Suffered its worst trading session in 15 years. The ruble bounced back at the open this morning, but it has since dropped once again, falling into negative territory against the dollar despite these extremely hard core moves by the russians. Russian stocks selling up again as Oil Continues to decline. Michelle ka reduce sa cabrera will join us with the russian story and why the markets are very worried in just a moment. Headlines out of china grabbing attention this morning. The first flash reading of the hsbc pmi showing the First Manufacturing contraction there in seven months. It was a reading below 50. This is the latest sign of weakness in the chinese economy. Stocks rose on hopes of more stimulus from chinas central bank. As for how things are shaping up here at home, check out the futures this morning. At least in early trading, remember yesterday, everything reversed by the end of the day. We were up 100 points in premarket. But in the premarket this morning, dow futures are indicated up by close to 80 points. S p futures up by 9 points and the nasdaq up about 17. 5. Boeing hiking its dividend 25 to 91 cents a share. The Aerospace Client boosting its Share Buyback program to 12 billion from 10 billion. About 8. 3 billion excludeing debt. The electronic payment firm trying to move away from traditional payment. Joe . Thats pretty good. Whats the yield now . Well, what did you say, 25 . You can figure that out, right . 25 . Three times 25. Disney raises by the large amount. This is from a yielder to even a bigger yielder. And, becky, yesterday you were right, it was not a triple digit loss. 99 points, wasnt it . 99 points. Gained back, only finished down with wait a second. You will argue that is not a hundred point no, no, im saying people that did argue that it was not a triple digit loss. Doesnt seem to be able to slow the rubles decline. Chief International CorrespondentMichelle Caruso cabrera is here to put it all into perspective. I would like 17 Interest Rates. Is there any reason to believe id get my principal by by investing in russia . Thats the big question. The general rule of thumb, the higher the yield no, but thats what i mean. It seems like kind of a futile attempt when theres so much question as to whether youll ever see the principal. They have so many things working. No, that was different. They did it once before, didnt they . They wiped that out before long ago. 1998, yeah. I wish we could do this int intraday. With we at 66 of now . No, were at were not. They raised Interest Rates last week by 100 basis points. They did nothing to stem the decline. I remember at the time you said this is really big. They raise to keep benchmark rates again at 6. 5, 650. And the runl is still declining. Yesterday, the finance minister came out and said they think the economy in russia next year could fall 4. 5 . Oil stays at 60 bucks. The decline of 4. 5 . No. I wouldnt think they could fall more than that. Yes, no, absolutely. Absolutely. Agreed there. Possibly leads to more sanctions against russia. Roft democracy net, the other day, issued a huge number of rublebacked funds, ruble bonds, piles and piles and piles of them. The question here is what are they going to do with all those rubles . Theres fear in the currency market theyre going to go out and buy dollars with them because they would need them and then youll have a flood of even more rubles coming on to the market. The situation is getting to the point where theres one member of the duma trying to get a law passed where if youre an exporter and you bring in foreign exchanges, you must sell 50 of it back right away. And now its zero, presumably. Did you say yesterday or i read somewhere that if it gets through 50, its just ive had people 60 or are you talking about oil or the ruble. Yeah. Ive been people telling me its going over a hundred. I thought that was the key it hasnt been there recently. You probably had a currency trader on who said that. I didnt say that. It was a technical level. Michelle, there are would places where they could essentially matter . The extraordinary debt to gdp, it looks manageable . Absolutely. Like 1998. 98, right. If the dead is in rubles, its its not something thats the way it supposed to work. When i was there, the ruble was a sign of power and it was a real sense of diminished power that the ruble had gone down quite as much. This number here at 70 is, like, double the biggest one you can go back ten years under putin. Does this undermine putin domestically . So youre asking essentially the question does this make putin blink . Im not sure. So far, he still has tremendous support from the people. Theres been an increase in purchases. Consumers have been buying more because they import everything there. So they think, oh, my gosh, my currency is getting weaker by the minute here. Let me buy everything i can right now because its not going to have as much purchasing power down the road. We hear stories about empty shelves because they import so much from europe. So you think i better spend my paycheck today the thats latin america in the 70s and 80s. Its all dependent on putin, if he abide eggs this right. And we know now that theres deep divisions now twl between the central bank and putin. And at first he didnt want them spending reserves, supposedly, to defend the currency. But now, you know what they do . They come out and they say were not going to defend the currency. What have they done nearly every single day since then . Defend the currency. Are you hear for the fed stuff or because you lived in are you a russian expert . There are many reasons. Arent my good looks one of them . It could be. And you lean communist, but joe, last time, where i became a capitalist was russia. But we the effects of you a tonnism was we found a guest named boris. Boris, are you there . Hes russian, isnt he . He is russian, i think. R managing director at bk asset management. You also i was just kidding. Youre a big currency expert. Werent they supposed to defend that . Everything you guys have been saying is absolutely true. One of the key components that they have no control over is oil, right . The ruble is such a currency right now, theres a massive correlation. The lower the oil goes, the lower the ruble goes. So we can control one side of the trade, which is Interest Rates, but they cant control the decline in oil. And i wonder if theres a Massive Hedge Fund trade. Id be shocked, shocked that a hedge fund was trying to do that, boris. Exactly. Even as we are sitting here right now, we are close to 70. We started at 65 just an hour ago. I think the market is starting to take shape right now. Boris, they raised Interest Rates 650 basis points, right . Right. And its still tumbling. Why is it tumbling . Because they can only control one side of the trade. Oil went down overnight, and that killed their whole plan. If oil stabilized right now, they could get some breathing room. So back to the panel, then, this is a situation where pultin has to decide what he does at this point, what hes done to this point is stir up nationalism. And rally the people around him. If obama wants to break putins back, he wanted to wait a second. Obama doesnt decide that, but our central bank, right . Correct. Which is why you cant have that im playing real politics here, fantasy land. The fed is going to do what theyre going to do. My point is, there are a lot of political ramifications of this. Even if the fed decides to tighten up Monetary Policy and the side impact of that is weakening the ruble even further, you could have massive destabilizati destabilization. I was thinking its fortunate we have sanctions in place because that allows putin blame sanctions for whats going on rather than pointing a time of Lower Oil Prices and this kind of stress on the economy could be a time for economic reform in russia. I dont think thats going to be the case this time, particularly when you have countries, michelle, that when oil prices fall, they suddenly open up the oil market to investors, open up the economy. Russia was a good example of that. That may not be the case this time. The currency trade in geopolitical mess, if putin uses that as an excuse, we could continue to have some problems going into next year. Keep in mind, beyond the ruble, emerging market currencies are just i mean, it is a disaster zone and theyre sending out all kinds of signals. Emerging markets. Which is why i think the fed being the macroeconomic factor in all of this is going to temper their rhetoric. And they dont want to exacerbate the em crisis. All they have to do is remove that phrase to make people move that even further. They still reserve the right to watch the markets. The recent moves are going to expand our i think its tomorrow. Were going to move, but they dont mean it . Yes, yes, yes. And you somehow defend it as appropriate and fair . Its necessary. Is that doesnt mean youre not. I want to get to this issue. The indian rupee, boris, as well, and michelle was bringing this up. Malaysia. How far does it spread and what are the risks now that this becomes systemic . Well, it all depends, again, on what the fed does. Where, you know, where the oil prices go, whether the market takeses the whole psychological move to all the em nations. The other point here is what else can russia do to stem the tide here . And then the final scenario, they could actually start monetizing because we dont have any assets, really, of oil and land. I think they have like 500 billion, maybe 400 billion, but theyve gone through almost about 100 billion over the last month. Its never enough in a crisis. At least thats what they can do in the meantime. And the key difference between now and 98 is growth. Right. So hopefully the adjustment here will be something the last thing, i am not a stock analyst. But the only thing as a russian asset that looked interesting to me is luke oil. Luke oil is up against Everything Else and the reason why i kind of like it is because it has a lot of assets. So maybe its more diversified as a russian asset. Whenever we have a crisis and a bubble and a boom, we always regulate everything. A continue mall ves already left. If someone had said whats the next big bubble and what will cause the next big selloff in financial assets, if someone told you a collapse in oil prices, that would have been the last place you looked for the next development. Here were watching it play out as it does and nobody knew the amount of debt and high yield and and nobody connected all the dots. Theyre saying jack lew said theres not contagion and its not housing that affects everything. But were watching it where were even taking it as a negative from the stock market. Im coming back this hour and im going to bring you a chart. Is that where some of your friends inflated a little bit too much with their loose Monetary Policy . Is that where some of the oil. This is the feds fault. Basically, everything is its not their fault, its your fault. Its my fault. The dollar against the weaker oil prices. Dollar denominated trade. But the reason it was up there in the first place was because of how people could perceive it was going to be weak because of the central bank. Boris, thank you. We have had do you remember . We had natasha on at the same time. Boris. One time. Which would be a can i say one thing before we go out of this . Which is this but please, this is a moment when people have made fortunes in the russian market. It will come back to that later. Trading below multiples of five. When it gets ridiculous, people have made money. So i should go to the Russian Party in davos this year . Im sorry, ann, i apologize. Well see you back here next hour with more. Still to to come this morning, how close janet yellen to a rate hike . The findings of an exclusive cnbc fed survey right after this. And then in the next half hour, his predictions have been spot on right here on squawk box. Markets stage mark grant will join us with his new call. First, though, we are watching a developing story out of pakistan. Nbc news reporting an attack on militants, killing over 46 people, most of them students. We will follow the situation. Bring you the latest throughout the morning. Squawk box will be right back. The Volkswagen Golf was just named motor trends 2015 car of the year. So was the 100 electric egolf, and the 45 highway mpg tdi clean diesel. And last but not least, the High Performance gti. Looks like were gonna need a bigger podium. The Volkswagen Golf family. Motor trends 2015 cars of the year. Welcome back. The fed begins a twoday meeting today. In light of better growth, whats happened to the prediction with the estimate in the forecast for the first rate hike . Unchanged, it was july 2015. Same as it is today. Next metric we look at is when do you think the fed is going to let the Balance Sheet decline . Thats 4 trillion plus of assets that it owns. That has been pushed ahead a little bit. You might see these adjustments in the wake of the qe program. When will me allow assets to run off right there . Then the next metric, when will you now its pushed ahead. Now its the First Quarter of the 2018 number to merely three years to get there. You can see this change in a much more gentle slope in turn of where the fed hikes rates. The end of 2015, now its seen just 0. 8 . The end of 2016. Still under 2 . And you can see that terminal rate being pushed out. It was 3. 3 , now its down a little bit and out a little further. That is how people are going to adjust to incoming numbers. Economy lists and trat gists and fund managers, whats the effect of inflation on the First Quarter of next year . 0. 4 , up on gdp for the First Quarter and about a 30basis point decline in inflation. Another number, 66 say its time when its to change the statement. A lot of these things that happen have been happening overnight, steve. I think theres a sense in the market right now, becky, that the fed is committed to that first rate hike and theyre committed to it around july 2015. What happens after that . Thats where the adjustment is going to be made. They could wait a meeting, they could not go every meeting. The fed is committed to that first rate hike to try to get something under its belt. Steve, make your way back over here. Well talk more about that with our market. Joining us right now is dan hecmman from bank wealth management. Kaven cavanaugh is here we say, as well. Dan, let me start with you. You obviously have been trying to figure out what the fed is going to do at this point. Boris made an interesting theory that they may change that statement, but theyll have to softening because theyll be worried about global contagion. What that means for Central Banks around the world. I agree with that statement by boris. We think theyll change the language, becky, this month. The Economic Conditions here in the u. S. , just focusing on that for a moment, are incredibly strong. Unemployment below 6 . Consumer confidence at alltime highs. Oil price res just a tremendous windfall for the u. S. Consumer. And we think that bodes well leading to melt yum economically in 2015. If the fed does remove that statement but they hedge it, how does the market react to that . Its almost like a nothing move. The economy is doing much better. Were in a sustainable economic expansion. I think the market is going to continue to move on. The markets are volatile. What about whats happening with russia, whats happening with some of the other emerging markets right now . Its something that we keep our eye on, definitely. Oil has dropped precipitously. That could destabilize whats going on. But for now, lower oil is actually a net benefit. 80 are doing better. Consumers are going to be doing better here in the United States. It will be good for economic growth. Those are some of the emerging markets and, of course, russia and some of the companies with oil. A fewer minutes ago, the ruble did pass that 70 mark that michelle told us to watch. I have 70. 7. So this is something that is speeding up rapidly. When you look at Something Like that, what do you do with todays markets . This is moving in realtime. We think investors, especially fixed income investors should continue to gravitate towards u. S. Treasury. When you look at them from a treasury super speculative, u. S. Treasury rates continue to be very attractive. U. S. Treasuries are key for investors here. Foreign investors have benefited by going into u. S. Treasuries. Theyve had a great windfall in addition to yields falling by the american dollar depreciating. Dan, karen, thank you for joining us. Thank you. Coming up, oil prices have been plunging and the ruble sliding. First, as we head to break, here is a look at s ps 500s winners and losers. Good morning, everyone. If you are just waking up, futures are starting to take notice of whats been happening in other markets. Right now, the dow futures are up by 58 points above fair value, s p up by 6. If you watch whats been happening in some of these other markets, take a look at whats happening in european markets. They are still posting gains at this point. The ftse up by 1. 05 . Russian stocks taking a tumble, down by another 14 . A lot of this because of what the central bank stepped in to do that doesnt seem to be working. Very quickly, take a look at asia, whats been happening there. Asia overnight one saw the market hang seng down by 1. 5 . The nikkei down by 2 . Shanghai up by 2. 3 . But a lot of these moves have been taking place since the dollar closed. The dollar is down against the euro and the yen, but its the ruble that is catching peoples attention at this point. Just moments ago, the ruble moved or the dollar moved to 70, above 70 versus the ruble for the first time in history. Moments later, its already at 73. 72. A lot of this is because of whats happening in oil prices. Russias economy obviously based closely on what happens with wti and thats been down another 2. 5 this morning. A decline of 1. 42, 54. 49 for wti. Again, this is after the russian bank moved to raise Interest Rates to 17 . That was an increase of 650 basis points. Briefly, it helped the ruble before kind of losing all power. The oil traded one out on this. If