Transcripts For CNBC Squawk Box 20100108 : vimarsana.com

good morning. a turning point. could today s jobs report tell a different story the markets at this hour, u.s. equity futures slightly above fair value. rallied a bit yesterday. a lot can happen now between this and the employment report and the open. we ll see. and we ve got a national champion, alabama beating texas, football, i think, 37-21 as squawk box begins right now. we ve got to squeeze out one more hit we re work it good morning, everybody, and welcome to squawk box here on cnbc. i m becky quick along with joe kernen and carl quintanilla. our top story today is no surprise. we ll be talking about that december jobs report that forecasters have been awaiting. news wires predict that the economy shed another 10,000 jobs last week. but it is important to note that a survey from reuters is calling for no loss in jobs. economists say they re looking for gains for the first time in two years. meantime, the unemployment rate is expected to tick higher to 10.1%. average hourly earnings are seen rising by 0.2%. guys, this is the game to watch today. yeah. the range goes from minus to plus 185 or something like that. we really are excited to see revisions, too. this is a report where you actually i m waiting to see what the numbers are for november. whatever trend is going, sometimes the subsequent month you get an even clearer picture on the trend. maybe november could go to zero or a lot of economists expect though be an inflexion point. that s why it s so careful to watch so closely. then you have to ask yourself, the market has moved so much already, if it is smart and takes a lot of this into account, we re going to need even more to keep it going, right? earnings season is coming up in a couple of weeks. are you ready? i think maybe next week. really. yeah. i think maybe, yeah. next friday. i m in for the whole month. i m taking january off. are you? yes. you ve been off. the girl the minute opens up for christmas and new york week, the girl is so organized. i will tell you, i ve already put in all my requests for 2010. i know you have. back in school, you were the one going, ooh, ooh. like in november, it s like, you know, i should take off thanksgiving week. get a day off, get a three day, four-day weekend. it s true. no. b of a will reportedly pay its investment bankers close to the amounts they received in 2007. the firm is trying to minimize executive defections. the judicial says about 25% of the bank s 2009 bonuses will likely be paid in cash. the rest will be handed out as deferred payments in stock. some of the pay would reportedly be subject to claw backs. bankers are expected to learn more about their pay in late january or early february. the amounts will be rewarded next month. how do you claw back cash? it s only the restricted stuff you can claw back, right? now you owe us money. that s a good question. i guess you theoretically could garner or say that you owe them. it makes sense when you ve got restricted stock. bus once you ve given somebody cash what if you need to give it back? what if you don t have it, you ve already spend it? you know, when people make a mistake and end up costing hundreds of thousands of dollars, they may pay for that for the next five years. but i thought that was the reason behind putting so much in restricted stock. or if you don t stay at the firm long enough, it never unrestrictes and you never get it. but you can imagine how much defection there is, and the big producers, their clients deal with them so they re asset gatherers and they can go wherever they want. the first three-quarters of last year made up i think a third of the income overall. there s been articles written, too, about a lot of these guys starting their own firms. yes, it s been active and ubs has lost people, too. but there s been a lot of function in that business. the new york fed, this was out yesterday. it said that there was no effort to mislead the public with that aig situation and disclosures, but apparently there were some e-mail exchanges. and you could see that the company initially proposed disclosing to the s.e.c. in early november 2008 that it would pay counterparties 100 cents on the dollar to disclose this, but then the information wasn t disclosed until 2009. tim geithner, who was tt of the new york fed at the time, had no role not to release that information. the fed has openly said that it doesn t think some bailout numbers should be exposed to the public. asia has had a pretty good week, in fact, the best week in a month and more green arrows overnight. we ll see what happened when that jobs number comes out at 8:30 eastern time. europe is up this morning, although modestly. euro zone unemployment is up to 10%, so similar action given our economies between here and the euro zone. oil, as you probably know, hit a 15-month high down today, though, to $82.40. i see retail gasoline has broken out to $2.6 0. the 10-year note this morning, 3.853%. people are talking about important flexion points at the 3.9% level. will we get back at 04? the dollar is rel ofly quiet and ahead of the jobs number. and then gold, given the relatively stable picture, down 10 bucks. let s head overseas and check in on london on this friday. geoff cutmore. good morning, carl. interesting how the markets have decided to position in europe coming the into your big jobs number. we ve got some modestly strong numbers for the banks and the basic resources. it s the commodity stocks that seem so be targeting. and wouldn t you know perversely, we ve seen the bank stocks go up. so i guess the analyst concerned probably are feeling sore about the way the markets responded to the call. o losing side here in europe, telecoms, chemicals and health care right now, just some defensive areas of the market that you would expect to be weaker on a day where the market is on the front foot as far as risk is concerned. so that is the picture here in europe as we count down to your big jobs number. now over to christine in asia. even though investors were cautious ahead of the nonfarm payroll data in the u.s., in japan, the nikkei hiding a 15-month high. this after newly appointed finance minister naoto kan called for a weak ebb yen yesterday. but today, kan appears to be backpedalling a little bit now saying currency levels should be determined by the markets. now, those comments saw the yen strengthen just a little been kan says still he s sticking to his view to weaker yen helping exports. but investors there are worried about the conflict on super p n pain. the kospi up a marginal 0.7%. beijing reportedly approved short selling and margin trading in the stock market which would pave the way for launch index future. overall in asia, how markets do on monday will spend on that jobs report later today. back to you. in other news this morning been jim chanos is reportedly shorting china ma. the new york times says the investor s warning that the hyper economy is heading for crash, he s told us this a year ago. chanos cites critics sessives, whoers beijing is cooking its books and inflating the data, so china says shorter income by focusing on instruction. literally, a year that he told us that china was a bubble. but new york times right on top of that. he probably gave an interview to the times and they wrote about it. i know. but literally, a year and a half. sitting right here. big blue is looking to build an operation with hundreds of millions of dollars in assets in its first year. china overtaking the united states in its world s top auto market. statistics show china sold more than 13.5 million vehicles last year. the united states had annual sales of 10.4. cars selling in 2009. growth this year, though, is seen much slower. it s still solid, but you re talking about much slower gains that we saw last year. that was a month ago. and i got some mail on it, but i quoted chanos as saying each peasant now that moves from the interlands in china gets his own skyscraper. he doesn t need anyone that s so you can move in there. they ve got so many that are overbuilt and aren t occupied that that is one of the inducements to get you to come to the city and provide the labor force. you can get 42 floors. yeah. to do what you want with. and they can keep building it. no, no, they can t. you know that. things eventually that can t be your growth. you can t manufacture the growth of your economy, can you? that depends if if you can stimulate enough of those consumers to stop spending and start saving, it might pay off. if bad things start happening in the economy, can you shoot the people responsible for the bad things happen? there s a story in the times today about drug rehab in china that involves physical abuse. you cannot leave. they ve talked to some of the inmates that have been released. does it work? i don t know but is it an effective means of i don t know. i wouldn t want to try it. can you imagine having a billion very smart people that have access to the internet willingly staying in a repressive ra shum? i mean one need to turn the screws to keep things orderly over there and that is why those guys are panicked right now. we ll see what finally happens. it finally happened with the wall. iran. people like to live freely, don t they? yeah, they do. they do. we re not going to take the other side of the argument. he s looking at us. oh, come on! when we come back this morning, weekend weather, the cold temperatures across much of the country continue into the weekend. we ll check in with scott williams of the weather channel. what are you doing.? calling chase sapphire, seeing if we have enough points to stay longer. now? you don t have enough time. and you have to push all those buttons. no buttons, someone answers every time. yeah, right. bet you a massage. yeah, ok. hi, julie. i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire. you call. we answer. no waiting. just press right here. go to chase.com/sapphire. chase what matters. good friday morning if you re just waking up. futures at this hour are slightly positive. a couple headlines, the new report today says the u.s. office vacancy rate his a 15-year high. landlords slashed rates since at last 1980. argentina s president fires the central bank chief. let s get the national weather forecast as we head into yet another cold weekend. scott williams at the weather channel this morning. scott, good morning to you. well, good morning to you, carl. certainly we ll continue to find the cold air into the upcoming weekend and into today. 19 degrees right now in atlanta. treacherous road conditions after receiving sleet and snow overnight. it s 18 greps degrees in tampa waking up in the upper 40s. as far as current airport delays, still finding problems as we move into the busiest airports right now. call ahead and check with your carrier as the day progresses. as far as the forecast for today, de-septemberist sunshine as we move into the high plains. windchill values, 30 below in some areas as we move into kansas city and omaha. more snow in new york city. lake-effect snow continues for chicago. so more delays in chicago yesterday. over 500 flight cancellations and as we move into buffalo, looking for some impact also into philadelphia, cleveland and pittsburgh will continue to find some problems as far as some airport delays. if you re traveling along i-95 watching that snow continuing to move in, light snowfall for you. 32 degrees will be your high temperature as we move into philadelphia. look for morning snow showers. temperatures in the lower 30s and the nation s capital. we are seeing flakes early this morning, but most of that will be coming to an end. as we approach the upcoming weekend, we are seeing some of the coldest air in the season but there will be a change in the pattern as we move into the upcoming week. it looks like the arctic blast will come to an end as we approach the days. back to you. scott, are these going to close the schools out in mill dd burn, new jersey, do you know? it doesn t look like we ll see a lot of snowfall from the system, certainly not like what we saw with the blizzard a few weeks ago. so if i ask you about specific schools, you re not going to be able to check with your local school district. all right. how many hits do you do an hour, scott? i can t even count that. we re just busy with the arctic blast. similar one webs too. and do you ever just vary your intoe nations or changes things around for your own amusement or do you just do it the same way? you have to just roll with the punches there. he asked, scott, because we do things like that to entertain ourselves when we re reading through. and we re going to throw smu punches. one of these days we re going to try to get you to totally join in with us and drop your professional demeanor completely. what, do you want him to drop his pants? no, not that i said demeanor. scott, i m sorry to drag you into this. see you later. potty mouth here. that s fair warning for tomorrow, scott. no, monday. we ll see you back here on monday. anyway, let s get a check on the u.s. markets ahead of the jobs report. joining us this morning is julia coranado. and allen gale, from ridgeworth capital management. julia, what are you looking for with this number that s coming out today? we re expecting relatively good news. we re looking for the first positive print since december 2007. we re expecting a positive 25,000 on nonfarm payrolls, although that is not enough to keep the unemployment rate from ticking up to 1.4%. all in all, that will be relatively good news given the healthy period of sizable job losses we re coming out of. so you don t necessarily expect to see major downward revisions, either? no. it s always hard to predict revisions. but in general the last few months, revisions have been positive. if anything, i think we would expect that. allen, about a week ago, we were saying most markets expected negative numbers before we saw this. you saw early outliars. and that seems to be the drum beat that has changed over the course of this week. now, my guess is that the market may be almost expecting a positive number. what happens if they don t get it? well, i think that we are in that important narrow range between negative and positive. you know, a range of 20,000 is not that high on the number, but the fact that it would take us from a negative to a positive number sutly makes it much more important for the market. so the fact that we have had continued drops in initial jobless claims, we ve seen some increase in temporary hiring does suggest that we are that the employment picture is going to continue to improve. if we don t see that improvement, at this stage in january, then it does it will present something of an obstacle to the equity market as we go into this critical month of january. yeah. i guess the question is, is it getting tougher and is tougher, as joe was asking at the top of the hour, is it getting tougher and tougher to push the market to go higher? well, there is a different between recovery and sustainability. and we are nearing that juncture where we say, okay, the businesses are no longer cutting back on jobs. that s great. we re going to see a recovery-type of surge in earnings in the fourth quarter. the question is, are we fundamentally expanding in the u.s. economy? and i think the jury is still out on that. so if we see evidence in the jobs report today that puts that in doubt, then i think equity investors are going to remain dennive. so what is an investor to do? i realize the questions remain about the u.s. economy being in some sort of a growth situation. but it s not just the u.s. where is an investor to hide? you have questions about china, you have questions about what s happening in europe. what happened? well, fundamentally, in my allocation strategy funds, because we believe the economy is turning and moving higher, i have maintained a bias toward equities. but i would classify myself as a nervous bull in here because we do we ve had a 65% ral hi in the market and we are entering into that transition phase. so i think it s good to keep a bias in favor of equities, but it s important. i m leaning more towards u.s. stocks over the near term. the u.s. equity markets and the emerging markets and i m shortening up on my bond durations. julia, within those numbers today, aside from the number we re looking at at unemployment, aside from job creation, what are some of the other metrics you re going to be watching? yeah. well, actually, one of the key indicators that i keep my eye on is aggregate hours worked. even as employers aren t adding more employees, if they re increasing the hours worked, that s money in consumer eps pockets. we got the first big jump in aggregate hours worked in the november report and that was a positive indication for consumer spending and that s something i m looking for in the december report, as well. what did it jump to, 30.1? yeah. and the total hours worked increased by 5%. that s a considerable jump. aside from that, i guess the revisions we talked about. revisions are always key, yeah. when you look out towards let s say later in the year, maybe once we get through the halfway point in the year, what do you expect to see happening at this that point? you mean beyond mid year, you say? yeah. i think by then we ll start to see a good, positive trend. there s a number of head winds to job creation. i mean, the credit situation remains extremely tight. that is going to hold down small business hiring, which is very, very important. so i think we ll be looking to move into the 125 to 150 positive payrolls by that time. and, of course, we re going to have the census hiring and firing sort of introducing a big element of noise in the headline numbers. so it s going to be increasingly important to keep your eye on private payrolls. great. julia, thank you very much for joining us. allen, you, too. we look forward to talking to you both very soon. my pleasure. credible. human genom. let s look at some upgrades and downgrades this morning. i have to confess that i have not been watching this and i m kind of shocked at what i m looking at here. but that is human genome, which is now a $5.5 billion company. the low really is around zero. and it is now 31. goldman sachs has had a buy on it. and they re going to a neutral now based on valuation. and things have been going right. yeah, that 1,000% in one year thing. i can remember back 10, 12 years ago when people picked this to be some of those tech guys, biotech picked this. they had so many intellectual property on the human genome that they figured eventually you ll find some drugs that had commercial potential. but it didn t happen for a long time. when i saw that it was downgraded, i thought i wonder what it was downgraded from. and it s a $31 stock, downgraded today, though, by goldman sachs. so i shouldn t put the new york times down for not knowing chanos was short on china when i had no idea this moved from pennies to 31. speaking of pennies, jcpenneys upgraded, neutral from sell. goldman sachs had a sell on jcpenney and they upgraded on neutral. target decreased from 28 to 30. macy s, downgraded from neutral to buy, also a goldman call. market cut from 18 to 21. limited upside to earnings per share in goldman. and chipotle, mexican, upgraded to overweight from underweight at morgan stanley. target price 111. i found one. really? i did. i happened to pass it and immediately went there later and i liked it. burrito bowl? did three different kinds of tacos. tacos. did you get a beer? they sell alcohol. i did not know that. no, i didn t. i brought it home, in fact. i brought it home and i liked it. for me, the worst mexican food is great, for me. i think that s an expression about something else. the worst i ever had was go ahead. coming up, we ll get more of this morning s top stories and the picture from the futures pits. stay tuned. and coming up, aerosmith sings about it, celebrities do it and many fail miserably. today we re asking our guests a very simple question. you can talk the talk, but can you walk the squawk walk? welcome adecco s ted gilliam. that s everything for chicago. and fedex ground will get it there fast. wait. fedex has ground shipping? oh, that s right. you just woke up from a 23-year coma. yeah, it was a long one. did i miss anything? uh, the cold war ended. 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(announcer) we re in the energy business. but we re also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won t- hurt-a-bit business. because we don t just work here. we live here. these are our families. and our neighbors. and by changing lives we re in more than the energy business we re in the human energy business. chevron. lose weight and jumpstart your year. any guy any age can do this. introducing the all-new jumpstart kit from nutrisystem. i m dan marino, and i lost 22 pounds with nutrisystem. that s me 32 pounds ago. i feel like i m 10 years younger. order now and get the jumpstart kit, specially designed to put you on the fast track to awesome weight loss. i did go.all.the.way! i lost 50 pounds with nutrisystem for men. nutrisystem is based on the proven science of the glycemic index that helps you feel fuller longer. for about $12 a day, you ll get 28 days of fantastic meals. fifty years old and back to my playing weight. order now and you can get two weeks of meals free, plus, the all-new jumpstart kit, our secrets to put you on the fast track to ultimate weight loss, based on more than 35 years of proven science. jumpstart your weight loss with nutrisystem. order now and jumpstart your year. call or click now. good morning. welcome back to squawk box here on cnbc. carl no kidding. no computer, no script, so issues this morning, but nothing that the viewers no. and they didn t need to know that, either. i m joe kernen along with carl quintanilla and becky quick. we had alabama beating texas last night, 37-21. and i hate to say that i knew this, but nebraska came so close to beating texas, right? and then you saw and alabama beat florida badly. and did you see what florida did to my cincinnati bear cats? yes. tebow just it was almost like college versus high school. they just so knowing that nebraska almost i don t know. i just figured alabama must have been good. the game might have been much different if colt mccoy hadn t taken that hit to the shoulder last night. and he says, i m not in pain, but my arm is dead. you could drive nails in it. do you remember tebow during the alabama game? that was weird. is there crying in football? i guess there is. there can be when you re trying for the national championships. there s no crying in baseball. you know that, right? if you re waking up, we have your top stories. adecco s ted gilliam is here with his market expectations. maybe them okay with her. so she doesn t cry. exactly. and changes could be coming in the world of late night. we re going to talk about jay leno and conan o brien. later, david malpass will join us as our guest host on this jobs friday where honestly, we say it every time, this is an important number. this is incredibly this will be telling this time. we ve got the market up 70% based on the perception that things will get better. we ve seen the declines. and the declines have gotten less and less. it will be interesting. who do we have that is going to give us that today? is hampton down there? i think so. we re going to get more signs about that before we get that number. as joe mentioned, it s the december jobs report. that is the huge story today, that employment report coming out at 8:30 a.m. eastern time. forecasters redifficult that the economy actually shed another 10,000 jobs last month, but it is important to note a reuters survey is calling for more change in payrolls. economists were all over the map, but right around that flat line so you could see a slightly positive number. you could see slightly negative. the unemployment rate, that is expected to tick higher by 10.1%. average hourly earnings are expected to rise by 0.2%. with that report, just a little bet than two hours ae, we want to turn to ted gillian who is the adecco group s north america ce on. good to have you back. great to be here. thanks. the debate over whether it s positive or negative, is that significant to you, or not? the survey margin of error is plus or minus 100,000. so whether it s minus 50,000 or plus 50,000, it s basically no job losses and/or no job growth the that s where it comes out. it s more of a mood setter, right? i think that s true. i think there are two other numbers that come out. the first will be the average hours during the workweek. we saw an increase from 33.on 0 to 33.2. that shows that the companies are using the capacity that they have in place. and the second factor is the number of temporary jobs. that number has begun to sway and since august when we ve been getting together, i ve told you it s getting better, it s getting better and we re seeing that temporary number continue to rise. that s where companies go first. they use their existing employees in place more and they go to the temporary and contract market before they get heavy into the market of hiring again. and we re seeing that transition takes place now. you clearly have your own data for december. is the temporary trend intact right now? absolutely. as we speak. in most skill categories and in the industries that are hiring, since late summer we ve seen a week on week improvement as companies have brought more people in. that additionally, that happens in the industrial skill sets first as companies build inventory. people who have jobs in manufacturing rolls or logistics and transportation. and then it moves into the skill cat core. but we re seeing demand and i.t. engineering and scientific skills. which is a very good sign for the recovery that will come in 2010. the cover of business week this week is about the disposable worker, talks about how this whole crisis has changed offshoring strategies, the strength of labor unions. is it possible that we might continue to see robust growth in the temporary market but companies simply unwilling to bring people on full time? i think there are two components to that. first, companies will good for more industrial solutions now than they did two weeks ago. so many clients said, look, i never thought i d have to reduce 20% of my head count. i don t want to do it again. so they re looking for a much more flexible way to engage people. i think that s maybe why the temporary numbers are better and why the contract worker is finding more opportunities than people who are only looking for full time jobs. the second piece to that is will they do that work internally or will they outsource it? from a worker s point of view, it doesn t really matter. they ve got a job, anyway, it may be for the outsource company as opposed to the direct client. i think the last point of your issue is really will the u.s. labor market be the place people, companies want to put jobs? and that, of course, is a much bigger question. within the united states, do you see areas making a much stronger comeback? like california or florida and are there areas like a detroit, michigan, where are those jobs gone for good? detroit has seen some job improvements that s not in the manufacturing category. they ve lost a ton of jobs directly in manufacturing, but we re not going to see improvement in the manufacturing jobs number or the construction jobs. those numbers are still very difficult. especially when you get into the professional skill areas. remember someone who worked in financial services as a financial analyst type can take those skills to an energy company or a scientific company or a pharmaceutical company that has maybe a more healthy job outlook here in the short-term. but do they have to pick up and move? what areas of the country are the places that are seeing a rebound? california hasn t seen that big improvement yet. florida has been pretty good. texas has been very good. the washington, d.c. area, you can imagine with all the government jobs being created and the companies serving the government has been a very strong job market. yeah. the journal this morning, rents in d.c. are now topping rents in new york, which is sort of a sad twist but says a lot about our economy. quick question on the mobility thing. i saw numbers yesterday about how the inability to sell your house is hampering people s ability to take a job, even if they get one, right? absolutely. in the beginning of 2009 when we were losing so many jobs and the housing market was terrible, we saw circumstances where people just couldn t relocate. they couldn t get out of the house they were in to relocate. that s improved substantially. people are in a better position now to get out of the homes they re in and to relocate. there are certainly still parts of the country where that is still a very difficult prop sig. but as a systemic issue, that s improved through the end of 2009. is it your gut that we will see perhaps another negative jobs number in the months to come? you know, i don t get too bend out of shape about the monthly fluctuations. you know, as long as we re moving generally in the right direction, remember, we ve got to get to a point where we have 200 or 300,000 job additions a month before we re going to start wearing down that unemployment number. and i think this expectation that the employment numbers tick up is not unlikely because as the jobs come back, more people will re-enter the job market that have been on the side lines. thanks for your insight. thanks for having me. comments or questions about anything you see here on squawk, e-mail us at squawk az cnbc.com. is it elvis s birthday? it is. 75 today. and there s a big celebration in greenwichvillage where a punch of impersonators are getting together. they re making prize peanut butter and banana sandwiches. i m hesitant to interrupt elvis with the a oi, the animal orchestra. sure. which song? heartbreak hotel do you think? vee va las vegas. in the get toe? coming up, why nancy pelosi and some of the america top aides are on their way to the detroit auto show. i don t know why. i m interested in that. and all morning on squawk box your parent company could lobby congress to pass a treaty. or you could put on a hat and tell kids how to save christmas. this is not working for me, jack. welcome back, everybody. if you are just waking up, the futures at this hour, with 8 points above fair value. again, anything could happen when those numbers come out. also in the headlines this morning, top lawmakers and members of the obama administration are on their way to the detroit auto show. house speaker nancy pelosi and ray la hood, they will be among the group. they ll be meeting with company executives, state and local leaderes and tour vehicle display peps auto show organizers say they are seeing more interest from washington this year, as you might expect, following the government aid to automakers that came out last year. right now, let s get a check on the news outside the world of business. monica novotny is here with a roundup of the pls. happy friday. good morning to all of you. we re going to talk about washington here. among the disturbing findings, the visa status of the alleged christmas day attacker was not flagged because of a simple misspelling of his name. and it is one of a long list of failures president obama is now vowing to correct. one change that s coming quickly in the matter of a weeks, in fact, is a boost in the number of air marshals. a huge portion of the nail nation is among those issues. a tractor-trailer in ohio spun out of control killing four people there. in college football, alabama is back on top of the national championship, beating texas 37-21. back over to you. did you guys stay up and watch? you watched some of it didn t you, carl? no. i heard about it this morning, obviously. my dad went to texas, so it s a bit of a tough loss. yeah, yeah, the quarterback. it may have been different if he had stayed healthy. colt mccoy. yeah. is your basketball team number two, too? texas? monica, what time do you get up? i m up at 4:00, 4:15. i didn t watch. i told the people today that these weeks are like days for me. i take naps, but it s like one big long day. i m sitting in makeup today. you know what? i ve stopped taking naps. i don t take naps. i m talking about my nighttime is one big nap. when i used to take a nap, it s like you have to get up and go get ready ten times. when you take up from your nap and you start day two. i go home and take a quick nap when my kids are napping and i wake up with them and start day two. i sleep during power nap in the afternoon usually. on cnbc? no, no, i didn t mean that. no, no. you guys have a great weekend. you, too. is it power nap? no, power lunch. i m sorry. coming up, we will bring you up to speed on this morning s top stories and take a trip to the chairs. we ll be dishing up more upbeat headlines than off beat headlines. stick around. and all morning on squawk box hello, peter. what s happening? i m going to need you to go ahead and come in tomorrow. so if you could be here around 9:00, that would be great. okay? the december jobs report, coming up at 8:30 eastern. well, look who s here. it s ellen. hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is. completely networked. so, anything happening, suz? she s all good. oh, my gosh. is that my car? [ whirring ] [ female announcer ] the new community. see it. live it. share it. on the human network. cisco. 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. i don t think there s any truth to the rumor. it s all been my experience, nbc only cancels you when you re in first place, so we re fine. we re actually okay. a time-honored tradition, really, and that is leno s ability to just trash his employer. letterman does it, too. howard stern always does it. howard stern, yeah. i would never. i take the opposite tact. doesn t it get boring being so good managing and doing things? anyway, who knows what s going to happen here. bill carter at the times seems to are it that a deal s in place already to move jay back to the 11:35 and then conan at 12:35. a half hour, they split that existing time. but what happens at 10:00? the affiliates, i mean, you know, squawk rerun at 10:00? that would help how about squawk live ? yeah. we would tailor it to a general news audience. i think what s interesting do you think the affiliates would go for that? you think they re mad now. i think what s interesting, it s get getting a lot of play, all over the newspapers and it s a reflection on how broadcast, even though cable is where everything thinks we re going, when it comes to talkers here s the live section in usa today, ellen degeneres during idol and broadcast is still what everybody can talk about off the top of their head. it s still the most watched. you re going to see a cable audience that s huge but splintered. if you re talking about aggregating eyeballs, no place we talk about jersey shore here and there but everybody knows about leno. the 10:00 p.m. leno show delivered on the number of people watching. so you whack that one. that works but then and. profitable. yeah but up comes the affiliate issue because they make their money from news which is why there are so many questions about whether that situation can still exist in the future. can you still have this affiliate branch koppel and his hair apparently may be going to may be going he would be great. he s the natural to get that. it s amazing he left, and really has been sort of the where was he for a while? didn t he do stuff for history? yeah, one of the cable outfits. maybe he comes back in a big way and takes over for george stephanopoul stephanopoulos. who s now doing morning. talking about brassieres and cooking for valentine s day. what brought that up? it s because what you always link with brassieres you looked right at me. also in the papers, gas prices, we mentioned briefly, $2.71 on thursday, $1 more than a year ago, high nest 15 months and people are saying we could be seeing2.75 and maybe $3 by the spring. we re talking retail gas at the consumer level. maybe $3 in the spring. refining capacity still constrained in this country. maybe that will collide with demand, which has been flat. why is gasoline up $1? that would not be good for consumers. every additional penny takes a huge amount of spending power out of the pocket. as this recovery is taking off. would you do this story if you don t have a topic? i did read this guy. he s 89, been to north and south pole. he s 89 years old. is this giving you hope for yes. how did you know that? because i know where your mind is on your birthday week. on my birthday week, this is they talk about a lot there s another guy who s 90 who took up wing walking. and a woman who s 90 who went to africa and was on safari, sprained her ankle and made it the three weeks. it shows active life continues the wing walk her a stroke and still does it. he needs help getting up on the wing but you need to wear a lot of clothes because it s so cold. it says this is an emerging market phenomenon based on tens of millions of longer living men and women not just longer living, healthier and more active. you re not talking about you re 65 and you re doing crosswords. you ve got a lot of words. you add in the e.d. stuff and you re not even 90. we talked about your abs being the situation . the situation , they re there. you ve got the guns going today. i used to have a six-pack i used to have a keg, now i have a quart bottle. when we return, we ll have more of this morning s top stories. we ll get the final countdown to today s monthly unemployment report coming out at 8:30 eastern time. check the clock in the bottom right of the screen, synchronize your watch, will we see growth? we re turning to market watchers for the answer. sharpen your pencils, stick around, we ll be right back. (announcer) we re in the energy business. but we re also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won t- hurt-a-bit business. because we don t just work here. we live here. these are our families. and our neighbors. and by changing lives we re in more than the energy business we re in the human energy business. chevron. jobs friday. the most anticipated number of the month and one that could set the tone for wall street today and in the days ahead. we ll have the december employment report and instant reaction. a beleaguered financial giant becomes more pessimistic about its rivals. citigroup cutting full year earnings projections. we keep a close eye on bank stocks even as the sector has performed reasonably well. why the squawk walk is not as easy as it looks. the second hour of squawk begins right now. ah! ow! aw! backseat lover and i talk to my daddy say you ain t seen nothing and sure to be changing ways good morning, everybody. welcome back to squawk box here on cnbc. i m becky quick along with carl quintanilla and joe kernen. we re going to take a first look at this morning s rundown. of course, the focus this morning has to be all about the jobs data coming out at 8:30 a.m. eastern time. market strategist david kelley and david malpass will be giving us their projections. barry gosin will tell us where he sees commercial real estate heading in 2010. the cold snap wreaking havoc across the south. citrus turning sour by the minute. we ll check on commodities. in 15 minutes we have minority whip eric cantor. we ll get his outlook on jobs creation and where he stands in the fight for unemployment. first, carl with a look at morning s top headlines. futures, pretty good action, modestly positive after good action in asia overnight. the best week in about a month for asia. all about the jobs number as we head for the 8:30 release of that government data. forecasters pullolled by dow jo think they shed another 10,000 last month. reuters survey is calling for no change. unemployment rate expected to tick higher by 0.1% and average hourly earnings seen rising by 0.2%. analyst who covers financials cutting full-year earnings projections for bank of america, jpmorgan and morgan stanley. a few numbers, b of a cut to 50 cents from 95 cent. rating is still a buy. goldman cut to 5.25 from 5.50, also a buy. morgan stanley cut from 3.10 to 3.50, ratings a hold. jpmorgan now expected to be $2.90 down from $3.20. stocks up nicely yesterday. b of a is one reason the dow was positive. we ll see how traders react to that news. look where goldman was. last time mayordy whitney was in, it was at $162 and she was very negative. yes. spyker submits an improved bid for gm s saab unit. bernie he caneckelstone has jum into the mix. gm says it will close the 60-year-old company if a suitable bid is not received. the national champions are crowned, alabama defeated ut last night 37-21. the crimson tide s first national championship since 1992. they got the heisman and the championship. bad news for colt mccoy, texas quarterback who went down on the first drive. and never was able to help the team come back. congratulations to bama today. the quarterback for texas, colt mccoy. i mean, do you think they even do you think they knew whether he was any good or not or he just said, i m colt mccoy. okay, you got it. you ve got the job. we are counting down to december jobs report at 8:30 et. forecasters expecting an improved picture in employment and a surprise could mean big things for the markets, either up or down. joining us this morning is guest host david malpass and david kel y chief market strategist at jpmorgan. because your our guest host, david, i ll begin with you. what are you expecting? there s a clear improvement going on in what was a very bad labor situation. maybe we ll get a break-even number this morning. the range of possibilities from a statistical standpoint is pretty wide. if it s a minus 50,000, markets will initially take that as a negative, where is the job growth? as you think about, it it s a big survey and it s hard to get exactly right. so the bigger picture to me is just a trend toward improving job situation, but dominated by what washington is doing to change the picture of labor, of health situation, of the auto i was listening earlier. it sounds like people are going to the detroit auto show. so we have washington running the auto companies and being very interested in the model, how many should they produce? a big question in the gdp forecast is how many cars is washington going to allow detroit to produce? because if you can pump them up, remember, it doesn t matter from a gdp standpoint whether they re sold or go into inventory. as long as you make them you get gdp. it makes a difference if you are a major shareholder, like the u.s. government is. like we are all. if they get a hot model, aren t they going to go for it? it pushes up the gdp and you hope people are positive and buys a new car. david kelley, what are your thoughts? our models are saying the exact same thing. number looks like zero on payroll growth but to david s point, the range of error in models and in the government s own estimates suggest anything but plus 75, negative 75 is reasonab reasonable. last year employers panicked. i we lost huge numbers of jobs, about 3 million jobs in a five-month period at the start of last year. and it looks like there s going to be some catch up here. every indicator we re seeing on the labor market suggests we re seeing an improving trend. this month is a close call, next month won t be. david, you are the chief market strategist now at jpmorgan funds? that s right. is that you re an economist, are you not? well, economics is in my blood, but i ve diversified a bit. wow, i can ask you anything then. are you mostly involved with asset allocation or do you actually do you have a target for the s&p at the end of 2010. not at the end of 2010. how about the first of the first quarter? how about the end of today s session? you don t get it. this is long-term mutual funds. what we think about is what the markets will do for investors over three, four, five years. will it go up or down? up nicely over the next three, four, five years. we think stocks are still very cheap. there s a lot of pessimism out there but over a five-year period, just getting back to our old ties would give you about a 60% gain over five years. so we ve if you include dividends. we think there s lots of potential in stocks. there s a lot of risk also in the treasury market as we get back to normal here. go ahead, david. how do you handle currency trend risk? meaning there s a consensus of people that the dollar s going to weaken because we ve got this out of control washington and big deficit. so if you re investing on that, what do you do to protect yourself against the dollar weakness? well, we actually think addition we re going to see stronger growth overseas than in the united states. we would say be a little overweight international investments. on this the thing about the deficits in washington, this year, the u.s. will have the second smallest debt to gdp ratio in the g7. if you look at the italians, germans, they re worse than we are. we don t see the dollar falling for that reason but we think the dollar will gradually come down. yes, be a little overweight international investments. the old best house in a bad neighborhood argument, right? i mean, that doesn t make you feel good about yourself, but i guess it s something. and it should make people worried about treasuries in the long run because there s no way the government can issue this much debt with ten-year treasuries with a three-handle. i m thinking the national debt may go up to $20 trillion on a marketable national debt just over the next eight, nine years. what do you think? can we actually issue that much successfully? i don t think it s going to well, if you talk about debt in the hands of the public, you know, somewhere in the midteens is where we re headed. i think we can just about swing it because, for example, there is now about $9.7 trillion sitting in short-term accounts in the united states earning essentially zero. if you can move people out of short-term bank accounts, cds, into the treasury market, we can just about swing it. we ll see higher treasury rates. it s not healthy for the long run. it does mean higher taxes down the road. long run being how long? ten, 20 years. i take a long-term view. if you re planning for retirement, the message isn t economy can t handle it but down the road there will be higher taxes on wealthier individuals, cutbacks on spends on retirees so you need to build a bigger nest egg because of the implications of today. and don t do it with ten-year treasuries. i should take up hang gliding when that s starting 15, 20 years from now? you re a young man. david malpass, all we ve heard from you is the dollar in the last year. did it surprise you this sharp rebound based on nothing? i mean, you wanted the policymakers to do something, didn t you? what happened? for one, i think the dollar just got oversold in october/november. i did a piece in early november in early december describing how surely for 2010 they would begin to exit don t call me shirley. okay. in 2010 they would have to have some concept of an exit and that should bring value back to global currencies, not just the u.s. dollar but the euros we haven t seen any meaning commodities should come down. we haven t seen any idea of an exit, have we? gold came down from 1200 to 11 1100. is that oversold or the trend? i think it s starting another wave of commodity buying is in europe greece got into trouble and other countries and it became clear the ecb is frozen at 1% interest rate because their stock that s why the dollar went up? well, yeah. so the problems in europe helped the dollar relative to the euro but we didn t do anything structurally to improve our situation here. no. clearly the structural problems in the u.s. are getting worse from the standpoint of protectionism, the deficit, the health care we don t want you railing against all these all right. we ll talk much more in the next two hours with you. david kelley, we have to s good-bye to you, chief market strategist at jpmorgan funds. that s a big change. i look at you purely as an economist but it s a fun job. good luck. see you. thanks. if you have any comments or questions about anything you see here on squawk, go ahead and e-mail us at squawk@cnbc.com. still to come this morning, cold weather wreaking some havoc in the commodities market. we ll get your weekend weather forecast and talk about how the cold weather has put citrus in a deep freeze. for some, putting one foot in front of the other is a major task. but squawk seems to have no problem doing the squawk walk. eric cantor, watch your step and come on down, you re the next guest on squawk box. it s so nice to have company after the accident. aaahhhhh!!! what is it? someone paid me cash! but who? who? aflac. who pays you cash when you re hurt and missing work? aflac. .cash to help with expenses that health insurance doesn t cover like the mortgage, gas and food. aflac! ahh!!! what now? someone s standing on my foot. all: ahhhh!!!! who could it be? welcome back to squawk box. the new york fed says there was no effort to mislead the public regardi regard disclosures about its deal with aig, which shows e-mails that the company disclosed in 08 it would pay counterparties. the information wasn t disclosed by aig until march of 2009. the treasury department says tim geithner, who was president of the fed at the time, had no role in any of those closure decisions. the fed has openly said it doesn t think some bailout information should ever be, should ever be released like the details of the health care plan. some of those things should never, ever be displayed spac-span will get an hour, minutes some things should be put in the al capone vault and they should find 50 years from now. nothing was in that vault. that s right. the countdown clock ticks down as investors wait for the job s number. here with washington perspective on the jobs front is eric cantor of virginia joining us on set along with david malpass. good morning. how does the republican party respond to something like that? listen, most republicans would say good job good movement is always better than job losses. but on the whole, i think americans want to get see us getting back to an era of job creation. the way we do that is to try and remove this environment of uncertainty that is surrounding this country and, frankly, affecting the job creators. you ve got the overhang of the health care bill and the increasing costs employers will face because of that. you have increasing prospects for tax hikes on folks who make a good income. people who create jobs. you ve got plenty of uncertainty now surrounding how much more washington s going to spend and add to the deficit. this is what s really impacting the entrepreneurs who are going to bring us out of this recession. the president is supposed to make that hard pivot to jobs starting today with the statement to the press this afternoon. if we get that, and if we get health care resolved somehow, we ll talk about that in a second k that clear up this uncertainty you speak of? well, carl, look at what the president s going to announce today. it s going to be yet another one of the programs where washington s going to crank up the spending machine, spending money we don t have for green jobs in this case. right. for jobs that now washington deems acceptable. going back to what we really ought to be doing, let s remove the environment of uncertainty surrounding job creators. job creators want to get back into the game but they can t act. they don t know which way washington s moving next. how is the health care conference going to play out? how is it going to go down, really? well, listen, not too many folks really know what s going on because no one s having their right to know realized. i mean, we ve got a situation where it s all being done behind closed doors. even as minority whip you don t have a real good sense of what s happening, is that beck y it s been some time now that the speaker pelosi and others have said that there s no use in speaking to republicans because we don t support a public option. we don t support setting up setting this country on a path towards single payer. one they have said that, they basically abandoned any talks out in the open. it s not only republicans being shut out, the american people are the ones who will pay for this bill. they don t have any clue or idea as to what s being negotiated behind closed doors. mr. can tortor, i would like personalize this, new york has a state deficit of $7 billion for next year. as health care costs go up, medicaid sharing, nebraska won t pay for it but new york will pay lots more. it s already sharing a lot of revenues back to washington. so my question is, is there anything that s going on right now that s going to protect a state like new york that s really getting hurt by the medicaid transfer payment process? david, i think you look at mayor bloomberg and the statements he s made and where he has come in the evolution of this health care debate. initially he was very excited and supportive of trying to do something. lately, i think you have seen him and his leadership say, look, we can t afford the added costs that are going to be laid onto this city, this state and the citizens here in new york. this, again, is a huge spending program that they are embarking upon. and a health care bill that is not designed to reform the system. not only is it going to cost end up costing the taxpayers of this country a trillion dollars, we re not going to see any increase in quality. in fact, it s going to be just the opposite. so there s a huge amount of concern. the public s got a right to be frustrated because they don t even know what it is they re going to be paying for because it s all being done behind closed doors. what is the party s plan come november if, in fact, unemployment is down significantly? well, carl, everyone wants us to go and pump up job creation. i m fearful, though, that what is happening right now is washington can t get out of the mode of continuing to spend money we don t have. right. and so if the economy s good, terrific. we all want to be there. but what are we going to do about these unsustainable deficits? what are we going to do about the fact that people want some relief right now and be left alone so they can get back to the business of creating jobs and finding that economic security that s been lost? do you think the issue of deficits and fiscal responsibility will outweigh employment, if employment looks better in november? well people always say it s about jobs. in the end, it s all about jobs. it s about people s financial and economic security. it s about the families sitting around their kitchen table wondering how they re going to pay for college, whether their retirement s going to be secure. that s what this election, i believe, will turn on. also about the relationship with washington, that seems to be changing a lot. meaning, people are getting have always been pretty down on washington itself. but that s got to be going to a new low. that becomes an election issue as well as job issues, it seems. david, there s a huge sense of disconnect on the part of where the american people are and what they see going on in washington. the agenda being pursued has no bearing or no relationship to the realities that families are going through, which is tightening their belt, the reality which small businesses are going through. washington is spending into oblivion without any sense of consequences. congressman, on those polls it s not only the democrats who are in power in the house and senate, it s also the republican party. how do you explain that? no question the polls are looking much more promising for the republicans because generic ballot last week turned out to say, hey, we re up by nine point. right, but the net favorables favor the democrats. the rnc has much less money than the democrats. i think that s what becky s pointing to, right? absolutely. the other point is, have we arrived back into the minds of the public as a party that can lead again? we ve got ten months to prove that. i would just look back a couple months ago to the elections in new jersey and virginia to demonstrate that we ve got a two-party system and there is a party in power where people are extremely upset at the leadership being promoted there. it is up to us republicans to demonstrate we can lead again. we have grabbed the bull by the horns. we have continuously proposed solutions that are countered to, the direction the obama administration and the pelosi-led majority in the house are about. again, ten months is a long time from now, but we are we are seeing increasing momentum come our way. usually takes republicans 20 years to get people this mad. to do it in eight or nine months mad about job creation going positive or mad about i m serious. but for as mad as people were at bush about you name it. and throw the bums out, the iraq war and the financial i mean, can you believe where you re sitting now eight months later in terms of polls and i mean, it s it s pretty staggering, is it not? any time you start talking about major change, as health care is, it s unnerving, especially when people don t know the volatility in the political atmosphere has gotten it is stunning. it is absolutely stunning to see the turn-around in just a year, where we are. look . it s not a year, is it? well, maybe from the from the inaugural it s 11 months. look, it is if the markets come roaring back and we have a sustainable situation where folks again become comfortable about the job prospects and portfolios and the rest, that s where we want to be. the policies being pursued in washington i don t believe end up bringing us there. i didn t say anything through all of this. i know. because he was saying it all for you. i have to recuse myself, but you saw the kov of this. yes the post has a great headline. show president finally connects the dots. they want to kill us. he actually is now talking about we are at war again with al qaeda. so we ve renewed the war with terrorists, i guess. reignited. i would think on national security he has impressed you more than disappointed you. the guy that was still skiing was a bush appointee anyway. did you see that? they call him obama s man on security. he was a bush appointee. it would change the market outlook if the president said the same thing about taxes, meaning as tax rates go up, small businesses don t want to invest into that environment. that s what happened in 1936-37 when the great depression re-ignited because people were trying to tax their way into the deficit reduction. we re at wr with the taxpayer and small business. i think he has said that, right? no, kidding. congressman, it will be an interesting year. please come back soon. thank you. good to see you congressman eric cantor coming up, jobs report and arctic air leaving the rockies, airport delays across the east coast and even snow. we ll get you a winter weather update right after this. hey, who s this? oh, that s kyle. he aced his fifth grade geography class. you see, now that we re using fedex to ship globally, i have to learn all the countries again, so i brought in kyle as a consultant. did you know that we have customers in czechoslovakia? actually, it s called the czech republic. yes, kyle, you re a lifesaver. without kyle, i never would have heard of that new country called buttheadistan. shh. [ male announcer ] we understand. you want to grow internationally. fedex serves over 220 countries and territories. welcome back to squawk box on this jobs friday. we ve got a lot to get to this morning, including the latest real estate outlook from real estate mogul barry gosin of newmark knight frank. at 8:00 we ll get job predictions and then coming up we have the big number at 8:30 a.m. eastern time. the government jobs data is released at that time. weet get you instant market reaction. let s take a look headlines. checking futures, one of those mornings, as you know, almost all jobs fridays tend to be at the flat line until we get the data. that s the case this morning with the dow perfectly in line with fair value. the big question, will we see nonfarm job growth for the first time in two years? dow jones survey calls for a drop of 10,000 but reuters revised their survey now calls for no change. unemployment rate expected to tick higher to 1.1%. spyker has a new bid for gm s saab unit. gm says it will shut down if a deal can t be reached. toyota prius was top selling car in japan last year. it s the first time a gas/electric hybrid has occupied the top spot. under 2009 priuses were sold in japan last year. let s get more on the deep freeze that has gripped much of the nation and we ll check in with scott williams at the weather channel. hey, scott. good morning, joe. well, we haven t seen temperaturtempte temperatures like this since the 1970s as far as the duration of the arctic outbreak. temperature in atlanta, 18 degrees, dealing with treacherous driving degrees. 26 in houston, good morning. 17 current temperature in dallas. new york city checking in at 29 and snow is falling. current airport delays we have them as we move into chicago, 45 minutes now. 90-minute delays as we move into atlanta due to some icing concerns. this system continuing to move toward the east as we move into the northeast, looking at the current radar, the snow is coming down as far as new york city moving into boston. light snow. not expecting heavy snowfall accumulations here. you might be asking, when will we see an end to this arctic blast? we will see a pattern change, but cold temperatures remaining intact as we move into the upcoming weekend as far south as florida. some concerns as we look at some of the citrus crops there. as we move into next week, we ll see the polar jet stream lift off to the north. subtropical jet stream will return as we move along the southern tier of the united states. we ll see some milder conditions back into the 50s. seasonal numbers for this year. back into the 70s as we move into the bulk of the sunshine state. certainly, it looks like if you re not a fan of the cold temperatures, by the middle of next week we will see some relief. back to carl. he s trying to avoid me. scott, do you appear do you appearance on msnbc, morning charles, do you do that, too? no, don t. you don t do it on morning j joe ? no. i was going to get a feeling my actual name is joe, not charles. so you don t have any feeling one way or the other you know, you might as well say i m the real morning joe since you re not on their show. would you say that for me? would i say what? we had the crickets ready. never mind. i ll get you next time. see you later. have a good weekend. you, too. next on next on squawk your tools of the trade, oil will you say i m the real morning joe? you know i already do. becky? you re the real morning joe. i will show you my birth certificate. my name is joe, not charles. oil, gold, currency, we ll get you the ready for the week s final trading day which won t get going until we get the jobs report, which if we haven t mentioned is coming at 8:30. coming back in two and two. 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 walk walk walk ah! walk walk like a man ah! welcome back, everybody. let s turn to our traders and take a look at where commodities and the dollar are headed today. on oil we have peter beutel, joe from fx solutions and an orange juice futures expert, we ll be talking to him about what s happening. also our guest host, david malpass. let s start things off, james, with what s happening with the cold spell and with oranges. how big of a problem is this? yesterday it looked like things were improving, looked like florida was escaping it but today more cold weather. it s interesting. the freeze possibility was thought to be two or three days ago when we escaped that. orange juice prices settled back. but actually now we have a cold blast that s going to probably extend through the entire state of florida. it s a really big deal based on the fact that this year s crop is so small to begin with. so where does that leave traders? we ve already seen a huge run up. how much more room to run is there for these frozen concentrated orange juice futures? it s interesting. most people think about fcoj and they think about a famous movie back in the 180s but this is truly great trade setup. 99% of all florida production encompasses the united states. in other words, the cal orangif oranges, texas oranges don t go into juice. five years ago were were ravaged with hurricanes. ten years ago we had the housing boom take 10,000 acres out of production. we have 130 million box production figure this year, less than half of what we were producing ten years ago. if we re looking down the barrel of a a freeze this weekend, we could lose another 10 or 15 million boxes and orange juice could get up to $2 easily. peter, let s talk about crude oil, which is pulling back down after what is it, eight days of gains. we ve seen some big, big runups. where are things headed and how much is cold driving the oil futures? first of all, joe is the real morning joe. thank you. you heard the question, peter. thank you. but, you know, we ve broken the $82 level. first three days of this new year, first we broke heating oil s high of 09, then we broke gasoline, then we broke crude oil. we ve already broken the highs seen last year. we ve added more than 50,000 new contracts in crude oil. a lot of those index funds, the investors piling into these commodities, driving them higher. we ve got plenty of oil, but cold weather means less oil than we had last week. so as long as it stays cold, the fundamentals will improve in a relative sense. if you take a look back and say, how do we stand against five years, ten years? we ve still got plenty of oil, but, again, it s a relative thing. people are still looking at the dollar. we ve got tons of money that likes to come into this market. i don t know why they can t hedge the dollar with these things called yen or euros, but for some reason they insist on hedging against a weak dollar with oil. that s our big, big problem as we move forward here. which, joe, brings us to the dollar question. we ve been speaking with david about that this morning as well. a little relief for the dollar after the huge beating it was taking at the end of last year. but where are you watching or what do you think is going to happen over the next, let s say, couple of weeks, and how much relates back to what the jobs number today is going to be? well, becky, the nonfarm payroll we ll get today will be supportive of the dollar regardless, unless it comes out very poorly. you ve got a number which is running in an improved trend ever since last year. so whatever happens with the number, the dollar reaction has already been set back in december. normally you get the move in december that we saw where there s a reaction to the trend that happened before and you often get a recovery the other way in january. i don t think we re going to see that this year. we have both the economy improving, we have the fed beginning to sort of edge into talking about interest rates, and we have this trend from december. all of those things are pointing towards a stronger dollar. at least in the first quarter. i think that holds up. joe, one of the key issues on the dollar is what happens in europe with the debt situation. as greece goes up and down in terms of its debt restructuring, it looks to me like they won t get into a giant crisis. in other words, in december the euro was weakening some and had to discount this idea of a real debt crisis but that seems to be lesson iing nevertheless this background is going to stay with us. and it is not a positive. it s not only on greece. there are many other countries involved to lesser degrees with this sort of problem. this is going to remain a background and it is not real positive for the euro. gentlemen, thank you very much. it s good to see all of you today. we appreciate your time. thank you. still to come, thoughts from our guest host david malpass as we head towards what may be the most important data point this year, the december jobs number. the art of walking. otherwise known as ambulation, not an easy task for those in the spotlight. ow! so can real estate mogul barry gosin make it to the squawk set in one piece? let s find out. the newmark knight frank ceo gives us his 2010 outlook for commercial real estate and the mortgage market when we return. (announcer) we re in the energy business. but we re also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won t- hurt-a-bit business. because we don t just work here. we live here. these are our families. and our neighbors. and by changing lives we re in more than the energy business we re in the human energy business. chevron. 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 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. so i got my nephew to build a website. i hired someone to make my website. five months ago. we are building a website by ourselves. announcer: there s an easier way. create your own small-business site with intuit websites. just choose a style that fits your business and customize, publish and get found in three easy steps. sweet. all from just $4.99 a month, get a 30-day free trial at intuit.com.  you must be looking for motorcycle insurance. you re good. thanks. so is our bike insurance. all the coverage you need at a great price. hold on, cowboy. cool. i m not done for less than a dollar a month, you also get 24/7 roadside assistance. right on. yeah, vroom-vroom! sounds like you ran a 500. more like a 900 v-twin. excuse me. well, you re excused. the right insurance for your ride. now, that s progressive. call or click today. welcome back, everybody. the commercial real estate sector is one of the biggest areas of concern for the economy, even as we see some signs of overall economic recovery starting to pick up. joining us right now on a squawk exclusive is barry gosin, ceo of newmark knight frank, one of the largest independent real estate services firm in the world. our guest host is david malpass. barry, thanks for joining you. great to be here. you are somebody who is not only a real estate broker but who owns a lot of commercial real estate in the new york area as well. the flat iron building, dumbo, many other dumbo. why did you sell it? timing, it was an opportunity. meaning? meaning actually, anything that you could sell, if you could sell in 2007, you did pretty well. selling near top of the market. have we reached near a bottom of this market yet? we re calling a bottom. i mean, our view is that the rents have priced forward, that values have come down significantly, and that some time this year prices will start to turn. we re talking about commercial in new york? we re talking about commercial pretty much everywhere. really? at the end of the day, rents have dropped throughout the country, except for washington. and what washington seems to be always on the rise. as much as 40% to 50% in new york, 15%, 20% around the country. the highs weren t as high in the rest of the country. so prices have dropped. it s been discounted forward. so, the market has, for the most part, capitulated, there s pent-up demand. what guys around the country tell me, companies are starting to think about spending money. they re looking. they re making decisions. doesn t mean it s going to be robust but a good sign. you mean a bottom in terms of the rents people are willing to stay in these buildings, not necessarily a bottom in what some of these buildings can bring up for sale on the market? well, i think the prices have adjust on sale. the question is, who are the buyers? there s a really interesting real it s not an anecdote, it s a fact. it tells a great story. sl green, one of the reads out there, just refinanced 1515 broadway, a 1.7 million square foot building in times square. and it was originally valued at $1 billion. they put on $625 million, securitization came due so they had to go out to the market and refinance it. what s happened is, the it s now revalued at $625 million in the new world. so they can only get $475 million in financing. so they have to put in fresh capital of $150 million. so here they re protecting their equity interest, assuming there is equity above the $625 million. they pump $150 million in. and they get they refinance at $475 million. by the way, they were going to do talf but it was too cumberso cumbersome. they went to the conventional market. there are new players. you have bank of chin nashgs a german bank and deca banks. so new bank and equity infusion. this says a variety of things. number one, prices will adjust, people will come back into the market with fresh capital. and the reets will do very well because they have been able to raise $60 billion. they re sitting on all this cash. i looked back and i think, what s the value proposition of reets? this shows the real value of reets because they were able to raise an enormous amount of capital. they re sitting on a enormous amount of capital. if a private guy had to pump in $150 million, it would be virtually impossible. i think you ll see a whole sea change. if we think about jobs, that s our morning data, when does construction restart in commercial real estate? what are the implications? hopefully not any time soon. you know, real estate s a simple business. it s a supply and demand business. it became a financial engineering business, like everything else. so you don t want people to build new properties because it would further depress the value of the it depend. we represent tenants as well. if you represent tenants, sure, build as much as you want. if you represent if you re an owner, i don t like anything else, if you control inventory and the demand is the demand is basically stagnant, you will have an equilibrium. if there s too much supply, you ll overbuild. you can t fool mother nature president at the end of t at of the day f you build too much, you go overpriced. but you re calling a bottom for this market? i m calling a bottom. we want to thank you very much for coming in and we ll see you soon. happy jobs friday. thank you. got a little happier. when we come back this morning, as we mentioned, the first big economic report of 2010 is still ahead. december jobs number in 40 minutes. we ll get it. and the instant reaction at that time. his reputation is expanding faster than the universe. he once had an awkward moment just to see how it feels. he lives vicariously through himself. he is the most interesting man in the world. i don t always watch cnbc, but when i do, i prefer stocks to watch and the animal orchestra. keep watching, my friends. i stumbled i fell one crazy kiss bam i guess love aw! are you going to take responsibility for that? no, no. i haven t seen this, is that good? family guy ? yeah. i ve never seen it. i meant the combination of elvis, family guy, and animal orchestra. it s like a buolebase. yes. stocks to watch. start with kocl, that s coke and colgate and jpmorgan thinks the next six months will be difficult. the firm looks for sluggish top line growth due to a weak consumer. and then it says, if the market continues to rise, which is consensus thinking, we see little enthusiasm for these stocks in the broader market. coke has to deal with a weak north american and japanese while colgate has the best fundamentals but it s already priced in. also alberto looks pricey. citigroup is lowering fourth quarter earnings view on morgan sanction, jpmorgan saying it expects the three to report lower revenue from fixed income and commodities. perhaps citigroup has noticed lower revenue in their own areas and decided, hmm no, they couldn t do that, could they? there s a china wall between their own results and analysts, right? you would hope so. if you live in the house and say the wallpaper is coming down, maybe your neighbor s is coming down. i don t know. interesting call. aeropostal and negative comments. the final countdown to the jobs report. we check out where jobs are with the ceo of careerbuilder.com. the bond king, pimco s king bill gross, he ll tell us when he thinks the fed will act on interest rates. charles needs those contracts tomorrow morning. we should send them overnight with fedex. i already sent them. i didn t use fedex. better cross your fingers. [ man ] oh, yeah, the accident. well, you better knock on wood. remember, we did a green renovation in here, there s no wood. but russ bought a rabbit s foot. it s a bear claw. you could throw salt over your shoulder. actually, that s a salt substitute. but you should find dan i think he s a leprechaun. what is it about me that says leprechaun? can someone tell me please, someone? you should have used fedex. [ male announcer ] we understand. you need reliable overnight shipping. fedex. host: could switching to geico 15% or more on car insurance? host: does charlie daniels play a mean fiddle? fiddle music charlie:hat s how you do it son. vo: geico. 15 minutes could save you 15% or more on car insurance. i was just in town for a few days, and i was wondering if i could say hi to the doctor. is he in? he s in copenhagen. oh, well, that s nice. but you can still see him! you just said he was in. copenhagen. come on! that s pretty far. doc, look who s in town. ellen! copenhagen? cool, right? vacation. but still seeing patients. oh. [ whispering ] workaholic. i heard that. she said it. i. [ female announcer ] the new office. see it. live it. share it. on the human network. cisco. this is a special presentation of squawk box. employment report friday. the jobs data main street and wall street will be watching carefully. you apparently didn t put one of the new cover sheets on your tps reports. oh, yeah. sorry about that. i forgot. yeah. will payrolls turn positive for the first time in two years? are the bulls ready to bust loose? or will the numbers snap the bears out of hibernation? i immediately regret this decision. these bears are massive. plus, words of market wisdom from the bond king pimco s bill gross and the job search with careerbuilder.com ceo. i m sorry, what did you say? you re coming off stupid. i m coming off stupid? you re wearing tuxedos to a job that requires you to clean bathrooms. the countdown is on. squawk box begins right now. a little less conversation a little more action all this aggravation with satisfaction in more welcome back to squawk on cnbc, first in business worldwide. i m carl quintanilla along with joe kernen and becky quick. we are counting down to the release of the december jobs number in about half an hour s time. according to dow jones, economists expect the economy to shed 10,000 jobs last month but a reuters survey calling for no change in payrolls. the unemployment rate expected to tick higher by 0.1%, and average hourly earnings rising by 0.2%. all head of that, fireworks in futures, nothing happening. we don t expect numbers to move a whole lot until we get the numbers in 30 minutes. b of a will reportedly pay investment bankers bonuses closer to those in 07. the journal says about 75% of the bank s 09 bonuses will be in cash, rest in defeared stock payments. china has overtaken the u.s. as the world s biggest car market. new figures show more than 13 million cars sold in china last year, compares with 10 million in the u.s. the rice in chinese sales spurt at least in part by government policy initiatives. joseph? thanks, carl. december jobs report is now just about 27:30 away. our squawk a-team on board with analysis. economy.com s mark zandi s, bob, dave malpass, and steve liesman all present. mark, what s your number? down 25k, almost 50k. i think it s going to be a bit disappointing. weather was bad and seasonal adjustment changes that will raise unemployment rate. a bit disappointing. what about november? you know, november could be revised to be a positive number. that could be revised up. december i think will be on the negative side. you said november goes up and all because of weather, then what you re saying doesn t really, you know, throw a wrench in the long-term view that things are happening. no. i mean, the job market no, no, you re right. the job market is moving in the right direction, just not moving quite as fast as the consensus expects or thinks right now. do you agree with what mark said, bob, or no? well, i know what i think s going to happen. tell me. i don t know about consensus. my forecast is we re going in the right direction and at a pretty good pace, so i think for 2010 maybe 2.5 million jobs. what about for do you feel like making a guess for today? well, we are all forced to do that, even though it s going to come out in 27 minutes and make some of us look foolish so i m at plus 25. what happens with november? does that go positive or is this the first positive? over the last seven months, the final number is revised higher on average 36,000 from the initial estimate, so reasonable chance we get an upward revision for november and it could be positive. a number? i go with minus ten. the job less claims have been falling pretty rapidly, so the good news going on in the labor environment is fewer companies are laying people off. the problem is, small businesses are not yet able to hire very robustly. we re going to get a lot of census hiring, hiring from the government, so the dominant thing in the jobs number over the next three months is just the government adding a lot of workers. steve liesman, you know what you said yesterday, that i was most impressed about, remember? i don t, joe. i don t remember what i said three minutes ago. really? planks constant oh, yeah, planks constant, there is no such thing in economics, right. but now that you know about planks, i figure you can use that to somehow the length of a photon what s your number? you have a guess. do it. i m on the positive side, but what i want to you are? you re on the positive side for december? i m on the positive side. i want to emphasize two things if you don t mind. go ahead. which is the diffusion among economists, which is very rarely so on the even on the zero line here, and if you put together the number of economists on the positive side, that s 31. those who are in neutral are ten. negative are 41. look at the range here. talk about looking for something constant in economics. positive, all the way to negative 80. i talked to bob bruska and to throw on the table this idea, there s recovery there s fao economics, barclays and calyon and goldman and westpac. they re europeans so we don t care. bottom line is this, bruska is saying this rebound looks nothing like the jobless recovers of 90 and 91. he says we re moving back much faster and he s not expecting i think the issue about the improvement we ve seen to date, the real debate is it s a sugar high associated with the fiscal stimulus and then you argue is disappears. interestingly, people on the left, krugman, and on the right agree that when the fiscal stimulus fades, the economy will fade. they just disagree on whether or not you should add some more. i think that s wrong. i don t think it s the. fiscal stimulus. i think it s riding the banks, getting the financial system in order. now that you ve got the financial system working, i think companies are going to discover they cut inventories and payrolls too much and that s why i think you end up with a self-sustaining expansion over the course of 2010. i ve seen a lot of comparisons lately to 02. i guess the spring of 02 where we added like 45 and then loss 265 over the next three months or so. could that happen again? in 02 and 03 the household survey was picking up the improvement because small businesses report more into the household survey. it s actually a phone to households. and also the nfib, national federation of independent businesses, was picking up job growth. neither of those is happening now. so i hope that bruska and others are right that this is self-sustaining. we don t have finance going back to small businesses. in 02 you had the prospects of tax cuts. now the biggest tax increase, it s already law, coming at the end of the year. all the leading data is still suggesting negative numbers. initial ui claims are at 450,000 per week, historically consistent with job losses. you need at least 400,000 per week to be consistent with flat payrolls and 350,000 per week to get job gains consistent with stable unemployment. and you need 300,000 per week to get job growth that s consistent with falling unemployment. we re still we re well we re far away from where we were but we ve got to go a long way to get real job growth. mark, that s not true for the challenger and it s not true for the ism manufacturing. all to are consistent with positive job growth. right. i mean, challengering is a very marginal report and ism manufacturering is 10% of the economy. ism-nonmanufacturing survey is still 45 and consistent with big job losses, 100 to 150,000 per month. you were at 675,000, you re now at 438,000. call me mad cap. i put a line to that and get to the numbers you re talking about by spring of this year. you are mad cap. i m not morning joe, but um morning chuck. morning chuck. i agree with you. we re moving in the right direction. we are going to get positive numbers for david s reason we re going to get several hundred thousand jobs in may, just from the census. we are going to get positive numbers but i don t agree with you that this is a self-sustaining economic expansion yet. we have seen layoffs abate, but we have seen no hiring. it s still a forecast that the hiring is going to kick? we ve got to keep it tight. they re all sticking around. mark zandi live from philadelphia, home of that fine, fine family run up in comcast. anyway, more from mark, bob, david and steve when the jobs report breaks in about 30 minutes. we to want take a look at the inside picture on jobs from the latest career the largest career website in the united states. joining us is matt ferguson, president and ceo of careerbuilder.com. matt, you ve been seeing a lot of these very same trends. in fact, i think you said employers, 20% of them, are planning on hiring this year? yeah. our survey showed 20% are planning on hiring, up from 14%. next year being this year, right? yeah, yeah, 2010, sorry. and then the number that are talking about decreasing employment was 9% down from 16%. so we re seeing good movement in the right direction. when you hear from these employers, are they feeling more confident about things? are they hiring just because they were at wit s end and had more work that needed to get done? a couple months ago we heard they were at wit s end and had to hire to get things done. i m hearing more optimism throughout the employment environment, from staffing firms, from small employers and large employers. i think we re going into 2010 with a much more optimistic outlook. i don t know you ll see a big jump in the numbers. i certainly wouldn t project on the high end of the range of 100,000 job being created in december. but i do think there s a better mood and environment. as we get into the year, we ll see more positive numbers. what are the biggest concerns employers still have about bringing back people in great numbers? well, there s still a lot of uncertainty. i think there was a great amount of fear in the fourth quarter and first quarter of last year. that s still on a lot of business owners minds. there were a lot of layoffs. i think that has made people very conservative. but i think that is fading. financing is still hard to get, especially for small businesses. i m hearing less of that. and i think that there s a more optimism throughout the general employment market today. you know, all that fear has made it the employers who have had the upper hand for quite a while but you did more research that shows that this year you re talking about maybe 20% of the work force maybe changing jobs, they re fed up, with cutbacks, being asked to do more than a lot of people are underemployed, they took jobs maybe they had to take to pay the bills. maybe they stayed in a job they weren t that happy with because they ve got financial concerns. and so as those recede and the market gets better, i think you could see numbers above that. does that mean we ll see turnaround in employers who have been doing things like cutting benefits, cutting back, not offering race rai ining raises,o change their behavior? i think so, especially as we get to the third quarter of 2010. thank you. we re 15 minutes away from the number, december jobs coming in just about 17 minutes. a live picture of the labor department where we hope to see hampton pa hampton pearson. first, meet the squawk, president obama dealing with squurt lapsecurity lapses, we l pick out the topic that have the whole country buzzing with david gregory of meet the press. national car rental knows i m picky. so, at national, i go right past the counter. and you get to choose any car in the aisle. choose any car? you cannot be serious! okay. seriously, you choose. go national. go like a pro. welcome back to squawk box, everyone. we ve been keeping an eye on the futures and they are standing steady before we get that number, less than 15 minutes from now, that jobs number is going to be the impetus behind the move today. right now it is sitting at fair value when you look at the dow futures, or across the board. let s take a quick note just to tell you that orange juice futures, they have rallied to a two-year high. this is coming on all those worries about cold temperatures in florida and possible damage to the citrus crop. we spoke with a trader earlier today who pointed out that about 99% of the oranges in this country that are grown for orange juice come from florida. that s where the big concern is this morning. again, at this point, up to a two-year high. other headlines this morning, france canceling 7 million doses of swine flu vaccine, blaming oversupply. that is just under half the amount it ordered. and the crimson tide of alabama is the new national champion, defeating the texas honghorns last night 37-21. it is alabama s first national championship since 1992. congratulations to them. a busy week on the hill, obviously, with senators dodd and dorgan announcing retirement, senator pelosi saying the health care bill is almost complete. david gregory, moderator of meet the press, joins us from washington. we get this long-promised pivot to jobs today, but that s still going to make some wonder, how much risk is left to the health care bill at this late point? well, in some ways it s moving along pace under the radar a little bit because of all this focus on this christmas day terror plot. and that may be the best thing for it. it s moving along. they re working toward a conference resolution here that would have it done in time for state of the union. so this thing has been counted out so many times, it s not going to be an easy negotiation, for sure. but it does appear to be moving. and that gives the president some room, the room he desperately wants and needs, to focus on jobs. in a way that he can bring some urgency to it, in the same way he s trying to bring to this terrorism discussion. how much of the dispute over the transparency of this process is real in terms of the political context in. i think it is real because of the president s promises during the campaign, because of a feeling like there s a lot of deals and a lot of special interests that are, you know, involved in this that the public can t see. and because health care right now, health care reform, is not all that popular in terms of how it s polling. even though there s elements of it that will indeed be popular to people once they can start to feel it. so there is this desire for more transparency. look, there s a lot of people who are in congress who are going to have to defend this vote. it s got to be one they can go out and more easily defend than they ve been able to do so far. that s part of the difficulty here. one of the big complaints about health care, even among fellows, has been it distracted the administration away from the labor market. if it gets done, right, and if we get through state of the union, how aggressively, how front burner, will jobs be going into the midterms?er there won t be anything ahead of it, unless terrorism becomes an issue. we ve seen terrorism can become the front burner issue. the question is, what is it the administration can actually do to affect the labor market? how much is it about confidence, getting businesses to expand, to invest? what s the real impetus for growth? what role can government play in that? what role does the private sector have to play? that s the balance for them here. i think politically the importance is for the president to keep his focus on it and to talk about where the economy is going, how the government can somehow affect that because he s riding that wave. could there be a rhetorical switch? there s talk that they may want to focus on jobs rather than the unemployment rate because you ve got a much better shot of generating good job growth than getting the unemployment rate down, given what happened to the participation rate. yeah, i mean, that may get beyond my expertise a little bit, but the first point of what you re saying, yes, i think that s important. i think that will be a focus on where new job creation comes from. and how they can focus specifically on that. and realizing the unemployment rate may be more difficult to move over the course of this year. particularly because you have so many people who have been outside the job market, and even outside those who have been looking for jobs, who may decide if things improve to come back into the hunt for jobs, which could keep that unemployment rate high. david, we mentioned dodd and dorgan at the top, we didn t even mention ritter, but some called tuesday black tuesday for the democrats, saying the election outlook is fairly bleak given the seats that are now open. how much risk is there to the super majority in the senate, how much risk is there to a majority in the senate for that matter, and why is michael steele of the rnc saying they cannot take the house? that still may be very difficult to do, given the majority there. but i think this was a big shot across the bow and a warning sign for what democrats face. and it s because democrats are the incumbent party. part of what it s interesting. there was so much momentum that president obama carried into office. so much hope for him. and yet what he s having to deal with, not only the problems, you know, sort of a raid against him that he has to deal with, but also a very sour mood in the country about big institutions, namely government, and how competent government is, what government can accomplish in terms of jobs and the economy overall. that s what he s up against. and so whenever there s this kind of throw the bums out mentality, it s going to hurt the incumbent party, it s going to hurt the democrats in power. and a lot of that change feeling that he ushered in in 2008 is still very much alive and well in the country. the new party usually has more than eight or nine months, david. i know the incumbent party is, you know give us it usually takes about eight years or so, doesn t it? is this time dilation, some einsteinian thing? historically that s not the case. first-year terms can be bad for incumbent party i got that, but just the mood it steams to have soured very quickly from the you remember the i agree. all the i mean, there are chills down every journalist s leg, dade. from a strategic perspective, the fact they did health care first seems made sense because they had the super majority and they never would have gotten it if they waited. i think that s exactly right. if they got super majority or not, although that s a key consideration, you couldn t have taken health care on in year two. it gets more difficult the closer the president gets to re-election as well. quickly, what is coming up on sunday? we re going to talk about the parties, the elections, the mood of the country. we have tim kaine and michael steele, the heads of the democrat and republican party going head to head this sunday. also an exclusions ive interview with arnold schwarzenegger on the politics of the country and the economy in california and beyond, what s the impact on the states if health care reform and the stimulus and the jobs outlook as well. we ll be paying a lot of attention to california this year. david, thanks. we ll see you later. maybe sure to to meet the press this sunday. coming up, the labor department is the center of the investing universe today. at 8:30 a.m., the world will get the latest snapshot of the employment picture. i dare say all eyes on-r on it today wellings just about. maybe not all eyes, a lot will be there for the breaking news. and bill gross will talk fed strategy, tell us how far down the road recovery is on right now. calling chase sapphire, seeing if we have enough points to stay longer. now? 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yeah, they get it. they really get it. a little more stability would be nice. northern trust offers the strength and expertise. that can only come from a 120-year track record. of thriving even in difficult times. they understand. roller coasters are for kids, not money. northern trust. wealth management. asset management. asset servicing. futures still barely budging but give it 3 1/2 minutes and things could be off to the races one direction or another. the market is anticipating every move we ll see here. up next, this is the moment the markets have been waiting for. this is the release of the december employment report. right now you re looking at a live picture of the labor department in washington. that s where our hampton pearson will be, giving us the numbers in a few minutes, followed by instant reaction from our panel and from pimco s bill gross. don t go away. squawk box will be right back. (announcer) we re in the energy business. but we re also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won t- hurt-a-bit business. because we don t just work here. we live here. these are our families. and our neighbors. and by changing lives we re in more than the energy business we re in the human energy business. chevron. 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 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. get ready, get set. we are a couple of seconds away from the december jobs report. looking for something right around the flat line. let s get to hampton. reporter: minus 85,000. december nonfarm payrolls declined by 85,000 jobs. the unemployment rate is 10%. average hourly earnings, 0.2% increase. the minus 85,000 below consensus which was looking for no change or perhaps a loss of 10,000 jobs. the revisions for october and november, very important. november went from a minus 11,000 lost jobs to a positive gain of 4,000 jobs. that s the first positive switch on job growth since the recession began in december 2007. however, october went from a minus 111,000 jobs lost to minus 127,000. the net for the two months, october and november, a net loss of 1,000 jobs combined. december, where did we lose jobs? construction down 53,000. manufacturing down 27,000. job gains, professional and business services up 50,000. education and health care, up 35,000. for the last 12 months we lost 4.2 million jobs. since the recession began in december 2007 a loss of 7.2 million jobs. 15.3 million unemployed. 6.1 million for six months or longer, that is a slight increase. all in all, a very interesting december jobs report. back to you. thank you very much. as you can see, futures taking a little tumble on this news, which is worse than expected. let s get a turn around the horn with our lineup. rick santelli, tell us about the market reaction first. we move from yields from 106 in a two-year, now at 97. we dipped below 380 down into the 378, 379 camp from 384. so the treasury market, the credit market, at least on a knee-jerk, is looking at the most current data, is not good. pricing it, you could almost say, in the old-stale fashion that weak data is going to bring down rates. that s a good dynamic for fear that higher rates will hurt things ahead. one problem, deficits, debt issuance could catch up and alter that. we see the dollar index, it fell against the yen, fell against the euro, and it fell a little bit against the pound. so, it s not a dollar-friendly, although the dollar came in at a very strong level. rick, stay right there. more to toss this over with. mark, why don t you tell us about what you said. you pointed out about the revisions and that s exactly what we saw happen. we saw job growth back in november but what about the downturn this month? this is disappointing. it s a little overstated because of the construction. 25k is because of the cold weather. it highlights the fact the coast isn t clear. the job market is improving but not engaging or in a self-reinforcing recovery. this shows congress and administration feeds to come with more. intanything that jumps out a y you. i think it s a mixed report. we held onto manufacturing. i like the temporary employment being up 47,000 again. obviously, what mark said is true. it s a disappointment. we got the positive revision to november we talked about last month. but overall, again, i think what you re seeing is the tentativeness among employers to hire. the household survey is a bit of a puzzler here. the work force declined by 661,000. so you re not seeing people drawn back into the work force. the number of employed declining by 589,000. so that s a bit strange. i ve got to square that with the payrolls, one relative to the other. i can tell you the household survey is much weaker than the payroll survey, which shows this gradual improvement. i know, bob, that a trend is not a straight upward line all the time. i think for the average minus 70,000, major improvement from the previous quarter and the trend looks roughly the same. i think you re talking about averaging something over 200,000 in the second quarter. david? and if you draw that line, that s what it looks like. i think the payroll survey is on that improving trend. the question here still is small businesses, not wanting to really get dynamic in terms of hiring. they re cut off from the financing. we re seeing it in the household survey. remember the way these survey works. the establishment survey, they go to existing businesses and ask them what s happening. which doesn t pick up the lost businesses on the household side. there s lots of new businesses that should have been created in 2009 that weren t created because they couldn t get financing or because they re afraid of the tax increases that are coming at us. so there s a that paralysis in the household sector. mark? could i make a quick point? the decline in labor force is very significant. the labor force is declining, incredibly unusual. if the labor force was growing at historical norms, 1% per anu aannum, it would be over 11%. this strongly argues the unemployment rate is going to rise significantly over the next six months. to what? that ticked up for the first time in a long time. it had been ticking down from a high of 174, ticked down, now back up. the overall measure, the broader measure of slack in the labor force ticked up this time around, mark. mark, why aren t people coming back in? what s your guess on that? and if you say unemployment could the rate could go higher, how much higher? well, they re not coming in because there s no jobs. no one is hiring. all we re seeing is the end of the layoffs. steve mentioned challenger, that s down. until people hire, people can t come in and find a job. that s why they re not coming in. now, if the employment rate, very likely, will go over 10.5%, i wouldn t be surprised if it hit 11%, given the fact the labor force at some point has to rise. what will it be in november, mark? well f you told me 10.8, 10.9, i wouldn t be surprised. if congress and the administration do nothing else come november, 10.8, 10.9%. i don t think more government spending is going to help that number come down. they ve been trying that year after year. so i just don t agree with the view you re pushing that another stimulus package is going to help us. the tax overhang is stopping people from hiring. can i just a little bit of if you think about the last six months and doing this each friday, i ve gotten to do this with you all, there s been a pulse, right? sometimes it s much better than expected. sometimes it s disappointing. if you take a step back, it has been improving on an unambiguous trajectory. i think the point me made with mr. gregory, i think they will switch their rhetoric and talk about job growth rather than the unemployment rate because of the potential for the labor force participation rate to go up. but i still think this is on track for important job growth starting in the second quarter of this year. i think they ll look at job growth in the establishment survey because big businesses are doing better than small businesses. so they won t look at this household survey, which is showing you the job most of us david, did you see the establishment survey for all of our careers but the reality is, if 25 million americans are unemployed or underemployed, that s a big problem. no matter whether you re creating jobs or not, you re not creating enough jobs to bring that down and you have to address that pip don t agree, david, the i mean, if you ve got 25 million people who are underemployed, the answer isn t how do we get them employed in a year. if you create 2.5 to 3 million jobs, you ve done as well as anybody could have imagined. but i don t think we ll do that unless there s more support to the job market. we do things, unemployment insurance, helps state and local governments, tax credits but it doesn t give people jobs, though. well, i mean, it it certainly well, it does in the sense that unemployment insurance benefits help support demand. if you don t help and state and local governments they ll be laying off workers. a job tax credit f it s targeted, that will get people hiring. job extending unemployment benefit is not an immediate fix. it s not going to create can i ask a quick question? it s about demand, though. the aggregate hours is unchanged, december 0.6, november minus 0.4. what does that do to gdp for the fourth quarter? another strong productivity number. 3.5%, 4%. so companies are making money, there s bottom line profit, but no hiring is the bottom line here. no hiring, yep. we ve got to get them to hire. gentlemen, we ll leave it on that word. thank you for joining us and for all of that analysis. david malpass is staying with us. steve liesman and rick santelli, thanks a lot. here now with his reaction to the jobs report, the bond king from newport beach, bill gross, pimco founder, investment officer. you ve been hearing everything, bill. what struck your fancy in terms of agree organize disagreeing? well, i agree with mark zandi. we need major government programs, either through incentives or some type of some type of program that allows for the private sector to regenerate growth. we need 250,000 jobs a month, basically, in order to bring down the unemployment rate. that s not happening. it s weird because you just i was just reading some of your stuff. you like german bonds better because they got their fiscal house in order. is that helping us get our fiscal house in order so you eventually like our bonds again, bill? well, that country does need to get its fiscal house in order. we have a deficit much like the uk. germany and the euro-land countries are closer to 5 to 6. logically, if interest rate were the same, you would gravitate toward the more conservative you want to make it worse! oh, i don t want to make it worse. i want to apply part of the deficit to the appropriate sector. i mean, what the government has done up until this point is to basically misuse the funds to put them into the wall street sector as opposed to main street sector. now we need to focus on the labor market. it s been a 12-month delay. now people will say, now that pimco has trimmed treasury holdings, let s spend like sailors, right? i ve advocated that for the last 12, 18 months. it s got nothing to do with our position. bill, one of the things you re most worried about is the exit strategy. we re just getting in deeper and deeper and deeper. i don t understand. well, i do worry about the exit strategy. and the fed has announced an exit in march from their quantitative easing program. they basically have written checks for $1.5 trillion over the past 12 months and they suggested they re going to stop doing that. now, i ve you know, over the past three to six months i ve suggested they should not because the economy is not ready for that. but to the extent they re ready to do it and going to do it, then, yes, something has to be something has to fill that void. bill, malpass is going to send you a dry cleaning bill because when you said that about the government program, he spilled his coffee all over his suit and his shirt. he wants to talk to you, i think. hi, bill. on christmas eve day they expanded fannie and freddie and it s a giant sieve. do you think that s gone overboard? that was a surprise to some extent. if they ease quantitative easing they want the agencies to buy some mortgages to expand balance sheet there. i think something has to be done. to the extent the fed has bought 1.5 trillion mortgages that have to be replaced over the next 12 months and the fact chinese and others only buy 20% of u.s. treasury debt, that leaves the private market to buy the balance. if other countries, such as germany are more attractive, then use who s going to buy u.s. treasuries, that s the key on the longer end of the kufb. that sounds like a shell game. the fed doesn t want to be holding the nbs so they expanded fannie and freddie to hold more. it s still in the family. the government is still holding them and that creates a whole other exit strategy problem for fannie and freddie. they re losing huge amounts of money already on the taxpayer. i don t disagree with that. the government, policymakers, have determined someone has to continue to buy these bonds as long as the u.s. treasury and fannie and freddie and the mortgage market are issuing them in the trillions. go ahead. bill, the fact is over the last six months with the rise for treasury rates, you ve had almost no rise for corporate rates. what you ve this is a big tightening. you can look at that spread tightening as simply an indication that people are more confident about the economy rather than having any reaction to the size of the treasury issuance. i think they are. and i think the 1.5 trillion in checks that have been written have to some extent flowed over into that market. i mean, look at pimco. if we weren t going to hold mortgages we were going to buy treasuries or corporates or other types of bonds. and so to the extent checks have been written, they have flowed not only into the corporate bond market but into the stock market. so i would suggest, and we ve cautioned that over the next few months, if this liquidity is withdrawn that all risk markets, that includes not just corporates but stocks as well, will feel the effect. bill, i ve been wiping the coffee off my shirt here. when you he thinks you re crazy. tell him why. when you said that the answer to this jobs problem is the government to come up with a lot of new programs, i was surprised at how direct you were on that. the government can t really create jobs. so why come back to that? w wie been trying that year after year where the government expands spend pentagon. they re spending trillion and trillions of dollars and it doesn t create jobs. why do you want to come back to that again? your approach is an anti-kansasian approach. it did work in 1930s that pulled us out of the depression it s not necessarily the best solution in the long term. it doesn t create productive jobs but it puts people to work and then it allows the private sector to take over the balance. but the argument was that the economy would be doing very poorly. i think the phrase was new normal, growing very slowly. in fact, it s been growing rapidly. gdp look like it s going to come in at 5%. the stock market s performance and the risk asset performances anticipating sfrong growth. the strong growth has now arrived. so for different reasons, perhaps, i don t see this as a moment where you want to now turn the spigots now again because the government is doing well and you need to step back not advance. our new normal said and allowed for 4% to 5% growth in the first six months. we ve seen that. it suggests over the longer term we re back to a 2% growth rate. the 4% to 5% growth you re suggesting basically is coming from inventory accumulation or lack of liquidation and from government stimulus programs that will fade in 2010. well, bill, quickly six months at 6% growth sounds like the true normal, not the new normal. bill, before we go, you re not a big fan of cash. we know you re not a huge fan of treasuries any longer. you like some sovereign debt around the world. would you say you re running out of options or running out of ideas? let s face it, let s look at the bond market realistically. it yields 3.5%. basically what you see in the bond market in terms of its yield is what you re going to get over the next four to five years. so investors in bonds must be content with those types of returns, whether it s from treasuries, from mortgages or from german bond. to the extent they compare that to a 0% money market yield it looks better but not close to the double digits they ve been used to in bonds and in stocks over the past several decades. all right. thanks, bill. for a minute i thought i was interviewing stiglitz. you said we bailed out wall street but not you re moving that way, aren t you? oh, no. i ve been there for about 12 to 18 months. oh 12sh to 18 months. i think the administration has been unfair focusing on wall street as opposed to main street. we need to focus on people as opposed to rich bankers and investment managers and the like. you re within spitting distance of the huffington post and you re on the same page. i like it. thanks, bill. say hi to mohammed and paul and tony and everybody. see you later. the gang. we ll take a quick break. when we come back, our coverage of the jobs number continues. art cashin will give us the play by play ahead of the opening bell. as we go to break, check out futures. the number minus 85 with some important revisions to november and october. all this aggravation welcome back to squawk box everybody. the futures under pressure this morning. down by less than 30 points below value all coming after disappointing numbers coming out in that december payrolls report. you re talking about a drop of 85,000 when people were looking at maybe flat lining, maybe even job growth for the month. we did see a positive revision for the november numbers. that s the good news. also the unemployment rate holding steady right at 10%. when we come back the word from the floor, art cashin will go over the jobs number with the jobs edition of the trader s edge in just a moment. okay. seriously, you choose. go national. go like a pro. time for the trader s edge on this jobs friday. art cashin is director of operations at ubs financial services. good morning, art. we finally got the long awaited positive number but i don t think that s the talking point. i don t think so, though the market is looking at it as possible static now. a lot of the year end stuff gets a little muddled in holiday action and things so we ll wait and see. i m looking at the two other numbers that popped up that kind of surprised me, and that is commercial paper issuance dropped drastically in the recent week and also m 3 seems to be contracting. that may be holiday related, too. we ll watch to see if it s a sign that maybe the economy is starting to pull back a little bit here. yeah, art. i think commercial paper decline is the fed has been selling off its portfolio. they re getting out of that business and it s showing up in that data. i didn t make as much out of that particular data point. the jobless claims are coming down. i think that s the underlying positive going on. i think you run out of the number of people you can fire after a while, david. that s right. small business dynamism remains a big problem for the economy and that showed up in today s household survey. you have this tale of two economies. the bigger companies doing well and the government of course hiring a lot and small businesses not yet hiring. yeah. well, you see that in the banking area, too. the big banks are awash in cash and claiming that no one wants to borrow. smaller, region abanks are not quite in the same shape and it s hurting small businesses. i think you re dead on art, david, we were saying during the break that the s&p as we all know is highly leveraged to big companies, international companies where the profit cycle is just getting under way. not so much to the domestic, small business consumer. is it possible the markets look past some of this disappointing data? well, what we saw recently, and it s beginning to change, was that there was a divergence. you would see that the s&p was stronger and things like the russell which has smaller companies, maybe not so many internationals in it, was performing badly. but as we came to year end, whether a january effect or not, they all perked up. so for now things are running in sync. i think david s observation is correct. but for now the markets maybe with year end money are trying to get back together. we haven t seen many big companies with preannouncing any disappointments now so i look for good quarterly earnings here. well, you can cross your fingers but i m going to wait until earnings season really starts. load up on the ice. okay. it will be marinading all weekend. thank you. we ve got just under 35 minutes to go for the opening bell. we ll get in a few parting shots on the market and the economy right after this. say hi to the . is he in? he s in copenhagen. oh, well, that s nice. but you can still see him! you just said he was in. copenhagen. come on! that s pretty far. doc, look who s in town. ellen! copenhagen? 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