to give them a price. What agent suckered these people into believing their house was worth 65 what percentage of people come to you and say i want this price and you try to talk them down and they wont do it. Then they say, oh, of course, weve got to im going to do business with you. It goes both ways. Sometimes its a seller who says, you know what, i know this house. I know what that sold for and i know what that sold for. Im looking for that one needle in a haystack billionaire. My house has it all and youre not talking them down off that ledge. Theyre absolutely staying there. And only the market tells them when the market speaks through all the showings, thats not happening. Youre saying the owners basically setting the price tag here and not backing down from that . I dont know that for a fact. Im saying its often the owner, i dont know in this particular situation. But its often the owner feeling uuber confident about the market. There are situations so i have a friend trying to sell place right now. And they went with the broker who said, we can sell it for this price. And by the way, theyre currently not getting this price. Another broker said thats not a realistic price. How do you deal with that . Well, as a broker, i try to give a realistic price. But as a customer. When three brokers come to you and give you three different prices. I would make them prove it to me. Prove to me why this will sell for this price, right . Its a question of numbers. Show me this is realistic and i will go with you. Show me what youre going to do to get me there. So 25 million versus 65 million. Safe to say the winner is . The winner is island time . Yeah. Island times. Its something where its realistic between 20 and 50, youre going to be able to sell a property in miami more likely than a 65 in aspen. I like between 20 and 50 is what were calling realistic. Yeah. This is your business not ours. Mega homes today. How do you bring it down to apples to apples . Price per square foot, what do you look at . And what are the taxes on each of these properties . Taxes in miami are based on the sales price, but taxes in florida are 2. 25 more or less if its water front of the sale price of the property. And aspen is about half that. So theyre very different. But, of course, florida has no tax. Now income tax. That makes that different. Theres all kinds of things that go into the mix. In terms of price per square foot, theyre both 1,000 square feet. Were not talking about huge differences. What could that be . A rec room . All right. So its settled, dolly, island time wins round one. Let us know if you agree. Tweet using milliondollarhomes. Dolly will be back later on squawk on the street for the next round. And later, shell crown the top home. Thanks for being with us on that this morning. Thank you. And coming up, predictions for 2014. What to expect in the markets and Health Care Sector when we return. [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. The energy in one gallon of gas is also enough to keep your smartphone running for how long . 30 days . 300 days . 3,000 days . 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It funds a marine biologist. Who studies the peruvian anchovy. Invested in the world. Bny mellon. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. Predictions for the new year. For 20, i can tell you a lot of things, for 30, i can tell you more. Well tell you what to expect from the markets and Health Care Sector in 2014. Violence in russia. A second deadly bombing attack in the last two days raises security questions about the Winter Olympics. Well bring you the latest from russia. And a pay hike is set to kick in on january 1st. What will it mean for jobs and the economy. The third hour of squawk box starts right now. Welcome back to squawk box here on cnbc. First in business worldwide, im joe kernan along with andrew ross sorkin. Becky quicks off today. Our guest host david darst. More from david in a minute. But first, todays top stories. Kayla . In our headlines today, at least 14 people were killed by a trolley bomb blast in the russian city of volgograd this morning. And on sunday, at least 17 died in another bomb blast at a Railway Station. The bombings are raising fears about security at the Winter Olympics scheduled to begin in sochi in less than six weeks. Volgograd is 400 miles northeast of sochi a car bombing on friday was closer in proximity, about 170 miles from the olympic venues. More on that story at 8 30 a. M. Eastern. In corporate news, meanwhile, apple is urging shareholders to vote against carl icahns stock buyback proposal. The company has said it has already demonstrated the commitment to returning cash to shareholders, setting dividend hikes and an increase in the Buyback Program to 100 billion in 2013. Icahns proposal asks apple to repurchase about 50 billion of shares by september of next year. The companys annual Shareholder Meeting is currently scheduled for february 28th. That proxy came out after market hours on friday. And in it, apple also released details of tim cooks pay. The ceo took home 4. 25 million. Gave up 7,100 shares. That was based on apple Stock Performance from apple 2013. Would have been worth about 4 million. Andrew . What did we say . 2011 income was 377 million. Was this salary or total comp . Total comp. Well, salary was the 4. 25 million, but still has some restricted stock units that will vest this year worth far greater. Right. But its the 4 million he gave up. Got it. Well be looking at that. A takeover deal it struck with apollo tires. Cooper says it became clear the deal will not be consummated by apol apollo. Apollo agreed earlier this year to pay 35 a share for cooper, but subsequently demanded the price be cut because of union demands. Lets take a quick check on the market to see how things will set up through the day. It has been sort of wild how up this market has been on what seemingly has been probably low volumes since nobodys around. Nasdaq up about 2. 75 and the s p 500 up almost three points. Stocks strong gains in 2013, not everyone is optimistic, though, about the prospects of the new year. And weve had peter on before, chief market analyst at the Lindsey Group and a cnbc contributor and david darst is chief investment strategist at Morgan Stanley investment. You were on a few weeks ago . Yeah. Moving totally against you again. Yeah. I miscalculated the Multiplier Effect of the increase in the feds Balance Sheet. They printed about a trillion. Just in the last three weeks. Well, its december. Anythings possible in december. I thought the market would respond negatively to well, 2013 was qe and 2014s going to be qe. Qe on the upside in 2013. And according to the feds plan, a reduction in qe. We saw 50 correction after qe 1 ended and same thing after qe2 ended. And i dont think itll be any different when qe3 and qe4 ends by year end. All right. Surprising, we were right around 16,000. Will you ever convert back to, wow, maybe i miscalculated on the positive effects of qe on the underlying market . Qe has incredible temporary impacts on markets and i acknowledge that. When the fed started how long is temporary, then . Well, as long as its going. A day of reckoning is coming then . I guarantee this will not end well. In terms of the stock market . Yes. Now, does it get back to if it goes 10 and it comes down 10 , were back to where youre already saying its not going to end well. Well, im not saying im not calling for a bear market, but were going to be in our sixth year in a bull market and if the fed is going to end qe, i cant account for the possibility of the bear market. Why arent you calling for a bear market then . I would say maybe we get the beginnings of one. Im calling for a 15 pullback, taking out a little bit of the qe fluff. If the fed wants to end qe in 2014, we have to look at the two previous qes and see the market response after they completed it. Peter, theyve got to Great Lengths to distinguish between tapering and tightening. And this whole Forward Guidance language well passed 6. 5 unemployment. What part does the role of zero Interest Rate policy play in this whole thing . Well, to me, the tapering versus tightening is semantics. The bond markets tighten policy. Interest rates well above where they were in may. I dont care what the fed says, the question is how methodical that process continues into 2014. The rise in Interest Rates in 2013 was rather sharp. Granted, theyre still obviously historically low. But if the fed continues to lose control of the bond market, not only in the long end, but control on the short end because short rates have gone up since they started the tapering in december. I think thats a head wind for stocks. Again, im not a believe that things are fine x the fed. To me, the fed has become the market, unfortunately. And i cant discount their role just as many others are. Youve got a negative view on the economy. No, i still expect maybe 2 , 2. 5 . I think thats okay. Im more worried about earnings. Lowquality earnings in 2013 driven by lowered interest expense. Thats lowquality type earnings. Almost about a third of the earnings increase off the trough in 09 is lowered interest expenses. Companies cant pull that lever anymore. I think the earnings will slow more so than the economy. Your whole vow is predicated on and also corporations not going well. Thats a forecast youre making while a lot of other people are saying finally the economys going to show signs of finally getting out of the malaise its been in and corporations will start spending some cash and not sitting on the Balance Sheet or not letting the Balance Sheets grow and starting to hire people and expanding. You are in the camp that says thats not going to happen . Well, im worried that the fed is going to stomp that out. The fed brought 1 trillion to the party in 2013 which made everyone ignore a mediocre economy and slow Earnings Growth. Did the fed prime the pump to where the economy can stand on its own . It indicates that the patient is able to leave the hospital under his or her own power. No longer needs a walker or assistance. And to me, its a sign that the economy is doing better. The ism numbers, the jobs numbers. The durable goods orders last week, the Industrial Production numbers, the consumers, retail sales numbers. The cylinders one by one are showing better signs. Maybe that lets the fed step back. Isnt that built into the market . Thats the biggest issue, right . Most people by the way, including myself and a lot of people around this table made with the exception of you think what you think. Housing is another thing thats basically stabilized. Its up 13 yearoveryear, the case shiller index. Youve got all the things that were dragging down the economy that are starting to lift. And so thats why i think the feds pulling back is actually a positive sign of health, peter. I understand the symbolism, but i dont believe in the free lunch that the fed can cut rates to zero and print a trillion a year and everythings going to be fine. When you look at the data and theres a litany of data that will come out this week and next week and you can get lost in it all. But to support your point, what piece of data are you most worried about . Well, to me its the fed. The fed has told us they want to end qe by the end of 2014. The stock market didnt respond well after qe one ended. Same thing with qe2. And i dont think the fed can immerse themselves to such an extent in the market and somehow walk away calmly and everythings going to be just fine. I dont believe thats going to happen. Since 2009, lets go back to 666 on the s p. You were bullish for which years . I was a bear in 06 07, extremely early 06. How about 2009 . Valuations and printing money, i reflation trade bullish. I started and then into 2013, i was a muted bull. I was expecting 1,500ish. At the beginning . This exceeded by far my expectations. I think i was right on the economy in earnings. You were at 1,500, now you were at its 340 points so far. If it turns out the fed did orchestrate a better economy that justifies the rise in stock prices, you can never go bullish. If magic can happen youll never go and the fed can pull this off, which i dont think they will. And im very confident they wont. At this point, youre 340 points behind. Yeah. So i expect some fluff pullback into the 1,500s again as the fed pulls back. And to me, this is a fed story. Is it a shortterm . We come down and go back up again . I want the fed out of the right. Is it a 5 or 10 correction . No. Just a correction and we bounce back . Itll be more like 15 plus. And if the fed mucks this up with the exit strategy, the coastlines potentially will be more. If we went back to 1,500, thats a much bigger decline. Its 15 . 15 is to me not a big deal considering the gains we had in 2013. And, again, if the feds pulling back, why cant we see a 15 construction just as we did the two previous times qe ended . 1,550 is about 15 . Give or take. So, again, to me this is a fed story and i dont want to fool myself. There are a lot of people with you on its going to be a messy exit, but we may not i bet on a messy exit. You do or dont . We think they can manage the exit. Markets have moved up. Markets have moved up, peter. The Interest Rates have moved up, yes, 3 , but its been gradual. Thats the key in japan and in the u. S. Japan Interest Rates began at. 79 this year, theyre. 71 . Theyve managed to keep them under control. To me, if the markets unleash and get out of control, then all bets are off. The best laid plans dont work. And its hard to believe they could be this skillful. Theyre not going to pull this off smoothly. All right. Well, weve got this is a batt batt battle royale. Youve got 63 employment ratio, okay, people up over 60 years. Thats an abysmally low 35year low. So this is not the p e. The shiller p e above 25. The only time led to the 1929 crash, 2000 crash and the 2009 crash. Those are the things that you should be in here talking about. Not with your onenote flute youre playing on the fed. I have another conversation about what you talked about. But the fed is what matters right now. Wow. Maybe you should stick around and keep this going. You guys want to get lunch today . I love you, peter. Coming up, more of our top stories including rescue delays for the Research Ship stranded in the arctic ice. And were going to talk to jpmorgan Senior Medical Technology analyst about the impact of obamacare on the Health Care Sector in the new year. Ll about a bike accident, just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. Became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. Welcome back to squawk box. A couple headlines for you, the administration is reportedly under pressure to name a chief executive to run the federal Health Insurance marketplace according to reiters, some of the president s closest allies are urging the appointment of a co, especially after the extremely rocky rollout of healthcare. Gov. And the ceo would set rules and coordinate with insurers and state regulators. White house officials, however, say the idea, they say not being considered. Also, new yorks next mayor is going to be sworn in on january 1st. Get this, by former president bill clinton. De blasio worked in Clintons Administration in the department of housing and urban development. Clinton will use a bible once owned by president franklin roosevelt. And also Hillary Clinton will also reportedly attend that. We should also tell you about bad weather delaying the rescue of a Russian Research ship. Several ice breaker ships have been deployed to the area but unable to complete that rescue because of snow showers and poor visibility. The stranded ship was chartered by a team of scientists and has 76 people aboard. Apparently so farther all okay. A look at health care in the new year. Bertha coombs will give us her predictions. And then well speak to mike weinstein. I had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about axiron. Welcome back. 2013 will be remembered by many for the disastrous rollout of president obamas health care reform. Will 2014 be better . Bertha coombs joins us with her predictions for the new year. But first, lets check with the score card to see how she did last year. Bertha predicted an expansion in medicaid. This was correct. Taking part in the medicaid expansion. Up next, bertha predicted the Health Care Exchanges would be on time for open enrollment but not without glitches. This is half right. Glitches may be an understatement, though, from what weve seen so far. Finally, she predicted a device tax reprieve. This one proved wrong. During the Government Shutdown this was raised as a bargaining chip. 2 for 3 for 2013. Lets see what lies ahead for health care in the year ahead. Reporter the big obamacare number for 2014 is enrollment. 7 million is the congressional budget offices of how many would buy on the health exchanges. I think the Obama Administration will fall short. Perhaps 4 million to 5 million by the end of next march. But problems with healthcare. Govs expansions will spill into the new year. The two key issues, will younger, Healthy People enroll in large enough numbers . And did insurers Price Exchange plans correctly . Margins could be hurt on new premium plans if newly insured and enrollees use more than expected. If they do, it will continue to fuel hospital gains. Beyond the Affordable Care act, the economy will be a big factor for hospitals in 2014. If people feel more comfortable about their jobs and their insurance coverage, hospitals could see their patient volumes increase. Not just from new patients, but those who have been putting off elective procedures like knee replacements. Bertha coombs, cnbc business news. And make sure to tune in throughout the day today and tomorrow for more predictions. You can watch them all on the web at predictions. Cnbc. Com. Well, for more on expectations for health care in the new year, were joined by mike weinstein, managing director of Health Care Research at jpmorgan. Mike, thanks for being with us. I know you specialize on the med tech space. But you do have expertise in the overall Health Care Sector. Insurers will struggle. They wont have priced their plans appropriately and it could be a weak year ahead for them. Thats much different than what the insurers saw this year. Their stocks were booming, margins were booming. Im interested in what you think about the insurance space specifically. Well, i think the questions she raised were the right ones. I think the things we dont know at this point. If we look at what happened in december with the enrollment into the obamacare plan. We dont know what the components of that were. We dont know how many young people went to those plans and we dont know ultimately as she was saying on pricing. Until we get a better view of those the plans price out, its going to be hard to make that call on insurers. And lets talk about the shortterm here, which is 2014. I think looking beyond that, i think all of this balances out and actually think the prospects are pretty strong. For investors in health care, specifically im looking at the xlv etf, that beat the market up 30 yeartodate. And the heaviest holdings in that etf are some of the big consumer pharmaceutical giants johnson johnson, pfizer, merck, et cetera. Do you think those gains will start to slow and well see some new gainers coming forward in the pack . No, it was an excellent year for health care. And if you looked across the landscape, pharmaceutical companies lagged a bit. Biotech was exceptionally strong, drug distributors, drugstores, it was a whole group of Health Care Stocks that really helped lead this market in 2013. The question for 14 is less, really, what happens to the Major Pharma Companies who are still coming out of this period of challenge and really now focused on pipeline. But what happens to the stocks that had 50 , 60 gains in 2013. Thats the biggest call that investors are struggling with going into next year with this revaluation of so many parts of the Health Care Sector, where should they be rotating their money in this coming years . Theyre all across the map. Some of them are you have, for instance, a heart assistance device, you have a hospital, you have a couple other device companies. Where are you finding value . Ill give you a couple stocks. The hardest company mentioned is a small cap company, 2 billion market cap. They make a ventricular assist device for patients with end stage Heart Failure. Theyve been on the market for four plus years now. Theyve taken 54 of the european markets since they launched the product, smaller better product, existing product on the market. And theyre going to continue to gain share over the next several years with the device they have today called the hvac. What makes people excited is the device they have going into humans in the next couple of months called the mvad which is another significant step forward in the Technology Reducing the size of the implant. And if those are successful, they have another breakthrough product behind it which could define the growth for the next five plus years. St. Jude, striker and Wright Medical group. I think our guest host david darst has a quick question. Johnson johnson is a third consumer, its a third conventional pharma and medical devices. What about the medical device part. Whats going to be the driver of j j . It, too, lagged a little bit, the health care index. Up in the mid30s with health care up 38 , 39 . How do you feel about j j . Well, the growth wont come from medical devices, unfortunately. Its going to come from the Pharma Business. Pharma today is doing exceptionally well at j j. The Pharma Business at 2013 will be up 10 , 11 . I think its going to be up 9 to 10 , which is better than what the street thinks for 2014. They really have a very strong pipeline. They launched a couple very important products in this past 12 months here. So pharmas going to lead the way. And thats historically whats driven the stock. If pharma looks strong, j j will do well. Time will tell. Well have you back to talk about this. But thanks for being with us. Thank you. Coming up more on the deadly bombings in russia, Michelle Carusocabrera will join us with more next. Get most of its energ . Is it africa . The middle east . Canada . Or the u. S. . The answer is. The u. S. Most of Americas Energy comes from right here at home. Take the energy quiz. Energy lives here. At bny mellon, our business is investments. Take the energy quiz. Managing them, moving them, making them work. We oversee 20 of the worlds financial assets. And that gives us scale and insight no one else has. Investment management combined with investment servicing. Bringing the power of investments to peoples lives. Invested in the world. Bny mellon. Welcome back to squawk box. Lets take a look at a few stocks to watch in todays trading. Cal maine Foods Trading 3 cents above estimates as the company benefitted from acquisitions from slightly higher egg prices. Also, take a look at cooper tire, their shares falling after the Company Terminated the takeover agreement. Agreeing to pay 35 per share for cooper back in june but has been subsequently trying to cut the price because of issues with coopers unions. This is an interesting story because apollos based in india. The emerging markets were seeing weakness. But im having people on twitter telling me they believe that cooper tire will be bought out by someone else who is in a more financially solid footing. I dont remember, but when that auction happened there was an auction for it. I believe there was. The question is why hasnt someone else shown up already . Or can they . Good point. All right. A bomb ripped a trolley bus apart in volgograd, killing at least ten people. Its the citys second deadly attack in two days, less than two weeks before the Winter Olympics in sochi where Michelle Carusocabrera joins us now. I hear its a lot of security in sochi. In fact, the head of sochi said theyre not increasing security, its so maxed out already. Lets give the update. Gave a lot of it there. We are particularly interested in it and weve seen bombings in russia in the past, but we know olympics are six weeks away in sochi. Think roughly boston to washington, d. C. , San Francisco to l. A. , roughly, thats the kind of distance. Certainly drivable, i guess, is one way to think about it. 14 dead today, 28 hospitalized, more than 30 dead in two days. Putin has ordered tightened security. And as i said, the head of the Sochi Committee said security was already maxed out. We now have a statement coming out from the Russian Federation saying this was a male suicide bomber, the remains of whom have been collected. Theyre going to send it for genetic examination. There was an explosive device that was filled with shrapnel similar to the one that happened yesterday. They are suspicious its the same group of people. And there is a militia leader out in what we call the restive caucuses, thatll be the phrase youll hear every single reporter use which means they are not restive, they are turbulent. That has particularly told his followers to target sochi and the olympics. Thats why everyone is worried. Now, remember, we are sending hundreds if not thousands of employees. There are many, Many Companies that use the olympics as a sales thing, right . If youre one of our big buyers, were going to take you there, et cetera, et cetera. So every time this happens, you can be sure theres fall away from tourism. And this is also a continuing embarrassment to putin who has already seen numerous World Leaders say theyre not coming because what they consider to be human rights issues. Do you know the total numbers expected . In terms of visitors . In terms of other winter olympi olympics. I would not be surprised. I think of this in the way i think about the greek olympics which were the first olympics after september 11th. And people were nervous about them because clearly we had entered a whole new world when it comes to terrorism. But in this case, there was a video basically as you said taking aim at the sochi olympics saying were aiming to thwart the games and thats got to cause a lot of worry. At the same time, you know that putin is a tough individual, right . I mean, what do you think has been done around sochi in the last year and in the caucuses in anticipation of this . I guarantee you, it wasnt pretty. U. S. Security historically in many country where is the olympics has happened has worked hand in hand with i would assume yes. You would assume yes . That would be interesting. Or if not, that would also be very, very interesting. Remember, this question came up a little bit during the boston bombing of the marathon, right . Just how much of a relationship did we have with Russian Security . And it was my reporting suggested inconclusive. Others suggested it was questionable and we didnt necessarily trust them. And i wonder, you know, given the snub theyre probably not really happy with us right now. Who . The russians . Yeah. Whos leading our olympic billy jean king. No, but the first ladys not going. Napolitano. The president hasnt historically gone to the olympics. But the highest level personal isnt usually a former what was napolitano . Right. It mean, its kind of a it was clear what he was yes. Absolutely. Absolutely. I wonder if were working as closely together whether they feel its kind of a snub from us. It has got to be in russias interest for this to be a very safe olympics, right . I mean, is he going to shoot himself in the foot just i cant imagine. All right. This has got to go off well for him or he is going to be triply embarrassed. And he hates to be embarrassed. Weve been talking a little bit this morning about turkey, their stock market losing more than 10 of the value. A lot of scandal at the top. Three members resigning, and he is, among other things, blaming it on the feds taper. Walk us through whats happening in their market and what you think could stem that fallout. All right. So youve outlined a lot of the facts. Those are good. Thats usually how i operate. And then theres whats going on. And you have a battle between two Islamist Groups going on in turkey. There is one led by an exiled cleric who lives in pennsylvania, believe it or not, they used to be allies, now theyre not. Believed the guy in pennsylvania has instigated this, which this drama which started ten days ago with the arrest of 85 people. The sons of cabinet ministers, millions of dollars in boxes found in various apartments, et cetera, et cetera. This is an argument between what is called the deep state in turkey. Now, you dont have to know the details. Do know this, its bringing on certainly a political crisis in turkey which has led to an economic crisis. Capital flight is tremendous. Theyve just received Investment Grade status. And now theyre at risk of losing it. Theyre also potentially facing a currency crisis. What i find when i talk with people in turkey right now, you see everything through geopolitical eyes and political eyes. What they dont seem to realize is that a currency crisis can go really bad, really fast and then you lose all control. We see it over and over again. They havent had a good one in that part of asia in a really long time and i think they forget. The Central Banks in there with 500 million a day. The key to turkey, can they hold on to that currency . If they dont, they start having massive inflation, its horrendous, demonstrations in the street, et cetera. And its been slipping, as well. Horrendous. Throughout this whole process. Thank you for keeping us up to speed on those. Lets get a check on the markets. Rick santelli from the cme group in chicago. Do you get a feeling these last two weeks we shouldnt necessarily figure out whats going to happen next year based on it . Or is this a good indication of what were going to see . Well, i think on one level its a very poor indication. I think with the taper being small and not really beginning until january. To me, trying to see stocks get as high as possible, see investors somewhat kevlar coated makes sense. I think what i wouldnt draw huge conclusions from either way is some of the movement in Interest Rates. Now, certainly we surpassed by a whisker a three handle on the close on friday. But it really was only by a whisker. If we look at other ten years like the uk, its a couple basis points over 3 . The bund is three basis points below 2 . The fixed income markets most likely will come alive in a potentially different fashion when we get into 2014. Depending on exactly how much higher they move, how quickly it occurs, but maybe more importantly is how it affects some of the credit spreads. I enjoyed the article today about how shorter duration junk bonds were more popular. What that tells me is that this great rotation that everybody hopes for and was many investors Christmas Wish isnt happening the way they would have suspected. Certainly were seeing some of the Duration Risk come out of the fixed income market on the ownership of longer maturities. But it isnt necessarily recycling into the equity markets. Theres a group of investors who want to keep that money out of the equity markets. So i continue to think youre going to see more of a yield curve change than a sector change when it comes to rates. David, we dont have all those little stocks with the that people remember, theres a bounce in the little ones the january effect. Are any of the stocks down to take losses on . This year, the gold mining stocks are down, the coal stocks are down. Theyre down 14 . You can find a few groups here and there. Whats the converse of the january effect when everyones up. Well, andrew and i were just talking, the first week, an 85 predictability for the year. For the year. And if its down, its down, if its up, the years up. And for the full month of january, its 76 accuracy predictor. Right. You want to watch very carefully how the stocks do coming out of the gate. There was another year where we had a great december going right into it and it fell off a cliff immediately. The worst january since 1950 is january of 2009 which we lost 700,000 jobs, as you know, it was down 9 . That january was down 9 . That was in the midst of the turmoil of t. A. R. P. And all that. The best was january 1987 when it was up 13. 5 . For january and didnt work out for the year. Did not work out for the year. Big crash on october 19th, fell 23 in one day, but it recovered up 14 for the year total. It did fight its way back. Although, it gained, between january and october, it gained how much. Gained a lot because then it gave back 23 to end up four. It was up 30 or so, joe. Right. All right. Rick, thanks, see you later. Minimum wage workers in more than a dozen states will get a raise on january 1st. Well talk about the impact of minimum wage hikes on jobs and on the economy with christian weller, senior fellow at the center of American Progress. Bos and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. [ male announcer ] this december, experience the gift of unsurpassed craftsmanship and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. Welcome back to squawk box. In two days, minimum wage workers in more than a dozen states are set to increase their pay. And our next guest argues contrary to some political opinion, higher minimum wage will not hurt u. S. Businesses. Joining us now is christian weller, senior fellow at the center for American Progress and a professor of Public Policy at the mccormick graduate school at the university of massachusetts in boston. Good morning to you. Good morning, thank you very much for having me. Heres the question. Are you okay with the current increase thats being proposed . Or are you okay with some workers from walmart and mcdonalds and others who have been calling for the minimum wage to be raised to 15 an hour . Well, the current proposal from senator harkin has been endorsed by president obama is to raise the minimum wage to 10. 10 by 2016. Which would bring the minimum wage roughly in inflation adjusted terms to where it was in the late 1960s. That seems at a good sort of bottom line there are arguments why the economy could easily sustain a possibly higher minimum wage. For instance, if the minimum wage had increased with productivity gains since the 1960s. We could have a minimum wage of over 18 at this point. So theres room here i think the proposal is a good floor, a good starting position to think about the minimum wage. In your dream scenario, what do you believe is the right number . Both for i dont think theres a right number. I dont think theres a right number. Why isnt there a right number . Why isnt there a right number . Why isnt there a right number . How about 50 an hour . Its got to be like a curve, right, you really dont have an idea . At some point youre getting too high. But whats that point . Realistically, i think the 10. 10 is in the cards. That is proposed by the senate. Its also possible, is very popular, has the endorsement from the president. Theres other ways of raising wages, improving the standards of many other workers. Youve got to remember were talking about here is a relatively small share of the population that would benefit from this. Talking about 28 million workers, roughly 15 of the workforce. Those are the lowest wage workers. Theyre earning about 2 of the total. Thats an easily absorbed cost, its anticipated. You can adjust for that with slightly higher prices. We have david darst from Morgan Stanley. I prefer you to say it aloud if you could. The manufacturing wage is 2. 60 an hour. Its come up from 20 cents an hour 20 years ago. Its 2. 60 and mexicos 2. 50. Theyre 10 cents below now, china. How does one how does one price minimum wages in a more increasingly globalized market for employees . Well, thats a silly argument, im sorry. Were substantially more productive than china or mexico our workers. We have industrialized economies that pay in substantially higher wages, especially manufacturing and u. S. Manufacturing and theyre still competitive germany, for instance. Productivity is the key factor that matters. And what we know from recent research or past research or minimum wage is that higher minimum wages, reduced Labor Turnover in some Key Industries can ultimately lead to higher productivity growth. Its over time the Service Industry a lot of the stuff let me finish, a lot of the stuff, a lot of the industries were talking about fast food, health care, and others where a lot of minimum wage workers are working are nontradeables. Were not going to china for our hamburgers. Well, that was my question. Given that were going to be trying to price control the private sector in some regard, would you ever do it by sector . Meaning there are service strees, restaurastree industries where you need these people here. But other businesses may not be tradeable. And how you think about those and do you think about them separately . Well, a, we have a separate minimum wage, for tip workers, especially in restaurants and for agriculture. But we i dont think its different. I mean, like what pays for itself, we pay in manufacturing because it tends to be a sector. Theres much better ways of doing this if you want to help well, one of the most effective ways why are you doing this way . Its a small group of people and that is not on the table politically. I think youve got to remember the minimum wage is something thats highly popular that has a lot of political support. It doesnt help that many people. And doesnt help that much and yet its going to be what democrats focus on for 2014. Why dont you urge them to do progrowth strategies instead. Something with a longterm lasting effect on everybody and might help everyone in the why a small group of people where its not its not an either or, we can do both. Theyre only doing one. I mean, look, and the end it is about giving people a choice, an opportunity to have a real career. But the other thing is also you need to make sure that the people who are in the lowwage labor market can make a living while theyre working. More than a quarter are 40 years or older, who would benefit from this policy, the 10 10 minimum wage. I think thats one thing. It is a politically expedient thing to do. Another wedge issue that doesnt help longterm. The vast majority of americans, even across party lines support a higher minimum wage. It is not a wedge issue. Leaders in congress go against it but republican legislatures at the state level have endorsed it and have passed it in the past. This is not a wedge issue. This has incredible bipartisan support among voters. It tends to be a few that oppose it. In terms of Economic Growth and opportunity, it has to be parcel of a larger opportunity. If you want to give people an opportunity to join a union, it has to be part and parcel of a mobility agenda and opportunity agenda. I get in trouble quoting the New York Times. They say Top Democrats see it not only as a wedge issue that they hope will place republican candidates in a difficult position but also a tool with which to enlarge the electorate. I can tell the New York Times to detract this. I may disagree with the New York Times on this. I am not a political scientist and i dont think they are either. It has enormous bipartisan support across the island. Thank you for joining us. Happy new year. Thank you very much for having me. I should have known better than to quote the New York Times. You tell me this is what i should do. The guy tells me im totally wrong. Where is the ombudsman person. They detract something. Will you tell them it is not a wedge issue for me. He with cwe can have him wri. Fifteen minutes could save you fifteen percent or more on Car Insurance. Everybody knows that parker. Well, did you know auctioneers make bad Grocery Store clerks . Thatll be 23. 50. Now. 75, 23. 75, hold em. Hey now do i hear 23. 75 . 24 hey 24 dollar, 24 and a quarter, quarter, now half, 24 and a half and. 75 25 now a quarter, hey 26 and a quarter, do you wanna pay now, you wanna do it, 25 and a quarter sold to the man in the khaki jacket geico. Fifteen minutes could save you. Well, you know. So i got the windows nokia tablet. Its, well, impressive. Its got the brightest hd screen, superfast 4g lte, so my son can play games and movies almost anywhere, and its got office for school stuff. But the best part . I got the lumia 928 for my daughter for free, with the best lowlight Smartphone Camera this side of the north pole. Dad for the win. Mm mm mm honestly, i want to see you be brave welcome back to squawk box. Lets take a look at the future. The dow would open about 25 points to the up side, the s p, 2 points, the nasdaq by half of one point. The latest top movie topped the Weekend Box Office for the thirs straight weekend the hobbit the desolation of smog took in 29. 9 million. 28. 8 for frozen, American Hustle was third and the wolf of wall street and the secret life of walter mitti. Coming up, investment themes for the new year. Adam shift weighs in on the amazon delivery drone controversy. Stick around for that. Bny mellon combines Investment Management investment servicing, giving us unique insights which help us attract the industrys brightest minds who create powerful strategies for a countrys investments which are used to build new schools to build more bright minds. Invested in the world. Bny mellon. And it feels like your lifeate revolves around your symptoms, ask your gastroenterologist about humira adalimumab. Humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohns disease. In clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira, your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your gastroenterologist about humira today. Remission is possible. [ male announcer ] what kind of energy is so abundant, it can help provide the power for all this . Natural gas. More than ever before, americas electricity is generated by it. Exxonmobil uses advanced visualization and Drilling Technologies to produce natural gas. Powering our lives. While reducing emissions by up to 60 . Energy lives here. Lets get back to our guest host. You heard someone talk about how bullish sentiment was. Are your brokeers telling you that . People have gun to edge into the market with stocks. They have been selling the bonds or taking cash and putting it into stocks. Our five themes for this year are, number one, to overweight europe and overweight japan. That one or two . Thats one. Why dont you make it six. Number two is to be equal weight in the u. S. With a focus on health care, technology and materials. Number three. Number three is be underweight in emerging markets with the exception of mexico where you have that reform momentum going on. Number four, joe so equal weight, mexico. You can be overweight in mexico. Number four, is in the bond area, you want to basically be underweight tips, not yet time to buy inflationprotected securities, underweight emerging market debt and underweight corporate, treasury and Municipal Bonds of 715 years and over. Last thing, overweight junk bonds and short duration bonds. Just like they said . Thats correct. David . Happy new year. You packed that all in. Ten more things to say. Any resolutions . My new years resolution is to spend more time with my kids and grandkids and follow your lead, you and andrew. Thank you, david. We have to run. Make sure you join us tomorrow, squawk on the street begins next. Thank you. Good monday morning. Welcome to squawk on the street. Im Carl Quintanilla with simon hox and david faber. Cramer is off today. Down to the final two trading sessions of the year. After a 4 move higher, futures are essentially flat, gaping a little momentum here at around 9 00 a. M. Eastern. The tenyear note is just a touch below 3 . A lot of data coming in this week, including