Transcripts For CNBC Squawk Box 20091231 : vimarsana.com

no, no, when a blind pig finds a colonel of corn. you forget how worried people were. no one really thought am ex was going away, did they? really. i guess maybe they did. american express. it was a dark day. the broader s&p 500 heading towards its first al annual advance suns 2007. the s&p dropped 38.5% the year before. technology and material sectors led the way. at one time, financials were the largest sector in the s&p. now tech again takes that title. the top ten s&p stock performers this year do not include a major u.s. bank, of which there are like two left, aren t they? yeah. are there? yeah. there s used be a lot. citi do we stim got that a major a major deposit bank, yes. as for the nasdaq, the tech heavy index rose nearly 46% year-to-date. closing low hit on march 9th. but of course the index is down 20% from its multi year high hit on october 31st, 2007. we re not talking about the 4,000 level from 1999. 81%. let s say that, you know, you were interested in tech stocks and you told your financial adviser, you know, i m interested in tech stocks and he said no, no, no, it s just too and what if you re not in that 81 move, but you re ready to go now. you re next year performance is going to be a tenth of you re starting at double. how long does it take money to double? it takes a long time. even at 12%, it takes six years. so if you ve just actually been you know, you ve lost it s a lost decade for you. you ve missed ten years of returns if your guy said no, no, where we got a 60% rally and you got a second change. one guy said i was a bouillon in the murchl. now there s housing prices are yeah. numbers weren t all that he curving, but other areas are and that never got out of control as much as california or vegas or florida. right. let s go to commodities and talk about that. oil prices almost $80 a barrel. overnight, 20 cents away. now posed for the best annual gain in a decade. among the key catalysts, surplus u.s. inventories falling to their low elf level in 11 months. prices slid to a five-year low, under 33. since then, they state a steady decline all the way back to a high of 82 and that calculates to an average price of $62 for the year. oil is not the only commodity that s been hot this year. the other headline, guess what it is. coper? copper up 140% so far this year, close to a high certainly for the year right now. gold heading to its ninth annual increase. sugar, up about 140% year-to-date. 40u67 how many straight years is that for cocoa? it s four straight years of gains. the lose herbs, grains, wheat prices and corn, know. that was that up? there s the chart right there, 1.6% increase on corp. you might be up until all hours of the night looking at this stuff and memorizing. actually, i m up early looking at this. the dollar, do you know that? huge. rock bottom interest rates. moving into riskier assets. we won t be at zero, hopefully. futures this morning, we got a little up side action in asia overnight. the final trading day of the year. the action yesterday, joe, we were up three points. we were down a point and up three, so the volatility is in full swing. but remember, hp, ipm. had a great week. do you see goldman, it s back to 1.66. for a lot of people looking at that goldman and apple as leaders, but they ve sold of die verged. goldman has come down and apple has gone up. i m thinking about meredith widny, gold is sort of the one to watch. if that heads back to 200, that will be a dead one to call. the bond closed at 2:00. japan, germany, brazil were all closed earlier this morning. there is a look at the 10-year at 3.796. i will hand it to you, though, on the markets overall, you went long. i think at s&p 796. after the march low, but you said this is getting ridiculous. in fairness, i m a permeable. i just i want to whole world stock markets to go up and i want everyone s prosperity to increase and i hope that that happens. you look at how disconsulate people feel and right at the worst possible time, that s ubl bad. we re hitting the highs for the year. we have a week left. people have been calling the highs since july. a lot of people. the people that didn t get in, even the people that did get in in march and then got out, but very few on the street people got into the market. they re still out. yeah. the average investor is still out at this point. so we ve got that to look forward to. if they ever coming back. unfortunately, they usually end up holing the bag while everyone else unloads it on them. the fast money. the mad money. the mad money. i think we got all of our shows in now. chloe cho is with us in singapore, but first to zurich with cherylarolyn schober. good morning, carl. the ftse and the cac are open for half a day of trading and actually, we do see a slightly more positive picture on these markets than in yesterday s trading, what many of the european markets ended in the red. now, let s take a check off where these markets are trading. the ftse 100 up by 0.2%. it s kind of a mixed bag for the ftse as some of the commodities and the financial stocks are leading that index higher. however, on the down side, we see some of the telecom stocks weighing on the index. bt down, for example, by 1.6%. in france, the cac is up by 0.2%. now, for the whole year of to 09, these european markets have done well. however, the best performances can be found in the scandinavian markets. the obx and norway up 70% this year and the omx in sweden, up 43%. now, the big question, of course, is what will 2010 bring for many of these core european markets? in germany, they will set another tough night. and over in britain, the government is starting to withdraw some of these emergency measures. the sales tax will rise from 50% to 17.5% starting in 2010. and that is it for me this year. now let s go to chloe in asia. hey, carolin. thank you so much. i hope to see you more next year. pan and south korea were out and trading for only a half day. there was plenty of optimism yesterday. a lot of it can be attributed to year-end window dressing. but yet again, a lot of investors are hopeful about 2010 s growth process spengts for emerging asia. so if you take a look at the final scores, we had pretty much greens across the board. hong kong, up 1.8. we also heard from the chinese president hu jintao that china is going to focus on moderate economic growth and focus on continuity of policy. and despite the obvious tightening, the markets took it in stride and the shanghai composite put on gains for four sessions in a row. year-to-date, take a look at the stellar gains this year, japan, up by 19%. south korea enjoying a pop of 50% and hong kong higher by 52%. shanghai composite up by 08%. india, its best performance since 1991. australia, a relatively modest, but its best performance since 1993. that is it out here in asia. we re about to ring in the new year in less than five hours from now and we shall you a very happy new year. let me send it back to you. you, too, chloe. thanks for that. joining us is lakshman ash yason. what do we do in the fourth quarter? what s the gdp that you re expecting and what will we do next year for the 12 months? well, i can t give a gdp forecast. i do think the second half of 09 you ll see average gdp around 3%, maybe a little bit higher. so that is consistent with this being the strongest recovery since the early 80s. in terms of jobs, you re going to see headline jobs growth start in the next couple of months, which will be quicker than we ve seen in the last two recoveries. so, again, starting off, we ve got a very robust recovery relative to recent recoveries. that will continue into 2010. i can t see to the end of 2010, however. i think the other part of the year, we re pretty optimistic. i ve talked earlier about signs of a global industry slowdown beginning in 2010. that s pretty much going to happen. and that s not a recession call anywhere, but it is slower industrial growth, which would kind of lean against the optimism on emerging markets that like to export a lot of stuff. why would that happen? because the stimulus gets putt pulled or you know, i mean, that s probably it on the margin, but more just because after things recovery, they have to throttle back. every time. it always happens. we can t just keep accelerating. and the same thing will happen this time around. it always does. and that in turn will make a really interesting challenge for investors as they try to look at the fed exit strategy or the central bank exit strategy. you see everybody around the world saying, okay, we re backing off the quantitative easing. the following question is when are you going to do something with rates? if you go on early, you risk a me recession relatively early. if you go too late, you get surging inflation. thin you have to slam on the breaks. i m nor worried about more frequent recessions in the coming decade or the next few years than we ve seen in the last few decades and that s a sea change in the way you look at the world, actually. and patricia, correct me if i am wrong, recently when you ve been on, your feeling has been the movement in the market hasn t been justified by the economic backdrop or the fundamentals up to this point? well, i think what i have felt is that the market is counting on a lot coming utah of the economy and i am somewhat concerned because i think the corporate world is in very good shape. the corporate world wasn t overlep leveraged. so, you know, in that sector, the market is fine or that sector of the economy. but it s the consumer that i worry about because i think the consumer took on so much debt and now has to pay back that debt. and i just find it hard to think that the consumer can reduce the leverage that we all have or too much leverage in the consumer sector and simultaneously be able to create the final demand that will keep the economy going very, very strongly. yeah. the overleverage and the you know, what we ve been through in all the manifestations of it over the past year took us down to those numbers. what was it that got us back 61% on the overall averages and 80% on the nasdaq? the market knew the consumer was weak while it was moving 80%. why? let s remember where the market came from. it fell phenomenally. off the bottom, it s not surprising that you would get such a strong rally and the market is a leading indicator. now we re still, what, 25% from our all-time high. are we fairly valued, patricia? i do think the market is fairly valued. i think there are a lot of good strong corporations the productivity gains have been phenomenal this year and that is a very positive factor. you talked about technology stocks a couple of years ago doing particularly well. i think part of the reason they do well is they re part of the season opinion i think it s not you know, a doom and gloom story. i just think final demand is generally generated by the consumer, two-thirds of the economy is consumer driven. and i just worry where they re going to get the power to be buying. would there be any reason for an investor to position himself heavily long on january 1st of 2010 given what you just said? i think you can be long. i think interest rates will move up ahead of the fed. i think the bond markets are looking at a market that is ticking up and looking at concerns about the amount of money that has flowed into the system. but i think that might drive some people to say i m going to take some of that bond money where i ve made a lot of money over the past year and put it into stocks. and so i think you ve got a fair value in the market, but i also think that we shouldn t read, that the housing market is going to come back strongly. it s all fine and well to say we re getting a tick up in housing, but for the most part, housing is dead. i think there s too much supply. we ll have a seesaw but too much will i i think it s interesting, lach, now you re worried about more frequent recession. patricia, you ve been so heavy in cash all year, now you re making an argument to go long on the first of 2010. patricia gave a good look at things that are of concern this year. still, we ve had this recovery. and it is i mean, i know this is hard to believe, but this recovery is stronger than the last two. that is a fact p.m. i m not making that up. but that s because the recession was so small. look, it may be, but the market went up. the world didn t end, the recovery has come back stronger than the last two. that s not saying a lot because the last two were very weak and it s not a double dip. it s not simply about stimulus. this is the normal business system dynamics. the problem is, those same leading indicators that forecast this recovery are not rising as fast as they once were. where the business cycle is really your friend, i think it s diceyer in 2010, given slower growth rate, higher cyclical volatility, we re not going to get a long expansion this time around and that has a huge set of kind of policy and investment idea implications that are different for the coming decade than the last two or three decades. there were two other things. the stimulus is going to go away at a certain point and taxes are going to be raised. those are two negative impacts for the economy. right. if you look in the middle of the 30s, they ve raised taxes from 20% to 60% and you had a four year expansion at 10% a year and you had unemployment drop by 3% per year. so the business cycle can overwhelm what washington does. i know washington likes to say they re all powerful. they re not. in the out years, i think they ve got some major challenges. all right, great. happy new year. happy new year. we re aboveground. we re not pushing daits daisies. we re going to tonight is going to be good, right? wonderful. you re staying. they don t have plans, do they? they don t. they have plans to eat the next morning at 7:00. and other things. yeah. coming up, where are you going to be for the new year? i m going to be hoeld home, i guarantee you that. our friends from the weather channel will join us to discuss how horrific it s going to be on the east coast tonight and then for the rest of the country. but first, as we head to break, a look back at this year s winners and losers from the s&p 500. anncr vo: with the new geico glovebox app. anncr vo: .you can get help with a flat tire. anncr vo: .find a nearby tow truck or gas station. anncr vo: .call emergency services. anncr vo: .collect accident information. anncr vo: or just watch some fun videos. anncr vo: it s so easy, a caveman can do it. caveman: unbelievable. caveman: where s my coat? it was suede with the fringe. vo: download the glovebox app free at geico.com. welcome back pop let s go to this morning s travel forecast. scott williams with the weather channel. morning, scott. happy new year to you. certainly as we ring in the new year across the northeast and new england later on this evening, things could be icy and dicey. watching already some of the prescription moving into new york city starting off as snow. around the baltimore area, the nation s capital, that pink shading that you see, that is a mixture of sleet, freezing rain and snow continuing to fall across the area. watching the temperatures and watching the moisture. advisories have been posted around the neigh s capital. philadelphia, new york city, as well. winter weather advisories, so watch out on those bridges and those overpasses for some icy spots. unsettled conditions as we move into your new year s eve here. the mid-atlantic seeing the mixture of the rain, sleet and snow. new england, the slight light snow will continue to move into your area as the day progresses. later on for your new year s eve, it looks like it will primarily be wet and rain as we move into the coastal sections. as the ball drops in times square, we could see confetti from mother nature in the form of light snow. interior sections turning colder and you ll see light snow as we move into your new year s eve forecast. here is a look at the expanded view across the nation. unsettled conditions. rain around seattle. the intermountain west we ll see heavy amounts of snowfall and snow levels dropping throughout the day. call ahead, check with your carrier as you move around new york city and the new york area. watching for rain and snow moving hour by hour. back to you. okay. i knew it. thanks, scott. good to see you. happy new year. we ll see him again, right? yeah. coming up, this morning s top stories plus the pictures from the futures pits in chicago. then, health care, job creation, big bailouts. washington s rear in review and prospect for 2010. at the end of our show, i think we have squawk today, too, don t we sdmp. we have our year-ender. yeah. it s like self-dem lagz. it s awful to watch, but you should watch it. former white house deputy press secretary tony frado is going to join us when squawk box comes right back. because we believe in the strength of american businesses. ge capital understands what small businesses need to grow and create jobs. today, over 300,000 businesses rely on ge capital for the critical financing they need to help get our economy back on track. the american renewal is happening. right now. as small businesses are busy reinventing the economy, small business owners have a lot of questions. can paperless billing get me paid faster? how can i keep my best employees? how can i bring down my insurance costs? and while at american express open we may not have all the answers, we know who does. other owners. that s why we re helping business owners connect. together, we re building a community for them to talk, share and help each other. a place called openforum.com where owners can swap ideas and ask questions. will tweeting get me more customers? how can i make my business green? and one question seems especially popular. how can i get paid faster? how can i get paid faster? i was about to ask you the same thing. and they re inspiring ideas like acceptpay. a new tool from open that lets owners invoice digitally and helps them get paid faster. ask a question. find an answer. join the conversation at openforum.com. throughout our lives, we encounter new opportunities. at the hartford, we help you pursue them with confidence. by preparing you for tomorrow. while protecting what you have today. you ve counted on us for 200 years. let s embrace tomorrow. and with the hartford behind you, achieve what s ahead of you. good morning. welcome back to squawk box here on cnbc. becky will be back on monday. if you re looking for a birthday gift for me, get me the emory board cat. i don t have a cat, but just watching that, i just want one. don t you, too? cat nip to a cat is like it s hard to find a good met for. if you are looking for something to get me, get me emory cat. here is a curious new poll because americans are showing a mix of optimism and pessimism as we prepare for the new year. it s the associated press latest poll, 82% are optimistic about what 2010 will bring for your family. but nearly two-thirds think that their finances will either worsen or stay about the same, which i think shows you that prospects for your family don t depend entirely on money, right? i guess that s true. well, of course that s true. although money helps. you want enough, right? yeah. you don t want to have trouble putting food on the table. but what makes for a good year for a family isn t necessarily all based on the all mighty dollar, carl. no. that is a nice message to hear. although some of the consumer confidence numbers reflect bad attitudes about today but hopes that the future is going to get better. that s probably true. investor res saying good-bye to the worst investment decade since world war ii. the last ten years torturing us with two devastating stock market crashes, a credit boom and bust, low yields from government bonds. if you maintained a normal 60/40 equity bond fort equalo since 1999, you would have recorded the lowest average annual returns since the 40s to the tune of about 1.4%. that makes this the worst decade of the 90s until you were in gold or real estate and sold in 06. a lot of copper. copper. sugar, at a 29-year high. i learned all these things from you at the top of the show. thank you. because you knew everything about the commodities. i try to do my homework. george, good morning to you. good morning, carl. where is your head going into the new year? because a lot of people are talking about this, you know, the rally off the march lows. how successful it s been relative to where we are and that now any kind of bad number is likely to result in punishments. is that necessarily so. i think that s exactly right. you know, where is my head kind open coming into this week and looking ahead to next week is exactly what you said. i think the general feeling in the market now is that we ve had a nice move up in equities. there s always going to be some kind of correction. whether or not it s a large correction or not is debatable. but there will be some correction and when is that correction going to come? i think you ve maybe seen the extension this week and you ve had the year-end positioning and increases in equity exposure into year and i think people are now too optimistic going into next week. because i think what we could see is trade down end of next week, middle of next week, the week after. so the next big data point that is out is employment numbers. we had the chicago number out yesterday. it was a good read. if you look at the employment component, it was the first time above 50 since november 07. you look at the continuing claims, initial claims, continuing peak last june, initial peak last march. we had that data out today. i think if you get strong, numbers for the labor market out today. if you look at the weekly nabs, it will be random. it will be one pore piece of data that says maybe the equity market is turning around. we ve heard talk maybe we get a positive read there. consensus for the rate, 10%. maybe we get a 9.9%. i think those are optimistic and i think part of it is getting priced into the equity market here. and then you look at the ii survey out earlier this week. i think the bears are down to 15%. people are saying, well, look what happened six months after that. that didn t turn out so well. when the equity markets are out, everybody wants to look at the good numbers, right? i haven t heard any talk about the bad numbers. so you re exactly right, that there are numbers like that. but even if you look at the optimism readings or the equity market, you know, they re at real highs. i think it s the highest since october or september of 87. yeah, april 87. and so you start to look at things and say, well, where is the gas going to come from to push the equity mark a little higher? so there may be technical reasons for this week or that week, but in general, i think we re at levels where you probably want to start taking profits, maybe not put on new longs and be a little more wary. right. you guys close early today, right? 2:00? the floor well, yeah, bonds close early. regular close for equities, i believe. so you don t get out earlier to start drinking or anything like that? so aside from watching the labor market numbers out today, i think a lot of people are going to be watching the clock. the clock, all the way to midnight. joe is going to sneak out early and get a spot at times square, right? yeah. sneaking out early. manhattan is an island and you need to go over or under something to get there and i will not be doing either. i can tell you i won t dpo do that for the next thee days. are you saying it s not safe? i m not saying it s not safe. it would be easier to find something in times square with a $1,000 bill than somebody with a 212 area code. absolutely. see you next year. take care. it was one of the more interesting years on capitol hill in 2009 and 2010 promises to be even more so as the midterm elections approach. joining us this morning from god s country pp trophy town, paeb, trophy town. that s right, joe. you say you wanted some cats, but you ve got your bear cats playing pretty soon, but you ve got your bengals. january 1st. are the bengals going to lay down against the jets? i need them to win. oshao cinco says everything is going to play. i can t imagine they would by carson palmer. although you saw peyton manning on the sidelines. he looked like a caged animal. i did. do you remember when the bengals were in the last time in the first play, like 70 yards and then he broke his knee or something like that. i don t want to see carson palmer play and get hurt, but i do want to see them play and win. i had tickets on it when it was during the day. until nbc changed the times. and little baby can t stay up. little baby can t stay up at night and get up at 3:00 in the morning, no, he cannot. will it be a tough year going into january? it will be heading into january and into february. i know they want to try to get to the end game on this. there s still questions they need to work out between the house and senate bills. i think there s a lot of consensus that they re going to be able to do that. but some of the differences between the two bills are not simple. but i think they re going to be able to do that and they re going to be able to jam it through the house. i was going to say, because the house rolls over, is that how they ll do it? i think the house is going to roll. i don t think they have much of a choice seeing how hard it was to pick up the last few votes in the senate that the house is if they want to get a bill done, and i think they do, that they re going to have to roll ov over. tony, ben nelson, his poll numbers in nebraska, he s not running. he s not up until 2012. lucky for him. but he s doing 30 points to some guy that is i think it s running for governor again or something. but he s you know, and he s a guy that is getting a lot for his state and he s still down 30 points. we had doug cass on yesterday saying his prediction, democrats pick up a big number of seats in 2010 in november november. that s an overliar prediction. is it possible? that the democrats pick up seats? yeah, pick up a lot of seats in 2010. no. i think it will be quite top sit. you know, what they ve done, when rahm emanuel and nancy pelosi went out, especially in the house to go and pick up members that could win and pick up the majority, they went to a lot of districts and they asked guys to run as democrats. they were democrats, but they were not, you know, in line with the left of the party that s dominating the agenda in congress right now. so they were asking these guys to go out and make some very, very tough votes. there are about 40 to 50 members in the house that they consider themselves blue dogs or conservatives, whatever you want to call them. but they re in districts that george bush and even john mccain won in an election where he got trounced. so these guys are being asked to make tough votes on health care, on energy and climate they ve made tough votes and they may get another chance to make tough vote there. so-and-so it s a very tough environment for centrist democrats and i think that will come back to hurt them in november. what do you think will be the hottest issues once we get past the state of the union? budget? climate? what? we started off the year with you all eyes towards washington and what the fed is treasury are going to do. i don t think that s going to change. we re still looking at what the exit strategies are going to be for the extraordinary fed programs and where they re going to go on monetary policy. on the hill, we re going to get a good indication when the president delivers his budget in february. they know that they need to put together a plan that is going to be credible in terms of deficit reduction going forward, so are they going to do that with spending cuts? are they going to do that with new tax increases? that s going to be a big marquis moment for the economy in early february. and then we re looking at the end game on health care. we re looking at financial market regulations, the senate says they re going to get to a bill here. they don t have one yet. and they re going to have to reconcile that with the house. do you think the fed has the political wherewithal to raise rates before the election? you know, i do. rif a lot of confidence in ben, in ben bernanke, the chairman of the fed. i think he s not going to let politics affect his monetary policy decisions. but i think they you know, the data are not right now giving them a clear picture and maybe we ll get to that. you know, i think the biggest factor in terms of economic policy making in washington is something you all were talking about earlier and that s jobs. you know, and if they get robust enough job creation that the rate actually comes down, not just positive job growth, but job growth in the 250,000 to 300,000 range on a sustained month over month and the rate actually comes down, that will be a much more benign environment for economic policy making for the administration and democrats. if they don t get that, it s going to be a very, very difficult environment for them to get votes heading into an election. tony, looking forward to a lot more of your insight heading into the new year. great to talk to you guys and have a wonderful new year. enjoy the football this weekend, as well. okay. i don t know if he d really be happy if the bengals win. there s a lot of rivalry. i mean, you know, they re both on they re on a river, they pittsburgh sends all their trash down to don t to us, basically. really? yeah. it goes down to cincinnati. it slows down. there s three rivers. but you re not sensitive about it or anything? no. it looks like cincinnati with the hills. quick headlines, straight ahead. plus, we re going to go into chairs eventually. it s going to be another man show. the last one before becky comes back on monday. before becky comes back and ruins everything between us. anyway, stay with us. good morning. welcome back to squawk box i m monica novotny with msnbc. president obama will receive a preliminary report today outlining how u.s. intelligence agencies failed to share information that could have potentially stopped the attempted terror attack on christmas day. this comes amid a renewed debate over airport screening and whether the threat of new attacks outweighs concerns over privacy. conservative talk show host rush limbaugh was admitted to a honolulu hospital overnight after suffering from chest pains. limbaugh s radio program released a statement saying he is resting comfortably. hillary clinton has been named the most admire woman in america. she just barely beat out former alaska governor sarah palin. president obama was the most admired man by 30%. i m monica novotny. happy new year. carol, when you replaced casual friday with nordic tuesday, was it really for fun, or to save money on heat? why? don t you think nordic tuesday is fun? oh no, it s fun. you know, if you are trying to cut costs, fedex can help. we ve got express options, fast ground and freight service you can save money and keep the heat on. great idea. that is a great idea. well, if nordic tuesday wasn t so much fun. (announcer) we understand. you need to save money. fedex coach, you look great. wow, coach, you really are back in the game. i took your advice, dan, and i lost 32 pounds on nutrisystem, and i feel great. so what are your numbers? i lost 22 pounds, and i ve kept it off for three years. get back in the game in 2010. order now and you can get two weeks of meals free, plus the all-new nutrisystem jumpstart kit, our secrets to ultimate weight loss. hey, you guys. boomer. well, thanks to you guys, i did go all the way. whoop, 50 pounds lighter. so, coach, how is the squad looking? best ever. you know, i have a real hall-of-famer at the helm. l.t.?! why not, danny boy? i lost 35 pounds on nutrisystem. l.t. and cheerleaders: pizzas, pastas, burgers, meat! come on, guy food is all you ll eat! four out of five men say nutrisystem satisfies their hunger. start your year off right. order now and you can get two weeks of meals free, plus the all-new nutrisystem jumpstart kit. call or click today. there s a river that runs through all time do you know who that is? tvenl. bone burnett. he s a ledgeary producer. he did the soundtrack for crazy heart, jeff bridges acclaimed film. he did something on the walk the line, johnny cash movie. he was a golf buddy of mine, a mutual friend. the reason i m bringing him up is because he this is almost a tribute crazy heart requests requests to guitar player steve, i don t know the name, bruton, who died in may. did all the work in this jeff bridges movie, they re all original, heart-felt which is part of what makes it such a great movie, which opened it s opened already. it is open. the reviews have been fantastic. for jeff bridges. the reason i m talking about jeff bridges is because of a piece yesterday in the new york times about the cult status and the big lebowski because it was a 90s movie. this article yesterday in the new york times. there are books it s being taught at colleges at this point. we can show jeff bridges as the dude. i ve got a shot of that. there s even a collection of essays in its second printings, the year s work in lebowski studies. this is such a huge cult phenomenon. it s bigger than rocky horror, all these all these lines that come from the movie. star-studded cast, but this is what some people think is jeff bridges finest performance. necessity say a lot of other guys, tom hanks, kevin costner, harrison ford, could not have pulled off the role of dude because bridge is less of a star which makes him perfect for the role of lebowski white house success depends on him being a slacker, basically, and even they even say that jeff bridges might be the most natural and least self-conscious screen actor i was thinking that. we were watching some clips yesterday when he was dancing in some of these faux films within the film, and he really does not the camera s not there. he is he is completely self-absorbed in the role, you know what i m saying? yeah. and i think he s 60 years old and i think he s been acting for over 50 years. philip seymour hoffman. the people that are in that and nate is unbelievable at jesus contana is his name. i m going through tnc. bone i was bridges to come on and talk about crazy heart . years in the business. i m sure he has insight about entertainment and where hollywood is going. to get him to come on squawk, and it s three hours earlier, l.a. they don t see us. i need to go through personal friend to make that happen. let s hope it is. if you re planning to go out tonight you ll be offered a couple glasses of champagne. usa today has a couple of ipod/iphone apps you can download to see if you are too drunk to drive. one is called are you buzzed put out by the department of colorado department of transportation, you plug in your weight, the number of times it s taken you to drink them and they tell you what your blood alcohol probably is. they can t judge your metabolism or what you ve had to eat. one is called last call and another is called can i drive yet? mothers against drunk driving doesn t like any of them because they say if you had anything to drink you shouldn t drive. a lady recorded 0.7. she blew a 0.7, ten times the legal limit and twice what anyone has ever seen before. coming up later this morning, we ll get top stories not funny. first, our guest host, mike ho holland, closing out 2009. is he moving in? as small businesses are busy reinventing the economy, small business owners have a lot of questions. can paperless billing get me paid faster? how can i keep my best employees? how can i bring down my insurance costs? and while at american express open we may not have all the answers, we know who does. other owners. that s why we re helping business owners connect. together, we re building a community for them to talk, share and help each other. a place called openforum.com where owners can swap ideas and ask questions. will tweeting get me more customers? how can i make my business green? and one question seems especially popular. how can i get paid faster? how can i get paid faster? i was about to ask you the same thing. and they re inspiring ideas like acceptpay. a new tool from open that lets owners invoice digitally and helps them get paid faster. ask a question. find an answer. join the conversation at openforum.com. it all starts with havinglocks more hotels to choose from.. that s why i book with expedia. so i can find someplace familiar. or somewhere more distinctive. nice! then i can compare dates to find out when i can save the most cash. done and done. we should do this more often. more choices, more savings. where you book matters. expedia. dot com airline and security president obama wants answers about the christmas day breach. we ll talk to benny thompson about getting to the bottom of the botched attack. and a former security director of the israeli airport authority will tell us about stepping up the screening process. tech stocks rocked in 2009. never never land but will the party keep on going into the new year? so tonight i m going to party like it s 1999 we check out some tech stocks for 2010 for those about to rock we salute you as squawk box begins right now. we salute you for those about to rock we salute you all right, good morning and welcome to squawk box. he s famous, though. here on cnbc. i m joe kernen, quk carl quintanilla is here, becky quick returns on monday. mike hollins is here. he should get top billing. i shouldn t have to read all this stuff before i say i m no becky quick. you are not a becky quick. our final trading block of 2009, gratefully our final trading block. prospects for the dollar, oil more in 2010. more task forces and more squawk stories and more of the sound effects. equities and precious metal, including insight from dennis gartman of the gartman letter. we ll shop around for the best retail plays for 2010. our aforementioned guest host today is mike hollins of is it is it mike hollin and company? who is the and company? me. mainly you, isn t it? mainly, mainly. so often the only company you have is yourself, and it s the same with good reason. with good reason. we re going to it s early for this bad of stuff. it s good. you can handle it. you re awake. we ve enup for a while. you can handle it. how are you feeling about yesterday i kept talking about 2008. remember 2007 we closed on our highs. wow, 2008 was gok great. january started bad and got worse every month until the end of the world almost happened. sitting here in march and april, it was incredible to listen to some of the people who had been so bearish for so long saying, this is a gimme. you have to buy things. great calls of the year in 09 you mean. going into 09. at the lows. yeah. going back over the last two years. when things were great and they re always going to get greater, last year was the opposite day. had you things were bad and they were going to get worse. armageddon was a word that came up every hour on this program. and i think john, one of the great calls, i was thinking of that yesterday, right over there he is, the financial stocks, specifically large banks, were going to double. this is in march, april. within two months they had more than doubled. he was talking about jpmorgan, bank of america, citi. one of the great calls. at that time people were jumping out windows. i remember thinking bank america, it was like $18 and i thought it was a great buy, then it went to $32 and then single digits. that s the reason you re here, not picking stocks. well we re not sure why he s here either. well, i feel addition i catch a lot of the up moves. i don t catch a lot of i don t get out of a lot of the down moves. i think you re similar to that. absolutely. you re basically completely full of it most of the time, but we have a half-full the glass is half full. but we have a half-full view. it works, too. the american economy is a great driver of prosperity. it s worked for our lifetimes. absolutely. i imagine it will continue. will it continue? i hope so. you promise? i hope so. i don t know. what do you think, carl? it s a world class athlete, is what the u.s. economy is. we re counting down to the u.s. economy it s on steroids right now with the fed. before we bring in 2010, breaking economic news on jobs on the way. we ll get the final weekly jobless claims of 09, most up to date report on labor at 8:30 a.m. we re looking for for a rise. futures looking relatively good. a lot of markets around the world, japan, germany, others are closed. a preliminary report into the detroit terror report is due today. the president wants to know why red flags did not prevent a man with explosives from getting on that flight christmas day. benni thompson is on the news line. mr. chairman, good to have you with us this morning. good morning. good morning. thank you for having me. we already know the president wants to get to the bottom of this himself. he s called the failure c catastrophic. what can congress add to that? i think we can add oversight responsibility of our committee as well as members of congress to look at what the failings includ included, whether it was technology, human error, whether it was a lack of cooperation between agencies, or the lack of sharing information between those agencies. so we can look at all of those things to try and put another layer into exactly what went wrong. do you have a sense as to where we all know there are multiple areas that need to be fixed. there was a reason why this man was not in the inner concentric circles of security, but does the hard work need to be done on targeting those potential terrorists or screening everyone who gets on a plane, qul they are a terrorist or not? well, the hard work is how do we collect the data to put people on any list? and what do we do with that data once we put it on the list? what our christmas event shows us is that we knew about a situation from one agency, but that agency, from the appearance so far, did not share it as much as it needed to with the other partners in the intelligence community. so that s a big challenge. congress can look at it. we can legislate it. but at the end of the day, it s the president using his authority as chief executive officer, commander in chief, to make sure that those agencies do what the wishes of congress happen to be. we ve done it in the past. but, again, it s left to those individual agencies to work it out. chairman thompson, are you going to be looking at other countries systems? i m thinking specifically in england they said this man was on their no-fly list beginning last march/april. are we going to look at what worked for them and didn t work for us? absolutely. we re going to see whether or not some cooperative agreement can be reached with all countries so that if they put someone on a no-fly list, that would automatically trigger an alert on our system. right now, that is not the case. so in that situation is a vulnerability. but i think that s a glitch that technology and sitting down, working with our fine partners all over the world, that we can fix real quick. mr. chairman, any doubt in your mind that two things will happen this coming year, that tsa will get a leader? they ve been without one for almost a year. and that we will see a big order of these body scanners for tsa? well, i m i hope senator demint releases the hold on aero. he s a fine man, he s gone through the confirmation process and passed with flying colors but the senate operates with a different set of rules. and we re without a leader. we need a leader in that operation. in addition to that, there is money in existing appropriation bills to purchase some of the machines. the question is, is it s not enough. hopefully we will move forward. but i d like to say, too, that there are sop othme other thing can put in place to layer our system. we re going to enhance the canine purchases around the system. we will use enhanced training for our people to begin the process of looking at people. you know, the israelis do a wonderful job in israel in facial recognition and other kinds of technologies that have proven successful. so we re going to look at everything. i m not so i think we have to put the resources there, but i think we have to be strategic when we put the resources. and i m convinced that this technology, what it is, congress will do the right thing. but we also have to make sure that technology, if a new technology comes along, we have to push it out in a reasonable period of time. one of our challenges historically has been, it takes too long to push new technology out. on we ll look at that process also. congressman, appreciate your time this morning. you ll be getting a lot of attention at those hearings, i m sure. thank you. let s get more reaction on the airline security issues from raffi ron, now runs a consulting firm in washington. it s great to see you, sir. and everyone agrees, what s done if israel is state of the art and what we should try to aspire to. why does it work so well? does it have more to do is it the electronic equipment or is it the ability to spot suspected terrorists that really does it? well, i think the main difference is in the perception and concept that is being implemented in israel. the main focus in israel is in detecting suspicious individuals and then tayliloring the level search and type of search to the individual. so what we are seeing is something which becomes very effect effective for identify single passenger and adding the right level of search to this person. sounds like profiling, obviously, which is probably a lot easier to do in other parts of the world. i guess one of the things that people say then, why wouldn t someone use a grandmother in israel, then? why wouldn t a terrorist whatever your looking for, why don t they send someone who fits the opposite description? yeah, well, there s a lot of misconception about the concept of profiling. in this country, profiling is usually interpreted as racial profiling. that is not necessarily have to be the case. there are a lot of other criteria that can be used in order to identify the level or identify the person who may be engaged in the malicious plan. we have developed here in this country a program called behavior of pattern recognition, which uses the behavioral indicators in order to identify people that deserve more attention from us. this program has been used now in a few key american airports very successfully. tsa has emulated our program into some extent is running its own operation within this category. and it s a successful one. but that s just one layer. i think that the problem that we witnessed on christmas day was that actually every single layer of our security system failed. we failed on getting the intelligence through. we failed when abdulmutallab came to the airport with the technology that did not detect the bomb he was carrying. and we failed with the people that did not recognize the suspicious behavior that he was exhibiting, both on the ground and on the aircraft before the attack. mr. ron, yesterday the dutch announced they re going to do a full body search machine. do you think this is a wave that s just beginning or not? well, we don t do full-body searches to everybody. we do those only to the people that we think that they carry that level of risk that requires that. but i would assume that the international standards that are being implemented at tel aviv airport, would probably include in the near future full-body scanning as we already see in some airports in this country and in western europe. although, the if they can still get around that, can t they, if they stick it somewhere? i m sorry? they can still get around the full-body machine if they put it inside their body, right? well, that is correct. but once again, the idea is that we don t have one silver bullet that will solve all our problems. if he carries something in his body we suspect his behavior will be such that we ll have a chance to detect him. customs have been using these kind of techniques successfully for many years and there s no reason we would not use it at the airport. really quickly, when you talk about the behavior recognition, can you explain a little bit how that works? is it a matter of watching how someone moves their eyes in response to a question or give us some detail on that? well, largely speaking, this is based on the idea that someone who is going to end up his own life in an extreme act of violence is experiencing a completely different mental status than any other people around him. in other words, someone who s willing who s ready to die in the next few hours, he s going to act differently? that is correct. there s a lot involved here. there are issues of level of stress, which is reflected in body language. there are some tactical aspects of the attack like when abdulmutallab stood up from his seat and went into the bathroom to prepare his device, that is something that did have some indicators that could have been picked up. there are issues involved in wearing a device or carrying a concealed device on your body that affects the way you behave, the way you move and walk, i imagine. exactly. you guys would have caught this guy i mean, i guess one clue in israel, if the father of the suspect said, look, this guy s probably going to bomb one of your planes, you probably would have taken some action or looked into the situation, right? of course. i think the information we had available before abdulmutallab boarded the flight was more than sufficient to make us stop him from flying. sadly enough, that information was not available at the airport. well, we search 5-year-olds, grandmothers. maybe there s a way of getting a card that says you re not a terrorist. maybe there s a card that says you can carry people are still saying that the dad, when he came to the authorities, did not have the goods. he didn t say, my he showed him the texts showing he did not say my son i think my son is a terrorist, is going to die for his cause and paying cash for a ticket in nigeria is not all that unusual. with no luggage, going through amsterdam. that s what some people are trying to fight back monday-morning quarterbacking. is that fair, rafi? yes, but at the same time, i think just the suspicion that was raised was supposed to be enough to turn that person into a selected at the airport, to say the least. pat him down. that didn t happen, sadly enough. i think if he was a selectee, there s a fair chance that his device would have been detected. all right. rafi, we appreciate your time, mr. ron, very much. would like to have you back again some time. hopefully these things have a way of quieting down. you know, these the stocks run up and security stocks come right back down typically as we forget. anyway so you re playing devil s advocate. yeah. i m wondering why people are saying that if it s not the case. i m going to pat you down on break just to see. i ve been wanting i ve been thinking about that. we have two minutes i know you wear you wear those underwear, those weird stop it, would you please. the clean ones, is that it? you have any comments or questions, drop us a note. our address on squawk@cnbc.com. when we come back, ibm, microsoft, apple, 09 treated tech pretty well. will the new year compute just as well for investors? time now for today s aflac trivia question. which band leader popularized auld lang syne as a new year s eve tradition? (sneezing): ah-choo! hope i don t miss work this christmas. yeah, how will you pay for things like food.electricity? dental bills. gazooks. you need a back-up plan ho, ho, ho. that s why we have aflac! so i ll have cash to help pay bills! great.but what if you re still not better by christmas? hmm. afllaaccccccccc!!!!!!! (santa): aflac. we ve got you under our wing. rudolph s better. but now blitzen s sick! was it really for fun, or to save money on heat? why? don t you think nordic tuesday is fun? oh no, it s fun. you know, if you are trying to cut costs, fedex can help. we ve got express options, fast ground and freight service you can save money and keep the heat on. great idea. that is a great idea. well, if nordic tuesday wasn t so much fun. (announcer) we understand. you need to save money. fedex now the answer to today s aflac trivia question. which band leader popularized auld lang syne as a new year s eve tradition? the answer, guy lombardo. tech stocks pumping up the market. rocketing more than 60% in 2009. joining us this morning with a couple picks and pans for the next year, ross mcmillon, an analyst at jeffries and company. good morning to you. obviously the bar s pretty high for the coming year. any chance of us even approaching what we ve done in 09? well, that s going to be one of the challenges. the way that we re looking at stocks is to try to see those we think have got the best legs for cyclicality, those stocks have seen their stocks decline through the trough of the cycle and have the potential to rise the most as we see recovery. you ve got a couple picks. autodesk among them. i guess you re looking for anything that s sensitive to manufacturing and construction. are people going to be designing as much as in the coming year? the way we look at this one is we see two-leg recovery. the first is that parts of the business, manufacturing, median entertainment business and some areas of infrastructure that are benefitting from stimulus, those parts of the business will recover first. we re not kidding ourselves around commercial real estate. we think that s very light cycle. we probably don t see real recover there until 2011, maybe late 2011. there are other part of the business that we think can start to show recovery early. given how much cost reduction has gone on in the business, and given the earnings power that s locked out because of that cost reduction, you know, we think there s a good cyclical play here with that, with autodesk. what s your price target on adsk? 30 bucks. 30 bucks. oracle, is that applauding them for what they ve been able to do in the way of mergers and acquisitions, or is this more of some praise for their organic broet? it s a little bit of both. oracle will be a beneficiary of corporate i.t. spend recovery. we ve seen very little of that so far, and we think that s going to be a bigger driver next year in 2010. in terms of m&a, the key thing at oracle is the sunmicro systems acquisition, that s still pending. we assume that that will close. the latest indications from the european commission indicate it s going to close. that deal will likely add about 15 cents to earnings in the first calendar year of close. and when we look at our numbers and add that 15 cents in, the stock looks very attractive from a valuation perspective. on that score you mentioned the i.t. spend in front of orac oracle. a number of people are starting the new year saying that the large u.s. multi-national technology companies, ibm, intel, microsoft, are representative of what you just talked about in terms of values. do you share that with companies like those three? well, we do cover microsoft and we have a buy rating on microsoft as well. and that company s obviously enjoying a cycle, a product cycle with windows 7. remember windows 7 from a corporate spending perspective is really all ahead of us. very few large corporations have upgraded their operating systems yet. so that s going to happen in 2010 and even beyond. so that, at microsoft, coupled with, you know, broad improvement in i.t. spending is certainly going to be a play there. oracle s in that camp. cisco s in that camp. yes, we re very much playing for that corporate i.t. spending environment next year. we look forward to that. thanks, ross. coming up, the market momentum ahead of today s big economic data. weekly jobless claims are due at 8:30 eastern. later, squawk s finest moments of 2009. that should be a really short should be pretty short. stories we would like to remember and some we d like to forget. an annual tradition you won t want to miss. it would not be the you have to remember bao. up next on squawk, your toolgz of the trade for the new year as we finish up 09. we ll talk about stocks, bonds, currencies, commodities. we ll ring in 2010. these are the building blocks of a perfect girls weekend. it all starts with having more hotels to choose from. that s why i book with expedia. so i can find someplace familiar. or somewhere more distinctive. nice! then i can compare dates to find out when i can save the most cash. done and done. we should do this more often. more choices, more savings. where you book matters. expedia. dot com the chevy malibu and toyota camry received 5 star crash safety ratings. but only malibu has onstar. big deal. i ll just use my phone. let s say we crashed. whoops, your phone s gone. onstar automatic crash response can call to see if you re ok. if you don t answer, they can automatically send help. i think i ll ride with you. now during the chevy red tag event, get an 09 malibu with 0 percent apr for 72 months. see red and save green. now at your local chevy dealer. welcome back to squawk on this final day of 200 #. get a check on the markets. looking pretty good as we inch out, perhaps, another gain here this morning. although the dow was we lost a point the day before yesterday and gained three points yesterday. so we ll see how hot and heavy things can get today. crazy. on the final day of the year. a couple headlines. the dispute between time warner cable and news corps. news corp. says it s unlikely they ll strike a deal to keep fox branded network on time warner cable systems. time warner cable does not want to pay the $1 subscriber fee that news corp. asks for. that means you go into new year with no simpsons, no american idol later, no house, no 24 . not fox news, we re talking big fox. big fox. that s unbelievable. big deal. we ll see what happens. a few hours left to solve there s no love loss there. time warner cable has nothing to do with cnn anymore, right? they my just be mad at they had to get rid they actually had to get rid of lou dobbs so they can claim they don t do opinions so they have no audience at all. we like it that way. we had to get rid of dobbs because we don t do what they do. we don t need ratings. a different business. they make ten times the audience. we don t care. we do news. tock executive at aig resigned because of pay instructions imposed by ken feinberg. anastacia said she might quit. bank northwest trust cutting projections. they say the company is slashing its 2010 entertainment budget after being excoriated for throwing a large party. rick waddell said the bank misjudged the political environment. who s that? that s a good one. s.a.t. word. excellent. you nailed it, by the way. you preread it. combined the consonents and vowels. five in the trading block. wow. michael on the dollar, rick smith, dennis gartman, our friend from the gartman letter, george at cme and our guest host mike hollin and company. dennis, as you look back at 09, does what happened surprise you? did anyone think this was going to happen at the beginning of thor. i don t think anybody thought we would be up 20% in stocks bit end of the year. at the beginning of this year it looked like the world was coming to an end. everyone was almost laughing at the fed. the treasury was being excoriated and looked like the end of the world. and suddenly in march, the fiscal stimulus took hold, capital made its way into capital markets. did anybody think we would be up 20%? nobody. anybody that tells you they did, would be aliar. do you go along with the idea we re top-heavy, lots of things that can go wrong? too few bears? any of that? there s a lot of complacency. let s say one thing first, the fed did what it s supposed to do. it force-fed reserves into the system. i understand my friends on the far right wing are going to be you know, are upset about that. they re concerned about inflation. but quite honestly, things seem to be going along per the normal plans of the post-recessionary circumstance we ve seen so many times in the post-world war ii era. is there complacency? yes. is it likely to continue? are we likely to see stock prices go higher, is the economy likely to continue to get better? the aanswer to that is yes. george, that s not the tone we generally get from a lot of traders at the cme. to themming i think treasuries are a bit of a ponzi scheme. good morning. the treasury, we don t think they re doing well. as far as the s&p, nasdaq and dow, we re still bullish on it, neutrally bullish, meaning we haven t seen any signs of institutional selling but we haven t seen any signs of institutional coupummulation. stocks making good sales are near their highs. when we see signs like that, we have to be positive going forward. what about insider selling or the lack of retail participation? well, actually, ep farr global just released a report december 23rd, $11.1 billion was coming into u.s. equity funds. that may throw something interesting on that. insider selling is not a good signal, we don t think. we think insider buying is a good signal but insider selling has never proved one thing or another. that s a common error the bears throw out. paul, what s your view? well, i think in our view our industrial client base we see speculative buying in petro and metals coming out of europe, primarily turkey and china. we don t think it s sustainable. as such, for crude oil, we see the same thing with new demand with the cold weather in the northern hemisphere. we don t think it s sustainable. there may be open strikes high that are exposed in crude oil that take us higher short term. long term we re really bearish for a few reasons. we think there s unemployment is too high so wages aren t likely to grow. industrial capacity. that s an overhang developing for markets that are contracting at this point. and as such, we think there will be a flight to quality. maybe some default, if it s a surprise. the dollar strengths. we think if the dollar strengthens significantly, that crude oil trades down significantly from here, maybe to $50. when you you talk about an event that could surprise, what do you have in mind? i think nonperforming loans in china. the interest rate resets in the u.s. that are coming up towards the later part of this year i m sorry, 2010 and 2011, and i think those are surprises that catch the market off guard. rhetoric from the premier wen doesn t seem to suggest that he s going to let that happen. sorry? i was going to say rhetoric out of the government in china suggests that they re not they re not about to let that kind of thing happen. understood. and i think that they have a strong hand in trying to prevent that type of event. but over time i think that is the risk that they re building capacity for markets that don t exist. mike, you ve been a big fan of china. even a lot of the bulls going into 2010 say asia faltering is one of the big ricks to their model. yeah. in the late 90s when they tried to tamp down speculation in the stock market and real estate market, as they re doing right now, they made a mistake and they bludgeoned that economy. this time around it looks so far, carl, as if it s just the opposite. retail prices are very benign. they re not going up very much. they are instituting some things which appear to be working in terms of slowing down the real estate price assent. so we ll see, but i thought there was going to be a different answer to your question, which was, you know, what event i presumed the middle east? i presume most likely to see something over there. you re worse than john kerry. yeah. paul, you want to weigh in on the israeli situation? we hear a lot of people say, you know, by april something there are going to be i ve got a plan i m not sure i have proper insight into that. i think with the protesting going on over there it pushes any israeli event back in time. let s see what happens with the government there. we could actually have a revolution in iran. no one s talking very much about it, but what s going on in the street or civil war. well, if the soldiers get tired of killing you saw people yesterday in police cars mowing down individuals, and these things are going on youtube now, you get things going on in iran right now, you could have so-called tipping point occur there where the soldiers, as they ve done in other places, the czech republic and so forth, where the soldiers lay down their rifles and don t kill their brothers and sisters. michael, would he weep coming back to geopolitics because they can t agree on what the economy will do, but would that result in a big ascent for the dollar? i think the big surprise in 2009 was a criticism over the dollar standard largely on behalf of the bricks. that was somewhat disingenuous. really in 2010 it s going to be a tale of two havlgz have dollar weakness creeping back in, trend in global financial markets take on what we saw largely the pre-thanksgiving type of if he no if he n phenomenon. i would be more inclined to be long european currencies, the dollar block the first half of the year and more inclined to be long the dollar in china at the second half of the year. china will begin to loosen up its exchange rate but not until exports show some form of improvement, let s say, by midyear. long european currencies first half? yes. you re betting things like grease a greece are going to bubble over? yeah. i think the professional community went home early this year is because we had two relative surprises, the dubai world crisis, if you want to call it that, and then the downgrades on greece debt. it did not have the effect globally that some had worried about. but nonetheless, it certainly was a warning bell. take your profits while you still can, go home for the year end holidays. so i think that, you know, you see in the first half of the year these small events are still going to be evident. the problems have not gone away, let s say, in latvia. and so will they have this type of systemic emerging market event? absolutely not. not as long as equity markets continue to rally. dennis, do you see yourself being net long or short in the new year? coming into the start i m in my fund i m slightly long. i m not aggressively so. at the same time, carl, i ve hedged it by being long on the u.s. dollar because so many people in the last six months of the year felt that you had to have a weak dollar to have a strong stock market. i m willing to say, i ll sell the foreign currencies, i ll buy the dollar, buy the stock market. thus far it s working. i ll probably end up doing more. the ruethe. there are times in the past year that i ve disagreed with nuri. in the past two years, taking the back side of his trades is not a good idea. the last eight months it s been a great idea, dennis. what are you talking about? i know. he s been terribly bearish will stocks. he was bearish at 666, looking for another down. same with the housing market. in fact, he s been so wrong in the u.s., he s talking about japan now in the wall street journal. he says, i ve given up on trying to predict things here. did you see that? speaking about the journal, read today s editorial on the a very, very good editorial. nasty. he s saying that nobody s afraid of president obama. yeah. all right. guys, appreciate your time, all of you. happy new year. happy new year. happy new year. including saturday night live . had you to practice that, kachuk. i would change that. to what? kaching. i would ask you to change that. carl quinn. stud anchor name. i think you should go k-e-r-n-e-n. coming up, not so fast. sure, santa has come and gone but the holiday shopping season s not over quite yet. there are gift cards to redeem and returns to be made. piper s industry team is here with its score card of retail winners and losers. because with national, i roll past the counter. and choose any car in the aisle. choosing your own car? now, that s a good call. go national. go like a pro. what s going on? we ordered a gift online and we really need to do something with it. i m just not sure what. what is it? oh just return it. returning gifts is easier than ever with priority mail flat rate boxes from the postal service. if it fits, it ships anywhere in the country for a low flat rate. plus i can pick it up for free. perfect because we have to get that outta this house. c mon, it s not that. gahh, oh yeah that s gotta go. priority mail flat rate shipping starts at $4.95 only from the postal service. a simpler way to ship and return. sdmi welcome back to welcome back to squawk box. scott williams checking on your business travelers forecast. check out around baltimore, a wintry mix, lifting nort ward into philadelphia and new york city. we also have some winter weather advisories posted, including new york, philadelphia and washington, d.c. so watch out on the bridges and the overpasses for some patchy spots of ice. meanwhile, is the fog in and around the houston area. we have showers and thunderstorms moving al the gulf coast into the sunshine state here. jacksonville, temperatures in the 50s. miami, 75 degrees. airport delays right now, we don t have any around new york s laguardia, but with the snow continuing to fall, also the rainfall, look for some delays. then eventually what about times square, the ball dropping? we could even see some confetti from mother nature as there is a chance for some rain maybe mixing with some snow. expecting light precipitation there. happy new year. back to you. you, too, scott. you don t carry one of those things where you carry buttons and suns come up, lightning. it s all prepared for you, right? yeah, it is. i have like a clicker that i just advance the buttons and i hope that each time i press it that it will advance. oh, all right. i m fascinated i always have been, by weather guys. would you like to be a weatherman? i think it s cool when they can do all these things. it s a blank screen and they look like they see the thing. it all goes back to groundhog day. networks interested. yeah, home shopping network hairdo. we re shopping around for the best retail plays for 2010. jeff kleinfelter and mitch kizer, both senior analysts at piper jeffrey. you have picks and pans for next year, the best and worst for 2010. mitch, let me start with you. what do you like for next year and why? i think the three stocks we re really focused on are best buy, costco and hh greg. we like consumer electronics as a category. we ve seen over time it s been economically sensitive in a rebounding economy. we think there will be growth there. bears will say it s product cycle driven, flat panel tv is 50% penetration and nothing new on the product cycle but we d argue there is and we think that favors the specialty channel. what s hh greg? it s a regional it s a regional consumer electronics and appliance retailer. they re going to grow their square footage next year about 40%. where are they? that will be attractive to growth. principally from indianapolis down to orlando at this point but they re going to expand in the mid-atlantic next year. you were saying something about costco, too. we really like costco as well. very strong same-store sale comps are coming over the december month and into the early part of next year. they took pricing down when they saw traffic decline, so they ve got very easy comparison. they re a very strong brand in discretionaries side of the business we expect to rebound and costco will benefit. i don t understand why you don t like cabella s or tractor supply. sarah palin was only a point behind hillary as most amazing woman. inca bella s, our concern there is when obama got elected and there was concerns about the gun laws, we saw very strong demand, also with the fear around what was happening in the economy, that a lot of people were buying guns and ammunition. it s going to be difficult for retailers to that, you know, that had strong sales to anniversary those sales. tractor supply, they sell overalls, right, flannel shirts? yeah, they sell a lot of, you know, horse-related products, things for hobby farms. we re concerned about traffic s been very strong there, but we think they have some difficult comparisons heading into next year. and 2009 was a relatively good year and i think it s going to be difficult for those for them to lap those, given what their product mix it-s. jeff, what do you like, not like? we like a number of retailers, mass and specialty. target, tgt, a great mass merchant to play going into 2010. we think the trade will come back from walmart to target as the discretionary recovery continues to evolve. last time we came out of a recession service a great way to benefit playing target from 2003 to 2006 time period. we re encouraged by their slight improvement in apparel sales recently as well as home. those two categories alone are 40% of their sales and should help to drive margins and comp. that would be one name. american eagle outfitters is another one, specialty retailer, national chain. they have not been benefiting materially during 2009 from a top line improvement. they re just starting to. a lot of margin improvement. so it s a great earnings power story. it s domestic only. very simple to understand and straight forward. we think they can make money in that name as well. guess would be another one. there s your global play. definitely discretionary product, apparel and accessories, footwear, et cetera. growing very quickly in europe, eastern and western, as well as asia. we think that will be important for 2010 for consumer stocks in general to have that kind of growth outside the u.s. not as positive on aeropostle or jcpenney. while we think apparel as a category will outperform in 2010, there are some that will lag. aero has had a fantastic run the last two to three years. very high level of sales per square foot, very high level of profit. at this point when you go into the next fashion cycle, typically that will will underperform other specialty retailers. we look for that to be a underperform. jcpenney, we think it will continue to underperform. they have a lot of competition in malls from macy s at this point with department stores and kohll s in off-mall locations. great, guys. appreciate it. mitch kizer and jeff kleinfelter. thank you. anything retail, we figure it s going to be becky she normally does a lot of the retail round. are you happy to be done talking about retail for a while? yeah, a little bit. aren t you? those guys had specific things they liked and didn t like. one of the good ones. i want to hear. when we come back, get a few stocks to watch. in the next hour, an energized outlook for the new year, the hofmeister is here to help us drill down on the prospects for 2010. and all of these. paid invoices go right here. bang! - that hasn t been paid yet. - what? - huh-uh. - all my business information is just a phone call away to my wife. who s not answering. announcer: there s a better way to run your business. intuit quickbooks online organizes your business in one place. it easily creates invoices and helps you stay on top of your business anytime, anywhere. this is way better. get a 30-day free trial at intuit.com. because we believe in the strength of american businesses. ge capital understands what small businesses need to grow and create jobs. today, over 300,000 businesses rely on ge capital for the critical financing they need to help get our economy back on track. the american renewal is happening. right now. i hired him to speak. a lot of fortune 500 companies use him. but-i m your only employee. we re going to start using fedex to ship globally- that means billions of potential customers. we re gonna be huge. good morning! you know business is a lot like football. i just don t understand. i m sorry dick butkus (announcer) we understand. your business could use a pep talk. a quick look at a stock to watch today. halliburton might get a bounce after target was raised by $2 to $36 by credit suisse. noting it could command a higher multiple due to refuse new growth potential, execution and strong balance sheet. that s it. no animal orchestra on the final day of the year? for you, maybe a little bit later, butmy new year s resolution is to do it every single day for you. really? how about every single segment. or segment. coming up this morning, the foiled plan to blow up an airplane on christmas raising all kinds of questions about security in this country. body scanners, name profiling, on board marshals, which options are best? at&t covers 97% of all americans. that s over 300 million people. i ve collected a few postcards of all the places that at&t has coverage. spokane, washington. boston, mass. san francisco. tulsa, oklahoma. dated a girl from there. warren, michigan. didn t work out. bozeman, montana. daytona beach, florida. madison, wisconsin. big college town. i think we get the picture. [ male announcer ] if you want coverage, we ve got it. at&t. this holiday, get a touchscreen samsung solstice free after mail-in rebate. it all starts with havinglocks more hotels to choose from.. that s why i book with expedia. so i can find someplace familiar. or somewhere more distinctive. nice! then i can compare dates to find out when i can save the most cash. done and done. we should do this more often. more choices, more savings. where you book matters. expedia. dot com sometimes the little things in life feel like our biggest enemies. [dripping] [shower running] they can be damaged. they can be stolen. happily, there s the american express charge card. if something you recently bought with the card breaks, it can be repaired. replaced. or your account can be credited. you ll even get membership rewards points with each purchase. and peace of mind when you travel. can your card say that? security under scrutiny. will beefing up security create an opportunity for investors? we ll screen some names in the sector. and will geopolitical flareups ignite oil prices? a former ceo of shell s u.s. operations, the hofmeister, will give us his perspective for 2010. there s a whole ocean of oil under our feet. no one can get at it except for me. ring that siren one more time for 2009. breaking news on the way, the weekly jobless claims number. find out if this final piece of data will end the year with some fireworks. squawk box begins right now. sydney, okay. we saw auckland earlier. that s a lot more going on in sydney right now. i wonder if mandy wishes she was back who s here in the states. we don t wish she were back there. we re glad she s here. sing this part. welcome back to squawk box here on cnbc, first first in business worldwide. they did. that was a live shot of sydney, australia, ringing in the my year. we had some m.j. we lost him this year. we did. unbelievable. a big loss. how about the live shot out of new york this morning? have you seen it? no. here the. that is not going to be pretty. snow? rain, snow beginning this morning and continuing into tonight. a million people are going to be there. and there will still be a million. and it s going to be wet. there will still be a million. yes. i m joe kernen, carl quintanilla, becky quick is off. our guest host, mike hollin. have you ever done that? no. you ve never done times square? no, no. have you done it am. no. carl, you did it? yes. i didn t live here at the time. i was a tourist. how was it? next year, you and i. how was it? awful. i would never do it again. i would advise nobody to do it. if you prepare, you wear an adult diaper, too, right? i mean, there are no facilities. no facilitiefacilities. they tell you, don t drink, don t drink coffee before you come down, because there s nowhere to go. well, i have an answer for that. what is your answer, joe? adult diaper. i could go from here. no, not really. breaking news on the way. jobless claims it all depends. yeah. let s check the markets ahead of the numbers. kind of a quiet week. we re looking at a 18-point positive open. gained three points yesterday, up six straight. kind of a muted advance. but still some of the narrowest ranges since 2007. very close to yearly highs, though, again. very close. and we re going that s what makes me nervous. same as 07, we were right at a high and next thing you know, we went into january, it was all downhill you ve been in this more than a year or two. you expect we have to give something back here, right? i do, i guess. everybody has been waiting for that to happen. we said in july, remember that? yes. couple headlines this morning. the fda extending its review of pfizer s children s pneumonia vaccine. it s a newer version of a vaccine that s been on the market for nine years, widely considered one of the most important products pfizer picked up when it acquired wyeth. u.s. trade court agreeing to probe allegations by samsung that rivals sharp infringed its lcd patents. the lawsuit just the latest in a long string of legal battles. workers at a giant mine in chile are preparing to strike and walk off the job monday. the owner of the world s number one copper mine is refusing to back down in a wage negotiation fight. strike is expected to be short-lived but it has had an impact on prices, nonetheless. there s a look at what copper has done, year to date chart on copper. amazing to watch. security industry seeing a major rally on wall street this week following the incident on northwest flight 253. joining us to talk about it, larry solo and brian morgan joining us on set and in miami as well. larry, good to have you with us. thanks for having me. it s not a good thing but occasionally your sector gets a lot of attention. names like osi are popping up all owe tver the place. is this going to have legs? i believe it will have legs. i think it will be similar to the frenzy created after the 9/11 attacks where it was a realization that security is not what it needs to be. and if you look back in 2002, a mandate was set for dramatically increased security protection at the airports. however, the technologies are still very unsophisticated at many of the airports, particularly at a lot of the smaller airports where it s still manual detection and limited prevention and deterr t deterrents for terrorist attacks. how many can they make? what would a significant order be for something like osi? it would they could make the capacity, i believe, is several hundred. so out there today i only think they have about 40 in the system. so there s clearly a lot of room for upgrades at several airports. i believe right now there s 19 airports using them and 40 systems in place. so it could go up to you know, there s 500 airports in the u.s. alone. ranging from small to mid to large. some of the larger ones could have ten systems in place. you re looking at upwards of 2,000, 3,000. stock is up 4% in three days? yes. you know, it could maybe get a little ahead of itself. i think it s something that s going to have to play out over time. if you look back, actually, the stimulus package set out $1 billion for airport security but only $50 million of that has been put into play. one of the reasons for that is the tsa is converting over to a competitive bidding process. and that is now working its way through the system. we won t actually see any actual bids accepted until later in 2010, probably august-september time frame. it could take a good six to 12 months before we could see real development. brian, weigh in here. walk us through some names besides osi that might be poised to benefit. yeah, there s also l3, lll, and icx technologies. icx makes a hand-held wand, essentially, that sells for about 25 grand a pop versus the body scanner of osi and the millimeter wave of l3 that sell for about 100 grand a pop. the phyto of icx technologies is used extensively by the d.o.d. and iraq and afghanistan looking for people that have explosives on their body and on their hands. so we ve already seen some deployment of the icx technology at airports. they deployed only a handful of those and only deployed a handful of the body scanners, which is by osi and by l3. what makes you believe this is going to be more than just a quick, brief phase in the sector? in other words, that attention is not going to be diverted elsewhere and the stocks come back to earth? what we ve seen throughout history, this is where i disagree a little bit, is that they ll be some money thrown at this. because this was not a successful terrorist attack, and thankfully it wasn t, congress will come back, have some hearings, throw some money at it. it will be tens of millions, maybe $100 million. it won t be in the billions. if this were a successful attack, we d be throwing billions at this immediately. this will be something that six months from now we ll be talking about something else n my. so you think the stocks are overdone at these levels? you know what, for osi, just looking at the current multiple, they re only trading at 18 1/2 times 2010 calendar earnings. i think they deserve a 20 multiple. i think when you look at the run that the group has had in the last week, yeah, it s probably overdone. but with yhen you look at it, s back and say, where should these stocks trade a year from now, they should be a 20 multiple stock so they have a little bit to go. i think that overall you don t chase this group. what we ve seen throughout history, at least since 9/11, is they have spikes around events and then come back down. so, i think that that s what s happening here s they re going to spike, come back down. they re not too expensive but they ll probably come back down to evert arth in the next coupl months. unless we re not done with these events, sad to say. if, in fact, there are more, you would expect the stocks to outperform in response. correct. unfortunately, as brian says, it takes one of these events to create more of a frenzy, but hopefully as we have multiple events people will say, let s not wait for another event, let s be a little more offensive and continue to build. one other thing i would add is a lot of people are focusing on the actual body scanners, but the terrorists themselves, there are many ways to get, you know, something into the airport. so the actual baggage checkage is where there s still a big lack. and companies like analogic are a good play on that. actually, analogic, they have a big medical side. their c.a.t. scans and mri, which are big sellers but held back by the economy. that s one of our favorite plays on both the security side and on the medical side. joe, you and i wondered yesterday how they work. it is electromagnetic wave, right? correct. it s not x-ray at all? it s not x-ray at all, correct. so you can do it every day and you don t get any it s very minimal radiation. i believe it s something i was told is it adds maybe 1% or 2% the amount of radiation to your body you would get from just flying on a regular high altitude flight from new york to denver. the icx, that s outside the body, they just swab you and she hoot the gun, right, the phyto gun. correct. that s even better. no health concerns. the one issue with the body scanner that has come up are privacy issues phyto gun doesn t do that. correct. what about the puffer? it would have picked up this gentleman s thing. the one thing with the puffer, i understand, there are problems with is there are a lot of false-positives. it s a slow process. holds people up on the line. you would have to either profile somebody or have a good indication he or she maybe is at a higher risk for trying to carry a lot have been pulled. the puffer, i think it s only there s only 20 systems out there. if they could actually improve that technology and improve, i think, the filter itself, they ve run into problems with the filters, so they re getting a lot of false-positives because of that. if they can improve that technology, thaet would deter someone from bringing this ptn in that this guy was showing. larry bryant, it s an interesting subject, unfortunate but interesting. thank you for your time. thank you. when we come back we ll check oil markets with the former ceo of shell s u.s. operations, john hofmeister. we ll give us his perspective on what crude may do in the new year. geopolitical hot spots as well that could drive the price higher. fewer people may be toasting the new year. we ll find out how liquor giants are trying to get to you drink, and more than just tonight. camrr crash safety ratings. but only malibu has onstar. big deal. i ll just use my phone. let s say we crashed. whoops, your phone s gone. onstar automatic crash response can call to see if you re ok. if you don t answer, they can automatically send help. i think i ll ride with you. now during the chevy red tag event, get an 09 malibu with 0 percent apr for 72 months. see red and save green. now at your local chevy dealer. bull market or bear, traders are always hungry for ideas. trading is all about strategy. and strategy. is all about information. heat mapping shows me where the money s moving. twenty five hundred stocks. one quick look. that s where the action is. plus, this amazing gadget. it s called the telephone. i can call td ameritrade anytime and talk trades, strategy. anything. td ameritrade. built by traders, for traders. this is what i need. announcer: trade commission free for 30 days, plus get 100 dollars cash, when you open an account. live? i believe that is a live picture of times square. we re looking for a million people to show up but they ll be a little wet with the cold mix of sxran snow, already under way and looking to continue into tonight. it s new year s eve and champagne and drinks will be flowing at parties around the world. not as much as in year s past. michele kaczynski is in ft. lauderdale, florida with a lot more. good morning to you. happy new year s eve, carl. of course, the liquor and champagne distributors is looking for a happy new year s eve. this is their big fight. 40% of all champagne sales for the year are sold in the fourth quart quarter. hasn t been promising this year. sales of distilled spirits are down. sales of champagne are down 50% to 90% from the peak. in fact, last year the u.s. imported 4.5 million bottles fewer than they did prior. and that s unusual. some warehouses were even shipping crates of champagne back to france because it was taking up space. of course, the economy is to blame. it seems like the catchphrase this year is trading down. people are buying less liquor, demand is way down. but they re also buying cheaper bottles. some people instead of buying champagne are buying sparkling wine and other substitutes. what retailers are trying to do is compensate by dropping the prices. for the first time in a while we re actually seeing champagne prices falling. this liquor store in ft. lauderdale by the way, florida is one of the top consumers in champagne. they put a coupon online on facebook and they said 20% of all those that received the coupon used it. ets unheard of. a sign of the times, carl. you ve got that right, michelle. joe, you re a fan of the good stuff r you not? if i m going to have some, i think, yeah, corbel. michelle, had you to go to florida to stand in a liquor store? i mean, we ve got some bad weather back here. reporter: that s true. you know, new york is also a huge consumer of champagne, so good luck to you and good luck to the retailers tonight. they re hoping for a packed store in about an hour, but we re not so sure. people don t want to spend the money. you know, they re finding sparkling wine is, to some palettes, just as good. sometimes i put orange juice on the good stuff. that drives people crazy. that s ridiculous. reporter: we call that breakfast in florida. have fun tonight, michelle. we ll see you later. reporter: you, too. take care perform be safe. clean energy technology likely to get an increasing amount of attention in 2010. as will traditional energy markets. joining us from harrisburg, pennsylvania, john hofmeister, founder and ceo of the nonprofit citizens for affordable energy and a former president of the u.s. operations for shell. also our guest host, mike hollin, chairman of hollin and company. happy new year. nice to see you. nice to see you. we had a long conversation yesterday with an analyst that makes a lot of recommendations in this space. it was all based on taking existing technology and making it cleaner. he didn t have any of the way out the risk curve with wind power or sun power. does that make sense to stick with making coal cleaner or nuclear or water filtration, things like that? i think it does. i think when you have the basic market of some 93% of the nation s energy is produced from either hydrocarbons, coal, oil, gas, and nuclear, let s focus on the 93%. that s where the big markets are. the wind, the solar, biofuels, that s about 2% to 3% of the market. so if you re really out to make a lot of margin, money, let s focus on where the action is. i think it s hydrocarbons and nuclear. i was out the day that we talked about this. carl brought up the fracturing of the tight gas formations. where does that stand? what do viewers need to know about their investments, if it goes one way or the other? well, i think i m pretty articulate now on the whole issue of the regulation of fracking. if the epa takes over fracking, which is the technology for the horizontal drilling, then it s going to slow down the growth of natural gas in this country, which i think is bad for consumers, it s bad for clean air, and it s just not necessary to go that route. fracking is an excellent technology. you do have to be careful. you can t be sloppy. you can t make mistakes because that will cause damage. but if we get regulators and lawmakers in there determining the future of fracking versus what the states currently do, i think that s not good for america. john, it s mike here are carl and joe. following occupy that, tos extent it s bad for consumers, which makes a lot of sense because the prices won t stay low, less supply, we have also had a very more abundance of natural gas prices because people thought the supply would be large because of this new fracking technology. if it s likely, as i m hearing you say that the feds may get involved here and screw thing up, does that mean natural gas prices have to go up? i think they would if the demand takes on its normal annual cycle. in other words, right now i think what held the gas price down for most of the past 12 months was the loss of manufacturing, where a lot of factories scaled back or closed and a lot of commercial demand for gas went away. residential demand is pretty much flat. doesn t grow a lot. weather comes, weather goes. and the big industrial demand for gas really is in power production. that s where we need the huge volumes of gas. the power production will drive the price. and if we slow down the production of natural gas because of fracking, the power producers will ultimately be paying a higher price. now, interesting, if you get into the politics of this, some of the people that are pushing for fracking regulation happen to come from the coal industry. because they see natural gas as a threat to coal. so in this fragmented energy industry where different hydrocarbons compete for one another, there s no neighborly love out there. no, it s like the big banks getting mad at big banks and vice versa. it s like intramural hatred going on. absolutely. consumers get caught in the middle of all of this. led legislators get all wrapped up in what s the right thing to do, and i think the right thing to do is back off. let natural gas supplies emerge, let the drilling take place, but hold people accountable for the regulations we have today. the incidence you read about, the one in pennsylvania, for example, turns out it looks like it was some sloppy drilling. and some fixtures that were not properly placed the way they should have been. so there was leakage. you don t want methane in the water system. i mean, nobody wants methane in the water system so you have to be careful when you re drilling. you re right. we have to cut it short. every time you say fracking, i reach for the delay button and i think, oh, he s saying fracking. why? freaking, fracking fracking legislation. all of that stuff. john, thank you. happy new year. we ve got numbers coming out at 8:30. we ll have you back and talk more about this. it s going to be an issue. fracking issue is what we re talking about. when we come back, the big economic number of the week just in time to end the year. weekly jobless claims in a minute. we ll see if that creates fireworks before 2010. (announcer) we call it the american renewal. because we believe in the strength of american businesses. ge capital understands what small businesses need to grow and create jobs. today, over 300,000 businesses rely on ge capital for the critical financing they need to help get our economy back on track. the american renewal is happening. right now. i hired him to speak. a lot of fortune 500 companies use him. but-i m your only employee. we re going to start using fedex to ship globally- that means billions of potential customers. we re gonna be huge. good morning! you know business is a lot like football. i just don t understand. i m sorry dick butkus (announcer) we understand. your business could use a pep talk. visit fedex.com/peptalk boss: hey, those gecko ringtones you put on our website people love em! gecko: yeah, thank you sir. turned out nice. boss: got another one for you. anncr: at geico.com, it s easy to get a free rate quote, manage your policy, make payments or even file a claim! boss: now that s a ringtone. gecko: uh yeah.it s interesting.. certainly not the worst ringtone i ve ever heard. ringtone lyrics: a-ringedy- ding-ding-dingy-dong, ringedy-dong-ding-ding. gecko (to himself): yeah, that might be the worst. anncr: geico. 15 minutes could save you 15% or more on car insurance. snow is starting to stick on the jersey side of the hudson river. we re looking for anywhere from 1 to 2 inches in the new york area. it s sticking on jersey s side. we ll see if it starts to in times square, but regardless, temperatures in the 30s tonight. a mix of rain and snow. it s going to be messy for the million or so people expected to turn out for the dropping of the ball at midnight. futures ahead of all that, in a pretty tight range. we will see what we do with this last drading day of the year. bonds close at 2:00 but the stock market is a full day, joe. closes at 4:00. that s kind of i think they could go half, don t you? what? they did on christmas eve. why not i mean, a couple extra trades, a little bit more close on the high, is that what you mean? yeah. do we have to go? yeah. we have jobless claims coming up. the most up to date number on the nation s market, coming up in a few minute. we ll get the number and reaction. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. 154 are tracking shipments on a train. 33 are iming on a ferry. and 1300 are secretly checking email on a vacation. that s happening now. america s most dependable 3g network. bringing you the first and only wireless 4g network. right now get a free 3g/4g device for your laptop. sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access www.sprintrelay.com sprint. the now network. it all starts with havinglocks more hotels to choose from.. that s why i book with expedia. so i can find someplace familiar. or somewhere more distinctive. nice! then i can compare dates to find out when i can save the most cash. done and done. we should do this more often. more choices, more savings. where you book matters. expedia. dot com welcome back to squawk for thursday, new year s eve on cnbc, first in business worldwide. we re one hour away from the opening bell. we ll get jobless claims if a minute. we have rick santelli at the cme, and mike hollin and joe and rick. what are the numbers? the numbers are, initial claims drop from a revised 454,000 to 432,000, but don t put much stock in it. the seasonalities through the holidays, this number s way off mark. if you look at continuing claims, they were revised rather large from the original, close to 5.8 million down to 5.038. and then that number this week drops to under 5 million. vane seen that in a while, to 4.98 million. as i said, especially initial claims, the amount of polling days with the holidays, seasonal factors, and we all know these numbers only scratch the surface. i ll have to go dig deeper and give you the emergency unemployment compensation and the unadjusted numbers and we ll continue to talk about this over the next 20 minutes. but no matter how you slice it, we see that this number did move the markets a little bit in the treasury side. we saw them move a bit actually, the price moved down a bit, which is a bit surprising. yieldses a are slightly elevate. i think that today, of course, going to be more about leveling out positions. what s really interesting around midnight chicago time we saw the dollar index get slapped back. it s almost as though people had a stopwatch as and as we moved into holiday mode, a little dollar selling crept back into the marketplace. back to you. let s get some more reaction. jim is with us at the cme group in chicago, bob bar-d bera standing by, mike hollin is here. jim, what are you expecting early on in the new year? like rick said, mostly position squaring. i think there s too much too many people interested in keeping this market big, plus these numbers came in pretty good. rick can say they don t mean anything because of the polling data, but they weren t bad. this number over the last few months, except for maybe a couple, has been the reminder that things aren t great and it kind of pops the exuberance bubble. i think there s recovery clearly a recovery going on. the stock market seems to be priced in a different recovery than the one i see. up 67% from the bottom doesn t seem like it s very legitimate. we go into the first quarter and all of a sudden the traders are back and people are starting to put on new positions, it seems to me the difference is probably the 10% to 15% correction i m expecting. in the past whef we wanted to kraekt, the weak dollar would come in and support things. we don t have that right now. and i think that takes away the crutch. bob, are we on track in items of what you ve been talking about, better than expected job growth? yes. take a step back. market is up 67%, but in march if you said jobless claims on a four-week basis are going to fall by 200,000 so we ll end the year below 450,000 when we were up around 700,000, people would say, gee, that s enough for the market to go up 60%, 70%. the market anticipated what has been a much better than expected performance for the economy. and i look at these claims numbers. i actually agree with rick. a lot of seasonality in here. nevertheless, you know, four-week, eight-week, 13-week average, these are much better and suggest we ll have job growth in 2010. bob, just to i have a quick question for you. byron wien said he thought next year the surprise could be 8.5%, maybe 8% unemployment rate. do you think that s within the realm of possibility? you think they re going to do a lot of hiring, huh? pardon me? i said the government s going to do a lot of hiring in 2010. i m feeling pretty good about what s gone on for the economy and markets. that s obvious. bob, everyone s feeling can i answer the question, though? sure. the if you look at what happened in the aftermath of lehman, you had a collapse in confidence, markets cratered and inventories fell wildly, and so did employment. they both fell wildly relative to gdp. panic draw down of inventory, panic firing. if it turns out that the panic was, in fact, incorrect, everybody agrees you ve got to rebuild inventories. i think you re going to rebuild employment. i think the employment data are going to be better than expected. bob, i m not we re not requesting of course, everyone feels wildly better than we did in march. it s like the relief when you stop banging your head against the wall. i m questioning the elation. we haven t begun to create jobs yet. we ll see next week if we re in that situation yet. less bad and clearly trending in the right way does not necessarily mean the stock market s going to scream. you said before, 60%, 70% seems legitimate. we had that already. my question is, where does the stock market go from there. absolutely. yeah, let s separate two things here. i m talking about the economy. right. if you look at if you look at the last 11 months, the average improvement is 75,000 in payrolls. so that can put you in the numbers, sort of like 250 by march of march of next year. the distinction i would make in terms of correction, historically you don t get the correction because it turns out the economy doesn t validate. you get the correction when you discover the economy s better than people thought and the fed has to start taking the punch bowl away. yeah, a correction, but because the news is good, not because it s bad. that s a correction i can certainly live with. me, too. go ahead, mike. got anything? rick? rick, you want to talk a few times. let rick in there. listen, i agree things are better. i certainly agree you ll have some inflated numbers due to restocking shelves. we all know it s coming. i will continue to say, allen blinder wrote the definitive editorial in july saying we were going to get this temporary uptick in the gdp numbers. i never thought we d see this downtick in terms of protection in areas like freddie, fanniea, gmac, so i m of the frame of mind you can subsidize to make things look better but you can t get away from it forever. we only have to issue 2.5 trillion in treasuries in 2010 and they called it a victory we were able to find buyers for 1.5 trillion in 09. that s not the kind of victory i m very proud of. i guess my final retort would be my dad tells me that all solutions are temporary, and i m pretty happy about 2009 relative to expectations. and i m optimistic about 2010. sounds like an economist. that was that who the heck is that talking? that sounds like you use that as a perjerativ. economists look at the bright side, they re middle of the road. when you hit the extremes on the curbs and i still think we need a couple of curb-feelers for 2010. rick remind me, the big problem with the french is they don t have a word for entrepreneur. i know that entrepreneur spelling changed in 2010, i think you spell it now entitlement programs. if you go between the trader that the tree is right here, like that, and the economist you might find some truth, somewhere in between the two of them. that s what we look that s a fair statement. that s what we look to for you, joe. we re all in big trouble. we re in big trouble, yes. all right. happy new year. okay, quick final word. how can we be so feel so good about things when we haven t created jobs yet? that s the thing that sticks go, jim! if we took the government out of, it unemployment would be terrible right now. so, i mean, going forward, i don t think it s that clear of a picture. i mean, the yield curve s poised to steepen dramatically. if the government threatens they re not going to buy much, they re not going to stop selling. my daughter knows unemployment is a lagging indicator, jim. it s not that hard of a question to answer, is it? no most are lagging right along with it. but the market can do things, not based on what s happening today. that used to be the case. i mean, i m just not what s happening today or happening yesterday is so much more extreme than happened in the past. we have double digit unemployment it s more spring-loaded. he said they panicked and fired more people than they normally would. maybe it s stretched. maybe it doesn t, you know, take longer to come back. but the fear lingers on. i can t see companies going we want fear. no question about it. but it tends to make the recovery a little bit more flat instead of a v shape. i think we priced in a very steep v shape. if you look historically at this moment where there s extraordinary anxiety because of a disastrous recession, if you use that method to forecast, then you would say you were going to get a very weak recovery in 75- 76 and a very weak recovery in 1983-84 because things were horrible and the recession was so deep. it makes a lot do you realize it makes a lot of sense, it makes a lot of sense, it just was a horrible methodology for forecasting after both deep recessions. what i m look sagt a comparison between now and the early 30s. i don t think it s a fair comparison to the 70s and 80s recession. my father wore the scars of the depression and invested differently and spent differently for 50 years after that. i don t think it s i don t think it s unrealistic. eight years from now that people will still remember the scars. he still didn t wear a jacket that ugly. no, much better. all our guests, happy new year. happy new year. it s a trader day. you wouldn t if i saw actually, that is jim s high school prom tux. he doesn t wear that to like a fis restaurant, do you? oh, yeah, sure, all the time. you ll see me there tonight celebrating new year s eve in this. you ve got a lot of class. you ve seen dumb & dumber ? you need the top hat and cane. art cashin says bottoms up for 2009. a final 2009 countdown for squawk box right after this break. futures didn t move a whole lot on the jobless claims numbers but better than expected. although everyone is talking about the seasonality skewing the data. clearly, the trend of the pace of firing in this country easing. appears to be intact, at least at first blush after those numbers came out. let s get the traders edge, the final one for the year. art cashin, director for operations at ubs financial services is here getting his singing voice warmed up, i imagine, as well, right, art? yeah, we ll be sing agent 2:0 5shg the tradition allege 2:05 traditional nellie. we ll be wishing our sympathies to all the cross-dressers of the world who will have a very tough year. hello, right? we re looking forward to something different at least for 2010. we survived a very rocky 2009 in the beginning. mike always likes me to pick out targets. my target of concern is the second quarter of 2010. and i think everything from chinese real estate to geopolitical tentions to class warfare could all come together and start boiling over. what about q2, is it, art? why q2? well, i think we ll have coasting power getting through q1. the chinese real estate thing will probably continue. i just think all of the lack of sustainability will become evident as we get into q2. you know, we re up because of what the government s done. if you look at gdp, most of it was cash for clunkers and a little bit of the real estate support. so, as our friend mohamed el erian says, where is the sustainability? if they take the patient off the extraordinary life support, can he live on his own? and there s still some doubt about that. art, thanks for the heads up. you woke me up here. with 74 and 82 in your arsenal, ten years that preceded each of those we had stocks getting their clocks cleaned by bonds. stocks did so horribly. we ve had now the worst ten years, including the 1930s, and we re finishing up today, is it possible that with including that correction you re seeing in the second quarter, that we are set up for ten years where the reverse occurs as it did in each of those where we had double-digit returns in stocks for the next ten years or this time it s different n your mind? i suspect this time it is different. you know, we went through these various bubbles we ve had since the y2k and long-term capital management. and it just seems, to me, that it would be a great stretch to see double digits. don t forget, internationally we re seeing changes in the balance of power. will japan stop being number two and fall to number three or four? the u.s., how will it have to deal with what s going on? geopolitical tensions are going to be a drag. so i think this time it is different. your counsel is always be nimble, right? yes, yes. as always, you want to stay very, very nimble. stay very nimble. happy new year. happy new year to you, art. happy new year to you and all the viewers. happy new year. he s such a wonderful dose of reality, isn t he? yes. nimble s good. quick might not except for beck y but becky quick. yeah, yeah. coming up, final stock to watch of 2009. we ll get that. we end the year squawk style. for those of you that don t like when we don t do just business, you i don t know, the last five minute are going to drive you crazy, which go somewhere else. change the channel, i guess. squawk box coming right back. no, no! and choose any car in the aisle. choosing your own car? now, that s a good call. go national. go like a pro. well-informed people are considering chevy malibu. are you a cop? no. you didn t hear it from me, but this malibu, it offers better highway mileage than a comparable camry or accord. estimated 33 highway. i saw that on the epa site. so how come the malibu costs so little. it s a chevy. you have cop hair. now during the chevy red tag event, get an 09 malibu with o percent apr for 72 months. see red and save green. now at your local chevy dealer. because we believe in the strength of american businesses. ge capital understands what small businesses need to grow and create jobs. today, over 300,000 businesses rely on ge capital for the critical financing they need to help get our economy back on track. the american renewal is happening. right now. almost sounds like they go together. thank you. do you have anything to say? you win. you win. that s what i say. what about the people that hate it? don t you love annoying them? you do. i would if no one liked it. if no one liked it which many people do i would do it just to annoy those who don t. let s look at some stocks to watch. citi national said it approaches $2 million of the preferred shares it sold the u.s. treasury under t.a.r.p. joining a slew of lenders attempting to come out of those restrictions. this is city national not national city. this is the l.a. bank that said the buy back represented about half of the total funds it received under t.a.r.p. pfizer says the fda is again extending its review of prevnar 13, a children s vaccine. the decision from the fda had been due on wednesday but pfizer says the agency hasn t completed its review and it s not going to be done. i m going to end it there. we don t need to know exactly what it does. once again, a delay. when we come back we ll say good-bye to 2009 in squawk fashion. check it out after our quick break. our year ender when squawk comes right back. is these are the building blocks of a perfect girls weekend. it all starts with having more hotels to choose from. that s why i book with expedia. so i can find someplace familiar. or somewhere more distinctive. nice! then i can compare dates to find out when i can save the most cash. done and done. we should do this more often. more choices, more savings. where you book matters. expedia. dot com that s over 300 million people. i ve collected a few postcards of all the places that at&t has coverage. spokane, washington. boston, mass. san francisco. tulsa, oklahoma. dated a girl from there. warren, michigan. didn t work out. bozeman, montana. daytona beach, florida. madison, wisconsin. big college town. i think we get the picture. [ male announcer ] if you want coverage, we ve got it. at&t. this holiday, get a touchscreen samsung solstice free after mail-in rebate. are you ready for this? as much as i ever am, i guess. it s a tradition, a squawk tradition. we want to say good-bye to 2009. embarrassing. in squawk style. hi. this is elmo from sesame street. squawk box begins right now. apologize in advance to everyone. right. it was the earliest recorded sightings of uranus. his urine smells after he eats asparagus. doesn t everybody else s? it says b, blank, blank, blank in the journal. i guess that s balls i think. you said ppi the other day. it s so easy to pooh pooh that idea. i said pooh pooh. did you say you re allowed to say dush as much as you re want? i was in talking to some of our guests in [ toilet flushing ] that s not where i was. this is really deteriorating. squawk box. that s hot. thanks, paris. on the count of three all talk at the same time. all right. let s go to halftime. congratulations are in order to carl and his wife judy who are now proud parents, twins. thank heaven for little girls it covers my mike. it s okay. we don t mind. blah, blah, blah. hello. hello. he s leaving. he s going. he just walked away. why are they back? why do i put them on? you want to know why? because i can. eventually it ll be just the three of us. listen. the audience will have left. i am the walrus. watch me put my hand through him. you re a halogram. you re not. see wha wrote oert day on it. he s the leader this guy right here. i think there s a little backup singer. there he is again. awesome. is there any way you can just color that out completely? clouds coming in later this evening. blow it. you shouldn t put me over here. you know that. wow. hallelujah it s raining wow. in the control room where you will be one day. in fact, joe, i don t know if you can see there is actually a chair in here with your name on it. you okay? with the head with it? live in london with the headlines. what s that? yeah. big ben. uh-oh. all right. we re finished. can they put you in front of an actual chart? they re taking away the green screen right now. ladies and gentlemen, oh, say. awesome. i m sorry. i overslept. dreaming pretend you re in a photo shoot. come on. i can t do it. oh, that s it, honey. beautiful. i know, i know. you do? i didn t know what that was. i thought that was lisa simpson. this is squawk box. say it. we may be on cnbc but we re squawk box. what somebody call 911 squawk box has been brought to you by the letters cnbc. wee! is it just me or did they make the show look more fun than it really is? yeah. it is that much fun. it is. that was only one year. it s business news. that s not easy. that was every fun moment of the year but i mean it is business news. i mean, have you seen some of those other, you know, less, more serious, you know, there is a competitor and they probably don t have a reel like that. no. they might be able to make one next year because they re slowly getting it. yeah. taking jackets off. let s hope they don t get it too much. yeah. let s hope they don t. we re going to run that again because if you want to just stay with we ll go right over to the squawk on the street because we liked it so much so if you no? mike, thanks for coming in today. happy new year. you re okay with that? thank you. it was so much fun. thank you. our thanks to brian. what a great job. that was the best part. eva? ava looks so much like you. i mean, it s like a little you. they ll get past that in life. so funny. great looking kids. have a great new year. we are back on monday with ducky to ring in 2010. squawk on the street is up next. live from the financial capital of the galaxy, this is squawk on the street. good morning, everybody. i m mark haines. i m amanda standing in for erin burnett. this is front and center. jobless claims fall to their lowest levels since july of 2008. the number of workers filing new claims for jobless benefits fell by 22,000 last week to 432,0 432,000, the lower end of what economists believed would happen. the futures, you know, it s a holiday. there are not a lot of people around but we do have a positive tone, could vary ten points on the dow. tone is probably the operative word. oil is as always still a big story. it s been this week and all year long a big story currently sitting at $79.57. a little firmer than 24 hours ago. and let s take a live picture of times square. here we are. about two miles north of where we sit down here in lower manhattan. the snow is falling and we ve got people who will start showing up soon to watch the ball drop. advice from a man who s been around. stay home. i was hearing some people were actually lining up this morning to try and get a front row seat. oh, look at this. that s right. beautiful. already 2010 down under. it s already new year s there. fireworks of course over the city bridge ringing in a new decade there in australia. good day, everybody. good new year to all of you back home. hello, mom and dad. you do know how to put on a fireworks show down there. i ll say that. i have to say i m feeling proud right now.