Transcripts For CNBC Squawk Box 20150107

Its great. And for you, especially. It was your idea. Its great for all of us. Lets get you caught up on the business headlines this morning. Three big stories we are watching right now, oil prices are up plunge again. Main benchmarks trading at 5 1 2 year lows. Brent dipping below r50 for the First Time Since may 2011. The latest Oil Inventory data is out at 10 on 30 a. M. Today. The adp employment report is coming at 8 00 a. M. Eastern time. Then we go minutes from the latest fed meeting. And breaking news overnight, the tail of the missing airasia plane has been found in the java sea. It is the first confirmed sighting of the wreckage from the jet liner. This is notable because the flights black boxes are located in the planes tail. Jcpenney announcing its samestore sales lows. They say comps at the high end of its previous year. Microns revenue forecast mission wall street estimates. The memory chipmaker hurt by a drop in output as it upgraits grades production lines. Im not going to digress this entire time, i promise, but i got a keurig yesterday for my birthday. I had a cup in the car. I press a thing so you dont spill it on yourself which i need. Signing a deal with dr. Pepper snap light. That was a really good gift. You stop and get coffee every morning. I put it in and i worked it properly. All the instructionses are there. There is another keurig in the studio. In the back. There is. I only need one cup. I got the large silver youre more highly caffeinated than you are normally. Maybe thats the probably. Anyway the wall street journal reports keurig will sell capsules that make dr. Pepper sodas. But can he urig and this is the new model where the little ones because there was extra welcome to the world the rest of us have been living in for a long time. Now my walkman is next i think. Im going to trade that baby out. To an ipod . Lets get a check on the markets this morning. It was a rough day for the markets yesterday. If you are watching stocks you saw the dow was down 130 points. The s p was down with its second worst ever losing streak. But this morning, the bulls are taking demand. Dow futures are indicated higher by triple digits. S p futures are up by just over 12 points and the nasdaq is up by close to 24 points right now. If youre checking out the early action in europe because this is where a lot of the problems have started in this first trading day of the year you can see green arrows there, as well. And the dax in germany up by 1. 25 . In asia overnight, youll see things higher there, as well by 0. 8 . Japans nikkei barely budged and it was up, by only by 0. 1 . Oil prices this is another one of the catalysts for weaker stock prices yesterday, energy plummeted, but stock prices are up by a gain of 55 cents to 48. 48 for wti. It was 47 yesterday. But you are talking about below 50 and well below it. We should check out was been happening with the bond markets. Treasury yields getting increasingly squeezed. Gold was up at a threeweek high but its up at 1,214. 40 an ounce. It was the yields that people were paying attention to. Not just here it was germany, australia, japan, yields everywhere under intense amounts of pressure. That capitulation low, do you remember what that was . 2 or something . No. It was under 2 or something. Mark told us yesterday, he thinks were going back to 2 . Hours later, thats when the markets said. Youre talking about alltime lows for yields in all of these markets that theyre hitting. We should look quickly at the dollar. Okay. You can see the dollar is up this morning, but youre still looking at the euro at 118. 54. Dollar is up against the yen at 119. Barely changed. Are you really going . Yeah we really are. You picked the right year my friend. Sweel see. Key inflation and Employment Data out of europe today and were calling it the intrepid dont you live here in new york city . I do. She did travel here. Our chief International Correspondent. An International Correspondent would have to live in new york city, right . Michelle crusoe cabrera travels all over the world covering the economy. Today shaed made her way to new york. Good morning. So nice to be here. You gave me a new mug to owner this. We did. Oh, right. Were all lefthanded. I didnt realize that okay. Is that in honor of you . No, im not lefthanded at all. So two things happen overnight that confirm a lot of the zietd that we have seen in the last few days in the markets. We got inflation data out of europe. And for the First Time Since 2009 inflation is now negative in the eurozone. We can show you a chart of what weve seen here you see this steady decline over the last receivable years. In addition to that brent crossed below 50 confirming what we saw already in wti. Spoke with many Hedge Fund Managers yesterday. The situation is causing a lot of anxiety and at the same time a lot of excitement. Anxiety coming because within the bond market there is a lack of liquidity problem. Its especially viewed trade. Emerging markets and many more people trade emerging markets because in the hurchbt for yields in the last couple of years, a lot of people went there, right . But in addition when you see what treasuries did yesterday and that sharp decline, it reminded people of that huge move that we saw, that nano second decline several months ago where people were wondering, is the bond market broken . That so that is zielt. At the same time theres finally volatility. Hedge funds have struggled to make money. But now its back. So theres opportunities, which brings me to believe it or not, there are people talking about now is the time to invest in greek debt. Were all concerned about what the situation is there, remember summer of 2012, this turned out to be a tremendous trade for people like dan loeb. And that is why the trade is an opportunity. How much do you believe in a but theyre betting on the idea that they dont leave. Let me show you why theyre considering this trade. A greek threeyear is yielding 13. 5 compared to portugals 0. 9 . Portugal is only 1. 4 . In the bond market experienced bond traders dont necessarily this he ask am i going to get my money back . But the bigger question is am i being paid enough for the risks of the sleepless nights that i am likely to endure. The tenyear is so much lower than the threeyear. So they have an inverted yield curve, which suggests a recession. However, if you thought there was a grexit it would go the other way. So there are people talking about getting back into the greek trade. Made dan loeb millions in 2012. It could get softer from here though. Some people are talking about venezuela, which is a disaster. Every time oil goes lower, it gets even worse. So you can buy right now a venezuela bond that pays you 41 cents in march for only yesterday you could have bought it for 49 cents. Pay 52 cents, youll get paid 41 cents in march, 41 cents the following year. If you think theyre actually if you think theyre actually going to pay. If this is important, can you be here every day so you can say that for us . Or maybe there. If i could ever get a visa into country, i would do it there. Some just i cant control it. It just comes out. And i can do others. And gomez would like we should see if there is a grexit. So that yeah. Its a haircut, right . The yield is so youre going to get paid. And then, in addition to that is recovery value. So they seem to make money. And the reason, remember this, there is really important. Greece has a lot of debt. More than 300 million. But tradeable debt is only 30 million. Right now it has a face at all value between 20 and 25. Greeces debt burden is going to be what they call the i cant believe its so early. Tinter national sector. People like the imf, the bilateral loans. Its going to be the private seblther. The situation, the singer in terms of is it possible that even if they have not covered that story in a long time so i dont know. I just know january 1 was the key date. In theory, everything has changed now. Im saying in the context of that do you start thinking maybe theres pay. Generally speaking, the holdouts do get paid. There are people would buy a lot of greek debt at 8 cents, 12 cents, 30 cents. They didnt do the debt exchange. They refuse, theyre getting 100 cents on the dollar. Still to come this morning, slam to start the new year as investors worry about plummeting oil prices. The s p now on its longest losing streak since 2013. Are the bears taking a break . We talk to two strategists to get the answer. Both of them work in the neighborhood, so they are stopping by on their way to work. And then in the next hour named activist investor bill ackman his main fund returned 40 last year. We ask about his latest targets at 7 00 a. M. Eastern. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage or major disaster, when you need us most, were there. State farm. Were a force of nature, too. Sgro the fear factor is back on wall street. Futures this morning are pointing to a positive open. Triple digit gains for the dow. S p futures up by 12. 5 points the nasdaq up by just over 23 points. Joining us this morning to talk about it is michael ryan. And boba reinhart. You guys thank you for stopping by the new set. Great to be here. You can just wuk right back to work right . Right across the street. There have been a lot of concerns about whats happening in the markets at the beginning part of the year. But boeing of you still think equities is the place to by for 2014, right, barbara . We did. We had some weak Inflation Numbers this morning, but if you take a look at some of the reading indicator data that came out at the end of december youre starting to see a bit of a turn. Especially for things like new orders in germany and ew confidence. Youre not just talking stocks, you would buy european stocks . We do. We think its consensus to dislike europe at this point and that gives us a lot of comfort. We think equitier for 2015. Mike how about you . First of all, i would agree with barbara, i think what youre starting to see now is growth in europe. Were still not completely convinced that europe has reached escape velocity in terms of the economy. But we still have a preference for equities in the u. S. Youre not likely to see the same gains last year. However, i think were going to have sole lit earnedings growth i think the fed will take its time and that creates a back drop for equities. What concerns you . There are so many things at this stage. The biggest thing right now, if we wind up seeing some of these geopolitical issues start to flare, not on a oneoff basis, but they become more for example, we were talking earlier about the greek exit. They become more of a Critical Mass now. I dont think thats an acute risk. I still think theyre manageable. Obviously, whenever you have geopolitical risk at a when youre at a policy inflexion rate, it increases the monetary policy. Are you of the view that it would be an isolated incident unlike the conventional wisdom two years ago . First of all, the notion of a greek exit happens neatly and cleanly is just an absurd notion. Its an unproven or untested approach. Obviously, there will be volatility in the market. I dont think its represents the same as it did years ago. I think they stepped up and said lets do whats necessary to make sure that the euro doesnt fail as a currency. So i think it represents less of a threat. But the notion that it has no impact on markets i and you dont worry about exiting, too . Once you set a precedent, there is a concern. But i think one thing is unique to greece and isnt the same dynamics in porl tu gal, italy and spain. We all went through the financial crisis but europe as a whole has had a tough ten years. Do you tie any of the that to the euro experiment. And what im getting at is are you sure you need to make sure this thing that would seem like a failed experiment to start with. Euro skepticism is rising. It hasnt gone well necessarily from an overall perspective. But europe has had a fantastic benefit in terms of trade by acting as a block. And for that youve got to see that it was a very smart experiment. The euro was created at a time when globalization has been taking a foothold in the world. If trade has been so agreed, why has growth been so sluggish . Their terms of trade acting as a block has been far better. Its a table they would not have had had they been acting as individual countries alone. Now if germany gets a 110 euro and that will obviously be blockbuster for them. Does this ever go too far in terms of the dollar hurting us here and the euro is too weak over there . What is the main problem, inflation . In terms of a strengthening currency in the u. S. That acts hike a disinnationary for us t in u. S. , that gives the fete a little more leeway. In terms of the euro it was clearly too strong for most of 2014 and is come down to levels where its going to be more of a beneficiary. And you have the ecb forcefully saying they would do everything to hold the euro together which is a very powerful statement on confidence. It seems like the eurozone most countries go from the recession to flat back to recession, flat. Now, i know there are structural problems that theyre not addressing, as well, but i dont know if we know this. Im sorry. Th. Here is the thing. Youve got a fiscal union, a political a Financial Union thats moving towards a Political Union, as well. Those things dont necessarily happen overnight. It takes time for those. Are you theyre theyre moving towards a Political Union . I think draghi is trying to force that issue very strongly. I do think the notion that the European Central bank is going to do whats necessary to make sure the euro as a functioning currency doesnt implode. I think theres structural issue youre going to have to work through. The notion were going to have a political fiscal year, i think thats much further down the road. What would it look like if we didnt have a euro . Were going to have a euro. The notion that we can simply turn back the clock and go back to currencies i dont think thats an option. The germans, italy, sweden greece theyre just waxing all the time and not it it is a great experiment but it wasnt necessarily driven exclusively by economics. It was driven by social and political issues. This is an area that had basically fought hot wars every 50 years or so. The notion was to tie them together that will never be able to see the same type of violence in europe. So a lot of its the political battle. Were talking about it from a financial and monetary perspective. This goes deeper. So yoj were going to see the ties in the euro. What kind of political pressure are we facing at the moment . How are things tied by things that are happening around the globe . The first clearly takes a look at the geopolitical scene. As a matter of fact, again were looking for 3 growth for the u. S. Economy for this year. This is probably one of the first years that you are more likely to make it than any other time. Its a little more risky, i think. The dollar gets stronger puts pressure not only on our economy, but also the russian ruble. There is one big thing that the fed has its its back. Declines of Commodity Prices generally give a big lift over a 12month time period. On average, about 20 historically. So you dont think you dont have a recession, it gives the at the time fed a little bit more comfortable and leeway. And not only in terms of lets remember that lower Commodity Prices and in general low wages means the fed has lots of latitude to keep the feds lower. I wish they were able to raise rates. And then the other thing, growth cures everything here as weve seen. All of our problems didnt go away wages start going up. But if it doesnt happen this time around all these countries that have been asked for austerity, theyre going to get sick of that. Not just in greece but in other places where they say, look you guys are bureaucrats. When do we get to participate in the growth in the world . That is why draghi is being so forceful. Hes slow moving in a lot of other areas. Isnt he . Different countries act differently. Theres a view in the u. S. That it should be going faster. Ill give draghi until the avenue chris in terms of moving slowly. I think hes probably the most occur yajus central banker. He redefined his mandate. I would agree with mike on that. Congress up an audio equipmentmaker is suing apples beats. Well tell you why. Plus if you thought things were getting interested in the market this week abdomen flood of jobs data is about to hit the tape and that starts with the adb employment report less than two hours from now. Weve got a lot of special gets today, obviously, but Steve Liesman will be here and join the band. First, as we head to break, a look at yesterdays s p 500 winners and losers. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] have troubling breaking news out of paris, armed men have attacked the officer of a french satyrical magazine. At least ten are dead after this attack on this satyrical magazine which has drawn controversy over satyrical cartoons over islam. The men were armed with ak47s and they opened fire in the news room ooh this french magazine. According to this police officer, at least ten are dead after the attack and we have been seeing that no country seems to be safe and its not doesnt look like its going from one to the next but now were talking about paris and were talking about this happening in france. At this point, do we know that the cartoons in islam were responsible for this or. We dont. We know charlie weekly, according to its editor, the magazines editorial, it respects all pluralism, even abstainers. It publishes articles on the extreme right. Weve seen laws declared against cartoonists in the past. Michelle Caruso Cabrera is with us. Were going to have people on throughout the day talking about how great things look for the Financial Markets except for the possibility of geopolitical events and black swan events. And i dont know whether this necessarily is going to affect the markets today, but this is the same thing that we could read about or hear about on any given day. Absolutely. And we just learned that the president of france hollande is headed to the scene of the shooting and find out. But youre right, joe, this is one of those questions that we constantly raise, whether or not there is going to be geopolitical events that are obviously horrific and potentially damaging and could lead to headline risk when it comes to the markets. Certainly this is one of the things that we talk about frequently were worried about Cyber Attacks and not just terrorist attacks, as well. Irnlt the reaction and where was it where we just had the one Police Officers guarding the it was in canada. Even when it made it to canada that was a huge story. Here it is were talking about, if the reports are correct, ten people are dead. Ak47. Well see what the futures are. When we last checked the futures, they were up by triple digits. He were talking about the dow up by about 105 points. Dow futures indicated up by by 95 points. S p futures up by 95 points. Oil prices have fallen back a little bit. Up maybe 50 cents from where they are right now. Steve liesman is on set with us. Steve, youve been thinking about some of the other ramifications about this too. One of the things we were talking about yesterday was anti antiislamic protests in germany. This is the sort of thing that on the one hand you have this horrific incident. On the other hand, you think about the backlash and greater social disruption as a result of this. They also separate themselves in ways that become targets, as well. There will almost certainly be some political backlash if its seen as an islamic attack. Yeah. The last thing we were expecting to be reporting on this morning. And we always stress that we dont like to immediately move to the Financial Markets when we break news at this. Were moved concerned about the victims and thats the sentiment were forced to deal with. Anything more that happens, well bring you up to date on. Obviously, watching jobs today, we have the adp report coming out. But if you want to talk about this issue of why it seems like the oil tail is wagging the dog, which is the economy. And here are some things ive been talking to economists about. Think about this time of transition. The winners are diffuse, in technologies of a point or hundredths of a point when it comes to lower energy prices. When who the losers are. Energy Capital Spending has been a big part of the total cap ex bill. That is seen declining. But there is no clear substitute. But if you think about money moving from energy into Retail Retail is not a capital intensive business. With these malls shutting down and bricks and mortar being on the wane and the internet on the up swing, thats very little Capital Spending. But consumers, what weve seen in our survey are more likely to say at least initially and pay down debt. So the impact of what youre seeing right now is lower rates, an increase in saving and a lack of investment opportunities. Adp at 250. One of the higher estimates weve seen. In part thats because they missed baftly last time. Jobless claims seen at 290. Unemployment rate is 5. 7 . On the fund fund what were expecting on the fed minutes today, what were expecting is really no change at all in terms of the outlook in mid 2015 is the time theyre going to discuss and probably hike rates. But all the talk weve had lately, you can see, 0. 6 in december fed fund futures. I dont think thats as far off as what i thought it was before the what we hear a lot of talk about is once the fete starch aaggressive are they . Over the weekend, they talked about an unaggressive path to raising rates. There is a lot of negative talk among fed officials about this notion of measured pace. I remember the the automatic quarter point increases. I do not think the fed will operate this way. I think it will do a quarter, it will wait. You have low inflation and low rates and no real hurry to do it. Rosengren said we could be patient. I think well hear more of that. Even if those are great things do you think the market even cares . If its bad, i can see the market pay attention. The question is whether they discount that in focus and everything else. One of the things that got me on this tail wagging the dog thing, how do you have transports declining in an environment of Lower Oil Prices . That drove me absolutely crazy. I dont think the account understands or knows how to focus on the benefits which we know its a net benefit to the United States economy, a net benefit to the Oil Importers around the world, but you have trm transporters declining. There is a Systemic Risk when it comes to europe. But how is it transports are on the way down when the most important part of their cost structure. You think about the idea that i am an oil producer. Im going cut my cap ex now. But if i am a retailer or some other guy thats going to benefit from there, i dont know if im going the start a new factory now based upon the belief of Lower Oil Prices. The heart of paris, this is an office that has been fire bombed before. Some of these cartoons were published back in 2011. Two black hooded men entered the building, ten wounding five critically, and a few minutes after the shots were heard, the men, according to this witness, were seen fleeing the building. So at this point, you dont know whether the its still very early in the reporting of all of this. But we have a report from reuters saying the french president will go to the scene of the shooting at that magazine. Again, its Charlie Hebdo is the name of the magazine which means charlie weekly in french. When we come back last years best performing Beverage Fund manager bill ackman is going to join us with his take. Later, Lloyd Blankfein will be stopping by. First, as we head to a break, here is a look back at this day in history. E financial noise financial noise financial noise financial noise welcome back to squawk box live from new york city. Mcdonaldss lovers in venezuela are dealing with a crisis. I know we thought with the Oil Situation in venezuela, you thought the disappearance of the french fry. Ra shortage at the fast foot food change comes as the country deals with shortfalls of many basic goods due to the strict inflows hurting imports. Mcdonalds restaurants are replacing the sides with salad, which were told to do here. Its a local affair smld called fridayed its yucca. It doesnt sound it sound like something you would find in school lunches. Fried, its not great for you. You about speaking of yucka, big gates showing the highest level of confidence in a new technology that turns waste, human waste into drinking water. I am not kidding about this. He tweeted from your toilet to my glass, i got to taste water made from human waste. Check out the highlights from the attached video. Young processor turns sewer sludge, which is nasty, into clean drinking water, electricity and cash. Its water. I think that was about ten feet away from the human waste and sludge right into the glass. Maybe after him. He called human waste sludge kind of nasty. What would be really nasty to this guy . What would rise to that level . I dont even want to know. I have another crazy story, but i want your views on this. Ill tycoon houfrd hward hamm has been making headlines. He offered his former wife nearly 975 million. She rejected a handwritten check he had written want. . She had worried about hurting her appeal of a Court Decision on the divorce settlement. Kind of hard no the to endorse a 975 million check. It my put that one right in the bank. We will go to break, obviously, and update everyone on this terrible story out of paris. Where at least according to sources, and we know that these things are sometimes we dont get everything or the sources dont get everything correct, but reportedly 11 people dead after two black hooded gunmen with automatic weapons went into a magazine news room that has published in 2011 it was a the prophet mohammed was on the covered. It has been fire bombed. Now as many as 11 people dead, ten wounded, five critically. Policemen, as well. Two gunmen seen fleeing the facility, as well. Thats all we know at this point. Obviously, its a tragedy. Well watch to see if it affects any of the Financial Markets, as well. Up next, well talk about propping up the shark tanks obsessed story. A brothersister team watching the attention and the backing of the hit show. Plus today Lloyd Blankfein is welcome us to new york city. Hell be joining us on set to talk about oil the acceptoff in stocks and much more. Squawk box will be right back. Following a situation out of paris. The latest news we have is the country now raising the terrorist alert to the highest level after what appears to be a shooting by arm gunmen with automatic rifles at a magazine that had been doing satire tunes and the like on the profit mohammed reports 11 dead, ten wounded, five critically. This was the same magazine and i think the same office that was fire bombed back in 2011. At that time a cover of the magazine had featured the prophet mohammed at this point. This is the president saying the antiterrorist plan is now at the highest level. And they are giving a press conference. Talking right now. As we speak. A spokesman for the police by the way, called it a butchering. Carnage. We dont know a lot, michelle, but there was a report someone saw the two men go in, black hoods, carrying i saw one report said ak47 s, and another automatic rifles, heard the shooting, and saw the two men exit as well i dont know if were updated. Theres a man hunt underway. Thats a question. Well start asking how organized this was when we talked about canada, and the situation in ottawa that was a lone gunman is this going to turn out to be part of something bigger and larger . We do know that it appears a last tweet put out by the satire magazine was a satire cartoon showing the leader of isis saying by the way, good health to everyone which would, obviously, be a satire play on a group thats killing people. Also just moments ago, said that there had been several terrorist attacks prevented in recent weeks and moments ago said as many as four others, in his words, are between life and death. We heard five of the ten that were wounded were wounded critically critically. The relationship with muslims in france has been problematic for a long time. In 2005 there was protests where large parts of the cities and suburbs were burned in antigovernment protests. There was a lot of controversial about women about whether or not they could wear the vail. They talked about passing a law at one point. Steve raised the issue if something as awful as this creates a backlash in the community, and what other type of unrest that creates . Sure which we are seeing in germany as well, antimuslim protests in germany because of the fears there are pockets we know of in cities like hamberg, people are trned that sharia law has taken over in small parts of the city as more and more immigrants moved in. So we see this definitely in europe. Remember you always see this in times of terrible economic times, right . Theres frustration laid on top of everything when it comes to jobs and ability to get jobs et cetera, and you frequently see it, see it in this country, blame immigrants. In the light of the rise of isis, and just the almost a new level of zeal it seems, where maybe were not safe anywhere, really. They have stated intention to even to the United States to try something in the homeland here as well. Its absolutely to destabilize our sense of security, to make us live our lives differently. Thats absolutely the goal. We always knew Security Experts expected to move soft targets rather than the big events, prove to places like where people congregate versus where theres a lot of protection. Institutions et cetera. Recent emails saying attacks, you know news organizations, magazines, thats been part of the idea as well. Obviously, we wouldnt be surprised if governments around the world, as we hear throughout the day, raise levels of concern about possible attacks. Take a look how its playing out in the markets. We are just getting details on this just trying to figure out what happened on the ground. We can tell you the markets in europe at this point still indicated higher or trading higher. The cac in france up by 1 at 1. 1 and ftse in london up 1 as well as the dax and germany. Well talk about how it plays out here and more on the breaking news story from europe. As we mentioned, 11 dead in a shooting attack at a french newspaper. Well have a live report from the scene when we come back. Plus bill ackman, how he chalked up a 40 return last year and the names to bet big on this year. From one news maker to another, Lloyd Blankfein will join us on set. We are live from our new home in the heart of the new york city. Stick around, squawk box will be right back. The evolution of luxury continues. The next generation 2015 escalade. Boy once upon a time, there was a nice house that lived with a family. One day, it started to rain. The house tried to keep out all the water, but water got inside and ruined everybodys everythings. The house thought she let the family down. They just didnt think it could happen. They told the house they would take better care of her. Always. Announcer protect what matters. Get flood insurance. Goldman sachs ceo, blankfein, and its the same attitudes big apple, going to broadway . I didnt think this was possible. Same off the chart access but now on the biggest stage in the world. Welcome to new york. Live from the beating heart of business new york city this is squawk box. And welcome back to squawk box, breaking news this morning, 11 dead temperature more wounded in paris in a shooting attack at a satire magazine magazine, and they call it a shocking act of terrorism, and raising the countrys antiterrorist plan to the highest level, Michelle Carusocabrera has more. Michelle . 11 dead at this point ten injured, five in Critical Condition at this point. We know the french president is headed to the scene. We expect to hear from him later. The country raised the terrorist alert as well. This magazine satire magazine in the past was attacked for creating cartoons muslims considered offensive or terrorism groups consider offensive. We are waiting to see if its a response to that if this is an organized attack as a result of what they pub my sized or what the editorial content is of the magazine. Again, 11 confirmed dead ten injured, five in Critical Condition. Thats according to the wire reports were getting out of there. Theres also wire reports of eyewitness accounts of masked men going in two masked men going in hearing gunfire, and leaving. Well wait to see if theres a man hunt to find attackers as well guys. Thank you for that, well bring you more as we get it and impact on the markets. Among the other stories were watching at this hour searchers found the tail of the airasia plane that crashed in the java sea. They hope the black boxes can be recovered. They are located in the planes tail. Well get a key read on jobs at 8 15 eastern time getting the adp employment report and home forecasters there expect an increase of 250,000 private sector jobs. We are watching oil. Brent crude dipping below 50 a barrel for the First Time Since may of 2009 and take a look at u. S. Equity futures at this hour. You can see were showing you energy right now, but well flip the board so you see whats going on in the futures. Things are looking up. Despite the news this morning, opening up higher dow, s p 500 up a little close to 12 points higher, and nasdaq 2 points. A little back, but one of the yearly opening for the s p. Bill ackman took the top spot on wall street with the main fund returning 40 to investors. He did this while a significant amount of Hedge Fund Managers underperformed even just the over overall market, and 220, they cant move the market. In last years record bull run, hes the founder and ceo of 18 billion hedge fund Persing Square capital management. Great to have you. Great to have you as our first huge guest on set today, bill. Thanks for doing it for us. Thanks for having me. 11 billion last year you do 40 , and youre at 18 billion. Its now, but you made the money, didnt you . Had a good year. A great year. A lot changed in 12 months. Even you and, you know im not barbara walters, but you must be thinking wow, ive had i wouldnt say you were down, but you had jcpenney and i dont know, 60 70 80. Started at 81. Yeah, and, you know, the announce ment announcement officially and i mean what jout kelly right now . Look its not a dance. We have a great team. No, no. Did you want that because you thought it was the way to combine these for the good of man kind but did you make more money . The answer is we dont take on an investment unless, one, its good for investers, and, two, its good for america. We dont want to short or long a company. Are you glad the way its turned out . Great for for shareholders not disappointed you cant combine the companies and do what you wanted to do . Interestingly, i think they could have had the transaction. There was a moment in time they announced good earnings stock was up. Had they raised the bid at the time, they would have got the company, to the credit you know, they launched the bid for the company, they value the stock at 130 a share, and the stock was trading at 125, and so they were issuing a currency worth about where it was trade trading. By the time the deal went down they valued currency at 170 a share, a number like that and the stock traded at 130. To raise the bid, all the sudden, it was more expensive. I want to go a lot of places on that. So they did not they did not raise the bid, and they could not compete. You had connections, colleagues, friends, this came together in a way that may have not been a forethought. Was this is planned strategy to combine with a public Large Company and go together, or was it this initial situation that just happened to be something you said hey, can we do this, and did you do it or a plan done with other companies . We talked for years about another business, but did not go through the details how it was accomplished. Will you do it again . Other people are, i can tell you that much. Im sure thats right. Can you tell us who yet . Notary public. Do you have a target . Its a hypothetical. Last question and then ill let you go. Lets say that you, along with vail i cant, were a thousand shares short where you wanted to be to buy, could you tell me hey, joe, come in with this were going to announce a takeover. You buy a thousand shares of this right now, in your account, and i know for a fact well make a play. We have money here too. Could you bring me in on that . Sounds goofy, but i want to get on another topic. Is that legal . I think the answer is you can trade on inside information if received from a source who was not briefing a duty. You could have done a threesome and done this . Absolutely. Is that the law, people do you expect some type of litigation to be offered by its ongoing. Litigation theres not been a transaction where theres not some amount of insider what about a law . A legislation . First of all, if you look at the outcome, right, so they made a fortune, there was a breakup fee, and 090 of the people got a benefit, and they got a higher price had we not got involved. I think, ultimately, laws get introduced when theres harm. Right . Bill heres the question though, the marketplace arguably, and we talk about it at the table, there is a view that the market does not feel fair. This goes to the whole, is the market fair issue . Sure. And transactions like this joe could join you, gives off a perception perception. Did not call, by the way. Is that a good thing or a bad thing for the credibility of the markets . I think you have to decide is shareholder act vichl a good or bad thing for the market . Pretty much every transaction we do we have inside information about a company before we bought the shares so when we bought a 14 stake in cannon pacific, we bought it with a plan to put in the greatest railroad ceo of all time. We did not tell one person we bought 14 of the company we planned to do that. We bought the 14 stake, they sold us to. Next day, we announced 13 that was news. Were allowed to trade on our own inside information, and we introduced hunter as the ceo, and the stocks go to 200 a share, right . We trade on inside information. We did not have a partner there, but did it on our own, but we talked to eded canadian Pension Plans to partner with us and shared with them our inside information, that we have a plan to put in hunter and they could have chosen to participate with us or not. They passed because, at the time, sort of the, you know the Club Board Room environment in canada, they didnt want to look hostile against a high profile canadian company, but we could have partnered, and no one would have blinked, but were a hung fund oh must be evil. Whats the lesson in this deal in a relationship that you end up having with the corporate entity . The other thing we kept hearing during the whole process was there were times you wanted something, and your partner did not. We had a great relationship the entire time. There was a moment in time you know we had a disagreement with the timing of raising a bid, and in our view if they were prepared to pay more thats when they announced earnings, and, ultimately, they changed their mind. They decided they were not prepared to pay more and wanted to get the company at their price. You know, mike pierson has a reputation for being a disciplined allocator, and the extra 20 a share, he was not prepared to pay. Would you do it again . Anything to do differently for the next time . Yes. One mistake. Mistake we made was three months, four months after announcing the transaction, i dont know the time frame, they said, look what can we do to increase probability of the keel and get you involved . Look, launch an offer, all kinds of rules, but they say basically, you cant buy stake in front of a tender offer if you took substantial steps of taking the offer or not a cobidder in the transaction. We didnt take any steps towards the offer. The lawyers reviewed email board minutes, and they said youre fine, launch the offer. The other side can sue us smear us in the press, and can use this as really a pr stunt to make us look bad, and then we got to i was on the other end of that. You bought into that. Andrew writes a thing in the paper they adopted your tactics. There you go. No they did. Oh yeah i wouldnt say that. We would never stoop that low. Herbal life . No doing gods work. As mr. Blankfein says. All right. Youre this altruistic morally straight guy doing these things. Every activist you do is good for society and shareholders and blankfein, some activists are a good force, others are a force of evil. You got lipman who thinks youre satan and either bill ackman. Its beneath me to discuss the topic. By the way, but lets go back the iconic one of the first things that made people think wall street is a bad place was gordon he saw the paper, saw something undervalued and decided, look, were going to go in here and buddy fox said, why are you doing this . Youre wrecking the company. Its wreckble. How are you different in going in here seeing the incentive, change a corporations strategy to more research i can help easily. Sure . Activist combines to become a fast growing, more efficient, research and development company. A much better company. How do you doe that . Markets the indicator of that. Its not a cash transaction. Its a merger right . Its gone from 120 it 210 a share. Its a much better company. Canadian pacific, stock is down six years, they did not get goods to the market negative impact on the canadian economy. We put in the greatest railroad ceo of all time keith from big wins, but you have losses. How do you think about those . Okay. In the history, we had 30 activist investments not just the Balance Sheets but jobs where companies have a worse outcome rather than a better one . Jcpenney was a dying company at the time we invested in the company, and today, continues to be so and we brought in what we believed to be the best ceo in the country in retail to reimagine change the business, execution was not what it needed to be. It didnt work. That can happen. Ultimately, none of the changes happen unless the majority of the shareholders support the initiative right . This deal does not happen without a majority of the shareholders. We could not release hunter until we could replace the board of directors. What an activist investor does is give shareholders the alternative to vote upon. If they dont like us or our directors our our ceo candidate, we have to fold the tent and go home. They cant turn around . Look i think i should be careful saying that. Look, i want them to be successful. I just think they are in a very very tough spot in the market and i think, you know they went back to the old model, which, in our view is not a sustainable model in the internet retail world. They do not sell much itsed commodity goods, highly discounted, and the consumers are smarter. You want us to trust you as a good steward of, you know of corporate even the welfare of society. Thats too strong too strong. I want to be point out individual deal, and you show its good. Look at everyone weve done. Everyone youve done maybe you are a good guy. You cant see how activists and shareholders could end up doing something to line their pockets and not be good in the end . Only if the other shareholders support them. Okay. So support the greedy activists support the shareholders, and employees are out of a job. Vast majority of america is owned by black rock vanguard and larry fink tells you that activism is a negative. Okay. Ill have lunch with him soon, i bumped into him on the street were going to have the conversation. The point here is black rock is a permanent shareholder, and they are not going to vote in favor of something that creates value tomorrow but destroys value, you know a year later or five years later, right . The governor on activism is the Shareholder Base and as a result, you know youre not going to see a lot of businesses be destroyed unless all the sudden index funds talk about a business you hope gets destroyed. Yes. You have done well on the trade now, you still argued from moment one that this is a stock youd go to 0. It will. A company that should not exist. Correct. Have you doubled down on the investment . No. We have not doubled down. We will make more than we would have made had it just straight gone to zero initially. We increased the position earlier this year. Double is not the case. Waivering . In 2004 . Well thats when you should have doubled down. We couldnt. What needs to happen in your view to go from 30 to 0 at this point . Down 12 monday. Down 8 yesterday. You know we have a few more days, and were done. Heres what is going on. Stocks down 12 , the New York Stock Exchange goes to them saying you have to announce whats going on with your company. Nothing from the company, 8 yesterday, nothing from the company. They missed earnings massively, they have to redo guidance next year. No one likes that. Why is that . 78 80 of the revenues are abroad, and 90 of the expenses are here, and the business is done in mexico venezuela, and brazil, the oil countries. Even if it were a normal company, theres serious currency head winds. When you shine sunlight on madoff, it makes it difficult to find new victims. Same here difficult to recruit calls from distributor say checks are declineing. I want off the train. How do i become a whistle blower . Imagine youre an employee the options are worth lest its a pyramid scheme. The chances of going to jail if you keep working for the company increased meaningfully if youre a senior executive, or go to the government and make a whistle blower recovery which is 10 million. You have a flight of top districters, senior employees from around the world contacting us contacting the government sharing information, right . Thats, you know, thats a problem. Theres a list because theres significant issues. The object of the slide show on the hong kong dollar with 90 slides. 90 short slides. One short slide. Lets talk about technical issues, right . Why is the stock going down . There is a massive seller in the market. How do we know 1234 look at short term option trading. Yesterday, someone bought, like, 28 strike options, a lot of them, 50,000 that expire on friday and paid like a dollar for them when the stock was at 34. Right . The only person who does that is someone with inside information, right . So its either legal inside information, okay which is okay, and legal inside information is hes blowing out the position and knows when he files today or tomorrow the stock is going to plunge, get all the stocks out. Or its a research or someone who knows the governments investigating. And i think they built it just because you had the opposite position. They quoted they broke the bank of england, they can break ackman. That guys gone. Two positions, jcpenney and herbal herbalife. Hes gone. Cut the position in half now, and do you think they went in for that . Did icahn go in because he didnt like you, going long because its a good company . No. They did it because of you . I say imagine now cap research is a great firm. Right. Fidelitys a great term. They owned more than 10 of herbalife. When madoff went down every fund of funds that had a dollar invested in madoff went out of business because a failure of this level of Due Diligence is i cant give you money as a fiduciary, right . You hope not only herbalife suffers, but everyone who traded against him . Unfortunately, it happens. If its a position of yours, its one thing to be frauded by madoff when they met with the fcc private asharing information, whats your excuse now, right . I could not have been more public about the problems here. Just in the last ten days think about it this way, ten days there was a video given to us by an insider, okay and its a three hour recording done by herbalife of a meet with two Senior Vice President s and a top distributor explaining how they defraud people. Okay . To the top distributors. We learned from the last time. Its a three hour video. We have an eight minute preview on our facts about herbal life website. That was that was last week. If youre an employee of the company, how can you stay . Have you had conversations with fidelity or managers about that . Fidelity managers who covered herbalife, the only analyst who came to see us. We sat and met with her, and we noticed they started to trim their position after the meeting with her. Maybe she no longer covers the stock, but what, you know, whats fidelitys argument for owning it . Theres no upside anymore because its deteriorating, guidance declining. You have doj, fbi, ag investigations, fccs been at it for two years. Another question to ask at what point in time the governments not done anything to protect victims. With all the you know people question your tactics with herbalife, if this happens youre going to end up looking like cassandra, a hero for alerting people to it rather than a rabblerouser. Heres an interesting thing. On friday i will be in chicago. I was invited by julie, an activist in the Latino Community focusing on immigration issues protecting undocumented i want grants involved in an argument called the league of latin american citizens. She invited us the chicago attorney general and the federal trade commission and me to speak on a panel to talk about fraud in the Latino Community. I was told not to go because the fcc cancels, ag cancels, and we want to be focused. I said, i cant go they will cancel. She said bill youve done more for the Latino Community than any regulator. You have to come. You have a financial interest. Thats okay with us. Your interests are aligned with the community. Give a short sale or something sm. In october, you had one short. Youll never hear about it. Done with public shorts. May be one of the last. Fannie and freddie, you had a great way to make them balance the sheets and that did not happen and now youre long . Yes. I dont know how you can say it in ten seconds . I hope in the new administration, new we have a congress and senate more aligned, perhaps someone wants to sit down with us, well offer a solution to give the taxpayer 400 billion, gives a Balance Sheet, preserves affordable housing, preserves a low cost Mortgage Market buy before they agree on what they want to do. Shareholder activism buy a stake, do the right thing. Make money after the fact. Before we go we have to mention we have we let you go the conference. Very important. February 12th boys and girls conference benefits very good Early Childhood Education Organization and after school programs, the Wealth Management at ubs, a good friend of mine were cohosting this. We have a speaker, larry robins franklin, an outstanding ceo platform, ill be there, and whats nice about it the conferences like the big ones theres small ones couple hundred people, meet the manager, intimate, good cause, only 15 00. The others are 3,000 and its tax deductible. Do we get offers . Absolutely. Joe, youre in. How much do you have to donate . 1500 a ticket gets in with you . Really the next hour . Thats all it takes. Liar. If you pay i have an Insider Trading problem then. Be glad madoff was not an activist. Theres good and bad in the world, and i think activism can be good or bad. I agree with that. Activism is good or bad, but the shareholders are the judge, right . The activists cant force it to happen. Okay thank you, thank you, thank you, bill. Thank you. Your a couple blocks down. Yeah, come see me. Okay. With be a contributor. When we come back, up to speed on the big terrorist attack on a french satire newspaper. Another squawk maker, Lloyd Blankfein joins us on set. Back in a moment. 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. Still to come an update on the shooting in paris, 12 people have died. Well be trying to make sense of the move in oil. The euro stocks squawk market master will be joining us next and at the top of the hour Goldman Sachs ceo lloyd blank fine is here, and well be right back. Welcome back everyone. Breaking news from paris today. At least 12 dead after a shooting at a magazine there. Our paris correspondent is joining us now with more. Stefan . Reporter good morning, the security alert raised to the highest level, and theres an emergency meeting in an hour. Ahead of the meeting, the french president made a quick statement calling the event a terrorist attack and we are a United Country in which will know how to react based on the last information we have from the prosecutor, at least 12 people have been killed this morning in the news room of the satire magazine Charlie Hebdo, two opened fire with automatic weapons, three people are in Critical Condition. Of course, too early to draw conclusions about who or what organization could be behind the attack, but its not the first time that the magazine has been attacked. Charley Charlie Hebdo is a satire magazine, sustaining an attack in 2011 fire bombed after publishing cartoons making jokes about muslim leaders, and the last tweet was a cartoon of the Islamic State militant group, and thats all we know for now. Of course; we are waiting more information from the prosecutors office, but at the time im talking to you, a man is still at large, at loose in paris, and actively searched by the police force. All right, thank you. Lets bring in Michelle Carusocabrera here as well following not only this attack, but a separate one. Right. We are learning the German Government websites have been hacked as well. Well follow that throughout the morning, and we should point out that David Cameron came out with a statement on twitter about the situation in france saying the murders in paris are sickening, saying we stand with the french people in the fight against terror and defending freedom of the press in relation to the terrorist attack. Things we dont know the hooded gunman that eyewitnesss say did this. We dont know what is the status, are they looking for him, are they part of the dead, we dont know what the situation is there as well. We see reports that their new edition of the magazine was coming out today with the topic of a future france ruled by muslims, and what it would be like. Is that what the twitter was we saw the last tweet an hour before the shooting. Exactly. That depict eded what they referred to saying good health to everyone, which, obviously, is satire as they kill people. Youre comfortable, terrorist attack . Not a shooting . Calling it a terrorist attack and its the deadliest terrorist attack in two decades. I dont think we called fort hood in the country or the administration did not call that a terrorist attack. It mathers whether you calling it a shooting or a terrorist attack. If called a terrorist attack, its a terrorist attack. The motivation could be because of the cartoons. Maybe hes jumping the gun. The magazine is a leftist magazine, and its antireligion in general. They have made fun of other religions as well. Catholicism. Exactly, exactly. One of the tenets of socialism is no religion. Thats a classic leftist position. Right now, we know that the issue that apparently was coming out today was about muslims. Without a doubt, he says without a doubt, however you say that in french without a doubt a terrorist attack. How do you define terror . Driven by some religious motivation . Is that how were doing it . Right. With somebody so inspired i mean, that may very well be. Sounds like its linked to the previous controversial cover that the magazine has had. Exactly. On islam. In the past reports, put out issues in the past and they have preemptively the police acceptability riot police to stand in front of the building for fear it was attacked. The magazine was used to these situations used to being under the gun for sure. Apparently police said there was specific threats against the magazine ahead of the event today. Okay. I have not seen that report. Thats what the Police Spokesman is saying. Police officers saying 17 injuries we said 10 injuries. I dont know. We never know. Early reports hard to follow. They are hard to follow. Thank you. Again, Michelle Carusocabrera, lets bring in a squawk market master the chief economic add adviser, and on the morning of breaking news, we are reminded its hard to see what happens with markets, where things are going to come from. Yeah this is tragic news. Its heart breaking. Our thoughts go out to the families and colleagues at Charlie Hebdo. It speaks to the fluidity of the situation away from economics and markets, so whether its politics, whether its whats happening in elections in europe, whether its politics with russia this is quite a fluid time for the world economy. A time for caution . Is this anything out of the ordinary . I mean, we always know that you dont see the next thing coming until it hiltsts you. The key issue in markets is we got two major global price realignment going on that are consequential and durable. First, we have a decline in oil price that reflects a change in the supply paradigm. Its a fundamental change in the paradigm with no one playing the role of the swing producer. This is going to have major consequences. The second is a major realignment in currency as we get increasing divergence in Economic Performance and in mop monetary toll si. Put the two things together, and they threaten the paradigm markets enjoyed and Central Banks delivered, but it does. Go ahead. It does not mean everything falls apart, but means we have to tip one way or the other. I i feel we tipped to genuine growth and Central Banks coping with the change in the global paradigm, or we tip to something worse, and i think the probabilities are equal right now. What i feel strongly about is we are not going to be able to main tape for one or two more years, this slow volatility paradigm with central bank and press major prices. The former colleague said yesterday this is a time to be cautious and content with low positive returns, and the good times have passed. Do you agree with the assessment . I think thats one possible outcome. The other outcome is that we get the privet to stronger fundamentals because we get the economic reinventions and that not only validates prices but pushes them higher. The key issue is investors should not give liquidity easily. Value liquidity. People give up liquidity. They are not paid enough for what they give up. What we learned over and over again, you get a market in this location, theres no shock absorber in the system. Not only do you get big price movements seen this week but in addition, you get the stress of the markets. Dont give up liquidity. Retain optionalty. When you look around at some of the crazy moves, a lot of what you talked about explains real pressure seen on yields for bonds around the globe, government bonds not only here in the United States but in germany, japan, and australia. Do you think theres more to come . So the german collapse in yields and the flattening of the curve there, and much of germany is 47 basis points is really the reflection of the weak economy in the eurozone concern about the exit of the year zone and likelihood they do more. What weve discovered is that you cant push the spread between german bunds and u. S. Treasury, and that starts moving our ten year. We have our ten year governed by international development, right . And thats whats happening right now. So keep an eye on the eurozone because its going to influence various prices and the currencies are asked to carry the bulk of the burden. In the past thats tended to break something in the system. Break something in the system in terms of the currencyies or somewhere else. What do you see happening . In the past when currencies moved a lot, it tipped emerging markets over. Im not too worried about that right now other than russia. What im worried about, something talked about a lot, is the concept that Central Banks can continuously press market volatility. Its questioned. Its going to be increasingly questioned as we get greater divergence in policy between the u. S. On the one hand and europe and japan on the other. You think the u. S. Is a better place to be in that scenario . I think the u. S. Has so many advantages. Its better economically right now. Weve done much more in healing the financial system. We are less exposed to geopolitical shocks from russia and the middle east, and weve got the entrepreneurship thats key. But valuations have moved a lot, so on a stand alone basis, the u. S. Absolutely dominates, but markets have priced that in already. Okay. I want to thank you for joining us today. Are you done . Go ahead. No, i just you know i you know a long time you felt we had a wedge between what the fed was doing and the stock market and it was way ahead of itself. The wedge removed and market goes higher. Were you wrong about the wedge . So the wedge has not been removed, okay . The wedge has been morphed. We have forward policy guidance. They had an opportunity. We got to find out a lot more when the feds release the data. They had opportunity to remove the considerable language, and instead, i dont know if they are worried of the language tantrum or worried about Economic Performance, but they fudged it joe. They basically fudged it. So you could still be right if this, you know comes back down but at this point, it looks like the fundamentals of the economy caught up with what the fed was doing. You said that had to happen to jump valuations maybe it happened. Well, we still have to get out of ab initially low Interest Rates, and we have to get out of very aggressive forward policy guidance, okay . At that point, we can judge whether to fund im encouraged by whats happening to the u. S. I think 3 growth rate for 2015 is attainable and the u. S. Outperforms other countries in a major way. Thank you for joining us today. Hope to see you back in here on set when in new york. Congratulations on the new set. Looks great from here. Thank you. Coming up a deadly attack in paris less than two hours ago, 12 killed the french president called it without a doubt a terrorist attack. Well talk to the former pentagon official about the situation and whether the world in entirety should be on higher alert than weve been on. Next, at the top of the hour Goldman Sachs chairman and ek Lloyd Blankfein is the special guest, and squawk box returns to our new home here in new york city. Well be right back. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] zblmplt welcome back futures setting themselves up markets higher despite the tragic news from paris, well talk about that in a moment. Dow opening up higher 125 points higher, nasdaq up 25 partnerships, and s p up 14 points, joe . We are following a deadly terrorist attack at frances satire paper, and its pronounced charlie and a resident, adi, author of dancing with the devil, when did you hear about this and what were your initial thoughts, michael . I woke up to the news checked twitter, and my feed was filled with this. Initial thought was this is because Charlie Hebdo has satirized islamic figures, and had a new issue coming out. The same thing to realize is that satire is really crypt night for islamists. Its not the first time they have become violent if they perpetrated the attack because they cannot deal with satire. Its a potent weapon. France said that several terrorist attacks have been prevented in the past couple weeks. How do you prevent an attack like this . Is it possible to prevent an attack like this . Well ultimately we just need to recognize that free speech is under assault. You cant curtail speech simply because some people dont like it. When the Muslim Brotherhood took over in egypt, the first thing they did was go after the egyptian equivalent of Leslie Neilson because he satirized islam. If the west is serious to upholding values, this is based on violence, ideology, not grievance and needs to be combatted at home and abroad. We had conversations about how to define terrorism in the age, how do you define terrorism . Deliberate characteristicing of civilians for political gains. Youre right one of the achilles heels for the west is we dont have a universal definition of terrorism. We use in the west in the European Union and in the United States and australia, over 250 different definitions of terrorism, and the United Nations does not define it either. We need to start defining what it is so we construct a policy to combat it. Michael, i dont know whether you know more than we do on this but i think its very strange that we dont know where the guys are. Are they at large . Well, ooemim not in paris, i dont know where they are, but whats true is paris had quite an islamist problem in the past, and reports i get is when Police Arrived at scene, they backed off because police were not armed. Thats a lesson yier peens need to learn about the importance of having armed police. Deadly force. Deadly force. Theres a report from the Police Spokesman there was a hijacked car that some of the men might have used as a get away car. We dont this may be an ongoing terrorist attack. If they are not apprehend yet, and they are still armed, right . Absolutely. One of the things we need to be worried about is of course copycat attacks. Right, right, right, all around the world. Not just paris, but london berlin, and the United States. We always seem surprised, and we always make the statement, well, were now in a new era, where we have to be ready, and yet we express surprise another new era where we have to be ready and terrorist alerts going up around the globe at this point, but michael, before we run, you mentioned the United States at the end. At the end of the sentence you mentioned three places in europe, and then the United States, which begs to question how susceptible do you think we are here . I do think were susceptible. We certainly have had the case of lone wolf. Its not a new era. Hes. Living urn that for more than 30 years. I mean, ultimately we do need to worry in the United States because there are lone wolf out there joining al qaeda, fighting with the islamist state, and if they return, well face this in the United States. Michael, thank you, appreciate it. Thank you. Appreciate your time this morning, thanks. When we come back a list of stocks on the move ahead of the opening bell, and at the top of the hour Goldman Sachs chairman and ceo Lloyd Blankfein will be here. Well be right back. A couple stocks to watch, American Express was upgraded to buy from new tral at Goldman Sachs, siting multiple benefits from an improving ma crow economy for ame kprgsx. The Financial Guidance falls short of current estimates. However, the ceo did say that the company is emerging from a challenging period of expirations and will resume growth. We talk about that many times when hes been a guest on the show. And jcpenney had upbeat holiday sales and gave projections at the upper end of the prior range. What was the bottom line . He said look it was a dying retail e and now that were gone, its a dying retailers again, but i have to be careful we never believed in the business modmodel, offering sales to get people in the door. I almost mentioned, what a great year a year and a half ago, he was hawking buttons at ron johnson. A year and a half ago, you try to make him cry. How do you feel . He turned it around. Right. Incredibly. And then shares of herbalife, also, are on the move today, and we did have bill ackman talking about that and hes always been outspoken, but hes more outspoken about something happening in the near term. Right. Its on a low. Down 12 . On a low, down from 80. When ke womanwe come back, the adp private payroll numbers moments away and Lloyd Blankfein, the chairman and ceo of Goldman Sachs. His take on markets and slide in oil and future of banking joining us on the new set when we come back. 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 to new york. Welcome to the new squawk box. Welcome to new york. Welcome to new york. Welcome no new york squawk box. Our interview with lloyd blank mooin. The adp reports minutes away and from bond trader to the story of a young southern gentleman putting a photo graphic face on the humans of new york. A brand new home on the biggest business stage in the world. Live from the most powerful city in the world, new york this is squawk box. Wow. Welcome back. First in business worldwide, live from the heart of new york city. I want to say that so many times. We are live wednesday morning live our new home located in midtown, man hadden across from where they do do i said do do saturday night live im joe with becky and andrew and, yep, Lloyd Blankfein is here and ready to talk. First, this breaking story followed all morning long. Tragically, a couple hours ago, a shooting in paris, were careful, but the french president called it without a doubt a terrorist attack. The worst in several decades. 12 killed 17 hurt. Well bring you more on that in the details in just a moment but first, lets just talk about what to expect today. Were less than 90 minutes from the opening bell on wall street. The futures have been up triple digits recently now up 142, adding the gains as morning has gone along. We started the year with the s p, down 4 . A little over. And little urn 4 . Yeah. And one of the worst starts out of the gate in january in history, and so well get back at least so far today a bit, and the margtss are keying off of oil. Looking at that in a moment as well, and there are the european markets. Something to be said for france being up for the cac up 55 points after what happened right in the heart of paris today. Futures looking up the bears are growling in the early going. The s p 5 hen and nasdaq down five sessions longest streak for the s p since december of 2013. They are down 6 from the peak at thanksgiving and the vix jumped 50 in seven sessions. Here to tell us if we should worry about the rocky start to the new year and get his view on all things the squat maker of the morning, thrilled to have you on our first day here in new york city. Good to be here. Last time i saw you in december, you thought 2015 was going to be relatively gang busters. It feels at least that the markets may not at least agree with that assessment and has this changed . Id say in the first two and a half trading days of the 260 were going to have it did not start out well but i do not extrapolate at this point. Let me read this to you. Bill wrote, be cautious and content with low positive returns in 2015. The time for risk taking has passed. When theres the year past theres minus signs in returns for asset classes. The good time of times are over. Look, we had such a long run. Its a safe thing baked in to moderate higher expectations, and it might we could have an off year but looking at the bigger picture, we are still in the situation where the macro context has the United States in particular at above trend growth and 0 Interest Rates, and the expectation that Interest Rates stay low for a very very long time as Growth Continues to cycle higher thats a very Good Environment for asset prices for stocks. How do you factor in the macro, though . We have a tragedy this morning in france called terrorism, and the issues around greece and the issues around oil. What that could mean. Im in the risk managing business in the business of lifting all the things that could possibly go wrong. Obviously, theres a lot of macro things that can go wrong, you know terrorism, dramatic results, in the business of war gaining anding the trying to account for this, but i think most of that stuff does not happen, and things mostly break to the high side, not low side. I say in this particular case the macro environment is very positive. When we see oil prices how far down do they go . I dont know. They could go they went into the 30s last time. I think, you know when you deal with oil, its two sides. Usually, you deal you dont always know when you see a lower price, whether its supply side driven or demand side. I say in general, the assumption is its supply side driven because of the sploiupply. Look at the effect that the lower prices of oil is having on equity markets and on the bond market, you start to think, gee, am i coming in with that as too much an assumption . If i was just looking at it, did not have an assumption, would i think that maybe the oil prices is telling us that theres risk on the demand side and its deflation pressure not just supply pressure driving the price of oil . I think sometimes you come in with a you know a world view and then you incorporate, you know facts according to the world view. If you suspend the world view you leave some part of the brain open to the fact that the oil price is saying that were the market suggests a deflation their period. You think theres i dont think it but its sensible to interpret whats going on. You know, 19 of 20 guests tell you a lower price gosh if oil was tradinge inging at 130 we wish for 50, now that we have it why is it a bad thing . Theres a million reasons why it affects in the short term, but you have to si it does not make sense because they know its a tax cut, its this, a boost, a subsidy subsidy, all the positive things in the economy. Whats going on . You know . Is it really not just the supply side and a blessing . Is it suggesting deflation pressure . You have a group that puts together an outlook at the beginning of the year, and i looked at 20 14 and 85 pages of 2015. You nailed 20414. Phenomenal, i will say. 2015 the preeminence of the United States in so many ways makes goldman, and you agree with the people you employee makes it still the place to be, and some of the concerns in 2014 had gone away which it was amazing to me which as a firm, they were sanguine even though they moved up. You dont have to you know go be over the top about it. I think the context is positive especially for the United States. We have all these tail winds, the energy tail wind the unemployment thats been a great policy. Well entrepreneurialship. Entrepreneurialship, but i read entrepreneurs we watch are growing, but the mask of people still number one for freedom in starting a business in the world, still number one in terms how easy it is to run it even though we talk about regulations. I was in china awhile ago, you know to my hopes, said of course things you have a productive society. You have 1. 3 billion people to draw on. The host said to me you know you have 7 billion to draw on including our 1. 3 billion if you want them. Thats the draw of the United States. Go ahead. Do you think that central bankers, our Federal Reserve central bankers in particular look at the deflation environment like you laid out with the oil suggestion . Does that affect how they behave . How does that impact the markets too . They feel a lot more. They focus on different ways with a different set of responsibilities, really im in the Contingency Planning business too. If you ask what i think, im not really i think things look the reason why Insurance Companies are in the world because people pay a fortune to get out of riffs that are not worth the premium they pay. Thats why Insurance Companies make money. They want certainty thats not available. We said responsibility is to guard against low probability, but adversely consequential things like a, you know like you know deflation, like a deflation pressure, in other words, the fed at this point, and i say whats driving my point of view i cant say what i would do but what i do is i would take a lot of risks on the inflation side and theres not much inflation, no inflation in any way, but i take that risk to avoid a low, but very adverse consequence of it backsliding. If it back slid what do we do . What are the remedies . A stimulus package, fiscal the only game in town has been the monetary, and we fight a lot of the bullets. I ekeep firing because sustaining it is a lot more sure than losing it and trying to recapture the forward momentum. A great argument counter to what many said they are behind the curve. You know something sm i respect them so much because if everything works out as well as it possibly could work out, there will be critics. The world could go great, and people say, you didnt need to do it because the adverse consequences would not have materialized, and so they give themselves certainty for second guessing down the road but there, you know you take, you know, you go in the jobs with a certain set of responsibilities, and i do think theres a low risk but very adverse probability if it started it backslide. What would you do . Yeah. The five things because i looked closely, the five corns that goldman has for the year i think the fifth one, which was a real concern for a while, was ebola, if it leaves west africa and becomes app end depp ig. Thats still mentioned. First is rates go up too quickly or disorderly or something, but none impressed me. Of the five things goldman does not think europe or ukraine are in a better position. Less worrisome in 2014. I know you, though, and i know there must be something other than wow, things are great. Whats the most concerning thing for you . Maybe its not knowing what it is . Look the leverage in technology, all familiar with the good leverage of technology but what about the bad leverage of technology . People talk about cyber terrorism and bad behavior what about mistakes . You know somebody makes a mistake, bad software wrong button, connect to 60 exchanges. What if theres an error . Finger trade used to cause drsh in the olden days you had you know, you had a fat finger and it would cost you a hundred thousand dollars. Could you have a hundred million mistake, a billion dollar mistake because of loveeverage. Theres that. Theres the fact that Interest Rates are low as they can be. Anybody and every issuing, somebodys buying securities. When rates come up all the securities have embedded losses in them. People know thats going to happen, but well discover people a lot of the worlds structure is built on assumptions, and im afraid one of the assumptions in the last go around was the assumption that housing prices cant go down 40 all over the world at the same time. You think theres an embedded assumption that Interest Rates can go up sharply over a high level over a very short period of time . As far as the disorderly nature you know at some point, its not the feds decision, but the markets decision. . Uhhuh. Once the fed starts to move they may want to go at a slow pace, but as i sate sit in the market and nay go in a measured slow but inevidentble pace, i get there in five seconds. They get ahead. I just got this is too good to pass up. This guys wellknown, and i know you know him, and hes been very successful. I cant mention the name but what a surprise if the ceo of goldman is arguing for more fed juice. Its not about inflation. Its about people doing things with money they would not do normally building up in locations where we dont know with the bubble is right now. Goldsman always likes 0 Interest Rates. It is true you love the fed being accommodative. Weve been around for 145 years, and our fortunes are tied to the long term success of the economy and long term growth, but i know what its like to be a steward of an institution and try to take extraordinary pay extraordinary premium to reduce low probability, but highly highly consequential risks, and i see the risk of a backsliding to be a very adverse, low probability, but very high how much do you pay to get rid of the risk . They are not ask you to write a check for it but take certain risks with the other parts of the economy. What joe gave me a hard time before we came on, talking about the paper you read, and he said does he not one time does it mention income inequality a problem. Andrews favorite. It either worries you, and do you think its fed induced if it is . Well, i think that some of the things that are affecting the macro market can disproportionally help people who have assets. So if row are doing qe and things that inflate asset prices, it helps people who have the assets. Guys like Hedge Fund Guys they love whats happening. Taking price of energy. Right. To the extent that thats kind of tax cut like its a progressive tax cut. Right. Theres something in the middle going on in the mechanic crow thing helping to support europe. Thats the drop in the euro. Yeah. Thats something that helps both sides. In fact, at the end of the day, for all the storm and drog about whats going to happen it may well be that the best spur to what they want to accomplish is just getting the euro lower. You know i just to close this i think you are one of the greatest risk managers in the financial crisis and you were unfairly tarnished for ridiculous issues. Others dont think that but you should have been on tv. Why havent you been on . Why didnt you come back on . You were great today. For crying out loud, you were in new jersey. Lloyd, stay where you are, were going to steve for a second with some private payroll numbers from adp. Steve . Thank you, andrew. Adp says payroll rised by 241,000, shy of the 250,000 estimate. Revised it 227,000, shy of the 321,000 government reported. Inside the december reports, strong goods, jobs growth 46,000 services 194, and theres the nonfarm payroll estimate. Quickly inside the numbers, construction was strong, manufacturing was strong, and, really, across the board, so guys, i know theres somber news from france, but good economic u. S. Fundamentals reported from adp. Becky . Steve, thank you very much. Back to the guest today, Lloyd Blankfein. Lloyd, you look at the numbers, and that reenforces the idea that the economy is doing gang busters. Unemployment rate declined sharply r and you pointed out its a great progressive tax cut culting oil prices down this says yes, the fed should be moving faster. Well i think the fed is moving by in terms of adjusting peoples expectations, but you like to have look you want inflation and more you like inflationary expectations. You want people to think the price is going up tomorrow so act today instead of its cheaper tomorrow so wait. Uhhuh. I want to ask you a banking question which is that goldman came out with a report suggesting that jp morgan would be worth more broken up than together. You didnt write it, but do you agree with it . By the way, e read that when you do because we separate research. I would say without jpmorgan specific, i say the structure of the capital rules assign a higher capital to your entire enterprise Balance Sheet. The bigger you are and the more complex you are. For jpmorgan and Goldman Sachs, and so you look at it whats the value of size and complexity . Well, sinnerynergyiessynergies, but now theres a cost complexity. Extra capital you need to have. That capital has a price. Look at the value of the synergies versus Additional Capital and, you know synergies are not worth it. If they were worth it for an enterprise, the consumer business is not helped by an affiliation with trading business for example. Thats applying to the large banks that have Additional Capital charges. Do you think well see big banks . I say in the past there was synergies, and no real measurable cost consequence to it. Now there is so i think that a lot of the basis for the decisions to aggregate have to be reevaluated in light of the discernible cost associated with being above a certain is the cost appropriate . I think the theme of size theres a number of redundancies in the structure of the regulation. For example, theres c card a capital rule, liquidity rules, all of which amp up the amount of capital. I say they are all designed as if each one was carrying the weight of capital, and collectively, we have too much cash. Having said that, do you consider slowing down Goldman Sachs, or is this is hypothetical decision . I think in a way were they do not think of us as a simple kind of firm really were an Investment Bank and asset firm. We dont have a fully integrated, and our Balance Sheet is like you know 900 billion, not trillions of dollars, so actually were smaller, and we are simper not simple, but simpler, but you cant run an enterprise today without thinking of the consequences of the capital thats associated with taking on more complex activities. By the way the extra capital does not just apply to the complex activity thats added. It applies to the whole Balance Sheet, and therefore, theres some businesses that everyone thinks has to be worth more outside the company. Theres good Insurance Business which we like a lot, but we sold that last year because that business was a Better Business outside Goldman Sachs. I was remiss maybe, in mentioning dimon and his performance in the financial crisis in terms of offsetting risk, long emergenciesy mortgages. Because you set off all yearlong positions, it was oncoming. Jamie, the whale was later, but jpmorgan managed the crisis better than any other bank, and yet theyre the 20 billion fine poster child. For some reason goldman, after all the compliments, youre seen as the two worst actors in the financial crisis for some reason and thats not a result of some survey. Why do you think it happened . Warren, to this day, the reason the message resinates so much with people in this country and with the far left is because of the narrative we have for how the whole financial crisis occurred. I think for high profile institutions, and if youre thinking of the sector their name and our name pops out high. If you think about, you know, universities in america, you think of harvard and some of the, you know the brandier names in that context, and i think that 90 of the time that is to our benefit that people think of us. You cant blame the mainstream media, dont look andrew straight in the eye and say the New York Times isnt the guy you write about from goldman . Antonio . Hes not a goldman. Well, let me ask you this relating to warren who recently said its on the screen theres a lot of talk coming from citi how doddfrank is not perfect. Let me say this. I agree with you, doddfrank is not perfect. It should have broken you into pieces. Do you believe that she worries there, or is there movement afoot to break up banks or regulate them more harshly . Of course. I think theres people who want to see it less regulated, people want it more regulated, runs the gamet. On every issue in the country. But do you think thats changing . Coming on another election cycle soon theres questions as to whether she runs likt to the left and she has to start its an issue. Here what i think, people think the pendulum did not go far enough, and others say too far and its going to swing back. Its not going to happen because the banks. Its going to happen because the consequence because the consequences are such that the users and the beneficiaries of the market are not able to get what they need from the banking system. The point of which well heeled people who should borrow mortgage but if people cant get mortgages, its not the banks that say, gosh, regulations are too tight, but people cant get mortgages who should, and they relax the mortgage rules, or it wont be because we say liquidity is effective in the market by the capital rules and the rules the way certain things are traded. That will be on deaf ears. The second that the consumers of the market cant get enough liquidity, and they say this is really hurting us and our ability to serve the public then that will get attention. That same person said the one giving you grief said you are right hesz is a genius risk manager. Nobody better than you. Youre not really reading something. He is. Ill tell you who during the commercial break. We cant wait to see you again next wednesday. Well see you next wednesday when you do this every week. A couple weeks in davos. You know what thats good. Thank you for being here. Thank you. Appreciate it. Good luck. Congratulations. Thanks. Thanks again. Coming up a busy morning in the big apple, more on squawk Box Including latest developments from paris this morning, a shooting at the office of a satire magazine. Plus, do you cut the cord and pay 20 a month to watch a Favorite Sports Team on a streaming service . Well talk about the growing buzz that could change the tv industry sooner than you think. 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Coming up latest on the deadly terrorist attack in paris this morning, and then were going to welcome former nba commissioner david stern. His take on skyrocketing ticket prices, the future of sports and how leagues are using technology to keep Fan Engagement and whether new york gets an nba team oh wait they do sort of. Well be right back. And last but not least the High Performance gti. Looks like were gonna need a bigger podium. The Volkswagen Golf family. Motor trends 2015 cars of the year. Breaking news from paris, 12 killed in a shooting at the paris offices of Charlie Hebdo. Joining us now, jeff lanza, a former fbi agent. Theres a lot we dont know what happened, but when you hear about the satire newspaper mocking religion including islam, what do you think . Caller the french authorities said its a terrorist act, and probably related to their you know, to the publications and a focus of the investigation is to determine who is involved but the french citizens how did they become radicalized . How did it happen to begin with . Where did they get trained . Are there other targets or victims out there . We have other cases recently a case in canada that brought our attention, again, to the growing problem that seems to be happening around the world, how does the United States view this, and how do we protect ourselves . Yeah, well, one of the greatest concerns of the fbi since 9 11 happen home grown terrorists. Thats a person who operates under the radar, and much more likely to launch successfully some sort of action. The Boston Marathon bombing, for example, or launch an attack inside the countrys borders. These are people who are radical radicalized for some reason not happy in life. They get training. They get weapons. They attack their own country. The fbi has always said since 9 11 we can take care of al qaeda in many situations around the world, we can hit the camps, but can we control young people from being radicalized with easy access to internet information . How can we feel safe . Whats done behind the scenes . Caller in an open society like in the United States, you dont want to live in a war zone, and theres always a tradeoff between convenience and security and in any business operation, and businesses should do the best they can to protect employees, customers, and clients, at the same time making for easy access. Theres a tradeoff and i think, you know looking at this situation in particular i think you may have to reassess how people get sb a business and the fact that they got in there and got out so quickly tells me that they knew the layout. They were able to get in there quickly. Police officers were also involved, which told me they were outmanned or outweaponed in this particular case so maybe some businesses ones that are in the category of putting out movies and publications maybe you consider their, you know internal security in a different light given the event. Jeff thank you for joining us today, again, jeff lanza, former fbi agent. Turning gears to media and sports before we set up david stern who is here but teams are looking for create ef ways to draw fans to sport venues as attendance is down. The Atlanta Hawks are hosting a tindr themed night tonight. This pioneers of the kiss camera encourages fans to use the tindr app to swipe right to meet fellow fans they are setting up an area where fans can actually have a chance to make a love connection, and, joe, youre on that app all the time. Yeah right. Why didnt you think of this . Do you know what that app is . I do. Im afraid to say. Why didnt you come up with it . Its a very imaginative. Once they are in the building this is for people to hook up. I have to say, do i have to define hook up for you . Because i didnt know. I thought it met meet someone. Theres a lot of Bad Information here. Like andrew said attendance is down, its not down in the nba, but up. Are the knicks not 355 . That does not relate to the fact that you guys and lloyd were sitting here in your short sleeves. Did you love that . Trying to have a little class. And you bring us tinder. I know. Consider the source. I know. Im a dumbny. Im a ventriloquist. We moved on okay . At least its male and female so its better. I mean, i i had not been to a knicks game in a while, and even though it was the knicks i enjoyed it. Thank you. Left it in good shape . Great shape. Our fans are enjoying it. Our teams are still trying to beat each others brains out because thats what competition is and does which is great. It was bad, but the average team is marked up how much because of the prices . 30 this year right . Marked up i dont know how you recall that im saying that value of teams are reflected in what willing buyers will pay. Do you think sports teams long term hold value or increase . Thats in large part based on cable tv and Sports Networks being bundled, and were seeing this whole unbundling take place. We saw it happen where espn is part of the dish propgt. What do you think happens long term . I think long term first of all, all of the deals are long. The recent nba deal by commissioner silver takes it out 11 years. Thats good. And i dont think that the unbundling is occurring so fast. The idea that dish has announced that Many Networks incoming espn will be Available Online over the top is appealing to an audience that either has cut their cord already or the nerves the never had cable, so actually, i think its going to bring in more people and i would hope that somebody who gets to see the occasional games on espn or abc will want to make sure they get to see all the games, requiring a different package. How does the nba protect itself and does not see the i have a hard time posing the question but i think the nba and nfl are in great positions, but how do you make sure by going over the top you do not lose the value along the way . Well, one of the things that is of great advantage for the nba is there are 300 million plus Television Households in the United States and there are going to be some billion or so outside the United States and the nba games are now available both on television and in 215 countries and territories, and over the top already where games are streamed and they seem to work quite well. How soon do you think well see a digital only company . A google or a netflix did on sports . I well i think that thats a very real possibility, and thats why the networks cmt, espn abc, traditional over the air networks tied up up rights. Google microsoft sitting on stores of cash are going to come to the same cop collusion that everyone else has. Live sports is what brings people in and keeps them there. You know we had nick parsons joining us months ago as the interim head at the clippers, and we talked to him about what happened with Donald Sterling and he said part of what happened is its a moving line thats moving quickly on whats acceptable and whats not. How do you describe how things played out not just in the nba, the nfl, but its a broad issue coming up all over the place . Well im watching it from a distance, and be careful. I was focusing particularly on what happened in the nfl with respect to social media and the wave and i always felt that due process is not a bad thing. When i hear people say because of particular player has been acushiona accused of something, why shouldnt he be immediately removed . Right. I dont think that is going to be the way it should be in the long road because americas a pretty great country allowing people to be accused, adjudicate adjudicated, and deal with them harshly if found guilty of something. Quickly, adam silver said he would like to see gambling on professional sports should be legal. Its a protege of yours, and for years, you were completely on the other side of the debate. Where are you now . Well i actually if you look at me position and its movement, you know we played an all star game in las vegas, a Summer League in vegas, and i agree with adam. Once daily fantasy became an acceptable exception to the law against gambling i think thats gambling so now i think the best approach would be as adam silver addvocateadvocated, is to be federal regulation. Bring the sports leagues in. If its going to happen and it has anyway by Justice Department rulings and the like make it legal and regulate it as tightly as you possibly can. Dpl thank you. Thank you, david. Great to have you here it is but theres more unfortunately, on the attack 12 dead 20 injured. As far as the perpetrators, one captured on video shouting allah as shots began to ring out. Its the worst being called the worst terrorist attack ever on french soil and the gunmen are, from what i can tell still at large. They fled the scene towards eastern paris, towards the suburbs after holding up a car, and the white house said the u. S. Security officials are in contact over there with their french counterparts, and the perpetrators at large, were going to track them down, work with the french to do that, to they told msnbc, to track down these two black hooded men who entered the building and killed eded all those people. At least as of them still at large. Well bring you more on the terrorism attack as we get it. David, thank you for being here. Appreciate it. Coming up next photographs from new york social media off the charts and hes talking about his rise from bond trader to best selling author. Brandon stanton is here creator of humans of new york. Hes going to join us off the break. Were live from midtown, manhattan, and well be right back in just a moment. 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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. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. City notorious, it is a rare opportunity to get strangers, and humans of new york is reshaping how we view the big apple, brandon is the brain and limbs behind the humans of new york. He interviews and photographs people every day on the street, and its going global too. They branded to capture the humanity of ten countries around the world, and its social Media Presence is skyrocketing with 11. 6 million likes on facebook, and 2. 3 million followers on ens instagram. Thanks for coming. Im very honored. You are not a new york native . I grew up in chicago. Went to chicago, became a trader, and how did you end up here . Trading went very poorly. It went well at first, i was in fixed Income Securities 2342008 when everything came unhanged, and so things fell apart fast and after i lost my job, i said, you know, ive spent two years obsessing over something over have nothing to show for it so im going to do something because i enjoy it and just because i love it and thats when i set out for photographs. We look at the picture, and the pictures are amazing, drawing people in by its the stories with them. Yeah. It captures people. Why it took off is it started off as a photography blog, but i started stopping people on street and giving them on the spot oprah interviews about their lives, and so you know what it is, every night i post four or five photos of random strangers on the street with deep stories, personal intimate stories about their lives. Like what . Give us an example of a couple that touched you. Well, recently, the i was told to look for business and trading stories. One man was walking outside here dressed romantically, and he used to be a commodities trader, and he lost his job, the boss committed suicide, and now hes the lead designer of stetson hats. I ask things about what are you most guilty about . People tell you . Yes thats the amazing thing is that the something about the anonymity of talking with a stranger m one of the questions im asked, is how do people tell you such personal things . Something about am anymorety of talking with a stranger, even if they know its shared with ten Million People they told me things they have told no one. Do they know usually . More and more now. I think half a million new yorkers follow it on facebook now. What was the breaking moment for the blog . When i did stories. Humans of new york was not a fully formed ideas that i had and that i executed. It came from tiny of hundred of evolutions, and the biggest was when i started getting stories that started as just a photography blog, and the growth chart, i started sharing stories of people on the street, it just went like that. Do you advertise . No. Never paid a dollar of advertising. Its, you know, the beautiful part of social media is that, you know if you i always say, everybodys one very good idea and a lot of hard work away from developing a giant audience in the power of their hands without the help of Distribution Center or a support system, and so you know it was a good idea. It was something different. That was stopping and interviews people on the street. No one was telling the stories of ordinary people with any consistency. Once i started doing that then social media took over. Everyonements to know do you monetize it . Artist or businessman . I never focused on monthization, but that was a by product. I foes kused on distribution i wanted the biggest audience possible, and so i never ask for money. All i did was give give give every day, five pieces of content, throughout the course of that the book is successful and then i also give speeches. Brandon, we know why we chose new york its the Financial Capital of the world. Why you . Why did you choose it . I guess the capital of selfexpression. You know, i just i photographed in a lot of cities and when i got to new york i always said that in so many other places the social pressure is to fit in. In new york, i feel like the social pressure is to stand out, and thats what i noticed is that theres so many people very proudly pursuing their own path and thats what astricteded ed proudly pursuing their own path, and thats what astricteded ed proudly pursuing their own path, and thats what astricteded ed proudly pursuing their own path, and thats what astricteded edttracted me. From northern georgia . Atlanta. You have nothing left. None. When needed. Brandon, thank you so much for joining us. When we come back we got a lot more. Were going to head downtown. Thats because were here. Were going to speak to jim cramer at the New York Stock Exchange. His thoughts on the s ps longest losing string since 2013. Were back in a moment with him. Lets get down to the New York Stock Exchange. Jim cramer joins us now. Said it was one of the worst starts for the s p. The market indicated higher than this tragic event in france. Yet, the market added to its gains. Do you think it holds up throughout the day . It may. I think that we were doing well going into this session. We had a nice rally until the last few minutes at the end of yesterday. I think that the number the deflation number out of europe its almost like its illegal for them to have this kind of thing according to the ecb. This action this terrible incident, i think, is going to make people feel like theres going to be a rightwing reaction, and the right wing has got a lot of ammo here because of the economy, because of germany. I think its very significant. You guys have been covering it great. I want to congratulate you on that beautiful set and how energized you guys are. Its fabulous. Thank you. We appreciate it. We did have a couple of i dont know if you got to see bill ackman and Lloyd Blankfein. Youve known lloyd for years, jim. Maybe he wasnt as good on tv but he was amazing, though wasnt he . Very comfortable. You raised a point. Why didnt he come on more given how engaging he is and how the face of goldman was him, except for we didnt know it was . And a lot of people were introduced to him with carl levin, asking those inscrutable questions, like whats the sound of one hand clapping . Blankfein would just look at him like, you know were not principals all the time. Sometimes were agents. Do you remember that . The guy is like he never had a business course. Hes very disarming. Hes got a great sense of humor. Hes also got, i think, a charm about him that didnt come off in front of the senate. I think if he had been on the show more i think people would have said, hey, you know what . Hes not a master of the universe as much as he is a guy who came up from nothing, doing well. Nobody wants to hear the came up from nothing. All they want to hear is hes doing too well. You made some great points. Thank you. Anyway thanks, jim. See you in a couple minutes. Our first day in new york packed with news and news makers. Well have some of the highlights after this. In the meantime take a look at the futures. Things it look like theyre off to a strong start for the bulls. That future is indicated up by 130 points above fair value. Stick around. Squawk box will be back live from the heart of midtown manhattan. Well that does it. Its the end of our first day in new york. But it was a great day. We want to thank everyone for their warm welcome, especially our viewers. We want to thank all of you for being here this morning. Its only going to get better. Tomorrow we have a great lineup. Mark lasry of Avenue Capital along with ivanka trump and barry sternlict. Plus bravos top chef tom colicchio. Another big morning starting tomorrow at 6 00 a. M. Eastern time. This morning was great. It was great. We got to get a new picture. Yes, he does not look like that. Hes been working out. Theyre all going to breakfast on their way here. Stopping by. Some of them having breakfast here. As you heard with lloyd. Were just going to start offering better, you know are we going to do hot food you think . Were really coming tomorrow so do we get a thumbs up you can do it again . Did they tell us . I think so. How was the lincoln tunnel . People still say where is this manhattan place. My ts are my ds. Maybe ill get we do things differently in new york. Were going to get used to it. That does it for us today. Well see you back here again tomorrow. Right now its time for squawk on the street. Good wednesday morning. Welcome to squawk on the street. Im Carl Quintanilla with davidjim cramer, david faber. A rebound of sorts as the premarket is higher. Were keeping our eye on this attack. Apparently two gunmen in france attacking a satirical magazine. The latest death count is 12. Oils in the green after closing yesterday at 47. 93. Were up to 48. 38. Tenyear yield climbing just a bit. Still below two, r