Transcripts For CNBC Squawk Box 20150106 : vimarsana.com

Its not its a state of mind. It is. Thats what we keep saying. Over and over again. And theres a lot of new this is the new blah blah blah. I think 15 years is fair. Dont you think 15 is fair . Is fair for what . What i am is the new 15 years less. Do you want to do how old are you now . I can sing it. No. You know what they say. They say that the beginning of the hours are the most important to hold, to pull in the viewers with the current news. Nerds, move on. Exactly. Thank you. Some of the stories were watching this morning, the Global Markets. Oil prices extending yesterdays 5 route. The reasons are piling up including dollar strength. Jitters about greece flight to safety, but especially whats been happening in the Energy Sector. Check this out. Pushing stocks lowers across the board yet yesterday. The s p now on its first fourday losing streak in more than a year. Wti, below 49. Unbelievable. That is conditioning today. You have to wonder whether that is going to do to stock prices. Dow futures are slightly higher up by about 8 points. The s p and nasdaq futures are slightly lower. If you are looking for proof of flight to safety, check out the treasury. Yesterday sitting at 2 . Today, thats the big question. Mark rand was on yesterday. Wool see what happens. Already quite a bit of chaos in all these markets. Check out whats been happening with currencies. Dollar has continued to strengthen. It is up to 119. Dollar is down against the yen. Dollar index yesterday rallied for the fourth straight session. It ended the day at a nineyear high. Take a look at gold prices as well. Gold prices at this point up by 6. 70. 1,210. 70 an ounce. In europe we have continued to watch some of the pressure there. European markets are slightly weaker. The dax is slightly higher. In asia overnight, there was a selloff there as well. I think it was the worst day weve seen in about seven weeks for some of those asian markets. Nikkei down by about 3 . The hang seng down by 1 is . The shanghai was flight. Lets bring you up to speed on a couple of the days top corporate stories. Aol shares are now soaring on a report that verizon approached the company about a potential purchase of joint venture with multiple offerings. Neither company commenting on that story. Yahoo was lobbied to think about a potential deal with aol. One of the potential stories overnight is a headline. My sources, by the way, theyre not waving me completely off the story, but more towards the joint venture do something with the video, if you will and some of the projects that necessarily buy the company. So i dont think we should necessarily take too much away from that headline just yet. In regard to that we have a couple other headlines. Money transfer company zoom sans nearly 31 million was fraudulently transferred to overseas accounts. The Company Announces its cfo is resigning after just a month on the job. Are those things connected . And then coach is set to reportedly buy stuart weitzman. And Johnson Johnson starting experimental trials of its ebola vaccine. For whatever reason, what i thought was a company that was just gone at 12 is now 50 something. Good for Tim Armstrong. Whatever happens, its now in a 3. 5 billion company. I think it was you know when the time warner thing happened it was and verizon is as well. From 12 to 50, i didnt think that was possible. Its ended huge dividends. And theres nothing left. When we thought about it it was like, remember dialing up and trying to get on the that seems like yeah. It was making the transition. To a Media Company to a content company is pretty amazing. What if my new age is i use the age of my hair. What . I use the age my hair is instead of my age. European fears are front and center once again. New data is out again adding to those worries. Michelle Caruso Cabrera joins us to explain. When people ask about it theres like you need to be an expert on 28 companies, dont you . How do we interpret whats what was it cypress or some other tiny Little Country destabilize the entire for two weeks, yeah. Its hard right . T. Weve got states bigger than some of those countries. And you worried about mish moshing them altogether. Dont you wonder . For sure. Fears about the euro are absolutely back. The new data out today is the pni numbers. The new numbers suggest europe barely resisted growth. Data continues to be bad. Add to that what to me is remarkable. Consensus is that mario draghi is finally going to do quantitative easing in two weeks. There is now no doubt in the markets about that. This they dont do it its a huge risk right . If anyone believes theyre doing it, why isnt that market rallying . If you look at the yields the yields are down facially. That part already played out. For sure. But theres concerns that eitherite not going to be enough quantitatively and qualitatively is it enough because there are so many things that havent been done when it comes to reforms. I would add oil is not as helpful to the europeans as it is to the United States for the simple reason they dont drive like we do right . Two, all of those governments loads up loads and lots of taxes on the price of gasoline. You dont necessarily see it transfer to the consumer the way we do here in the United States. Also the fear that if one country leaves the whole of the euro will fall away thats not gone away. Hollande the president of france yesterday saying its up to the greeks to decide whether or not theyre going to stay in the euro. Thats very different than a couple of years ago when they said through is irreversible. Is this tough talk . You mentioned yesterday the germans were trying to say, look be careful what you cowith these elections . Right. Hes planned to do a showdown with europe about the massive debt that they still have. Germany over the weekend, through weeks and now hollande yesterday suggesting you want to have a showdown . Lets have a showdown. Youre not going to blackmail us into giving you even more bailout money when you havent done a lot of reforms, when you still have a government that cant rely on the tax revenue that it got at this point. The big dates, the 22nd is the next ecb meeting, the 25th is this election youre looking at a hectic week. And in theory one have been very positive and one can be very negative. It sounds like theres only the potential for downside left. So draghi has in the past shown remarkable ability to surprise the markets or use suasion to bring more to the table than what people were expecting. What tricks does he have in his hat . But i dont understand, thats what the bond buying does, it lowers rates, right . Right. Maybe they need to buy s p futures. That could be. They cant do this they cant do that. Theres talk that they buy aaa bonds only. How much more can you get out of lower rates . The way economists think about it can you get Interest Rates below the expected rate of inflation . This is really key. Fiveng inflation is going down 1 zero on a bond looks good. Right . Youre still Getting Better yields than what your money would have done they would buy over here wouldnt they . They are. Exactly. And that helps. Exactly with the currency translation rate. That inversely helps the dollar. Our stocks as well. And if it slows here the dollar gets even more i dont know. They really need to devalue the euro. Im glad you brought that up. At some point when you talk about greece potentially leaving the euro, at some point the market psychology goes down right . Remember, this drags the euro lower. And sometimes the market psychology may shift and say wait, it will get stronger. People have done breakdowns where they say what if every single one of these countries have their own currency 12347 the last analysis i saw, germany would have something more a hundred percent value of the euro. Will you stay . Sure. Youve got nothing else . I was going to go to the gym, but you were . Yes. Elga barsch is with us. Im just start with you, mark. You were a poor guy for the euro, werent you . We agreed on that. I think so. One of the things we agreed on joe, is the dollar is going to get stronger this year and were beginning to see a small sense of it today. This is our trade is it possible to do Something Like that to get short at 135 and just stay short and make all this money and when it seems to obvious, mark . There has to be you know it cant go straight down the euro, can it . Thats what we see with the dollar and the euro today. The japanese are expanding their Balance Sheet and the yen today is the strongest currency. Today were trading around 118 1 2. I agree with you markets dont go in a straight line. But i think theyre in a strong dollar environment. Elga can you tell us in your view mark what happens over the next couple of months in the eurozone . Im one of the people who thought greece was going to stay in the union before and i still think its going to stay in. I think the kind of comments i think this is posturing, this is negotiating. I dont think blake mail is a helpful concept here. I think its just hard nail biting negotiations. I think more important than the first thing coming up is on january 14th the European Court adjusted is going to make a preliminary ruling on the omt, the original plan draghi had about supporting the european bond markets. And i agree with the idea that the ecb is going to buy Asset Backed Securities as well as sovereign bond. I think the trick, though is rather than the ceb buying them they will stay on the Balance Sheet and there will be a Small Program to allow germany to give us the cent to it. I think the eurozone will go down further. And we had one of our guests yes say look the continent is right on the cusp of a nice recovery. And its always darkest right before the dawn. And whether the ecb does it or not, the surprise will be those recover more quickly than we thought. Yes, i agree with that. 2015 will likely be the year in which the pace of growth in europe particulars up materially. But, of course there are some enturn at the i and to some extent greece brings back some of the folds which will complicate matters for the ecb when they decide on whether or not and how to embark on a qe program. Is it going to be sort of the where yields are . I mean the economy is with zero you know money. Seem to eventually catch up with it. We had a hard time believing it would work here and it finally did. Sits believed that the economies will find a way . I think they do. Im not entirely sure that its so blindly obvious that we need to at some rate in the game im park of a qe program. The Inflation Expectation keeps dwindling and given that we have a heavily underutilized economy there is a risk of this inflating into negative second round effects where people are willing to take more wage cuts because they think prices are falling, as well. Why exactly do you think there will be growth next year in europe . This year. This year right . Because we have a very expansionary this year been next year as well we hope. The reason is that we have expansionary financial conditions the euro came off, as you said, prices are coming off. We have this massive fall in bond yields. And now after the aqr, its starting to feed through into lower bank lending rates. And that will set into motion stronger credit growth and with the Global Economy ticking along nicely, we think that means that europe can recover. Well have to leave it there. Mark, thank you. Started with you. Were tight on time, as well, but we appreciate it. Thanks. Coming up when we return we have a live report from the Weather Channel as much of the country braces for a bitter cold day. Plus what does Marissa Mayer have . Well talk about that next and a controversial new book on the yahoo leader. First, a look back at this day in history. Welcome back to squawk box. Keith carson joins us now from the Weather Channel. And alex wallace, you know, looks very nice last week too. I dont know whether you feet off of each other. I dont know where you were. You certainly didnt tell us you werent going to be around. Its good to see you today, keith. I did. I didnt know i had to check in with you guys ahead of time. Its nice. You dont have to but ill send you a message next time. Wallace is a well dressed man. Its becoming a competitive thing. Hes dressing all nice. I had to step it up. Thats what happened. Today, washington, d. C. Delays and cancellations been light snow moving from philadelphia to new york. Most of the heavy snow here over the next couple of days is all lake enhanced stuff. Maybe 12 to 18 and most of these spots are spots that are used to seeing know. The bigger story for more people is the cold shot. One across the northern plains. The second one comes in across the eastern seaboard for thursday into friday. You can see all the purple settling in. That is the stuff that is much colder than average. But look at tomorrow morning. 26 below in international falls. 12 below in chicago on thursday morning. Down in atlanta, looking for lows in the teens. Friday morning, 19 in rally and 23 in atlanta. Guys, for sure i see how atlanta reacts when we get into the teens and Single Digits. Thats going to happen here on thursday morning. Wow. It wasnt supposed to happen any more in atlanta, wasnt it . No. I started laughing when you said that. Its like the people that are down there are like what is this . People forget like when my parents come visit im from boston. They come down here in november and they say its a little chilly. Im like its not the tropics. Its not key west. We are going to talk about yahoo this morning. Marissa mayer, the ceo of that company and a new book thats out called Marissa Mayer and meyer, mayer, i dont know why it is so complicated. It shouldnt be. Nicholas is here from business insider. He is the author of that new book. Welcome to the program. Thanks. Here is the question. You have this new book out. There was a big chunk of it in the New York Times magazine just two weeks ago. You paint a relatively awful picture of her and what shes done for the company. I would argue or suggest that youve suggested she should effectively be fired. Why such harsh treatment . I definitely didnt suggest that. I went into what some shareholders are thinking about the situation. And there are shareholders that think yahoo should be bought by aol, even if that means Tim Armstrong would become the new ceo. I painted the pictures of what is going on. But it sounds like an awful picture. Yahoo is in a mess that she go there. She was a good hire in some senses, but but it sounds like you think she was not the right hire. Ive read the book now. I dont think you think she was the right hire. So explain. Right. And especially explain given that the stock has risen and done as well as it has. There is a scene towards tend of the book and she said when i got here we have had 12 people working on mobile and now we have hundreds. When i got here it took forever to get a mobile app out and refresh a product and now its down to weeks or day. That is a fact she has gotten yahoo moving much much facilitier. The question is whether ya should should have focused on making products. He nude to have on your mobile phone several apps from yahoo and yahoo is going to be your phone appmaker. That is just i question that. I think apple was already there. Who should have been her . Who should have been the ceo of yahoo instead . The reason im asking this is ive watched, the stock has performed. Shes only two years into her run. You compared her at one point to steve jobs and she she compares herself to steve job. It certainly took him a couple of years to get his act together and this was a troubled cup to begin with. Im wondering whether were making a judgment too quick. The story of my book is about the first two years of her run there. Yahoo owns a big stake in al by baba. Right before meyer joins, they did a deal where alibaba had a lot of incentive to go public before the end of 2014. Mayer had a unique situation that new ceos never get, that is how does she do getting it ready for the future when no one is looking at the core. Is she going to take a lot of costs out of the business . Is she going to get revenues growing again . She didnt. And you want yahoo to merge with aol. Or you think thats a good idea. Again, i was just reporting what shareholderses are lobbying for. And right now, mayor is effectively negotiating with shareholders will whats going to happen with this giant stake in alibaba. I noticed you tweeted out last night when there was this report out that she would want to buy some of the media property if that were to happen. My sources say that deal may not happen. That verizon deal . Right. Maybe theres a joint venture or some kind of business relationship. Its murky to the point its all over this. Do you have a take on that . She loves tech crunch. Here is the problem. I talked about this the last two years where she got a chance to get everything in order. The plan was at the end of the two years, if yahoo looked great, she was going to get this money from selling alibaba stock. But the fact is that now, two years afterwards, the company is not in super great shape. How much is the alibaba deal worth now . Sgliets luktating. Do you know approximately what its worth . I dont have a number. But its like 30 billion or something or more . From some of the parts perspective, you could argue that. Its like the entire market cap of yahoo so the rest of the company is maybe you can decide. Its worth it. So the core of yahoo is worth somewhere between negative 4 billion and 5 billion. Just because shareholders are worried shes going to squander that money, they want to right. Theyve seen yahoo go through many acquisitions over the years and theyre tired of yahoo spending the money on what it thinks can who you would you prefer to be in that spot . My job is to tell the story and i think i did that in the book. Im not here to pick a ceo. Henry. That would be great. Thats my bought boss. No, my book tells the story of a troubled time for yoohoo. Do you think its in more trouble today than it used to be . I think absolutely. Yahoo can have another two years without getting its growth going again. Thats what shareholders were expecting and. Some people thought two years ago it was really up for ded dead. She did in certain ways for sure. Marissa mayer came in and on the first day she goes in and she has a guy she thinks is the i. T. Guy actually its the general counsel, ron bell, she asks him to set up her computer so she can start coding. She grabs this company and says lets move faster. She did get it moving trappeder. But my book also tells the story of how troubled yahoo was for many, many years. Yes, mayer is an effective admirable person who works really hard and was the strategy of hiring her what are we supposed to take away from the fact that you didnt interview her . I cant get into her head and firth out why they didnt want to work with me. I think she felt like it wasnt worth her time to talk to me perhaps. But shes a very black and white person. If she wasnt going to do a book that she her book im not sure she wanted me to do the book. She tells the story about how when she was at google she was in a meeting and larry and sipdy were fighting. After, shes walking out with her you of one of her friends. The friend say to mayer, it was like mom and dad were fighting in there. Six months later, Marissa Mayer is reading the story and they quote it the first thing she does she puts down the story, goes to security and reports her friend. I know how hard t to report that but this cyst junt marissa wanting to talk to you. You couldnt even fact check the book. So if youre a reader of the book, how are you supposed to think about that . So i have a long note of sources in the back. The fact is i got plenty of access, just none of it was official. I went to mayer early and often and yahoo pr early and often. Id like to interview whoever you want me to interview for this book. They not only said no they also told mayers friends not to talk to me. Mayers friends did want to talk to me. That meant that i had to protect those people so i ended up use his a lot of anonymous sourceing. We talked about this show last friday, this idea that they need to buy scripts. Yes. My showerses say they dont want to buy scripts. I reported during the process when they were looking at what they were going to do with the alibaba stake, they want going to spend it too transform the company. During that process, they looked at that as one of the things to look at. Reality happens and yahoo is not in a position to spend billions of dollars on those things. What do you think happens to marissa and yahoo five years from now . I think the best move forward for ma advice sa mayer is to have one thats a Holding Company for the asian assets and one that is a much smaller yahoo maybe a 5 billion, maybe a 10 billion company. Its a reset button, she can go from the there, she has a board of directors that love her and she is going to be there for five years and shell get a chance to be steve jobs. People were happy when she came in. Jerry yang how do you think they feel now . Jerry yang and dan loeb have moved on. They are emotionally invisited in yahoo but jerry yang is a very successful venture he. And dan loeb is she bought dan loeb out at 31. Yeah. Who is the sucker there . Who is the big owner. That might have been her best move. Thats what im saying. Was was it to get out before well you know hedge funds have these horizons ta like they need to get out. So aol, 3. 5 billion. Yahoo 46. 5 billion. Who has done a better job . You would say Marissa Mayer. But i think it might be 22 of you think thankalibaba. 22 of alibaba, thats over 50 billion and its only valued at 46. The rest of it is worth less than shes in a great position. She could leave this company and say, look what i did with the stock. But you hired me as a Software Engineer i became a financial engineer. But it wasnt just sitting on the alibaba. You dont have to say it to she managed her job well and she did get yahoo moving fast and she makes this Small Company again. Some of the smaller revenue negotiate that she can get in tumblr matter from a smaller base. I think thats where she should start. The book is called Marissa Mayer and the fight to save yahoo . Thank you so much. Thank you. I think if you were story telling rather than reading. Story telling. Tell the story. Dont just right . Dont wait. Just give it to the viewers. An update on the spacex launch it has been described. The next possible launch is friday morning where the weather is forecast for an 80 go for launch. This morning, the nations Biggest Companies coming under new policies for prefers drug pricing. Squawk box comes right back. 2550 open a schwab account, and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 so if you get a trade idea schwab can help you take it on. Tdd 18003452550 were getting a lot of questions tdd 18003452550 about organic food stocks. Tdd 18003452550 [ male announcer ] sharpen your instincts tdd 18003452550 with indepth analysis by schwab experts. Tdd 18003452550 and if you want to run your idea tdd 18003452550 by a schwab trading specialist, tdd 18003452550 our expertise is just a tap away. Tdd 18003452550 whats on your mind lisa . Tdd 18003452550 id like to talk about a trade idea. Tdd 18003452550 lets hear it. Tdd 18003452550 [ male announcer ] see how schwab can help tdd 18003452550 light a way forward. 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It sounds like patients and doctors wont have as much ability to choose the drugs that they think are right. Thanks for having me again. This has been a huge move for the industry. Weve opened up access for patientes and were talking about streeting more patients and getting more patients cured. I dont understand what that means. Again, just on the base of it, it sounds like this is a situation where you can kind of cut deals and say this drug makes the most sense because of the pricing perspective. Explain to me how that is good for parentes and good for doctors. Think about it. You have two drugs that both have 95 cure rates. So these are two outstanding products. So the difference is one you take once a day, one you take about twice a day. The different is 125 a day. Would you rather take the less expensive drug and save 120 a day and have to take your medicine twice a day for 84 days or take it once a day for the simplistic answer i guess what were saying is less say theres 5 where the side effect profile is different. The doctor realizes this. The doctor would like to prescribe the one with the better side effect profile for his patient litly. As we go down the road as we go forward, the dont wont have the flexibility to do what he thinks is right for his patient. There is always medical conceptions. So when the doctor needs a medical exception, they can get it. What weve seen in the past is very rarely is that asked for. The reality is these are two great drugs that are very clean, very low side effects. And were talking about a slippery slope, if this were to be done you keep speaking just to this case and i just you know, were talking about extrapolating it to where it could actually where patients might not get the drugs the doctor wanted them to get. So we have a lot of experience in this. Our National Preferred formulary has done this in other classes. We always use external panels of doctors to make sure were doing the right thing in putting clinical first. Its crucial that you have viets doctors can get the products they need when the patient needs them. But its crucial to lower the cost and increase access. Access is a huge issue in health care. Doctor could you tell us how this is applicable to other theyre pewter areas. When youre talking about Something Like hepatitis c which could be cured, you can say there are two rates of 95 . But lets talk about multiple sclerosis where there are so many drugs out, but they all have different profiles. Can you apply this same idea to Something Like that . Yes. Last year we actually did it. There are two companies that make a different version of beta theron. They both have identical profile webs yet we can get one cheaper than the other. We moved an enormous management avenue patiencette to other product and we got no calls from doctors asking for the alternative. So he can get to the alternative and improve access. This is a win for doctors, a win for patients and a win for the country. So there are talking about a medicine that is in the same class. But there are others that you wouldnt pair against one another. Correct. You have to be very careful in doing this. This is why its crucial to have experts reviewing the data and have an external committee that bless thats when he do. You have to make sure those patients and physicians are well served. You know, steve, the future of health care one of the criticisms comments from people that didnt support the Affordable Care act was that we seem to be trading in access or at least were worried that were broadening the access but that the people that already had it that they are health care is going to be inforor to the way it was supposed to be. I see the fine line youre trying to walk. Is this something panel people outside experts of doctors making decisions, this is something were just going to have to accept for the health care of the future . This is just the way it is because of how much everything costs . No no. The reality is do you want the government making these decisions or do you want the market place making these decisions . Its one and the same if youre talking about the solutions. If its medicare saying theyre not going to pay for it versus you guys saying theyre not going to pay for it. Youve said that the doctors, all they have to do is call up and ask for that exemption and theyll be granted it . No. What happened is there are rules to the program. So they have to have a good scientific reason why the patient needs this. So, for instance, if the patient is intolerant to the ingredients, thats a Clear Pathway to get to the alternative therapy. But if its just that the doctor did the studies with and they prefer a different product, thats not a sufficient reason to justify changes. So are you suggesting some of these Drug Companies buy off the doctors and thats why they go with these things . I dont need to say that. This is fighting a drug Company Getting in on the other end with the doctors doing it versus i guess my question just comes back to how complicated is it . F doctor believes this is the best drug and they say that the person has these things while youre going back and forth with the doctor do they get to stay on the old drug or do they have to stay on the new drug until the doctor whips the fight . In this particular case hepatitis progresses slowly. One of the great things about opening up access is were now allowed to treat everyone with hepatitis tr cancer. Do you really want to wait until your liver starts scarring null start treatment . Im sorry, youre allowed to treat everyone . Remember, prior to doing this, most payors were only paying for patients with advanced Liver Disease because the drugs were so expensive. Because weve opened up access our recommendation is that everyone with hepatitis c be treated. That is what the infectious sdooi disease doctors want to s and so it goes along with the recommendation to doctors. Ur want want to wait to be treated if you were thinking about yours. That is true. Maybe youve seen this show but i do have concerns. I understand you dont want the Drug Companies to be able to buy out doctors. I get all of that. But steve, i think its something were going to be watching very carefully as it goes through on a casebycase basis to make sure this is really good for the patients down the road too. You are definitely right. Were moving forward cautiously. We know there will be opportunities in other areas like cancer and other things. Thank you for joining us. Thank you. Still to come on squawk box who needs a show fur when you can own a driverless luxury car . Well take you inside the mercedes vehicle of the future. Phil was that was audi but were looking at mercedes today. Stay tuned. E financial noise financial noise financial noise financial noise still to come this morning, phil lebeau will take us into the luxury car of the future. He is in the drivers seat one against, but again, he is doing very little of the driving. This is the future of getting from point a to point b. But this is not your typical car. It is the vision of the future from mercedes benz. Come along for a driver in the f015 luxury in motion. Yesterday phil lebeau took us on a driverless trip in an audi. Today hes giving us a look at a concept car from mercedesbenz. It looks cool from the tease there. What they have done is stretch the possibilities for what a car might be in the future. They call it the f015, luxury in motion. Mercedes calls it luxury in motion. The f015. Unlike any car youve ever seen. Mercedes believers in the future your car is not simply a place to go from point a to point b, but a chance for you to turn around and talk with others in the car in a way we havent done in the past. What were you shooting for . Well our relationship with the automobile is really fundamentally changing. This is an electric autonomous drive car with 26 inch wheels and windows coated with a special pattern to add privacy. It feels open. That was the idea here . Exactly. Another way to think of the luxury. Luxury is space and comfort. It also has touch screen doors so each person in the car with surf the web, look at whats around their cars thanks to cameras offered 360 degree views. Im seeing what another car up ahead is seeing. I can talk to my friends and say youve got to see this. And he can actually see it. And you can see whats around your f015 even when youre not with it. So youre connected to your Autonomous Car all the time. You park the car, you want to know where it is, you click the 360 degree view and always see where your car is parked or when your car is driving to pick you up, you can see where the car right now is driving. So you can always in essence, you can watch your car at all times. Thats true yes. In the future mercedes is considering gesture controls and more connectivity. Some of it will likely come from a touch screen table that pops up between seats. Its a lounge im taking with me opposed to leaving behind. I have to say that ive been in a lot of concept cars and most of the time guys youre sitting in there saying this is kind of a science project. I dont think this will ever see the light of day. And true some of this technology is a long ways off. But its if you thinking and its real. And some of this Technology Well see incorporated in cars in the near future. Probably the next five to seven years. You have convinced me in the last two days. I thought this stuff was 10 15 20 years down the road. But youve convinced me this is something in the not too distant future. And i start thinking of things like Car Insurance. Do you need it or the manufacturer have to buy it . Were going to talk later on squak on the street and he said look somebody will introduce a fully Autonomous Car. The question about accidents and whos responsible. Sure theres going to be a messy transition there but think back to when Cruise Control came out. Im sure people at that time said what happens if your car rear ends another car. Now its standard. And thats what its going to be when we see Autonomous Vehicles brought into peoples showrooms over the next five years. So i have to pay for Car Insurance even though im not driving . Yes you will. Thank you for that. Bringing us cool images and a great story. When we come back weve got more to talk about. Oil stocks plunging as crude prices drop. The Energy Sector now down 24 from june. Well talk about the most battered and bruised names when we return. Crude oil and stocks getting hammered. The reaction in europe and what you should expect from u. S. Markets ahead of fridays big jobs report. The new Congress Today taking over. Former House Majority leader eric cantor says forget 2016. Americas youngest generation needs action now. And automakers releasing strong december numbers. Well hear from the largest auto retailer. Mike jackson is going to join us. The second hour of squawk box begins right now. Welcome back to squawk box here on cnbc first in business worldwide. Im joe kernen along with becky quick and andrew ross sorkin. Markets this morning are focused on maybe rebounding early on after these 300point moves. I mean we talked about it. Its not that big on a percentage basis. Get used to it. Right off the bat, first week of january hit a 330 down. The dow and s p coming off their worst session in three months. 331 points is what the dow lost. The s p fell 37 points. Were looking for at least on the open a rebound of about 70 or 80 in the dow. Although wti is at 49. 17. It was even blow that this morning. Joining us dominic chu. Whats going on this morning . We are trying to find a semblance of footing here for the oil and gas sector overall. Oil and gas is the focus for a lot of investors because it was the single worst performing seconder on a down day like you said. Crude oil off by 48 just over the course of the last 12 months here. And you can see here down about 2 so far this session. So again trying to find footing. If you look at the Broader Energy stocks picture, those particular losses are translating even more so into some of these losses for the Energy Sector. You can see for the last year down only about 12 for the s p energy. Were hovering near low levels we havent seen. And arguably multiple years. So as you look at where the action was in trading yesterday, a lot of the huge moves happened in oil and Gas Companies here. First of all, petroleum was off by 8 in just yesterdays trading session alone. Thats going to a focus for some today. Also diamond offshore. Off by 9 . Also one of the worst performing stocks over the course of the past 12 months in the s p. And then noble energy down 10 just yesterday alone. These three companies have been hit hard in this energy selloff since we saw the highs for crude in june. When you look at what happens with the s p Energy Sector its about whether some names have the ability to find some footing here. Right now there hasnt been a sign of that. We know theres a correlation. Energy stocks typically trade with Energy Prices. And right now Energy Prices fall. Come over and join us for this conversation. Were also going to bring in the executive director at mkm partners. He has a bullish look for the s p and thanks for joining us. Pleasure. Were only three trading days into this new year and already theres a lot of chaos. Oil prices probably the biggest one of those at this point. What do you mean . What do you make of all of this . Becky, we have a number of factors that are impacting investors right now. We have a situation with oil, testing the lows we havent seen since the financial crisis. Brent may test the low of 45 a barrel last seen in 2008. We have the ecb where markets are clamoring for fullblown qe. Theyll meet january 22. We have a greek vote on whether to possibly bring in what would previously have been an unlikely Political Party into power with the prospect of their suggestion of moving away from the euro. Sounds like a lot of chaos. Thats right. Plus situations in the hot spots there. We have uncertainties with russia. How putin may respond to sanctions and the recent decline in prices. You think our markets are going to do well as a result of all that chaos or in spite of it . I think so in spite of it. A big process of the game is deciding variables. While energy is intrinsic to what we do its less than 8 of the s p. Less than a million jobs out of a civilian labor force thats 153 million. I heard someone say Something Like 225 thourkss,000. And if one wanted to have a low tax relief for consumers, its difficult to think of a better relief mechanism than lower gasoline prices. So can you explain all of these issues are getting conflated. The question i have is given whats going on here if you take the europe or greek issue out of it what changed between yesterday and last week . Theres uncertainty about what is going to be the impact of oil at lower prices on the u. S. Economy. So you think theres a Tipping Point at which it becomes negative. I think theres the perception of a Tipping Point. Do you think theres no Tipping Point at which it becomes negative . I think so. But i dont think its a realistic one. Why did you give us these themes for last year . You nailed it. S p double digit. Inflation will continue to not be an issue. Gold will continue to be discredited as a safe haven. Shareholder activism will be a big deal in 2014. And so for next year you say not double digits but youre back with the Single Digits like everybody else. Maybe low double digits. Maybe. Its possible. Its hard to say how the American Consumer, 70 of the economy, how will they respond to lower prices that are controlled if theyre lower . Do they respond by increased disposal income . If so then a s p for 2015 of 140 a share is possible. And, of course by this time or by december or even october of 2015 markets will be looking towards 2016 earnings per share. Is the fed do we care at all about them anymore . Theyre responding to whats happening over there. They can stay out because relative to the rest of the world, our yields dont need to go up. Theyre sort of not only do they not need to go up but theres reason for them not to go up. If the ecb stays low and boe stays low, thats reason for the fed im worried the fed cant raise. And the box theyre in is they cant raise. There is some argument to that. But i think markets, if anything will be surprised with how late the fed makes that first move off the zero. I would Say Something here. First of all what ive heard from experts we talk to all the time is theres one thing the American Consumer will do it is spend money. You have gas price savings, they will turn around and not save it but spend it. Second of all, the question that we often get with the oil and gas sector is the jobs which you just addressed here. But its also this idea of the ancillary effects. The biggest decliner on the dow yesterday was caterpillar. Because of the perceived ripple effects of what happens to the metals and Mining Industry the equipment industry. Its a strong dollar too. Maybe then start to feel the impact. So is there you say that the Tipping Point is maybe not realistic. But theres got to be some point when a ge or a caterpillar or these other Large Industrial Companies Start to say, hey, the business aint there. Maybe we need to stop spending so much on developing the industry. That might be true. But then you could counter to that by saying is it enough to offset the incremental benefits that come from the incremental spending that takes place. Oil people everybody that we have on and i watch your stuff and youre contrarian. We agree on a lot of things. All that stuff, charles. But on the way down were every expert said were hitting a bottom. And now theyre saying were going right back up. This is just a temporary thing. Im trying to figure out how theyre going to be wrong there. If we do 9 billion barrels a day permanently, thats different in this country. If the growth stays relatively slow, its not going to go down but couldnt this last a couple of years . We dont go right back . Thats right. If demand moderates along with gdp, lets assume that for a minute, and we continue to produce at nearrecord levels we know iraq is producing at multiyear highs. We know russia is producing at multiyear highs. Right. Even if we shut in some if we still do 9 Million Barrels a day, this might be a new world. It begs the question of what was really the dynamic that brought us lower to begin with. I would submit it is a paradigm shift where there is a new marketclearing mechanism at place. Heretofore this goes to the issue of not just jobs in the United States, theres the midwest. If you really get into trouble and what happens to russia. But then also all of the investors, some by the way u. S. Banks and others who are invested in all this stuff and whether there is some type of massive ripple effect. Do you worry about that . The item i probably worry about the most is the question of the day. And that is how does policy makers address Slower Growth and unsustainably high unemployment. Particularly youth unemployment in the United States among minorities in the eurozone in the arab gulf world. How do they address that . And that calls for policy makers to develop in coordination growth mandates and put regulation and retribution for past misdeeds on lower priority. Growth is where its at. Id say thats just not an easy thing to do. Thats a 10 20 30year project. Thats right. But along the way theres the transition period of the project and what that means in the interim. Charles, dom, thank you both. Thank you. Okay. Also some news to tell you about. It is official. Coach is buying designer footwear brand stuart weitzman. They said that deal valued up in total. Birthday boy . I keep saying its a state of mind. Im sticking with that. It doesnt matter. Its a state of mind. Coming up youll see. Enjoy it. Because its wasted on the young. Happy birthday. Thank you, thank you. No birthday worth looking forward to after you turn 21 anyway. Can we go 41 at least . See that is just further away from me. See . A seasoned pro on the path for the new congress. Former House Majority leader no way. Hes here . In the flesh. Wow. Leader eric cantor will join us for the rest of the hour. And later, key reads on the auto and real estate sector. New numbers on december car sales and the latest evidence of rising home costs. The 114th congress convenes today. For the first time during the Obama Presidency the republicans have control of both chambers of the house. Eric cantor has a message for them in his latest oped found on cnbc. Com. Do people do they walk around and call you hey leader. Are you once a leader always a leader . First order of business when i joined the Incredible Team was its eric. And thats what i say to becky every time i see her as well. Why dont you say that to me . You like when i call you leader . Youre the birthday boy. You can say whatever you want. Lets get right out into it. The president s interaction with his party right now, its always been interesting with republicans, obviously. But even the very first deal where they got mad about when Elizabeth Warren and nancy pelosi got mad. Republicans got hammered for trying to shut the government not doing a budget deal. They were ready to stop it this time because of what the credit default swaps the president said in your face to those guys. He didnt care. Is he going to be willing to alienate the far left with some of these things like fax reform or trade . This is the question. The question is will the next two years be spent relitigateing the differences that had been well defined over the last six years. Right . We know that republicans dont agree with obama on his Health Care Bill or unilateral moves on immigration. We also know that democrats dont agree with republicans on tax reform and, entitlement reform and the rest. So will we see congress relitigating that or are we going get something done . I think there are two things in the near future that we can look to to be a telltale sign to see whether this is going to be a productive congress. The first is on the president s side is what is he going to do on trade . You know hes got an opportunity really to do a progrowth implement a progrowth policy if hed get behind and put his shoulder to the wheel on trade promotion authority. I think it is to two really important constituencies. The environmental lobby. Its an effort on both of them. Interestingly youve got Elizabeth Warren who has come out against already saying that these trade deals were done in back rooms without the light of day. And that shes worried about undoing doddfrank and the rest and these trade deals. Will the president stand up to her and others. And similarly on the republican side. The republican side is very shortly were going to see 42 house i think move to deal with this question of funding of the department of homeland security. Thats where the hangup became on this question of unilateral moves by the president on immigration. And the question is yes, everyone will have their opportunity to cast their vote and be against the president s unilateral move. But are they going to be able to dispense what the difference is once the president vetoes that bill and then get on with the business of Real Security issues at airports, Real Security issues on the border and then get on with the business according to the last discussion about growing this economy for working middle class people. What do you think . You know these people. What happens . I think the leadership i know that john boehner and the rest of the team as well as Mitch Mcconnell in the senate are desirers of wanting to see Real Progress to show theres not just this shortterm attitude about exacting some flesh and scoring some political points. But trying to get something done for the people of this country. They deserve pit. The leadership wanting to do one thing and able to is different. This is the question though. And its similar to what joes point was. The president s got to be able to stand up to his side. And some would allege the extremes on his side. And the Republican Leadership as well is going to have to deal with some of those who want to employ tactics that are somewhat extreme they could lead to a Government Shutdown and both have said no shutdowns. Were not having any brinksmanship. I think if youre going to grade and see what this congress is about, thats sort of the low expectation mark. Lets just not have any brinksmanship. Brinkmanship. Brinksmanship is when theres multiple no no no. Its always brinkmanship. Eric, you wandered into this debate. We all say brinksmanship. Its in the dictionary. It sums up everything. Brinkmanship. And its not the exact same thing. It sounds silly. Its my single best idea. All right. I dont know what you know keystone im almost ready to not even talk. He has postured in a way where hes going to veto that. Absolutely. We expect republicans and theres bipartisan support in congress. Do they have to get theyll get 60 to bring it up. But they dont have 67 to get it done. Overriding veto is a big deal, yes. I think there are other issues you may see. I think this question of iran sanctions, it is not inconceivable to think the senate is going to come up with a veto override on that. Because youll see, i believe, a congress become much more assertive in the area of Foreign Policy now given whats gone on in russia whats going on with this pending sort of meeting with iran again. Whats obviously going on with cuba and the latest unilateral move with the president , i think youll see an emboldened congress on these issues. I dont know if you do pr for the gop anymore im with moelis and company now. Taking on the economy and the interest rays and the oil boom taking credit for all of that. Did you think about saying maybe the sequester wasnt the end of the world. Have you thought about taking joint credit like they did when gingrich was in . That is for let me ask one other question. When the president says you know, i havent pulled out the veto pen very often when harry reid never sent a bill to him in the first six years and he had nothing to veto, i mean is that do we believe him when he says i can use it now when i never used it . That is hard to take credit for it. What about when he takes credit for the oil boom . Ive always said this. This politics is such a dirty business. But go ahead and finish it. This notion of a National Energy policy. I think the administration has been for years on a path of hostility. And it happened anyway. But i think the broader question for this congress so nice now. Is about working middle class people. Are we going to be focused on wage increases for working middle class people . Because you can look at the macro indicators all you want but the problem is working middle class people havent seen this upward tick in wages in well over a decade. Which means real impact to people when theyre sending their kids to school theyre dealing with but you were against minimum wage, right . Thats not for the middle class. But arguably its about getting people out of the lower class. And theres so many people weve discussed that arent its not just about teenagers on minimum wage jobs now. And, andrew i am. I think the government saying heres what you must pay is simple economics when you wage price control. You have a Small Business person struggling to grow a business, keep it open and say its going to cost you x more to go and do that. I think its when you see imempirical studies, do you write those off as ideologically flawed studies . I think in the totality of the studies, and again i dont know which one youre referring to, but you probably have an equal number that says if it costs more to have something and to get less of it. If you want jobs why are you putting added costs on the Small Businesses which are the job generators. Each side says the other side studies are wrong. But we continue to have its a holy war on that issue. Very powerful political issue. And youre going to see on the state ballot question youre going to see that rise more and more. Itd be nice to create a bunch of jobs. Eric is staying with us for the rest of the hour. When we come back if you want to make sure your television will work with streaming services guess what netflix wants to help. Well have details after this. Ep breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhhahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. See why speed matters, at aflac. Com. Welcome back to squawk box. Netflix is launching an Evaluation Program that will base smart tvs based on how well they interact with programs like netflix. Also based on how quickly they power on how fast they launch apps and video playback without a delay. Recommended models will carry a netflix recommended tv logo. So check that out at best buy or wherever youre buying your tv next time. I bought about five of them. But netflix is pretty good. What about buffering . No. And it comes up on the tv automatically and its one of the apps. Sons of anarchy, you seen that yet . Yes. You know samcro. Yeah. Ill tell you at the commercial break. As gas prices plummeted, autonations mike jackson is going to join us with decembers numbers from the largest auto retailers. Take a look at u. S. Equity futures. [container door opening] what makes it an suv is what you can get into it. [container door closing] what makes it an nx is what you can get out of it. Introducing the firstever lexus nx turbo and hybrid. Once you go beyond utility theres no going back. Welcome back to squawk box, everybody. Sonys ceo is praising his movie studios employees and partners for standing up to hackers. Twitter says it has fully fixed an issue with delays appearing on timelines. Twitter faced a slowdown of 25 to 45 minutes late yesterday. And the worlds fifth largest automaker hyundai promised to expand Capacity Building new headquarters and developing new vehicles. Hyundai and kia motors announced new factories in mexico and china. Check this out. Gm says its onstar program could help you get a break on Car Insurance. The Communications System will grade a car owners driving record for 90 days and measure things such as how fast you accelerate and how hard you brake. You get a good score, you could choose to have it sent to progressive insurance for possible discount. Story is raising concerns about data and privacy. If you get a bad score, do they send it . Apparently they dont. Yet. Thats the concern though. Before this onstar program, you could get progressive and others to give you a device to put in your cars. And if you dont drive between 11 00 p. M. To 11 00 a. M. To get places. They monitor horns. Ive worn out horns. Have you really . Yeah. Do they record what you say . Its all going we talked about people are going to wear these fitbits and jawbones and the Insurance Companies for thundershower own health care are probably going to give you a discount if you do that. I mean, im sorry. Its a pet peeve that ive resonated with many times. The twolane guy in the left lane move to the slow lane. Doesnt know. Doesnt known that youre supposed to stay to the right unless youre passing. Has no concept of that. You know you try to tell them and they look at you like what im in this lane. I flash thats 55. I try to flash what theyre if i went like that would you know . No. No . So i think they know. They think youre crazy. Youre going like this out the window. 55. 55. Thats what it means . If theyre going 45. It looks like fancy hands. Going to continue with this thing. Boosted by falling gas prices and improving economy, 2014 was the best year for auto sales since before the recession. Americans bought more than 16 million cars and trucks last year. Mike jackson is ceo of autonation the countrys largest auto retailer. Hes accurately predicted the number of cars sold annually in the country for the last three years. Good morning mike. And you youre an excellent driver and you go about five miles over the speed limit, typically. You dont go under. Joe, good morning. Happy birthday. Yes, they should put a monitor on your porsche. I think it would be very revealing. That would be tough. Yes, i am a performanceoriented driver. I like cars that go fast. And youve rid, me. I drive very safe. I have. Something has to keep you in place. You were right. I also think we could have kmikted the economy. We almost could have predicted the jobless rate. We almost coup predicted the s p if we knew you were going to be right about 17 million cars or whatever it was. That indicated a lot of things. I said 16. 5 million for 2014. Spot on. Im forecasting over 17 million for this year. And december ended the year in spectacular fashion for autonation. It was our best year. Over 33,000 units up 12 . But also a great month for the industry with the selling rate almost at 17 million up 11 . And of course the big story for last year were that the increases were in truck sales. Truck sales up 10 . Imagine, becky, suvs last year outsold sedans. No surprise. Look at the gas prices. People clearly expressed their interest for the Sport Utility vehicles and with where gasoline prices are going for the month of december trucks were 55 of sales. You know your gas tax thing, it almost makes sense now. I mean im not saying taxes are just i dont know. But your gas tax did those words just come out of your mouth . Almost makes sense. I love it. Profiles encourage for senator corker to stand up and say it would be a sensible time to increase the gas tax. Youll never get cantor. Yeah hes not there anymore, by the way. Dont rub it in. Hes here. There you go. I think youre right. Youre not going to see a gas tax increase out of this congress. Im not sure its the smartest thing to do. Its the beginning of a response. But as you indicated, people are buying bigger cars. They are, though as you know the cars are a lot more efficient right now too. So the model of funding longterm for our infrastructure needs needs to be overhauled. And i think heres the issue, eric that i have with washington. And i think youll agree with me in many ways. The town is schizophrenic. They sold we must sell fuel efficiency whether the American People want it or not. Its like telling the American People you need to eat your broccoli because its good for you. When prices are this low people are coming in and saying give me a doughnut with chocolate on it. The industry is spending billions mandated by the government to put fuel Efficiency Technology in these cars. With gas prices this low, thats not what the American Consumer is looking for. We havent touched the gas tax since 1993. I agree with senator corker. Its a sensible thing to do. Repair our infrastructure and send a little message to the American People that gas prices wont be low forever. There is a big test on this coming. I mean weve got youll see at the end of may, theres the expiration of the highway bill. There will have to be some response to the need for a longterm infrastructure for this country. Over the last several years theres been inability for congress to come up with a longterm funding mechanism. Again, i dont think youre going to see a gas tax increase be part of that but with the current reduction in the deficit, maybe youll see some Solutions Come to the floor. But right now there is none and were looking at five months from now the need for some type of response for longterm construction. Mike, weve got to have you come in as a you know for an extended talk about what oil and gas prices are going to do for the industry. But what a great year. I mean, i know you switched everything under the autonation banner. And wayne, you know hes probably proud as he can be. 60 stock now up from about where was it . 4 5 in 09 . 5. Been a great year for autonation. I just took our founder wayne to dinner on december 27th to celebrate his 77th birthday. And he sends his best regards to you. Great entrepreneur. Hundreds of thousands of jobs in the private sector. Mike, well see you again soon. Thanks. All right. Thank you. Coming up next when we return, the Real Estate Market in new york is hotter than ever. I guess thats why were taking the big show to the big apple. Weve got the details on the big move of squawk box and the latest on the soaring price of new york apartments right after the break. Well take a look at u. S. Equity futures. Were back in a moment. Welcome back to squawk box. Real estate prices in new york keep going up. Robert frank here to take us inside some of those high numbers. Hit 1. 72 million in 2014. That was a record. Apartments now average 1297 per square foot. We also had four closings for more than 40 million in the last quarter alone. 2014 was kind of the year of the stash pad. A lot buying new condo towers. The rising dollar slowing growth overseas can this continue . I think it will continue. The product thats being built today is so much superior to what was around before these new developments. So people are willing to pay up for something they have to go in. They dont have to renovate something thats sort of ready to move in. You see the pipeline. You know whats coming through the first quarter. What gives you signs of hope for 2015 . In december alone we sold four apartments and developments, average price about 40 million. Four. In december. We know were going to have a good start to the new year. Then well have closings from units we sold early on in 2014 that will close in 15. And most of those are 3500 a foot. So youll have those closing in 2015. Thats almost ten times what it costs to build a house somewhere in the country. A really nice house with good materials. Whats the Tipping Point . What are the numbers you look at at which you would say we might be getting here. Everyone looks at total number of yuntss coming on. Thats going to double next year. The inventory is going to double but pretty much a historically low number. One thing we do see is no great surprise. When you have these 70 million apartments penthouses in New Buildings averaging 8,000 a foot. There are more 40 million buyers than 80 million. So obviously you adjust to that. People as prices go up per square foot they become less focuses on price per square foot and on total unit price. Will we see 100 million apartment . We saw trades last year nationally at 100 million or more but nothing yet in new york city. Do you think well see one in new york city . Youll probably have the closing at 15 which was 95 million. Thats been reported already. What percentage if you look at the apartments being sold for that much what percentage are foreign buyers versus american buyers new yorkers, if you will . I think a lot of it is locationwise. If you looked at west 57th street, youre probably 2 3 foreign, 1 3 domestic. So will that be an empty building at the end . No. But i think 432 park and probably because its park avenue and doesnt have a hotel, you know, which appeals to other type of people i think thats going to be just the opposite. I think that will be probably 2 3 domestic 1 3 international. Of the total market though only 15 of the total market of manhattan is foreign buyers. Its very concentrated among a few buildings that are brand new sky rise towers. Very expensive and in locations around the park. The percentage of the foreign buyers downtown which is realistically the hottest location other than around the park you rarely see foreign buyers. Whether its doubling the tax, could that chill this market . Well of course. Look, i think any onetime tax is not as devastating as an annual tax. Even with maintenance costs in buildings, you run into people very wealthy people who focus not only on the price but on the monthly carrying cost. As they should. And i dont think that way, but other people do. And what a lot of times they dont realize is the price reflects the maintenance cost. But it drives them crazy to have a high monthly cost. Think about it. Paying that much for the mortgage and then its like wait. Just to live here is this on top of that . It can be like a normal person mortgage. I know you you look at it. Were going to leave the conversation there. Howard, thank you. Robert, thank you. And we should tell you, talking about new york in part because today marks our last part at our headquarters in new jersey. Starting tomorrow squawk box is moving to a new home in the heart of new york city. It has a window to the streets of manhattan, the capital of corporate america. We started to know our digs this weekend. You can check out our Facebook Page for a time lapse video of the two weeks it took to build that studio. That was all outtakes and off air stuff that wasnt supposed to make no. I believe i was pointing out where rock center was. And i do have a personal trainer now. And, you know im rippling through my im sorry. Wow. Did you see the cnbc management was just there. Yeah. Did he ask to be in the probably not. Sams running things. That lady right there. You will see us there tomorrow bright and early and we should also mention that the big move comes as squawk box celebrates our 20th anniversary this year. And were doing it in style. Among our first guests tomorrow bill ackman, and lloyd blankfein. Former nba commissioner david stern is going to join us and barbara corcoran. It all starts tomorrow at 6 00 a. M. Eastern. You dont want to miss us from our new digs. Were back in a moment. 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. Lets get back to our guest host today eric cantor. We spoke with you at the top of the hour about what is and isnt liking when it comes to washington and congress. But with your new job at moelis company, im sure you have to look at where there are opportunity zblps what weve seen is obviously coming off of a banner year on the m a side you know well past 2007 precrisis levels. And i think theres probably going to be continued momentum although there are some signs out there. Obviously internationally, i think you talked about it on this show with some geopolitical events that sort of hang over the markets and certainly allow for some more struggle internationally. But i think that you know it is so imperative that this congress focus on that growth mandate. And focus on creating an environment where youre going to see a commitment to invest for the longterm. How do they do that . Does that mean deals like infrastructure, a bipartisan deal to do that . I think what it means is if youre going to say the growing economy is priority one. Youll have to commit yourself to incremental progress to move the ball down the field. These big sort of grand goals that each side has have fallen short for the last six years under this president and last congresses. So lets learn from that. And lets hopefully see a congress that will say, okay whab do we believe in common on energy . How can we go forward . Keystone weve already said as joe said the president said hes going to veto keystone. So i think congress will pass the bill. But when can you get to work on doing some Real Infrastructure pipeline permitting. Transport of the fines youve got that are stranded right now. Do you think that i mean is there Common Ground beyond just keystone. Do you think there really is Common Ground on both sides . I do. I think theres Common Ground in the area of energy and pipeline permitting. I think theres bipartisan agreement on that. I think if you look at some of the broader issues that are facing our country like education, honestly i think both sides would agree. If we can get our Education System great from a secondary education level and up through higher ed from affordability to quality the problem is the two sides have different ideas how to get there. The house passed overwhelmingly last congress a Charter Schools bill that was you saw democratic congressmen and women join with republicans. Unfortunately the senate didnt take it up. The senate could take that bill up now, pass it. And we could begin to make some progress in expanding replicating Charter School success. Those are the kind of things i think just get used to working together, get used to finding where Common Ground is. Hopefully well see that in a real commitment to creating an environment for growth. We want to thank you very much for joining us today. Good luck in your new digs. Look forward to seeing you in our new digs. When we return well have a special guest. Why he thinks now is the time to actually bet on the Energy Sector. And plus were going to head to vegas. Our own Julia Boorstin caught up with the one and only Ryan Seacrest. The latest on his controversial iphone keyboard and other Tech Ventures when squawk box returns. The evolution of luxury continues. The next generation 2015 escalade. Crude slide hits stocks. Former wells fargo ceo is here to help us make sense of oils dramatic fall and what investors should be doing with their money now. Plus peter orsack has a perspective on 2016. And from new years eve to American Idol now Ryan Seacrest is making a splash at the Consumer Electronics show. The details are just ahead as the final hour of squawk box begins right now. Welcome back to squawk box here on cnbc first in business worldwide. Im becky quick along with joe kernen and andrew ross sorkin. With us is the former ceo of wells fargo. Good to see you today. Good to be here. You were a final are a final guest here at englewood cliffs. Im sure youre excited to be moving to new york. If you havent seen it already, we should let everybody know were moving to new york starting tomorrow. Look at the pictures of the set. It is an exciting move. We look forward to being there. Were going to tell you what to expect later in the show. But first before we do that lets get to the morning headlines. Heres whats making headlines right now. Oil prices extending yesterdays 5 route. The reasons they are piling up including surplus, supply jitters about greece and the flight to safety. A couple of economic releases to watch this morning. Snapshots of the services and manufacturing data. And aol shares talking about a potential purchase or venture. Neither company commented on that story this morning. We are just 90 minutes away from the opening bell on wall street. Weve been watching the futures. After the big selloff yesterday youll see there are some green arrows. This isnt as strong as weve seen this morning, but again agree arrows. Dow futures up 52 points after losing 330 points yesterday. S p futures up by just over five and a half points. Nasdaq up by 12. 5 points. If you want to look at europe we did see selloffs earlier there today. Things have turned around quite a bit since the last time we checked. The ftse was down about 1. 25 earlier in trading. Now down by only. 3 . The cac up by close to. 4 . Few stocks on the move this morning. General electric downgraded to hold from buy at deutsche bank. Probably in some way related to the selloff in oil. A lot of acquisitions in recent years have been building up that part of the companys business. And michael kors was downgraded to neutral at credit suisse. Under armour upgraded to buy from neutral at citi. And a longer term focus on the supply chain and shares of taser getting a boost this morning on news that the Los Angeles Police department will deploy more than 3,000 of the companys weapons. Thats an old squawk sound effect andrew. Hurts. I think it was one of our guys, right . Msnbc wasnt it . Was it rick sanchez . Someone volunteered to get tased. We should have a taser on the set. I suggested that earlier. Every time you say Marissa Mayer mayer. At wits end. The interesting thing is where were going to connect the taser. Okay. Oil stocks i know where hes going with that. You dont miss a trick. The s p Energy Sector now down about 24 from its high in june and the space is putting pressure on the broader market. Here to take us inside those numbers now is dominic chu. Andrew again, the market may be getting tased a little bit in yesterdays trade at the we want to point out like you said people may be buying the dip today. The s p 500 is down about 2. 5 over the course of the last month. A lot of that happening right here. You can see on the righthand side of our screen here. If you move to beyond just this month to beyond the santa claus rally. We talked about the santa claus rally. Thats the day after Christmas Trading all the wa i to the second trading day of the year. In that span here we are still down about 3 . Thats important here because that was supposed to be the santa claus rally. This is the First Time Since 2007 the santa claus rally has not occurred. This is also the worst santa claus nonrally, if you will since 1999. Third worst since 1969. So maybe not a great start to the new year for the s p 500. If youre looking for what drove the markets overall, this is a big deal. The Energy Sector again down 4 just in yesterdays trade. Down 12 for the year. A lot of that happening just in the last six, seven months of this year in 2014. Thats when we saw those prices drop by about 40 overall for the Energy Sector. And remember a lot of this is driven by the fact that we do have this concern about oil prices, the commodity in and of itself. But when you see a fourday slide for the s p 500, something that hasnt happened since december of 2013 its got a lot of traders taking notes. Back over to you. Traditionally see a rally in those days. Dom, thank you. As dom mentioned, oils mass i ive slide was the key factor of the lack of a rally. Although you could say that maybe santa came earlier this year. Our guest host today says crudes collapse is a big opportunity in the oil company. The tomorrow former chairman and ceo of wells fargo. What do you think of these collapses pricing . I think the good is that it will improve consumers in the United States. More money to spend. Its going to be good for 70 of our economy as consumers. Thats the good fuse. The bad news is it does affect certain oil jobs et cetera. I think people forget five Years Ago Oil prices were at this level. And this is about the fourth or fifth time in my Business Career that oil has collapsed. And theres only a Million Barrels a day of excess capacity. It will cause these things to occur. Can be administered. If saudi decides they want to cut production, they do that often by a million a delay. And also youre going to see listening with your show with automobile sales and suvs and so on youre going to see gasoline consumption increase. So i think this is a temporary decrease. And i think we will see 70, 80 a barrel by midyear. You mentioned we were at these prices five years ago. But five years ago we were facing an incredible downturn in the economy. And it was something that a lot of people hadnt seen in their lifetimes before. This time around its a little different because it feels like at least in large part its because of supply. The United States being able to find supply we didnt think wed be able to get out of the ground. Is there a chance we could look at the Lower Oil Prices for some time to come . Its possible. Everyone says its going to be different with any kind of a radical change. I want to point out i was playing golf with the ceo of a Major Oil Company this past weekend. He said a Million Barrels of excess capacity is not a lot to absorb eventually one way or another. Last time it happened we were in the middle of a financial crisis. Right now unemployment is plummeting. Were at 5. 8 . We had a 5 print on gdp. New highs in the stock market. I dont know what was different this time. Maybe the move from 20 to 100. People said no its 100 now. Maybe that was the its different this time. We thought bonds always had to be at 6 or 7 . Suddenly it looks like maybe they would be dont you think people said the same thing about bonds . Now it almost looks like people are starting to believe were in a 2 world. Maybe above six was the aberration. Also why did we have 120 a barrel. Opec can reverse that. They havent. Well, if they could. What are they masochists . No. I think theyre playing this game to see how long its going to last. They want to punish some of the fracking thats going on. So none of us know. Alls i can say is if you really believe that the economy is great, which i dont, then argues against your case as well. And if chinas not great and europes not great thats my whole point. I think whats happening is the International Side of the economy is not good. And thats whats youve got greece going on and all this kind of stuff. Its having a compounding effect on the market. And markets tend to go up further than they should before they collapse and they go down further than they should. What you said even if we averaged 70 or 80 the next three years, thats a lot different from going up to 120 where everyone said wed be by now. I think 70 80 is the sweet spot economically. Wed sign onto that for five years, i think. Thats what im saying. Im not saying were going back to 120. Im just saying remember Goldman Sachs . I just think and what its going to take is the right economic policies. And i think the thatll happen. Let me ask you the downside of oil. So we know the good side. Its about 115 billion a put in the pockets of americans. The downside do you worry about some sort of people who loan these Energy Companies them going out of business banks that are involved with them . I mean weve seen what happens when prices go lower. You dont have sort of a larger worry that you add that on top of whats going on in europe and then were in a bad place. I think that might well occur. The good point though is three times that, five times that 20 times that is what it does to the consumer side of things which is a lot better. Theres always something wrong in the economy. I mean just its always the case. And there are the reason you need to be diversified as a Financial Institution is there are some bad things that are going to happen that you dont expect. And there can be some good things that you dont expect. And it all averages out. Dont you think that we cant even quantify in terms of Foreign Policy. Even our posture, how that can change if we dont feel like theyve got us in a strangle hold. How many Foreign Policy moves have we made in the past 20 years have been based on the middle east became much more important to us over the past 20 years than maybe it ever should have been. And in russia ukraine, all these things become less important if youre more independent in terms of foreign oil. Exactly. It would be a huge piece dividend. I think the country is missing the picture of the oil situation. It is about national defense. We should not be worried about environmental impacts of keystone. The combination of whats going on and whats going on in mexico in terms of them wanted Oil Companies to come in and take advantage of all the opportunities in the gulf. North america will be energy independent. This is the most Important National defense we can have. No longer will we be subject to rogue states such as iran and so on. We should be taking advantage of this now. And i cant for the life of me understand why people dont understand its about national defense, a reason we need to be capitalizing on these opportunities. And we wont have to be having trilliondollar wars to protect the middle east production. Let me ask you another question. You said you think the economy is pretty lousy when you look at china, europe and other areas. Do you think that catches up and drags our economy down as well . Yes, i think it can. Only 15 of our economy is exports, but its 15 . I dont think this is the fourth or fifth time in the past five years where theres been excess in my opinion, optimism on the u. S. Economy. And it hasnt come through. I dont think the economy is as strong as 4 and 5 gdp. I think its more like 2. 5 . Which is you know its okay. But its not going to have a Significant Impact on the job Participation Rate which is still at an alltime low. And the International Side is very, very weak. And so we need to get this economy growing at 3 plus. And i think its going to take some political changes to make that happen. Im more optimistic whats going on politically. We may get people working together in washington. Dick is with us for the rest of the hour. Hes got more ideas on how those policy changes can be enacted and what needs to happen. Well ta you can to him about that later in the show. Coming up next blood on the street to kick off the first week. Just the big money selling last years winners . Weve got that after the break. Plus peter orszag with his take on the economy. And we are going into the world of Ryan Seacrest. And later, cramers take on the market. Squawk box returns in a moment. Is rolled over into a Td Ameritrade ira. Yes so no set up fees wooh yeah so i get help from rollover consultants . Wooh yes no rollover hassle. Great. Woah oh, were spiking things, robbie. For all the confidence you need. Thats better Td Ameritrade. You got this. Have you heard of the new dialing procedure for for the 415 and 628 area codes . No what is it . Starting february 21, 2015 if you have a 415 or 628 number youll need to dial. 1 plus the area code plus the phone number for all calls. Okay, but what if i have a 415 number, and im calling a 415 number . Youll still need to dial. 1 plus the area code plus the phone number. So when in doubt, dial it out the dow and the s p 500 both having their biggest oneday declines in three months. Yesterday jim paulsen told us stocks are still the way to go eventually. But it could be time to look abroad. Where are you going to go . You going to go to bonds at 2 or cash at 0 . Id say overweight. But what i would do is diversify in ways i havent until now. One of those ways is i would minimize my exposure to the United States stock market. I would go overseas. I like europe. I like japan. I like the emerging world. All right. Lets get into that discussion now with chief investment strategist at strategis. I dont think weve spoken in awhile. Youre positive on overall on 2015. Do you have any of the concerns jim paulsen has . Not really jim not really joe. I respect jim quite a bit, but i have to say that the other side of that equation is that people in europe and people in other parts of the world by my experience they generally start with the idea of the currency and then they move into the asset class and then the security. And from that regard it gets really hard to fade u. S. Equities. You have other people looking to get u. S. Exposure because of what is likely to be a continuation of weakness in both the euro and the yen. Are you buying the Energy Sector yet, jason . I would say you have to be a little careful still, but frankly were underweight officially at our firm but im a little bit more interested now than i was. Because i think the u. S. Economy particularly which is the largest engine for growth in the world is quite strong. I also think somewhat lower Energy Prices are going to provide a boom to the rest of the world. Going to give some opportunities for other central bankers to ease more aggressively. And i have a feeling i dont want to put in i dont want to call the low right now, but i have a feeling the price of crude and brent will be higher at the end of the year than they are right now. Well that could be 52. Right. But it certainly would be something where its a tail wind but also its not going to be the i guess, the death now for the economy that some people are looking at it to be. I dont believe anything anybody says about where oil is going. At 80 they said it would be higher at the end of the year. And the markets wrong and im right the entire way down. So all bets are off. No one saw this. No one could have predicted it. No one would have said that all of a sudden and it was weird. When we talked to a lot of people in the business, we said what about fracking. They said thats a big Global Market and were doing a little here. As you know the cure for Higher Oil Prices are Higher Oil Prices. We had 20 years of High Oil Prices and never got cured. This is something where youre seeing Energy Companies i dont want to call the low in the energy market. But by the same token with youre seeing a lot changing Capital Spending plans. Thats going to work through for the commodity. It took 20 years for the value of 100 oil to get us to make more. Who knows how long it takes to work the other way. What about europe . Better than people think this year or not . Only because of the currency joe. I think listen. Draghi is in a situation now where im telling you, if the ecb doesnt ease later this month, its going to be a bad day all the way around. I dont think theres much of a choice. By the same token, i dont think its particularly good policy. You know, i dont know mario, but im somewhat sympathetic to him. Im sure from his point of view its what do you want. Five year german bunds are negative. Its hard to imagine quantitative easing being some sort of panacea without real supply side fiscal reforms. By the same token, marty said dont fight the fed. I dont Like Fighting central banks. To me its just its a toughy. I would be somewhat bullish on europe and Japanese Equities as a result. Maybe its not the low Interest Rates in europe we get from qe. Maybe its they devalue the euro just down to par. Then it would be bullish that it would work that way instead of just lower rates. Were basically close to the ipo price of the euro when it first came out. As you remember it went down to im getting this wrong. Went down to Something Like 83 cents at one point. So its i think a lot of people were wondering when the euro is finally going to weaken. It weakened in a hurry and i have a feeling theres more to go. Greece may opt out. I think theres a couple of you and i have talked about it. The euro skeptic movement in europe is growing. Theres no two ways about it. Feeling pretty proud of themselves. Youre going to have a lot of elections this year where youll see populous movements make a determination. This has always been driven by the elites. The dollar should be the universal currency everywhere. It has been and theres nothing against they should just make it official. I hope theres people watching over there with steam. Good luck this year. Good luck at the new studio. Thank you. Well see you there in person. When we come back this morning, a pill that tricks your body into thinking youve just eaten a huge meal. Could it be the taste of the future in weight loss . That story is next. And then market pressure geopolitical risks, and the state of the Global Economy. What will drive markets in 2015 . Well ask citis vice chair peter orszag. Squawk box will be right back. Out of 42 vehicles. Based on 6 different criteria. Why did a panel of 11 automotive experts. Name the Volkswagen Golf motor trends 2015 car of the year . Well give you four good reasons the allnew Volkswagen Golf starting at 17,995. Theres an Award Winning golf for everyone. Hi. Pete and jon najarian here in new york city outside of the nasdaq, where we bring you live daily market updates. And today, we have a very special free gift for you. So many viewers email us wanting to know our secrets on how we trade options. So we put our secrets into a new book. And if youre one of the first 250 people to call in right now and just cover shipping and handling well send you a copy for free. Look at the rate of return weve made on some of our recent options trades versus what we would have made had we just bought the stock. Theres no comparison. To make the best returns in todays market, you have to learn how to trade options. And our book will show you how to do it for free. Jon has been Trading Options for more than 30 years. Pete is one of the top 100 traders in the country. And our book will teach you how to trade options for free. So call now. [ male announcer ] call the number on your screen now for your free copy of jon and petes new book. Thats. see the number on your screen call now. What if there was a pill you could take that would trick your body into thinking it consumed a huge amount of calories . A scientist has developed a pill that creates an imaginary meal. Tough inflate it once you swallow it. No. In early tests on mice it halted weight gain. So were going to have a bunch of thin mice running around. Lowered cholesterol and reduced the level of unhealthy white fat. It sent out the same tigales that normally happens when you eat a lot of food. But theres no calories that youre ingesting. So no change in appetite. Similar diet drugs have been developed but they affect similar organs and have unwanted side effects. They say this is different because it never reaches the blood stream. Doesnt sound that different than getting the permanent lap thing, right . You know what . Any time that ive eaten too much, its not because i think im hungry. Its because im eating stuff that just tastes good. Really . Does this stop you from doing stuff like that . If youre full. You were so full you dont want to eat. So full youre going to throw up . I hope not. Because youve already said you ride in a car backwards, you throw up. You ride in a plane you throw up. I worry about here. Hey, i didnt throw up on you nine months of being pregnant. I know. Thats true. You lucked out. I did keep my distance though. Yes, you did. You tried your best. I worry about it all. You got lucky. When we come back this morning, the return of an 80s icon. It will help personalize your music experience. We have the answer straight ahead. But first peter orszag on washington and wall street. You might as well take advantage of it. Go out and go ice skating. Those people were having a nice skating lesson there. Lets look at the stocks on the move today. El pollo loco upgraded. Pharmacy serving 14 at walgreens. And a smaller cap looks to be a loser at this hour. Xoom says nearly 31 million was fraudulently transferred to overseas accounts. The cfo is resigning a month on the job. And moving overseas where the money is . I dont know. Good deal. One month. No probably not what happened. Gm says its onstar program may help you get a break on Car Insurance. Oh, boy. It will grade a car owners driving record for 90 days. I do not want this. Measures things such as how fast your accelerate. Oh boy. How hard you brake if you ever do. And if you get a good score, you can choose to have your information sent to progressive insurance for a possible discount. The story is raising some concerns about driving data and privacy. Youve been in my car too. I have. Very scared. We have video of that. My wife the other day with the kids in the car, i did something. She says every time i get in here i say im never going to ride with you again. I said were married youre never going to ride with me . Obviously she knows you well. Never going to get in this car again. In the meantime, lets talk oil, the election and more. Joining us is peter orszag. Vice chairman at citi group. Our guest host Dick Kovacevich is also here this morning. We havent gotten your take on what you think of the slide and oil prices. I think were seeing a bit of an overreaction. But i would say its not right to say no one called this. Not quite the extent. But ed morris has been saying for a significant period of time that we were going to see Lower Oil Prices for, you know that basically 100 a barrel is over. And our predictions are for 60 to 70 especially on wti for, you know as far as the eye can see. We could have used that on the show. It was public. Well i know. But well have him on. We obviously didnt call him and you didnt call us peter. Sorry about that. You think its bouncing back and bouncing back quickly . I dont know how quickly. We think on average during 2015 more 60 to 70 than 50 to 60. Well see. You talking years down the road . Years down the road. The supply revolution especially from u. S. Mexico north america is massive. And you dont worry about the demand . Weve been talking about this demand issue as well. The demand is playing a role also, but i believe the bulk of whats happened here is supply driven. And whats your take on greece right now. Its a concern. I think ultimately there will be some deal thats worked out in which debt is renegotiated to some degree. For investors waking up this morning and thinking the sky is falling from yesterday, is it you imagine its going to continue to fall . You dont want to conflate those issues . Dont conflate stock prices and the economy. Im more bullish on the real economy than dick is. I think we will see 3 growth. We have been for the past three quarters now. And into early 2015. Stock market is going to go up and down. The Oil Price Decline is still a net positive for the u. S. Economy. Greece is a concern. But lets hope it gets worked out awkwardly. What did your oil guy, what did he see . He didnt see it from the demand perspective . He saw it from the supply perspective . Technically it was at 90 or 95. And we heard about fracking. But it was stuck there but it never went up on any of the geopolitical stuff in iraq and isis and all this stuff was happening. Things were getting shut down. Another thing is obviously theres its more complicated. The fed was exiting. Not only that but there is the different types of crude. And refining and what have you. And so you have to go kind of well by well. He could see it didnt make sense. Pretty amazing. So go to washington with us for a minute. Keystone. In the context of the politics of the moment. Do you think the president does . I actually i mean i heard you all saying the reporting is i have no inside information. You have no inside line on that. We have a better idea than you do about what theyre going to do. Should have never said that. Let me ask you an election question. Lets go 2016 for a second. Yes. Democratic party. Do you think hillarys the presumptive nominee, but do you think elizabeth will show up . No. I think Hillary Clinton is the only person who can bridge the divide within the left and centrist but theres going to be a war over does she get forced to move farther over and what does that do to her likability if you will, from those in the center . A bit. I think this is the classic tension between a primary and general election. You get pulled during the primary. You have to make sure you dont get pull too far to the extrooemextreme. Do you think its her time or that its too late . In your heart of hearts in the general. I think she would be a great president. You think b she can get elected . Yes, i do think she can get elected. That being said popularity has come down a lot. This is not like a no book sales. The country is effectively split 50 50. So every president ial election do you think it will be bush clinton . We dont need to print up new forms. If it is bush versus clinton, whats interesting about that is since dwight hooizeisenhower got elected that was expected to be president at some point. It was all very much kind of from nowhere or seen as a lightweight. Or people were so sick of the last person we had that theyll take anything. We also have to realize in that todays media and with the press scrutiny and twitter and what have you, we build everyone up. Every president is going to disappoint. It doesnt matter. I mean they always disappoint the other party. Dick is jeb your presumptive nominee on the republican side . Yes. Youd take him over christie . I would. But in my opinion, its going to be a battle. Were going to have the primaries versus the general election. But i think he is at the moment the most electable for a president. But hes going to be a battle. Is there a dark horse on either side you think emerges that were not thinking about or talking about . I think on the democratic side if hillary wins its going to be hard for a dark horse. I think jeb is probably the most forceful of kind of electable republican. But there are going to be others who enter. So its a little different in the two parties. Heres a wall street question for you actually for both of you. This goes to sort of the Elizabeth Warren issue which is shes always wanted to break up the banks. Do you think that that is going to be a conversation thats going to come back during the elections . I dont know if you saw it. There was a report out just talking about the valuations of and benefits of possibly breaking up jp mohr prks morpmorganjpmorgan. Do you think thats something well be talking about as the election season begins . I doubt it. Some people have said with the new Republican Congress well see rolling back a lot of parts of financial legislation. I also dont think thats likely. I think there will be perhaps some rhetoric. What do you think of the valuation the Goldman Sachs is saying theres 25 upside in breaking up an institution like jpmorgan given what theyre doing with Capital Requirements with that bank. I think that could be the case in the shortterm. I think its a huge mistake. If theres one thing we should know about what causes banks to fail, its concentration of risk. You have to be diversified. And i cant think of anything worse than having four businesses that are very concentrated in their space. That is a recipe for failure. Did you ever meet gruber . Yes. Whatd you think of him . I thought he was a m. I. T. Professor who knew a lot about health care. And obviously how many times did you meet with him . No no. Like, i coauthored a paper with john gruber. Do you think im stupid too . Not me but i know you think im stupid. Let me ask well, you by definition as a conservative i must be stupid. Not only here but on the show. I must be stupid by definition. You have talked about the cost curve being bent even though i dont really think that was the Affordable Care acts main there was more access. Some people argued its because weve had a slow economy, theres been underutilization. Others talk about key dates coming up in the future where we will see some of critics concerns coming to roost. First, everyone agrees Health Care Costs have slowed down dramatically. Thats a great thing. Fact one. Fact two, the economy is playing some role in that slowdown. When do we see will premiums skyrocket . Heres the thing. The reason i think Something Big structural is going on theres no evidence that medicare is affected by the economy at all. And medicare has slowed down dramatically. Last year in 2014 real medicare spending when beneficiary declined. Is that because of the new people that went into it . No. Even if you control for demographics, no. There is something significant going on and the cause and effect is because of obamacare . Or we dont know why . I think there are multiple things that directionally the law helped. But its driven by digitization. Its driven by the reality and the perception that were moving away heres what needs to happen at this point. Many hospital administerers are worried they have one foot on the vote and the boat and the dock. We need to go to paying for value. What the Administration Needs to do sooner rather than later is say lay out the time path. We are going to hit, you know, 50 of payments by this date 75 by this date. This is how well get there. Right now theres this blob out there. We dont know how and when were going to get there. Thank you. And good luck in your new digs. Thank you. Youll be in more then. Well see. Up next seacrest in. Our Julia Boorstin catching up with this generations dick clark on all his ventures. Plus the return of a tech icon. It helped transform sony into an electronics powerhouse. And now the walkman what do you mean coming back . I still use it. The walkman is making a comeback. Now you can lose inches off your waistline. Effortlessly. Thanks to the new super walkman from sony. Oh how the times have changed. Sony making a splash with its new walkman. Aside from the iconic brand name, the new zx2 boasts on board storage and a touch screen display. It also improves on the original walkman by connecting to the internet and not being the size of a book. But the real focus will be on high end audio. Supporting all of this latest audio files, big difference between b the original walkman and the new walkman. Also the price tag. The original one about 200. This new one just about 1200. Wow. 1200 bucks. Get an iphone or something. You are the Ryan Seacrest of business. Were all trying. Ryan seacrest cant stop working. American idol, new years rocking eve. The today show a clothing line. And now the Consumer Electronics show our Julia Boorstin caught up with him to talk about his controversial keyboard and much more. Julia . Thats right, joe. Ryan seacrest is here to promote the typo 2. Its a keyboard that slides over your iphone or ipad. Soon after it was introduced last year the company was sued by blackberry. Seacrest wouldnt comment on the pending litigation but he says this device is a game changer for how he works. I like the feeling of those keys. And so for me when i first started typing on a virtual keyboard i thought, my gosh im going to lose a job. Because i cant reply to everything and im saying things i dont mean to say in my replies. And i still sometimes say things i dont mean to say, but i do less of that. Now, seacrest says he does not invest much in the stock market, but he invested in and cofounded typo because he wanted the product himself. Part of a strategy of investing in what he understands. I try to think about something that i can add value to. Not just you know capital, but where i can add some value as well. And think strategically about it. This i knew was right for me because i needed it myself. I also asked seacrest who has produced dozens of shows from keeping up with the kardashians to dick clarks new years eve if he was concerned about cord cutting. He says hes betting big on the power of live events. I believe that live events are probably more valuable than they used to be. I believe that we now are incorporating better integration into live events so there can be more ad dollars there. Not that its reinventing the wheel, but weve come a long way in terms of integration. What he means is product integration, a whole new way to do advertising. He says he thinks theres never been a better time to be a content producer. And he doesnt care where people watch his content as long as theyre watching. Julia, thank you. Do you have one of those, by the way . Oh, yeah. I had the original one last year. And i just got the new one yesterday from ryan. We did a little typing test to see who was faster. If he was faster with the keyboard or i was faster without it. I have to say, i am really fast on my iphone because i where a lot of scripts on it. But it makes a big difference. You can type a lot faster on this. Especially if youre originally a blackberry user. I want one. I really like it. All right, julia. Thank you. Up next well be talking to jim cramer on what investors should be doing today after yesterdays big selloff. Check out the futures right now. Youre going to see that at this point it looks like the futures are up by about 30 points for the dow. Up by about three points for the s p 500. Squawk will be right back. Lets get down to the new york stock exchange. Jim cramer joins us. The market was worried about the Falling Oil Prices yesterday and greek exit. You have looked at this as the really good positive news. Is this just shortterm we have to get through before we get the benefits of Lower Oil Prices . Yes. There are 16 states indirectly affected. Six states directly affected. If you take a look its about 28 Million People versus 317 all together. Im listening to my hero dick. His common sense approach is the way youve got to go. Hes been talking about there are buying opportunities. Do you see those, too . Yesterday someone downgraded wells fargo. Whats the point . You want to get in ahead of a Net Interest Margin number that might not be that great . Buy it back at 52 . Thats what im seeing from analysts. I dont want to play that way. I want to be involved in the great resurgency of the United States. Oil is coming down. I want to own wells fargo. Its almost insulting when i see these downgrades. Jim, thanks so much. Well see more of you in a couple of minutes. Okay. When we return the final block of squawk box on this set. In new jersey a look at our new home located in midtown manhattan. We wrap things up. Financial noise financial noise financial noise say youre a finance guy. A farmer. A researcher. You used to depend on experience. The internet. Your gut. Today you can use ibm watson analytics. It can make sense of all kinds of data. Uncover hidden correlations and new opportunities. And give recommendations with more confidence on who will buy. What to make. Where to plant. Which helps you make smarter decisions. Theres a new way to work and its made with ibm. Dick you were talking about you think these Lower Oil Prices create a buying opportunity. Im invested in the stock market. I think the market is fully valued at the moment. I think you need to keep about 10 or 15 in cash to buy fallen angels. I would oil stocks as that. Youve got chevron close to 100 paying 4 dividend. Youve got exxon when it gets in the mid 80s paying 3 . You get paid to wait. Im not saying its the bottom. I cant pick the bottom nor the top. Getting paid to wait at these prices are good. Then the corrections in the market. Buy on corrections. At the moment im fairly fully invested except for the 10 . A lot of that is dividend stocks as a replacement for bonds. Banks are paying good dividends. Utilities, pharmaceuticals, et cetera. Ive been buying lately because those prices have been high. I did get in the oil prices the last month when you see whats happening there. Anything else youve been watching in the market . Anything else that concerns you either in the economies or the market . Well what concerns me let me put the positives out. I think if we can get our Political Parties working together. They should be motivated to do that. Republicans didnt win the last election. They have to have a positive agenda if they are going to keep the senate in 2016 and win the presidency. Obama has a legacy problem in terms of the worst recovery that happened. I think there is room to get together and do the right thing for the American People for a change. If that happens, i think we can have 3 plus growth. Thats going to be great for the bond markets, great for employment. See if it happens. Thank you for being here today. Tomorrow we are going to kick off a new beginning for squawk box. We are moving to new york to the city where business never sleeps. Same team same off the charts access probably more. Just a little closer to the action. One of the longestrunning shows in Business Television will call midtown manhattan home. Well be across the street from the famed radio city music hall. We were there over the weekend checking out the new digs getting ready for the go tomorrow. Check out the lineup for our first show. Lloyd blankfein. Bill ackman. Can he do it again . Can he do it the way he did it again . He can, right . The law has not been changed. Yes. He made 12 million a day or something. David stern. Check it out squawk box live here on cnbc. Now its time for squawk on the street. Happy birthday to joe fuhrman. So far free market all that encouraging. Downgrades at work including ge. Oil is down. We hit 48. 47 earlier in the morning. Just above that level. Yields at record lows around the globe. U. S. Ten years below