Transcripts For CNBC Squawk Box 20150105

Of data on the docket. Building up to fridays jobs report, today we have december auto sales. Tomorrow, its ism nonmanufacturing and factory orders. Wednesday we get the adp. And well have International Trade and minutes from the last fmoc meeting. And thursday the initial claims and the friday payroll report. How are traders viewing 2015 . So far with a slant to rise 8. 2 this year. The big drivers they are looking at economic expansion and earnings growth. Oil prices dominating the market this morning with wti and brent losing half their value since mid2014 with prices falling to 5 1 2year lows this morning. Among the headlines, iraqs oil exports were at the highest level since 1980 last month. Also, we can tell you the new congress meets this week and the incoming chairman of the Senate Commerce and Transportation Committee says a gas tax is on the table with them not rising since 1993. I dont, joe, drive, but i think 18. 4 cents per gallon for unleaded. I think its 24. 4 for diesel. Senator john thune says this is to help with and existing shortfall with the existing plan expiring in may. Well see how that debate unfolds. They are arguing on how to do this by state. Well look at the stocks to watch this morning. Shares of cempra get a boost. The oral version of the lead antibiotic leading the main goal in a late stage trial. I was alerted to this by our interpret pharmaceutical reporter mike huckman on this being a big story today. Appreciate that headsup. And leaders of the American Airlines pilots union approved the carriers contract offer. Union members now must vote on it. If approved there will be a retroactive 23 wage hike. And Dreamworks Animation appointing new copresident s of feature Animation Studios chief creative officer is stepping down. A check on the markets as we told you what strategists expect this year but thats not the way the futures are headed. Right now the dow futures are down by just over 80 points. The s p futures look to open down 10. 5 points. And the nasdaq is down by close to 20 points. You have to believe a lot of that is concern on whats happening in europe right now with greece. If greece might actually end up being let go from the European Union. Thats something that has been talked about. Angela merkel making comments in suggesting that they might not be too upset with Something Like that happening and thats causing concern. Well take a look at what is happening in europe where a lot of this is playing out at this point. Right now the european markets are all indicating weaker. Greece down by 3. 7 . France is off by. 80 . The ftse in london down by. 70 . And the german dax down by. 50 . The nikkei was down a quarter percent. The hang seng down by. 50 . And the shanghai is down as well. Well take a look at where gold is trading this morning. Youll see at this hour it looks like gold is up 4. 20. 1,190 down. A piece in the journal has it very close in greece. I dont know what its going to be on the 27th. But more and more people are starting to sort of spin the cycle that it would not be that disruptive. You saw the draghi piece in the times. Such fundamental problems in parts of europe that they blame now a lot of it on the common currency that has not really worked out in terms of its been a six or sevenyear sort of twilight. And its been a stretch for reforms not being put in place, either. You are trying to put the changes in place but the reforms never came about. They are too important, not just the jergermans laying around in the sup all day long. They dont want to give them more money. If greece would exit they are never going to switch currencies. Lithuania, i dont know what their currency is i forget. They are going to switch. They are happy but just this tiny they want to be wow, we have euros now as part of the trading buck, but the big country like germany, to try to heard off the cats when you dont have a common fiscal authority, its almost impossible. And then countries that get the austerity from the bureaucrats in brussels and their people spend years trying to live up to the expectations of the bureaucrats, i dont know the whole thing could be a big Angela Merkel is suggesting we are in a better position to allow greece to exit. Spain has come back a long way. But as you mentioned, you look at italy and some of the situations they still have there was did you read the piece over the weekend that suggested, someone was saying this would be Lehman Brothers squared for the greeks. If hes on hes on. I like the equation that he sent us because he had the term i was going to talk about the markets and use some of his concerns. Because what went from all these positive things if you look more closely at what a lot of these things mean like the drop in oil prices you look at what that means when you take and connect all the dots or look at whats happening in china, driving by the huge ghost towers and stadiums where no one plays, its a lot to worry about in the year. Going from positivity to negativity. We are just starting. The beginning of the year dont we get to do that . Now we are wondering, what will 2015 bring . Because its weird because its arbitrary to just put a cutting point on 2014. You have to measure it from somewhere. Given whats happening with the euro below 1. 20, oil breaking under 50. Nineyear low for the euro. I mean things that make you start to wonder and reassessing value. And the oil prices too, there are major parts of the world that were addicted to 100 oil. Everything they do is based on that. And it may stay here for a while. We may have broken the back of the opec cartel. But you said thats a great thing. It is for consumers. But heres what happens, those economies slow down. Our dollar gets even stronger. I said that a couple months ago and you said who cares about those economies. I didnt really say that andrew. And i dont think you said that either. The dollar gets stronger and its harder to export. Sooner or later we import some of this inflation maybe, and the slowdown that so many of these developing countries need. And they were using our qe. And the qe3 ship has sailed. You are wearing the tie. Qe3 and it looks like its sailed. We would never wear this because it has color. Yours are like do you ever see your ties, if you ever took a the festival and you spray the thing going like that if you spray every single color, thats what comes out. I wear i wear the classic, this is is a maroon tie. It is like a mud. I would wear that tie. No you wouldnt. Lets ring in you know the dating fans why dating bengals fans is a good idea . Why . Because they never expect to get a ring. The bengals will never win. Someone sent that to me on twitter. Who . They want you off the bandwagon. You add mitted you were drawn in to watch it again. I left and never came back. It was just it was right to what i knew would happen. However, you were rooting for the steelers. Yeah a little bit. But i was rooting for the steelers to undercut some of the other people that love the steelers. And it worked. Im angry at them in the first place. And it worked. It did. Investors have plenty of key data to look at. The fed minutes in the first friday jobs report of 2015. Come on, is it time for another jobs report . Joining us is lou this morning. And on the economy, we have Steven Wright global chief strategist at citi private bank. Lou, are you just being a guy that thinks absentment and consensus, we are going to do 8. 2 in the bag. Does that make you nervous every one of these guys never right is coming up with 8. 2 . 8. 2 on the stock market . S p, yes. Its all right. I dont know what youre supposed to do at the beginning of the year. Last year i said the market would move 12 and i was right it moved 12 . I dont want to listen to the other people then. You tell me what it is going to do this year. Except that i thought it was going to move 12 lower. Okay. And this year im going with 12 again but not going to make a decision on which way until later in the year. Maybe december. Smart. But i think that theres the litany of things you just went through are very important for the market overall because that sort of sentiment and whether it goes into the bond market or stock market will be determined by a lot of the things you said. And i think the fed and the Housing Market reacts to the fed is howto be the most important thing for where the s p ends up this year. My estimate for going down 12 for the s p was because i thought that during the taper of the qe that the markets would act as they did when qe ended for both one and two of the strategies. When in other words the s p went down at the end of qe 1 and 2. And the yields on the tenyear went down when qe ended. So this year when the taper began, the tenyear yield fell from the beginning of the year and continued to fall throughout the end of the year. The s p after a stumble in the early year had a steady gape but then in midseptember, the day after the fed made it clear that qe was dead and gone after october, the market had a 10 decline or just about a 10 decline in a few weeks. And on october 15th, the s p was flat on the year. So i think that i think that how the market reacts to the fed in con junction with the other things going on is one of the keys. Steven you have written like a thesis on the asymetric look of things but this will sum it up. Acute negative effects are some, but kind of a widespread event for a lot of other people. You cant just look at the net effects being positive for the u. S. Economy in isolation and see to ignore the big risk things. We are going to have sovereign debt stress. We are going to have tremendous problems of the marginal producers. This is hair whole life as the oil price. For others we all drive cheaper. We all transport things around but we were okay with 100 oil. It is net stimulus but expect a lot of volatility out of this with a long tail effect from the variety of things in the latter. Im positive on the u. S. Outlook and the u. S. Economy in the current year but i think economists probably underestimated how strong of a positive effect it had. The positive spillover of growth is oil booming in this case. Purchasing power for americans benefits when the dollar strengthens. But it seems like all multinationals get hurt by that. If we have a nineyear high on the dollar and we are still at zero, does that nineyear high anticipate where the yields are going up or does the dollar get stronger as yields go up . It has further to go. Cant that eventually hurt . Well, eventually it will hurt, but you look at the ranges the u. S. Traded regulated dollar fell eight of ten years in the last decade. You look at a lot of relationships in the markets to be extremes. The u. S. Tenyear notes four times the level of german tenyear yields. When you look at currencies and the we are at low levels. But it is a record low spread to germany. These sorts of things actually do matter. Surprisingly with as low as the yields are right now. And there are strong inflows from the rest of the world saying, this is not a 2 yield for me. This is a 9 return in my currency. So this is important. What you mentioned about the overseas earnings it is important that we always see the up flows into our marketplace that we see the dollar strengthening drawing investors into the assets they have. Thats large cap u. S. Equities amazingly attractive around the rest of the world. Lou, i was thinking 20 with the market this year and not say up or down. But even there you could be wrong if its not that big as far as magnitude. You have picked the perfect number because 12 it will probably be one or the other and it will be up or down. I guess you could be wrong if it stays where it is too, right . You are very sly. You are a genius. Do you think even the people that we ask they know we have to give them a number but no one really believes this and its just we all just sort of discount even the sort of whole mechanism of trying to do it on january 5th or something . It is a fools game isnt it . To say what the market is going to do. It always has been for me. And i just theres too many variables. You can say, well, these are my best guesses on how the dollar is going to go on how the consumers going to be et cetera. Then you plug it into a spreadsheet and say, oh this is what its going to be on the year. Or you wait to see a general Opinion Survey and go with that. Even a lot of times that is what happens. Even if someone spotted you, ill give you what the multiple will be and you figure out the earnings. Or if they give you the earnings and you figure out the multiple you still couldnt do it. Okay. What we are seeing today, we had a lot of positive stuff happen in november and december. And january should be interesting because we kind of predicting this could happen. We are down 80 today . January should be interesting. The thing that merkel said greece may or may not be in the euro at some point in the future, thats similar to what she said back in late 2011. And thats important since the odds of the euro membership, being as it is in the future the odds of that changing are not zero. Thats very important because if one country leaves there could be an advantage to early movers and somebody else may follow. At least there could be the expectation someone follows. Okay. You guys are im riding on what you said because its the new year you are the first guys predicting. Oh, january 2nd we did. But this is the first with all of us together. So essentially it didnt happen before. Lou, steven, thank you. Still to come in this hour well get a live report from the midwest where residents are preparing for the arctic blast. Strong winter storms expected across the country today. Plus, ben white is joining us onset with his stories to watch this year including the early jockeying for the white house. Jeb bush will be in greenwich later this week. And this is a sad and strange story, a Hedge Fund Founder killed in his new york city apartment. Well have the details that when we return in just a moment. E financial noise financial noise financial noise financial noise welcome back to squawk box. We are watching the arctic blast that is underway and well go to mike seidel from the Weather Channel channel. Reporter it is cold in International Falls with their temperature at 28 below. The windchill 50 below zero. Two arctic air masses coming across the canadian u. S. Border this week to impact everybody east of the rockies except for florida and the immediate gulf coast. They wont get as cold as last month. This includes the northeast in a couple days but it is the windchill. You have to layer up wear the hats and gloves and cover the extremities. In the summertime we talk about frying an egg on the sidewalk in midtown manhattan. How about this . I cracked an egg on a piece of paper at 10 below zero theres your frozen egg this morning for breakfast in minneapolis st. Paul. How about that . Along with the call, we have a clipper to bring a swath of snow to bring it across iowa and chicago. They get three to four inches tonight and some of the snow will linger to the east coast, new york and philadelphia tomorrow. A little bit there, an inch or less but the bottom line is the next flee three to four days bundle up it is january, after all. It took five minutes to freeze to the paper . Reporter about five minutes, yes. Go back in the truck to get somewhat warm. Reporter im going to save this for kernan. Im back on eggs in a big way. Eggs are the perfect food. Protein. If you can just deal with the its the cholesterol issues. Which dont have a problem with but you dont want to create it. Just eat the egg whites. I like the yolk. You dont do hardboiled, do you . Im on a new kick. Almonds and not kale but green things. What is it january 5th . Yeah. Yep. We are all on the bandwagon for a few days. The Huffington Post i have to check once in a while, five foods you cant eat if you have a belly. Im going through they dont let you get to it ever. I know how to buy insurance policy and know how to buy a ford escort. I click i dont know what to click on and never found it. I never found the five foods that youre not allowed to eat. I can imagine. They are bread, pasta. Alcohol is not good. Alcohol is not good. Candy. Anything white. Chocolate can be good because it is a healthy fat. It can be but only dark chocolate. If the weather has you stuck inside Mark Zuckerberg suggests you read a book. Move over oprahs book club. The facebook founder is creating a yearend book page encouraging friends to read a book every week in to 20 15. Hes focusing on learning different cultures. His first book is the end in power. The title First Published in 2013. And it was out of stock on amazon yesterday. How did you like that pronounce area . I give you credit. I would just say the name of the book. Youre right, you would have. Youre on your own finding the author. 2016 and the race for the white house kicking into high gear. Everyone is talking about the potential for another bush versus clinton election. So what can we expect from the economic platforms in the two frontrunners . Ben white is here happy new year. Happy new year to you. We mentioned in the tease that jeb bush is coming up north if the weather doesnt get to him first. Hes coming to greenwich. The homeland of the bush clan. Then clinton is doing a little work in the midwest this week. Yes. The potential for a matchup is there, although jeb bush will have a lot harder time getting the republican nomination than Hillary Clinton will in getting the democratic. The wall street journal which you pick up this morning says Iowa Democratic leaders are troubled by the prospect Hillary Clinton could win the states 2016 president ial caucus without a serious challenge. They are desiring a more liberal candidate or a more robust debate. Even though the wisdom is shes it, there seems to be a sense people want somebody else instead. I think as far as independents go they think its i think they are worried it is more of the same with obamas policies. If she moves left shes in a real tough spot. Hell have to move left. But i think independents think shes too liberal and the Democratic Base think shes too wall street. Thats very true. The iowa thing is she had trouble in iowa the last time around and they like to see a contest. They would like to see Elizabeth Warren or something in the caucuses to make it a real debate. And they want a debate or a different candidate . I think it is mainly because they want a debate. And i think they want her to be held accountable on wall street reform issues her ties to wall street on her economic platform whether it is progressive enough, more taxes on the rich, that sort of thing. They want to hear that kind of discussion and maybe nudge her on some of the issues. Adding ultimately they and the rest of the Democratic Party view her as the strongest candidate. Does she move left . I dont think shes going to move significantly left. In rhetoric she will and she has to some degree. But she gets in trouble every time. When you Start Talking about those things and assuming it is only going to play in iowa it will turn some people off. But i think in terms of her policies, i wouldnt expect to see a very hard Left Progressive tax policy or wall street reform policy. Shell talk the talk but not going to come out to say im going to raise marginal tax rates on the rich by 10 or do a number of things to increase scrutiny on the banks. I dont think the policy platforms move that left. Keep your eye on the general election. So now were talking republicans for a second . Really quickly. At this point, eight years ago did anybody see obama at that point . They didnt. This is the classic line on okay clinton is not the de facto nominee because somebody could come out of the woodwork like obama did. He was the rising star in illinois, but theres no one else on the democratic side other than warren. I dont think it is a hard no. Shes a very ambitious politician and shell see a window here. I think if there continues to be stories like this about the Iowa Democrats really wanting somebody else in the race and people start coming to her with a harder Draft Movement it will be hard for her to absolutely positively stay out of the race. She probably wont run, but i would give it a 10 to 15 chance yet. The republicans, jeb bush comes to greenwich this week. Chris christie was at the cowboys game last night. He loves the cowboys. If it is just a matchup between those two, is it a slam dunk for jeb bush . Not slam dunk but he has the advantage. He doesnt have any baggage, not as a cowboy fan, but other things that Chris Christie brings to the table, the snuff from new jersey that has troubled him from the years. Jeb has issues with his last name, but as far as a National Candidate with the name recognition, the money a lot of the policy proposals, i think to the establishment of the Republican Party, jeb bush is more attractive than Chris Christie. The articles have been written more recently that the people that dont like him because of common core and immigration, that even those people could get behind him because they are sick of what we have seen in terms of the laws on either side stalling. If we can get we need to get a guy elected for the republicans before we can do anything. And thats the same trap they have fallen into a couple times in the past that the conservatives point to. If you run another bush it will be like romney or mccain or something. But the articles are now being written that they can even swallow some of the things immigration will be an issue for him in the primaries. His policies on normalization of did you see the piece on written by the guy that formulated the strategy with jeb, and he said that when you say hes just an thats not true. He wants to enforce the rule of law first and foremost but then theres the compassionate side finding a way to deal with the people here who nobody thinks we are sending back and we are not sending back. I think he can move the republicans on immigration. Some will never support his position. Common core is more for the general public. Its for conservative republicans who dont like the state of the federal role of education, but he can explain to people how to compete with the chinese. We need the standards that our kids need to meet. I think he can sell republicans on those two things but wont derail him. Who is the dark horse for the Republican Party 2016 . Youre lizsaying Elizabeth Warren for the democrats. I think the people we dont talk about are kasich or scott walker. One of those people will catch fire to some degree. And they will be competitive in the republican primary process. Youll see state of the state addresses coming up soon where some of them will put forward ideas to catch fire. So i think maybe if were looking for somebody we are not talking about a lot now but a midwesterner governor. The possibilities are there. Huckabee is possible. He wont be president. Thats not very nice to say. Do you think he should have just kept the job . He had that option. Hes talking about running and doing something politically. But hes got a nice business going of selling books and if he runs and doesnt win, he could go back to fox and do a number of things. Some of the folks are in it for their have you ever used a dog as a stool to reach something on a higher shelf . You havent done that have you . Dont do that. Sarah palin, one of her children, i guess on a home video, was trying to reach that a little kid, the dog didnt even budge. Didnt flinch. But peta is going nuts nuts that the little kid did that. I missed that. You missed that too . It was not in the Morning Money report. This is supposed to be a complete it is about sarah palin how can you miss that . Ben, great to see you. You keep talking amongst yourselves. When we come back we will talk about a Hedge Fund Owner found slain in his new york city apartment. And check this out with the euro falling for the first time in nine years. And coming up we have last weeks winners and losers. Welcome back to squawk box, if a hem if. We have breaking news with a Hedge Fund Founder found dead in his apartment yesterday afternoon. His wife made the discovery, called 911. And police at this hour continue to question his son, Thomas Gilbert jr. Thomas gilbert sr. A founder of wayne Scott Capital Partners found shot once in the head. He was found by the wife and called 911. The new York City Police who responded to the scene, that was a shot of the wife being taken away very distraught. She left without comment. And the father a graduate of princeton university, the son also apparently went there. The friends we have spoken with said he has become increasingly volatile in recent years but at this hour has not been charged and police are not yet calling this a murder as the gun was found near the fathers body. So they need to try to rule out suicide before any charges can be filed in this case. So the investigation continues. As of now the son is in custody being questioned but not considered under arrest. No charges filed at this hour. And i assume well hear more about this in the next couple of days. Or even in the next day. Do we think, there was no struggle or no view that it was a struggle either it was a suicide or something much worse . Investigators say homicide is the leading theory at this hour but anything is possible. They interviewed neighbors who tell police they heard some sort of loud noise, a big thump, a big bang around the time of the shooting. Then the son was seen leaving the Apartment Building with a hoodie pulled up over his head. That according to the doorman who worked at the building. But again, as of now, the son has not been charged. Who owned the gun, do you know, john . We dont know. We know that it was a. 40 caliber weapon, a pretty powerful weapon. But we dont know who it was registered to, if anyone. Okay. Tragic story again. Thomas gilbert sr. Described as a loving husband, a really decent guy. Very wellthought of in the Apartment Building and also in the business community. And the son, who is very popular or was during his high school and college years, and then was described to us by one very close friend of the family that has become volatile and had issues in vept yearrecent years. But again, it is unclear to know if hes to blame for what took place in the apartment. Police continue to question him at this hour. John thank you for that. Of course well be looking forward to hearing more on this. Have you heard the name before . I have not heard it before. It was a new hedge fund that opened a few years ago. I dont know how much he had in it. He was also a Harvard Business graduate. Okay. A tough story. Well talk a little bit about whats been happening in the markets. We have been watching the euro fall to a nineyear low against the dollar coming amid speculation that the European Central bank is moving closer to large scale bond purchases. The question is will the eurozone economy face another tumultuous year . I think the answer is probably almost certainly yes. But joining us to talk more about it is mark grant, managing director at southwest securities. I have to get your predictions for the year, but first the situation in europe. How bad of an issue would it be if the greeks would exit the euro . It would be difficult not only in terms of contagen but the germans say, well, the bonds, the greek bonds arent owned by the banks in europe anymore, which is true. However, what they dont tell you is that the ma joejority of the greek debt is held by the ecb and other banks in europe. So there would be significant fallout if they defaulted. The front page of the Financial Times this morning is saying that massive qe wouldnt be enough to revive the eurozone according to many economists. Do you think thats the case too . I agree with that statement. The reason is that most of the borrowing in europe is done on the fiveyear and not the tenyear. So they look at the sector more than we do but the fiveyear sovereign debts are either negative with germany right at zero or right off zero in terms of the netherlands, france austria. So the effect of the quantitative easing would be glenlgable glenlgable negligible. Rates are pretty low. Hey, were going to drive down rates and spur economic activity. Do you think that they will let draghi if you were the ecb, would you want to buy the bonds of these countries that arent going to be able to pay you pack . Probably not. I havent lost my mind yet. If you were german and they were saying you have to pay for the crappy bonds, how is he going to do it . Better not to do it since it wouldnt help anyway but they are just between a rock and a hard place. I agree with you, joe. My thought at this point is that the ecb is out of bullets. They dont have anywhere to go. They are facing deflation. I think you are seeing inflation inflationary numbers across the board in january. And i think europe is a rock and a hard place to minimize. Before oil they were facing deflation. Then with russia we said germany was the first to get hit. Now italy is warning that it has been hit by russia too. So you add all that up i think the answer has to be an overwhelming yes. This is a difficult year for the continent. Difficult may be a mild statement. So mark you probably dont think five years out, but the whole euro experiment success in the future at some point . Or not . I think probably not, joe. I think there are too many warring tribes if you want to look at it that way, that are in opposition to each other. You just have different mindsets in italy, spain, as compared to germany. Crazy idea. People that didnt switch are going to look smart, i think. Mark before you go i want to talk to you about what you expect on the tenyear in the United States this year. You were right last year and called it early that the yields will be under pressure. That was counter to what everyone was saying at that point. Now weve got a new year and everyone is saying once again that yields have to go up this year. You dont necessarily think thats the case. Not necessarily, becky. I do not at all think thats the case. I laid out a formula in a piece that youve gotten i think the tenyear goes back to 2 and heads down three quarters probably to 150. And i laid out the reasons why in the formula. It has to do with relative value versus the sovereign debt in europe and asia. But a significant drop in the price of oil. And i dont think the fed is going to do anything right away. The fed is going to get balked in one day. And one day in the spring, they are going to say things are so bad we are not going to do anything about it. Mark you were right last year, well see what happens this year. Thank you very much for joining us this morning. Well talk to you again soon. Thank you becky. Coming up recordsetting numbers from amazon. Details next. But first heading to break, heres a look back at this day in history. The evolution of luxury continues. The next generation 2015 escalade. Hey, jennar fuzz mike troober munny sling. Awwwwww scram im crust mike jubby roll bond chow gonna lean up an kiss bet. Peas charty get town down. [laughter] borf a liver tute face stummy wag pow pam shabeeps stella nerf berms. Saxanay nay . Badumps a head. Temexiss gurrin. Juppa left. Fluppa jown brone a brood. What . Catch up on what everyones talking about with the x1 entertainment operating system. Preloaded with the latest episodes of the top 100 shows. Only from xfinity. 2014 was a good year to have your products on amazon. Amazon sellers sold a recordsetting 2 billion items. The internet bohemuth introducing an amazon seller app to help the companies with their businesses. Coming up the young and successful. I look at you. I appreciate it. Keep looking. From the court to the silver screen, this is you. From wall street to Silicon Valley the showtown and publishing. Forbes unveils oh under 30. I just missed that by 7 years. 30 under 30, next. Welcome back to squawk box. Forbes kicking off the new year with its Fourth Annual 30 under 30 list. Excuse me. We were saying things during the commercial break we shouldnt be saying. A whos who of the next crop of entrepreneurs and innovators. Gracing the cover this year is palmer lucky, the founder of oculus. He sold last year netting over 5 million. With us now to go through the list is managing editor at forbes. Good to see you. Good to see you. Was he through the clear winner . Do we do this in a rank order . No. And its more like the 600 under 30 in we have 30 people in 30 different industries. Its the day forbes breaks the internet. Its a great Cross Section of just industry by industry and amazing judges whether its czarsara blakely and other people that are superstars. 500 million is now a Facebook Stock booming. Hes close to 600 million at 22. The way we figure nobodys ever been that young with that much money. Not even zuck or bill gates. When you think about what he accomplished at his age, its amazing. We have a list here showing on the screen here. Of everybody on the list if you want to make a bet of who we would hear about the most who could become the next Mark Zuckerberg, if you will the next Mark Zuckerberg. Weve got a guy named austin mcchord. He turned down a hundred he owned 100 of this thing and he turned down 100 million offer to buy it. He does data backups so if Something Like Hurricane Sandy happens and youre a speedy trading operation, he can get you back up in seconds. Which is very desired. Instead he went out and raised about 40 million bucks. Somewhere between 20 and 40 million to try to do it himself. But he turned down a hundred million bucks. That will be fun to watch. Im also looking at this list. I assume this is an accolade of bill ackman. Rian israel. Will he go off and start his own fund after being put on your list . How does this worth . He said he knew more about warren buffett. He was one of the key guys on the burger king deal. This is somebody who again in that industry in private Equity Hedge Fund it takes awhile to get running. Heres somebody at 29 is already a goldman vet and ackman thinks is quite the comer. And tell the about these women who started the skim. A Million People are now reading the skim. These are two today show colleagues who say nbc people. We want to do something that speaks to our generation, have a point of view. So they do basically a news letter that skims the news. And if that sounds simple they went out and raised about 6 million bucks recently to go blow this thing out. Theyve organically in the last year or so taken this to a million readers every day. Randall, we appreciate you coming on. Always good to see you. Congratulations on the issue. Look forward to seeing you for the next big list. Always good. Thanks. When we come back this morning, the good the bad, and the ugly. Well talk stocks. The euro dropping below 1. 20 when squawk box comes right back. U. S. Stocks coming off a year of gains, but take warning. Dom chu joins us with a big cautious signal for the markets. The euro sliding to a nineyear low against the dollar. Well tell you how far the euro could fall by february. And its been a year since colorado said its okay to toke up recreationally. I just want to say that was a great idea a peek at cnbcs new documentary about the cannabis boom. The second hour of squawk box begins right now. Good morning again, everybody. Welcome back to squawk box here on cnbc first in business worldwide. Im becky quick along with joe kernen and Andrew Ross Sorkin. We are watching the euro this morning. It is hitting a nineyear low versus the dollar. The euro has dropped nearly 14 since march. Its picked up very recently though. Picked up with that speed in decline. Forecasters are now looking at a greater chance of quantitative easing package for the european meeting. Also watching the greek elections on january 25th. A victory by a popular far left party could put the bailout in jeopardy. Thats a concern this morning and thats why youre looking at the euro at 1. 19. Also in our headlines, it is jobs week. Among the key economic events leading to friday, were getting the adp payroll report, also minutes from the last fed meeting. Jobless claims then on friday. The governments employment report. Also the new Congress Convening this week. Seeing a gas tax on the table. They have not risen since 1993. Senator john thune saying all options must be looked at. And then the final hobbit movie taking the top spot at the box office for the Third Straight week. You both saw it . We did. Brought in nearly 22 million in north american ticket sales. Disneys film version of the Broadway Musical into the woods was second with 19 million. Ive not seen that yet. Have you seen it . No. Im interested in it. Meryl streep . Yeah. Looks good. Just havent gotten there yet. We should tell you theres a warning light out there for the markets. Dom chu sounding the alarm for the growing level of debt. This is a big story. Its one of the big ones. To help kick off 2015 we here at cnbc are releasing a new and improved online offering called cnbc pro. Meant for real market junkies. Among the stories youll look at the margin you were saying. Thats borrowing money to buy stocks. The data released by the New York Stock Exchange every month. As you can see in the chart here, the amount of money people are borrowing to buy stock has reached a peaklike level. Were at the highest level ever, but thats to be expected as the market gets bigger over the years. But now were at the highest level of margin debt relative to the economy since 1929. We all know what happened there. You can see these circles here around the internet bubble. Before the financial crisis. And here we are right now on the far righthand side of the screen. Experts are divided on how important an indicator this really is. One thing it might indicate is when stocks fall in value, that downdraft to the downside again could be more volatile. Now, investing editor piece is up on cnbc. Com and for a limited time there is a free trial of the cnbc pro product. You can check it out. The full story for margin debt online there. Back over to you guys. Any thoughts as to what leads to that . People just get more interested in making sure they buy, theyre more interested eded in buying more because they think theyre sure things or something . Its not just that. The reason why theres a debate about whether or not this is important is margin debt is not an unhealthy thing. It could signify a longer bull run. These types of things these type of margin buying situations could go over years. This is not to say that this is going to crash any time soon. Its more of a flashing yellow instead of red light about whether people think theres a peak level out there. Thats why this is important. Its not so much were going to see everything crashing down now. Its just one of those indicators that in confluence with other things could indicate we may be due for but its another one of those indicators of an economy or sentiment thats getting pretty bullish. But were still at zero which is classic with all these things that maybe wage pressure started to build up and unemployment is down. Margin debt is at a high. And the feds still at zero. Now im starting to think theyre in a box because now they cant raise. Its not the box they have to stay low. Its now with the rest of the world staying at zero theyre going to continue to get screwed for the next year or two. Thats been the knock on the zero Interest Rate policy ever since it got put into place. The people with disadvantages are the ones on the older end of the wage spectrum. Yes, theres a tradeoff for all of this stuff here. But what this is mostly is just at least an indicator people want to watch to say whether or not their things are going wrong. This is not to say they are, joe. Well a lot of reasons why it would be nice to have some dry powder next time theres an economic slowdown and not be at zero. And you also worry about so much money moving into areas where maybe it shouldnt be. Where in more prudent times it wouldnt be in emerging markets or whatever. But thats whether or not you learned the lessons the last time to keep that dry powder. We dont have any right now. And theres a slowdown. Im worried, dom. Im very very very worried. Ive been worried. But ive been worried for six years now. By 8 00 ill probably be fine. Probably be bullish by 8 00. Yeah. Stick around right . Yeah. Doesnt really matter. Dom, thank you. Thats really interesting. More on the markets now. Were joined by joe quinlan and jim paulsen. You know paulsen, well get to you in a second joe, but last time you were on your thesis was all the good news was pretty well telegraphed and maybe in the market. Maybe were set to ring a little of the complacency out of it. I kind of think were going to be at a broad trading range this year joe. We could go a little higher. But i think we also are going to see some lower levels as the year progresses. Kind of digesting the big moves weve made over the last three years. You know its interesting, weve got this sense we had this big move in 2014 but as we sit here this morning were probably 50 points away from the level we were at in the summer. And it wouldnt take much of a decline to be flat since last summer if you will. And i think thats kind of what well revisit this year. You know i do think im not as worried about this current deflationary fear everyone has. And worried about whether the ecbs going to do quantitative easing or not. I think its already been done. I think weve had a massive stimulus applied to the economy. Its the equivalent of a massive fiscal tax cut and equivalent of a massive Quantitative Easing Program thats already been done throughout europe. Look how much bond yield sovereign yields have fallen over the last year. I think with the lag were going to see a pickup in growth not only here in the United States. But across the globe. That might be good for europe and japan, but i think here with the Unemployment Rate falling close to full employment, i think its going to put the fed and bond vigilantes in a box in a hurry. Thats good. Im glad youre saying that. Maybe. Well i was going to say longterm you stayed bullish. I was going to give you all the things mark just talked about to not be bullish and see whether you change them. Youre still saying any sideways action we have in 2015 isnt because of the fundamentals have deteriorated. Theyre still good. Thats right. What about you, joe . I agree with that joe. But i am concerned as we start the year. Europes a huge drag. Chinas probably growing by 5 not really 6. 5 or 7 . Theres an adjustment there. So i agree with jim. The oil price cut is a huge tax relief for a lot of the global consumers. Its going to take six months for that show up. Europe a is huge economy. Theyve got to get moving. Weve been saying that for six years. Here we are in 2015 saying the same thing. You differ with jim on that then. He says you know i mean whats qe going to do . The germans need to drop down the yield on their bonds . The eurozone is a surplus region of the world. They need to spend more. How they spend it that depends. But theyre really taking demand away from the Global Economy as putting more demand in. But thats not something the central bank there can be right . Their only option is a qe bond buying program. They can do more with the Infrastructure Spending the Service Industry is terribly fragmented. Its behind the curve. Its really theres a lot of regulation that could be broken open to bring out some more growth there. Those are changes we were expecting over the last six years. Right . We thought we were buying time to get the changes through. They didnt really follow through on any of it. Not at all. Here we are 2015 were still having the same debate we had in 2010. Is your number 8 to 10 for the s p positive this year . Or is that where you are . We are there, joe, in a sense. I do think the u. S. Equities are underowned by foreigners. I think at least in the first half of this year youll see them moving into equityiesequities. So what would you put your money on if you had to . Flat. Flat. Zero. Yeah . I think we might see over 2200 2250 this year. We might also see 1850 joe. I think the markets caught in the United States between two opposing forces. Weve got much better growth here in the United States. I think were doing 3. 5 this year up to 4 in growth. The broadest growth and recovery. But we are also near full employment. And are very close to setting off inflationary indicators which i think is going to be problematic for the markets. We may melt up on better growth and bond vigilantes. Anybody thats been worried about that has been wrong. You know, thats like still way up there. And everybodys working parttime. Nobody can get a betterbaying job. You act like theres no slack left. Thats sort of an outlier opinion, isnt it . I think it is. I think it is. I think weve been worried about slow growth so long that when you head towards 5 unemployment youre creating 2250,000e inging 250,000 jobs a month and youve got net worth over 80 trillion in households 20 higher than the previous peak. Isms for manufacturing and Service Sector are back. Bank lendings up almost 8 annual rate. This is an economy which has shifted from 2 stall speed to 3. 5 growth probably. But the difference is were no longer at 8 unemployment. Were closing on it. I think we go into this year with a deflationary spiral fear in the air, but i think were going to have inflationary concerns before the year is out. Jim, when is the last time you predicted a flat to down year . I havent been bearish at all in this recovery. I think even in pullbacks previously i just felt the market was so cheap and sentiment was so bad that it wasnt worth worrying about it. They wouldnt last. But we now have a more we have a market thats now at 18 times earnings sentiment is the calmest and most confident its ever been. And we have to do one thing. We have to reconnect Interest Rates in the United States to the economic cycle. We can no longer have Interest Rates priced on fear of 0 Interest Rates 2 10years. Youre calling for correction this year but youre calling longer term over the next two to three years for higher stock prices. We have people watching this program this morning thinking they missed the bus before and wondering should i get in should i wait for the paulsen correction to happen. If the stock market is going to be up in two or three years anyway. I should just forget about even trying to time it. I would not try to time this much. Where are you going to go . Bonds or cash . Id say overweight. But what i would do is i would minimize my exposure to the United States stock market. Id go overseas. I like europe. I like japan. I like the emerging world. Sfl sfl jim as an enigma youre a herbal socialist basically. I dont know whether you do that thing, whether you whip yourself for being a bad guy and a good guy. But have you come to the realization that a paralyzed government is what we need since thats what delivered this rosy scenario. Are you finally willing to admit that government is not the answer . Maybe a paralyzed gridlock situation is better . As an investor joe, i have no problem with gridlock. I think in some steps our Founding Fathers set that up by creating a crazy thing 550 people have a agree on something. And happy days are here again. Washington has to do i think people have worried far too long about what government will do or wont do when what they should be focused on is main street. And joe, everybody complains we didnt have an Energy Policy a federal government Energy Policy. Seems like somebody had an Energy Policy. Yeah. We did. It was called the private sector. The wildcatters in oklahoma an montana. We changed the world. We can grow without the government. But longterm we need a functioning washington. We need that to kick in. That could be the outlier in 2015. Oh, no. Another kennedy democrat. Quinlan, another you are, arent you . Not really. Sound like one to me. All right. Thank you, joe quinlan and jim paulsen. There you have it. When we return we have the growing population of vaping. Poised to take off. King rogers has the topic. And a sneak peek at the marijuana documentary one year after the legalization of Recreational Marijuana in colorado. And then well talk about the precipitous slide in the euro. How much farther could it fall by the end of this month and what does it mean . Stick around. Well tell you about it in just a moment. Welcome back to squawk box, everything. Weve been watching the futures this morning and they have been under some pressure. The dow futures look like they would open down about 80 points this morning with the nasdaq down by about 20 points. Weve also been keeping an eye on shared of cempra after an oral version of its leading antibiotic meeting the main goal in a trial. Stock up 30 . Oxford dictionarys word of the year is vape. As in vaporizers allowing marijuana and nicotine users to discreetly consume. Vaping is kind of this Family Friendly legal cousin to marijuana with ties to that growing industry, but its also taking on a life of its own. The Electronic Cigarette and personal vaping industry which allows users to inhale vapor from tobacco, marijuana, and nonnicotine based juices is poised to hit 3. 5 billion in the year to come. 2014 was also a big year for vaping. Oxford dictionary coneined vape as the word of the year. Now, users say it not only helped them quit smoking but its a way to socialize. Im bringing more and more friends into it. Yeah. We sometimes just get together and, you know have a glass of wine and vape. And its fun and it doesnt smell and it doesnt make you and with flavors like honey, gummy bear and more even nonsmokers are getting in the mix. Its now less about quitting and more about community. Most people start using them to quit smoking. But then the experience of vaping has grown into this whole kind of social aspect of things. So after, you know maybe after they have totally kicked their smoking habit, theyve met cool people here. But those nicotinebased juices may be off the market in 2015 pending fda regulations that may require brands to apply for approval. The fda says this shrink the market from thousands of products to as low as 20. So we were just talking before we got here about what vaping is how it works. You said it smells pretty good in the shop. Its basically battery operated devices that have a cartridge on them with a juice. And it heats it up and turns it into vapor. You inhale and exhale it. A lot of flavors do smell great. Why dont they smell them as an air freshener instead of in your lungs. So its a gateway. And we dont know if its better than cigarettes. Theres studies on both side. And the fda only studies e cigs for how do i know the difference of ecigarettes being sold at stores by the Cigarette Companies . Theyre the same. But the fda regularlations could take them out of it. Before youre addicted to nicotine maybe you think you look cool when you smoke. But theres long been maybe a freudian component to being fix sate fixated in the oral stage. And it gives you something to hold. It can satisfy that craving. People who are trying to quit say. I dont know if i buy all that. Do you buy all that stuff . Do you have dreams about Washington Monument . No. Tunnels, trains . No. Your mother anything . No. Coming up no . No. Nightmares about you. Thats good. Nothings going on is there . Nothing that theres anything wrong with that. Ubers new years numbers. The Ride Sharing Service releasing stats from a demanding night. And then the euro hitting a nineyear low. How the ecb and elections in greece could drive it even lower. Squawk box will be right back. Take a deeeeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhhahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. See why speed matters, at aflac. Com. When we come back this morning, it has been a year since colorado legalized Recreational Marijuana. We have a sneak peek at a new cnbc documentary showing the unexpected profits and pitfalls from the pot market. Stick around. Well be back. E financial noise financial noise financial noise financial noise welcome back to squawk box, everybody. In our headlines this morning, the u. S. Consumer regulators reportedly writing new rules for payday loans. The wall street journal says the goal is to make the money easier to repay. Vanguard is reporting a record 216 billion in inflows last year. That data is the last sign theyre shunning funds for indexes that charge a lot less money. Mark zuckerberg is creating a year ends books page and is urging friends to read a book every other week in 2015. And uber ringing in the new year with a spike in users. The Car Sharing Service says it provided 2 million rides on new years eve and new years day. The Smartphone App was downloaded more than 20,000 times in the few few hours of 2015. Demand for rides in most places peaked from 1 00 to 2 00 a. M. Paris, france demand peaking after 4 00 a. M. And the hub blowing up on social media. I saw this between christie and jerry jones last night. Christie watching dallas beat the Detroit Lions 24 to 20 in the ffc wild card game. People might say, wait a minute you were at the knicks game. How did you see that . Because i was behind where all the reporters were watching it. And all the tv screens were on and i was able to watch live the knicks and i did see that weird hug. I didnt see it. And i also watched the simpsons. Somebody emailed me afterwards saying Chris Christie blew a chance he had. This is coming from a broncos fan. Twitter was alive. I had my phone like this and it started almost burned up. Saying what was that. You know what . But Chris Christie if he wants to be you know and he doesnt worry how it looks. I think thats for me thats a benefit. It is. Picking teams makes it tough if you want to be a national politician. You should pick a team opposed to well im kind of a white sox fan im kind of a cubs fan. You talking about hillary now . Thats much worse. Apparently hes been a fan. What does he do in the awkwardness of the moment. He gives a high five and nobody gives it back. Andrews only question does he pay for his own flight down there was your other question. Thats an interesting and ticket. Question. Well the ticket im sure he could go as a guest of jerry jones. I dont know about that. Really . I dont know what the rules are. Okay. Harry smith is here. We are very happy hes at the table. Cant keep my mouth shut. Were thrilled to have him here. Hes here to talk about all things, but one of the main reasons hes here is because it has been a year since colorado became the first state to legalize Recreational Use of marijuana. Tonight on cnbc hes got a take at a look at some profits and pitfalls surrounding the green rush in a new documentary hes been working on marijuana country the cannabis boom. Heres a look at it. Dr. Edward ma runs the Epilepsy Center at Denver Health hospital. Hes been studying the effect of charlottes web on kids with drava syndrome. Its one of the newest things. When we think about antiseizure drugs and the Drug Development pipeline, this is one of the things that has very very exciting promise. But he cautions its overall effectiveness needs more study. Research shows charlottes web reducing seizures in less than a third of the children using it. The impact size is not as large as perhaps was being touted in parts of the media. 20 to 30 are having a dramatic reduction and it tails off from there. Usually we see you across the way. Happy to be here. Becky can ask the question. You were asking a question what is charlottes web . Its a strain of marijuana thats high of cbds. Thats the mystery part that they think has some actual healing prots versus tch which is the stuff that is psychoactive, you know that this guy takes most mornings. And so there is this very specific strain. There are more than 200 family who is have moved from across the country just to get to colorado just so they can get this for their very, very sick kids. A mistake maybe. If youre saying of a third of the benefit. Most of these meds because all these kids end up on these. They load them with poisons and they get less and less able to fight uf what theyre trying to fight off. One in three is about average for different kinds of meds they might prescribe. What is the tch content . Its almost zero. And whats interesting is some kids do a little better if theres a little bit of thc. So its kind of an interesting balance. The kids that are hyperactive, who know how this stuff works. Theres no question. To me one of the things thats most interesting, this schedule one drug forever and ever we dont know anything about it. The research is just now starting to happen. And they say there are actually resenters in the brain that are there for millennia that are clued into some of the properties of marijuana. You know when our hands were dragging on the ground maybe people were smoking this stuff. But it could be Something Else that of course. We did a segment before you came on about vaping. Yeah. Huge. And is it safer to vape marijuana than it is to smoke it . Of course it is. Thats clear . Its just like an ecigarette. And do we believe that ecigarettes become gateway drugs, if you will to smoking cigarettes and pot . Who knows about that . You talk to a bunch of different people talk to them about addiction and say marijuana is absolutely a gateway drug. Saying absolutely its not. We talked to veterans out there who say you know what . As opposed to all the opioids and all this other crap that the va is prescribing for me why dont you let me smoke a little weed . The whole every time i go out there and i come back and feel like im watching a genie come out of a bottle. It is so interesting. In a bad or good way . I have to admit sitting here ive been a little concerned about saying i dont want my kids getting into stuff like this. Im concerned about the legalization spreading. Are your views . This is already there. What colorado does is it opens the curtain and all of a sudden this thing thats been there forever is out of the closet. Thats why were so interested. You spent time there. What do you think its done to the culture, to the crime rates, to all of the issues people are worried about . Everybody said this sky is falling. Crime is going to go up. Serious crime is actually down in denver. Everybodys going to drive stoned and kill each other. Actually highway deaths are down this year in colorado. So all that kind of anecdotal stuff, theres no way to know because theres not enough data. They do now you know ding dongs and twinkies under lock and key in Convenience Stores now. Thats where the theft was occurring. And doritos. Its like i know what im talking about, dont i . Did your brain go all the way back to the 70s . I remember the 70s which i shouldnt. Vaguely. Were talking boulder in mid70s. When they legalized it i was like wait it wasnt legal . Heres whats interesting about it. Youve had two states that have sued the state of colorado because theyre saying colorado is a pot exporter. We have the attorney general of the state talking about we know that significant amounts of pot are i said to what you are the new mexico. He said yeah kind of. If you had to look at the net positives and cost benefit analysis. How many people dies of dwi. And then you look at boardwalk empire and what that spawned when you tried to outlaw it and all these things come into play with this discussion. And i think thats whaun one of the interesting things about this documentary tonight at 9 00 eastern. There are so many unintended consequences. Hickenlooper, the governor out there, is a smart guy. Theyre handed this. Hes handed this by the voters. Legislature never got their hands on it. Handed this by the voters and all of a sudden we have to implement it. Its a gigantic crazy experiment. Lets legalize it. Just wow. Big stuff zplp well check it out. Thank you very much. 9 00 p. M. Come on back. I want to know about all the business guys cleaning up from this. I have stories. You want a real quick one . Yeah. Mark twain says picks and shovels and if theres a gold rush. Weve got a guy in the story tonight who makes extraction machines in the middle of a farm field in ohio. He cannot make them fast enough. For the vape. No. To get the raw material out of the to get the oils out of the raw material. Harry smith. The documentary 9 00 p. M. You do not want to miss it. When we come back two big slides at the end of 2014. The price of crude and the euro. Our trading block breaking down the move. Were talking about that when squawk box returns. This is happening just one week after competitor u. P. S. Did the same thing. So whats this mean for Online Shoppers and online shippers . Or own Morgan Brennan is here with the lowdown. Hey, andrew. Now that the holidays are out of the way, its all about the new rates. U. P. S. Hiked its rates 4. 9 . And today fedex is doing the same. But heres where its interesting. Dimensional pricing. They are now charging by size as well weight. Thats on all ground shipments. Thats the big change to focus on. Directly targeted eretailers with packages that take a lot of space to ship. A 17 inch square box weighing three pounds will be billed close to if it was 30 pounds before. This means more revenue. But u. P. S. And fedex have been working with their customers in laboratories to pack more efficiently. And the big upside here creating more space on trucks and planes for even more goods. But consumers are going to see the shipping bills increase. And this is also why you may see some of your packages from amazon ebay others come through the u. S. Postal service instead. While u. P. S. And fedex are hiking prices, the usps has been slashing prices to attract more ecommerce business. Morgan thank you so much. I always wonder. You get those boxes from amazon thats something this big with a box this big. Exactly. You see toilet paper sent out in big boxes but doesnt way much. Now it may cot most to ship that than buy that toil it paper online. Lets get to the first trading block of 2015. This nine year low against the dollar with the euro. Joining us now on where question expect the dollar and the oil to trade in the year ahead is becky lien. Welcome to both of you. Kathy, why dont we talk about whats happened with the dollar. What weve heard from people already today is this is just the beginning. The euro could face significantly more pressure as we get a little closer to that january 22nd meeting coming up. Youre right. I think the real question to ask right now is why would you want to own euros . An environment where theres weak growth quantitative easing is coming and theres a risk of upset. So i think investors are starting to realize that and as a result theyre pressing the gas on the euro slide and theres a very real possibility we could see a minimum of 1. 15 by the end of this year. 1. 15 by the end of this year. So thats something youre expecting more pressure. Thats what we heard from analysts last year. Right. And were starting to move in that direction. I think the monetary divergence story is really going to be the main headline of 2015. Many people have talked about it. I think youre just beginning to see corporations and private sector flows move in that direction. Youre probably going to see more hedging as we as the euro continues to fall. I think thats really going to exacerbate the slide. Even spectators look at the positioning. Not at the same levels they were in november of last year. So there is more room to the downside. Do you expect the Federal Reserve to raise rates this year . Absolutely. I think its a given in terms of when in terms of their rate hike. I wouldnt be surprised if they raise by 50 basis points. So the markets certainly looking forward to that. If they dont, we had one analyst earlier this morning who said he does not expect them to raise rates this year. If they dont, would that change your guess about where the dollars headed . I think if that were not to happen it would not be realized until the middle of the Fourth Quarter of this year. Between now and then theres still a lot of uncertainty for the eurozone. We have more coming down the pipeline from europe and japan. Thats only one side of the story. The other side of the tour is still going to push for dollar gains. Ken were fiveyear low for oil prices today. Whats happening . What happens from here . Good morning, becky and happy new year. From here were probably getting closer and close tore that point where six months from now well turn around and say thats when it changed. Two things are going on behind the scenes. One is that rigs are slowing here in north america. And the second is that demand though sleepy is going to wake up. Eventually people buy more and travel more although apparently based on the previous segment, they may not be using as much logistics for oil. In any case where we are going from here is january is a weak month for demand. So this is not a particularly good time to try to pick the bottom. But it may be near the point where we will start to see signs. Most importantly if we start to see this production in north america really is slowing down then the first signs of that can start to show up january, early february. Then you might have a different conversation in three months. You say its not a great time to pick a bottom but sounds like you are. No no. Im hedging. Im picking a near the bottom. Which is saying nobody can be sure and the history has always beaten the analyst if you look at the record. But when does you know heres what i think. Or heres what just listening to everyone we have on kevin, they all say its only a matter of time before we snap back and go to a more realistic level. And just that mindset one of these days it could be where, you know it doesnt return to 90 in three months like it did the last three or four times this happened. What could give me your average price give me the range for the average price next five years for oil. The next five years, the futures take it above 80. And could be anywhere between 70 and 100. But for this year between 70 and 80 is probably as high as youd want to go. The real reason is inventories have to burn off before anything can change. What if its 40 to 60 for the next five years. Something youre not even admitting the possibility of and no one is. I dont think its likely. Thats what i mean. Were going to use it to grow. We all have opinions. But well see. All right. Kevin, kathy, thank you both for joining us this morning. Talk to you soon. When we come back this morning, Driverless Cars on display around the Consumer Electronics show in las vegas. Phil lebeau is there and hes taking a test drive. Referee handsfree and footfree. Whats it like to drive the california highways . Not really driving the car. A test drive of awwudis concept car. Coming up on squawk box. Why are we so committed to keeping you connected . Why combine performance with efficiency . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The xc60 crossover. From volvo. Lease the wellequipped volvo xc60 today. Visit your local volvo showroom for details. Car companies showing off their selfdriving cars. We keep talking about this phil. We must be getting to the point where weve got to take it seriously. You should take it seriously because the technology is here. Yesterday we had a chance as we were driving from San Francisco to here in bakersfield in this car. This is the audi a7 pilot driving concept car. Yes, when i got behind the wheel, i was driving hands free. Were on the highway just outside of palo alto california. The vehicle has let me know that its okay for it to take control. I press these two buttons right here, an l. E. D. Strip on the front dash board as well as the Instrument Panel lets me know that the piloted driving technology is in control of the car. And thats it. Now we are hands free foot free. Im not controlling the acceleration or the braking of this vehicle. As were driving down the highway towards San Francisco, if there is a car that slows down in front of us and we need to lane change there are 20 sensors in this vehicle that are measuring the other vehicles on the road. If its safe to make a lane change, it will do so. Now, this technology only works on the highway. When you need to exit the highway or you need to slow down and go into street traffic, the vehicle will tell us. Now, were turning right now. Im not controlling the vehicle at all. But in about a half a mile or so its going to tell me that our next exit is coming up here and its time for me to take control of the vehicle which is basically pressing two buttons. 15 seconds until it deactivates. I press these two buttons right here. Lets me know that im now in manual driving and im taking control. In fact, im going to lane change here. Do it the Old Fashioned way looking out the back window to make sure its time to get off at our exit here. So the number one question i got all day long when i was tweeting out that we were driving hands free from San Francisco down here to bakersfield, what does it feel like . I have to tell you its very intuitive and natural. Its like the next extension of Cruise Control where you set it and you sit there. And the car is literally moving in and out of traffic as it needs to as youre going down the highway. We were coming down i5 coming down here. Were going to be driving this a7 live on cnbc hands free a little later this morning on squak on the street and power lunch. Itll be interesting to see how it goes about today in terms of reaction we get from other people who see us driving. Because when people pass you and see youre driving hands free theres a bit of a double take. Wait a second. How do they know youre driefing hands free. Are you driving down the road like this just to scare everybody around you . I cant see you, becky, but if youre waving while going down the road can the car do this as night or in the dark . You look like its dark outside where you are right now. It can do it at night although we should point out that this test drive and we were licensed by the state of california to be part of this test drive, its doing it during the day. Now, they have tesd it at night. They eventually will offer this at night. There are some areas, though where it wont be able to happen. A couple of those areas, if its snowing or raining. Because that hurts the sensors. You looked a little nervous, i have to say. You looked nervous. Phil you probably get nervous with Cruise Control all the time. Ive got so many more important things to do instead of driving . I dont have anything to do. I cant read. I get car sick. Id rather have it just tell me if im changing lanes into an 18 wheeler. Id rather have it stop me from doing than rather than just being in control. I dont know joe. Very natural. Once youre behind the wheel of this, youre very comfortable saying okay. The car knows whats going on. All right. Phil thank you. Well be watching that live test drive later this morning too. See ya. When we come back this morning, the euro plunging to nineyear lows. How much lower could it go . Weve got that story coming up. Say youre a finance guy. A farmer. A researcher. You used to depend on experience. The internet. Your gut. Today you can use ibm watson analytics. It can make sense of all kinds of data. Uncover hidden correlations and new opportunities. And give recommendations with more confidence on who will buy. What to make. Where to plant. Which helps you make smarter decisions. Theres a new way to work and its made with ibm. Predictions for 2015. What would a greek euro exit mean for the Global Markets . Is a proxy fight brewing at coke and pepsi . And can investors expect to pay higher bank fees . Well discuss that issue and others that matter most to your money in the new year. Plus which investor should you listen to . Unveiling the latest list of whos who on wall street. And well introduce you to the next selfmade icon. Hes the creator of fresco. He will be our very special guest as the final hour of squawk box begins right now. Welcome back to squawk box here on cnbc first in business worldwide. Im joe kernen along with Andrew Ross Sorkin and becky quick. A swath of arctic air going across the nation. Well see some snow. The fastmoving storm already prompted warnings and other winter advisories. Check your flights if you plan on flying today or tomorrow. In new england temperatures are not expected to get above zero. Its january. Theres snow. Stop the presses. Lets get you up to speed on some of the other top stories this hour. The euro sinking below 1. 20 since early 2006. Among the biggest speculation, worries about greece. More in just a minute on that story. And crude and the supply gut. And calls for the s p to rise 8. 2 this year. Thats the average prediction by Research Firm bernini associates. I always i have a supply gut. Thats actually a glut that were talking about here. It say gut or glut . Go back. Does it matter what it said . You know its a supply glut right . I was thinking all right. We are less than 90 minutes away from the opening bell on wall street. Futures off to the lowest levels of the morning. Dow right now down 66 points. S p indicated down about nine points. And this is coming after red arrows started off the session in europe. In france the cac is off by 1 . Ftse down by. 7 . A lot of this coming about whats been happening in europe. And along that theme, concerns over the health of the eurozone are resurfacing. Michelle caruso carrera is here with more. The radical left is still ahead. 25th is the election. Lets tell people why youre talking about this. Over the weekend there was an article in a german magazine that they say if greece leaves the euro not a big deal. Why are they talking about that right now . Why would they plant that story right now . Because there is an election in greece three weeks from now. The guy in e the lead this guy alexi alexi sampras. Hes not nostalgic for the former soviet union. But very much would be against all of the things you talk about in modern capitalism. What makes him different compared to all the other antiestablishment people rising through france and people in the uk is he says he does not want to leave the euro. However, all of the things that he says have to be put in place to stay in the euro make his participation in the euro unattenable in the eyes of the rest of europe. Would like to stay in the euro but would like you all to keep paying for it. Exactly. He wants a huge forgiveness of loans and things that are not going to fly. And so now hes basically setting up if he wins and its not for sure, hes only leading by three percentage points. He used to lead by more than that. If he wins hes setting up a showdown with the rest of the European Union about what theyre going give greece to get them to stay. Thats why you see the greek 10year falling and all the yields falling relative to germany holds greek yields are rising sharply while people are worried about this. Practically speaking the germans are right. The greeks no longer have the power to blow up the Balance Sheets of the banks. That was the whole Debt Exchange they did. They told all the banks youre not getting paid and then greece was loaded up with debt from the rest of the european countries. So greece still owes a lot of money. But now its to german taxpayers. Right . Who want to load them up with more taxes essentially to forgive their loans. Thats certain will i aly a possibility. If greece leaves who is next . I know irelands in better shape than they had been. Im not sure anybody is next. Maybe cypress but they need to be part of the youre row and you think it might work out that way sfp. That greece would leave . Absolutely. I think i read it could be A Lehman Square moment if they would leave. Personally i dont believe that. Because train wrecks that you can see far in advance are not you can get out of. Exactly. I dont think its going to be up to the greek government. When will we know that greece is going to lee the euro when we see bank runs. When the population says this is coming. Remember, a currency that is not backed by anything like gold is a deeply psychological thing. And in theory if you look at latin america in the 80s compared to now, youd say greece should have left the euro a long time ago. But they stayed. Thats one thing to keep in mind as we talk about this. Its not going to be some grand macro decision. Its going to be the people on the ground. An economic Conference Takes Place today. Steve leisman joins us with the highlights. Thanks. This is the biggest economy conference of the world. The United States economy is on better footing than others around the world but there are serious concerns about asia and about europe and whether quantitative easing would even work in europe. That comment, becky, about lehman square greece leaving, that came out of this meeting. It was a comment by barry ikengreen. And Eric Rosengren said the Federal Reserve needs to tread carefully at raising rates this year. Low inflation means that we may be able to be a little bit more patient than weve been in the past as long as were experiencing low inflation theres no reason for the path to be particularly abrupt. Former economic former bush economic adviser glen hubbard says the u. S. Has a lot of scope for improvement including things like tax reform. But said looking around the world, the u. S. Is the leader of the pack here. We have had an uneven global recovery, to be sure. Despite the sometimes sour attitudes in this country, the u. S. Continues to dominate industrial economy success. Even with the Downside Risks faced by the American Economy over the next year its still likely to be the relative winner of the party. Bob gordon of northwestern university, hes sticking to his idea of this secular stagnation that because of low popularity were doomed to 2 growth and low Interest Rates for a long time to come. But he got a lot of pushback here with u. S. Growth rates recently hitting that 5 mark on the euro. A lot of skepticism from guys like Marty Feldstein who says with Interest Rates already low over there, he has his doubts about whether draghis potential qe would have any positive effects like it did here in the u. S. Back to you. Can i ask you one question . Is there a historical relationship between the 10year and fed funds . What should we can we multiply it to get it where it snoub the reason im asking if they start going up and the 10year according to some people if yields still drop because of whats happening in europe would it look weird if it keeps responding and the 10year doesnt respond, does it have to respond . It should respond. Alan greenspan said they were trying to raise rates but the 10year didnt respond. So the control of the fed over the 10year is once thats always been suspect. You can imagine if the market thinks the fed is making a mistake and raising Interest Rates prematurely, it can come down to reflect the lower inflation. Its not just that though. However, the Balance Sheet and the ability to use qe the fed may exercise more control over the long end if it gets into a serious situation. I think it would be a last resort. But we had people who pointed out earlier today that hadnt thought about it when you compare it to the german bund when you compare what youre getting on it it looks good particularly if theyre facing one much stronger. Could they do qt . Whats qt . Quantitative tightening. Could they sell bond . Absolutely. Thats why in our fed survey which you make a lot of fun of which is fair enough but we look at the Balance Sheet. Thats going to be another instrument. Youre going to have your Interest Rates out there. And theres this 4 trillion kind of hammer that hangs over the market that the fed can decide to clamp down if it wants to. I dont think its going to push against the 10year right now. I think they would be happy to have a subdued 10year while it raises just a little bit. Larry summers has an interesting idea here by the time the next session rolls around they will not have enough arrows in its quiver to cut rates the way it can. Were getting back to the zero lower gain in the next three years. All right. Thanks, steve. Well see you soon. Reuters is out with predictions for the year ahead. 2015s theme is animal spirits and crisis. Rob cox is joining us. Its great to see you this morning. Great to be here. Explain that. What are the crisis ghosts and animal spirits. You see stock markets around the world are up. Youve got m a at nearrecord levels. A lot of industries are still dealing with the aftereffects of the 2008 financial crisis. Primarily banking. Right . So were seeing a lot of that is still a theme were seeing throughout all the economies that we look at around the world. And that is actually driving some of the things we see that are going to happen in the coming year. Such as what . Well activism is going to be a big one. It keeps its the gift that keeps on giving for all of us but its going to get really interesting. A lot of the lower hanging fruit has been kind of picked right . So as these guys get out there with these really good performances from the past couple of years, lots of noun put to work theyre going to struggle to find you cant just come in and take another Restaurant Company and tell them to put more salt in the water. Right . Youre going to have to do other things. Some of the things we think might happen are particularly big banks. One of our predictions is citigroup, jpmorgan, may see a cage rattling. Become a target. And in the past this has been difficult. Youre not just dealing with shareholders and boards youve got regulators. But right now any move to simplify big financial you put citi at the top of that list . Or jpmorgan . Zblild put citi at the top of the list. Theres quite a lot of talk about jpmorgan. Its going better than a lot of competitors, but there is an opportunity to simplify the bank. Bank of america in that category . You could. Im not saying break up into one of the arguments is break it into four pieces. But you could simplify a bank like citigroup and say mexico is a distraction, spin it off. Your overseas Retail Business is a distraction. Youre not making enough money on your u. S. Retail branches. Sell them. Youve got regulators index. But right now anything to simplify would be welcome. We were talking about ibm who was the worst performer in the dow this year. Do you think they become a target of axis . Yes. Again, its not like you just walk in and say break it up and do this. One of the problems with ibm is its been a Financial Engineering play for the past 20 years. Its returned 23 billion, 10 billion of that is buybacks. Thats not a good return. If you look at their business, they need to reinvest in the business. So they say they are in the middle of a turnaround and were going to see it in 201516. Do you believe that . No i dont actually believe that. Unless they strange strategy. Theyve got 10 billion in buybacks or something scheduled for this year. We calculated. If you instead of buying back the stock, you invest that in capx, you would have a higher return. Something like 12 . What would you want them to buy . There are any number of companies. I wouldnt say they spend all of it on m a. We both know as youve written many times that m a doesnt always meet the cost of capital. But you can invest in the business. They have Something Like a 22 return on capital. Rob thank you so much for coming in today. We have a lot of things were going to be covering in 2015. Look forward to talking to you about more of them. See ya. When we return is it time to add some chips and salsa to your portfolio . Or is this the year that burgers and fries will be the big one . The restaurant trade. And a look at the best and worst analysts in 2014. A teenager who turned down a job at apple to start his own company and our first dose of cramer. Whats ahead in the money mans forecast for the new year . Were going to ask him. Back in a moment. Welcome back to squawk box this morning. The nations automakers reporting Monthly Sales today. Chrysler, december sales up 20 . That was weaker than the 25 analysts expected. Biggest sellers, jeeps and pickup trucks. The restaurant sector trailed the Broader Market last year but there were a few fast casual names that topped the trend. Chipotle topped up 30 . While Buffalo Wild Wings jumped more than 20 . Here now is an analyst that thinks this could be the best year for the sector in a decade. Bob darington. Because of gas prices bob . Its a combination of a lot of things. Yeah thats one of the contributing factors. When you look back at the domestic economy, the wealth effective consumers. The jobs growth all these things really kind of set the stage. And then ultimately when you have low gas prices it contributes to that. So which sector of this group are you talking about mainly . Will it be you looking at a monolith or you sit down at an applebees or a drivethru . Which will do best . Historically the better performers in the group has been the fast casual brands. And i think as we look out to 2015, the names that we think are going to have especially good years likely will be panera bread. We think theyre going to have strong samestore sales growth. We think buffalo wild is set up for strong trends in 2015. And we also like red robin. They think that company is positioned on a valuation basis to be a strong stock price performer. Seeing improvements in the labor market which probably will usher in higher average pay for the entire Group Whether its states doing minimum wage. Whether the president is successful. Is that a head wind and for which part of the industry . To be fair, its a head wind for the entire sector. Whether its casual dining, fast food, or fast casual. Theyll probably all see pressures there. The key thing that we really watch are same store sales trends. Without those youre not going to be able to face those head winds. But i think a combination of both better same store sales, lower Commodity Prices for a lot of these prices could more than offset that. In the past ive thought that shareholders and, you know the corporations themselves have done pretty well in recent years. Weve all talked about the wealth disparity. Lets say the president was successful and we went to a higher level federally, would it hurt Profit Margins or would it hurt hiring . Would it hurt the people that it in other words, would it hurt the people intended to help . Would fewer people get more jobs or would it just hurt the shareholders of the restaurant chain . You make a good point. What i would say is every restaurant brand whether they want to admit it or not are looking at ways theo try to be more efficient. In other words using more labor hours to operate their businesses. And theres a lot of ways they can do that. Both in the front of the restaurant and in ethe back of the restaurant. Broadly my view is that fast food chains will probably benefit more from a minimum wage lift because that puts more dollars in the lower income strata that ultimately use fast food restaurants more. Weve had a couple of negative we had a taco bell close in springfield. The closest one. Friendlys closed by us. Was that a day of mourning for you . It sort of was. And also in ft. Lee. I think a taco bell there closed. Whats happening there . Is it economychipotle . Can it be stopped . You know to be fair chipotle is a juggernaut. No question about that. And i think the key thing people are getting is the fresher, better quality, less processed food. Its really resonating with consumers. I think thats a trend across the board. Bob, thank you. Appreciate it. Up next a Hedge Fund Founder fatally shot in his new york apartment on sunday. His son may have pulled the trigger. Well have the details after the break. Squawk box is coming right back. Hi. Pete and jon najarian here in new york city outside of the nasdaq, where we bring you live daily market updates. And today, we have a very special free gift for you. So many viewers email us wanting to know our secrets on how we trade options. So we put our secrets into a new book. And if youre one of the first 250 people to call in right now and just cover shipping and handling well send you a copy for free. Look at the rate of return weve made on some of our recent options trades versus what we would have made had we just bought the stock. Theres no comparison. To make the best returns in todays market, you have to learn how to trade options. And our book will show you how to do it for free. Jon has been Trading Options for more than 30 years. Pete is one of the top 100 traders in the country. And our book will teach you how to trade options for free. So call now. [ male announcer ] call the number on your screen now for your free copy of jon and petes new book. Thats. see the number on your screen call now. Welcome back to squawk box. Im kate kelly with some tragic developing news from overnight that a Hedge Fund Manager tom gilbert who ran wayne Scott Capital Partners was shot dead at his home in manhattan. Gilbert was pronounced dead at the scene by paramedics sunday afternoon when they arrived at his apartment. He had been shot in the head. Gilbert who was 70 years old was suspected to have been shot by his 30yearold son tom gilbert jr. According to media reports from late yesterday and today. The nypd confirms this morning and gilberts son has been take sboon into custody overnight. But its yet to be ruled a homicide. Wayne scott was founded in 2011 by gilbert. Company officials at wayne scott did not respond to request for comment on his passing so far. More details as we get them. All right. Thank you. Well be listening, watching. Still to come breaking new ground. Youll meet a 19yearold tech whiz kid whos gotten the attention of apple and peter thiel. The reason those folks and a host of Media Companies think his site could be a game changer for the news business. But up next the best and worst analysts. Thats the same guy. Here to name names. Squawk box will be right back. As we head to break, look at u. S. Equity futures. Yes so no set up fees wooh yeah so i get help from rollover consultants . Wooh yes no rollover hassle. Great. Woah oh, were spiking things, robbie. For all the confidence you need. Thats better td ameritrade. You got this. E financial noise financial noise financial noise financial noise out of 42 vehicles. Based on 6 different criteria. Why did a panel of 11 automotive experts. Name the Volkswagen Golf motor trends 2015 car of the year . Well give you four good reasons the allnew Volkswagen Golf starting at 17,995. Theres an Award Winning golf for everyone. Welcome back to squawk box. In our headlines this morning, johnson and johnson buying a license option from isis pharma. Shares of cempra are getting a huge jump this morning after an oral version of their lead antibiotic met the main goal in late stage trials. And ford downgrade to neutral for buy. And isis. Sticking with the name. Sticking with it. They had it first. Were going to stick with it. Were going to get through this period. Its rough. Been rough. How to pay for that . Al qaeda pharmaceuticals. I dont know. Isis. Change it. Or sell it. Were going to take a hard turn i dont know left or right, who were the best and worst analysts of 2014. Tip ranks is designed to help Retail Investors make better decisions figuring out which analysts are worst listing to. Here is the cofounder of the list. And also eliot spitzer, the former new york state governor and attorney general. We had you guys on earlier in the year. We wanted you to come back to tell us what happened now yao been doing the rankings. Tell us the best and worst of it. Id like to take a few seconds to explain how we determine who is the best and worst. Some of them incorporate factors like their compensation, where their work for, and how kind they are. We only measure the performance of the stock they recommend. Theyre only as good as their call at tip ranks. What we did was look at every stock that they rated, we have 30,000 buy and sell ratings this year. Another 15,000 hold neutral ratings that we were agnostic to. And every time an analyst committed to buy a stock, we bought it and then closed the position three months after the position was open. So we found lets start by general numbers. We found out just following any analyst you would have made 1. 12 every quarter which is less than the s p that did about 3 every quarter. If you followed the top 100 analysts, you would have made 6. 98 every quarter which is almost 30 a year. And about 18 above the s p. And if you followed the top 50 analysts you would have made 7. 5 . Im talking about those that were ranked highest in 2013. That you measured. If you started looking towards the top 100 january 1st 2014, these were your results. You should do the top ii rated. I had gave a speech at an annual awards dinner once and said hate to say it you wouldnt do as an investor if you followed these guys recommended. You said that at their dinner. Oh, yeah. I had tomatoes thrown at me. I also said its nice to put faces to the emails at that dinner. Thats funny. It was. And what tip ranks has done is create the metric for transparency in the market so investors can use hard numbers. Are there any matches . Any matches between whats on an ii list or any of the other lists and your list . There were no matches. Is there any reason to think that past perfect is indicative of future results . There were a lot of Academic Research on that. And we found out there is some correlation with the top 50 guys are actually good some of them . Thats a new idea for me. They have to become our new guests. Thats what we want people to be able to do. To see whos good and who isnt. So the folks you have here who tip ranks says are worth following. But also investors to get the hard analytical data. This is a marketbased answer to the questions we discuss. I worry its going to be hisenburg. You study it and change it and it comes back. This is why banks are investing with us. Why a lot of platforms want to get us on their sites is you can find those correlation ifs youre smart about it. And if we want to go to your site, we pay to be on your site . Well its a premium model. You get a lot of information for free. Whats the stuff you pay for . If you want to see the analyzed information. If you want to see what are the best performing analysts are saying. The most recommended stocks. Go to the wall. Lets tell us who the top five. So the top five number one is ph. D. From Green Capital called jonathan nashrof. And his quarterly returns with for did. Was does he cover . Health care. Youll see a lot of health care in the best and worst. You could rank sectorially. The metrics can be measured precisely to this. If we want access to that research, for example, they go through your site to get access to your research or get access separately . They have to get access separately. Were only publishing the bottom line. If its a sell and price target. Is there anything these guys had in common . Did they come from small banks typically . Big banks . Thats a good question. We noticed two interesting things about the top five list. First of all, there were no tier one banks in that list. Which we did see on the best performing recommendations. But we didnt see them on the leadership board for the best analysts. The second thing we found is all the five analysts on this list except for the last one were on our top 50 list of 2013. And the last one was ranked number 183 out of almost 4,000. Which puts him still in the top. You also rate bloggers. And we have viewers who look at blogs. Which were you have this winter you would have made 239 . Yeah. So if you look at the best bloggers the interesting thing we found is all the top five came from seeking. Even though its 20 of the information we take from bloggers bloggers and the stocks theyre recommending . Exactly. We use Machine Learning technologies to understand. With analysts they have a structured language and set of terminology, buy sell hold et cetera. With bloggers there are no rules or grammar issues. They can be sarcastic and its more difficult to determine how they perform. How do these guy dos it . Recently we have discussions about guys that do a lot of leg work and was it inside work . It was and it wasnt. Are these guys pushing the envelope on whether they have the ability to if he finds out youre going to be were not exposing him to everything. I wouldnt even tell him half of this stuff. The short answer is we dont know. Our job is to measure oh now you dont care. Now youre not running for anything. Ill be on the phone in seconds. Guarantee you. While youre here i want to ask. This was this appellate decision on insider trading. Did the government overstep in that case . Or do you think its not possible. Or do you think its considered too narrowly . Im not going to pass judgment on the particular case. But heres what ill say. Its time for a statutory definition of insider trading. Back when i was in law school this issue of tipper and tippee liability. Are you defining it narrowly in the way that the appellate judges would have . I think they may have been a little too narrow. But i think that the lack of clarity and youll agree with me on this. All the cases i made we proved an actual lie by the person whom we prosecuted. Tipper tippee liability theres an area of ambiguity. Thats not good. We need certainty and clarity so people know what the rules are. Do you think they are getting a statute . No. Right now Congress Wont do it. If youre a prosecutor you dont want a statute. No no. I always believed we did want clarity. I as a prosecutor didnt want to take advantage of ambiguity. I wanted certainty. I always said to the community define the lines and play by that line. Its simple. We dont need regulars or uncertainty. Just establish a bright line and live by it. Okay there. You have it. Eliot spitzer, uri, thanks for coming in. Thank you. Up next well introduce you to a teenager who turned down a job at apple and is now running a social media site being called the instagram for news. Hes getting a lot of attention from bigtime pc firms and Media Companies. All of this before he turns 20 years old. We have his story after the break. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. Well move over getty images. Theres a new kid on the block. We mean new kid. This is a 19yearold who founded fresco news. Fresco is a photo sharing app thats dubbed the instagram of news. The startup actually licenses its photos from amateur photographers at the center of breaking news events. Already fresco is on the radar of major Media Companies. John meyer joins us ceo of fresco. Great to have you. Thank you. Its amazing to be here. I love so many things about your story. But tell us a little bit about how you got into this how it all started. Its ridiculous. I got into apps way back in 2008. I grew up incredibly inspired by steve jobs. How old were you in 2008 . 13 i believe. Wow. And it just kept going and going and going. And you started building apps like crazy . Yeah. I built like 40 in high school. I get to nyu and get the idea for fresco news. Before that you had the flash light app, right . Which weve all used. But now its built in. Were you upset when apple built it in . Im not. I loved the brief success i had for the first few years. It was a ton of fun. So tell me you loved steve jobs. You followed everything you did. And yet you turned down a job at apple. Yeah. The reason why i turned down apple was because i was already working on fresco news for six months or so. I was so passionate about saying i cannot be at a low level position at this time in my life. No matter what company it is. And i really believe what im doing could potentially have a pretty large impact on the global news industry and hopefully society in general. Lets talk about what fresco is. We started out as sort of this instagram for news app where you can browse your news through images in a neat way. And we realized that licensing images are super expensive. So we worked on some internal tools to be able to source verify, license breaking news video from twitter, facebook and vine. To the point where we are living in an age now where there are half a billion tweets posted every day. The second anything happens, lets say, in Downtown Manhattan a protest starts taking place. You have a dozen people within 10 or 20 seconds posting photos and videos of that on twitter, facebook, and vine for video. So well detect those images and videos within a minute or so. And theres tools for that already. Then well go beyond that and verify that its legitimate and then distribute that content to our news partners. Lets say like the wall street journal or if i take a picture of a news event, do you then tweet me or send an email say i want to represent you basically want to represent me the same way getty images might buy an image. Yes. An individual will ask can the wall street journal use this photo. You click a link, hit approve. And thats it. I dont negotiate with you over price. Not yet. Thats something that were working on now. But weve seen over 98 of everyone we reach out to gives it to us for free. If i have the ray rice video and tmz is calling or youre calling, i want to give to the highest payer. Its not just you posting. One of those people will get do they get a photo credit . They do. Thats probably the biggest reason they give it to us for free. They get their credit on their Television Screen or newspaper. And in our trials well ask, why did you give it to us . We hear as an individual they always say, i really felt the need to get my content out there. I thought it could potentially make a bit of an impact. Youre 19 years old. You wanted to meet us because youve seen squawk box before. Am i right . Ive been watching squawk box for about two years now. Two years and youre 19. You have noticed that media in general, cable news even now movies, people your age and for the next i dont know what is it . 12 to 30 are doing things differently that make it hard for us to know whos watching or how to reach certain people. Do you have an answer for cable news an how to get young people to watch their i definitely do think a lot of it comes from incorporating more media in your reporting. If its a newspaper like the wall street journal oh, no. Social media . Not just that but photos and video. People dont want to read full text articles at all. Youre into invigorating photos of videos of the ferguson protests, for example. Thats what we need right now. Thats what i see in relationship with these companies that a lot of them are going towards. John youre on entrepreneur. Youre a young entrepreneur. We always think that everyones young and theres so many young entrepreneurs out there. Theres a story in the wall street journal here that says young entrepreneur under 30 years old has reached an alltime low. Only 3. 6 of households headed by younger than 30 have a stake. What do you think is happening . Do you think that the young people are less risk takers . I thought young people were more risk friendly than they used to be. Aprntly the numbers say im wrong. And its an interesting point to bring up. I think what weve seen is that in the past if u years its become so incredibly competitive in the Startup Space that a lot of young people are taking the time to lets say you didnt go through college or go to a facebook internship before they founded a startup. A lot of other young people i know that are my entrepreneur friends are doing that exact thing. Because it is very quite risky. Especially if you dont have a grasp on your end vision and youre not super passionate about it yet. It all comes down to passion. Do you worry theres a bubble in the new media Media Companies . I dont think so. I think were at the cusp of a tremendous increase in these, not even a bubble. Because i mean for example, with us we see that camera tech in our smartphones are getting incredible over the next few years. Well be at a point within five years where an iphone camera is on par with an slr that a professional uses. I think a lot of it is going to be about how do you take a smartphone and technology in our pockets or even in our wrists this year and, you know, help out media with that. John whats your end game . What do you want to do eventually . We want to create a Public Perception of selfreporting being something you can do. But do you do that as an independent company . Do you take that public . Do you plan on selling eventually to another company . If it comes to the case where its clear that a company like news corp. Or like yahoo or news corp can acquire us, that is something were open to. But were building a platform that helps News Agencies frely and were even building a mobile app that will let users submit directly from us. Do you write your own code . Yes. Im a programmer turned entrepreneur. I taught myself objective c when i was 13 going into high school. We all between that. Objective what . Objective c. Sdl how about ruby on rails. Im not into that that much. What is he running . Its a programming language. Its what i do after the show. I program. You look very clean, but you got the hipster i keep a nice stub he willsce did stubble. Youre amaze. Were impressed. Thank you. When we return jim cramers 2015 wall street outlook. Well catch up with him. Hi. Pete and jon najarian here in new york city outside of the nasdaq, where we bring you live daily market updates. And today, we have a very special free gift for you. So many viewers email us wanting to know our secrets on how we trade options. So we put our secrets into a new book. And if youre one of the first 250 people to call in right now and just cover shipping and handling well send you a copy for free. Look at the rate of return weve made on some of our recent options trades versus what we would have made had we just bought the stock. Theres no comparison. To make the best returns in todays market, you have to learn how to trade options. And our book will show you how to do it for free. Jon has been Trading Options for more than 30 years. Pete is one of the top 100 traders in the country. And our book will teach you how to trade options for free. So call now. [ male announcer ] call the number on your screen now for your free copy of jon and petes new book. Thats. see the number on your screen call now. So ally bank really has no hidden fees on savings accounts . Thats right. Its just that im worried about you know hidden things. Ok, whys that . No hidden fees from the bank where no branches equals great rates. Lets get down to the New York Stock Exchange. Jim cramer joins us. Crude is down now another buck. Were like 50. 85. Could we start with a 4 handle soon . Yeah yeah i think its realistic. Were not cutting back production enough. And its demand side. When you look at what is happening with europe what is happening with china, there is no place to put this stuff. Venezuela is next to be able to cut out for imports in this country. And the issue is if the export oil, where is that going on go. So i think its realistic that if can go longer. Are you worried about a im not worried about anything. One state will get hurt texas. We know governor christie of texas oh,. Sorry. Thats right p its a different yeah different state. Probably not huge for an eagles fan. Yeah. Ive just it slipped my mind. Because who was in the box . Was it it wasnt the guy who forgot the two different cabinet members. I dont know. A little disturbing. So should we be worried in terms of the equity market about greece . No. Honestly, i think it could be a positive. I think it just puts more pressure on germany to be able to say germany is like willing to let greece go. It puts more pressure on them to do more quantitative easing. But unless we get construct allstructural re230r78re reform in europe, i dont think we care. Looking forward to spending a lot of time with you in 2015. See in you a couple minutes. Still to come, why Richard Branson almost quit on virgin galactic. [container door opening] what makes it an suv is what you can get into it. [container door closing] what makes it an nx is what you can get out of it. Introducing the firstever lexus nx turbo and hybrid. Once you go beyond utility theres no going back. A cargo ship sitting high and nearly dry. Is this a car carrying ship that went aground near south hampton. All 24 crew members were rescued safely. The ships ocean said it was grounded intentionally to keep it from cap sizing. Is this a nearly 57,000 ton ship. It has 1400 cars on board. And sir Richard Branson putting no regrets on his postings. This coming after octobers fatal breakup of the spaceship reflecting on his decision to continue with space travel he said a single visit to californias port confirmed he needed to pursue the project in his own words, he points to the designers, builders and engineers and the pilots and the whole community who still believe truly opening space and making it accessible and safe is of vital importance to all our futures. Check out the futures. Things have taken a turn for the worse. Dow futures are down by over 120. S p 500 off by 15. Check it out with squawk on the street. Well see you tomorrow. Welcome to squawk on the street. We are live from the New York Stock Exchange. Carl is off today. Its our first day of 2015 in terms of reporting on these markets. Lets give you a look at those markets. In fact were looking down as you can see. Crude oil, yeah its still going down. In fact i think we hit a new low this morning. A new recent low on wti. You can see it