Transcripts For CNBC Squawk On The Street 20141029 : vimarsa

2. 293. Yes, this was the year when we were going to go higher in yield. No, its not. Spain, 2. 1. Yes, spain is 2. 1. I like to go through all of those. And germany, 0. 88. All right. Crude oil, which has been the key to this market, according to my buddy next to me here, the key. You can see right there we are above 80 on wti. We breached it earlier in the week. Were below it for a bit. 82. 48 right now. When goldman said it should go lower, they took it lower. Now its bounced back. That was the buy signal. Lets get to our road map this morning as well. It starts with those markets, starting from a position of strength ahead of the fed statement today. Widely expected to detail an end to current bond buying, otherwise known as qe. Facebook is lower in the premarket on declining revenue and growing expense worries. Not declining revenue. No, revenues were fabulous. Guidance, the guidance. Declining revenue is impossible at facebook. If they had declining revenue, that stock would be down 40 . All right. Were going to tell you what Mark Zuckerberg had to say in his companys defense. Again, an example if you put it in front of me, i will read it. The greatest Growth Company of our time, other than alibaba. And maybe google. We tossed the idea out there yesterday. Now it is a reality. Chris veeboker out as ceo. What . He didnt want to be fired, david. He did not want to be fired. That may have actually been why he was fired. All right. One of the nicest guys ive ever had on mad money. Not anymore. Fed policymakers are set to wrap up their twoday meeting hours from now and issue a statement at 2 00 p. M. Eastern widely expected to announce an end to their bondbuying program. Investors will also keep an eye out for clues about a possible timeline for Interest Rate hikes. This all on the day after a stock market rally that put the s p 500 within 15 points of 2,000 and the dow is now back above 17,000. So much for that volatility. Here we are again. The fed is not unimportant. That Balance Sheet is quite large. It is not as though theyre going to start selling down. Theyre simply going to stop buying. What a shame theyre not selling. Boy, we could use a little inflection in the curve. It would help a lot of savers. It would do great for the people who constantly say the fed is a bunch of knuckleheads. It would solve a lot of our problems, but they wont do it. They wont do it. The question is, are we going to get anything today that we dont expect . You know, theres focus on considerable time being eliminated, but that may be the next meeting. I guess whats the december meeting before year end. I think this is a parlor game we have been playing for years. The parlor game has made you no money, so i have let other people play. I play sorry. I play clue. I play battleship. I let other people play fed. These are all equal ly they dont mean anything. The data, david, not so hot. Not so hot, although not so bad. If youre looking at employment and where we are with the Unemployment Rate in this country, one has to wonder your we still have 0 Interest Rates. I looked at durable goods. Its not a madeup number. That wasnt so good. Retailers are telling me that october is not such a great month, but it was also quite warm. Seasonal does seem the seasons havent changed yet. We had Superstorm Sandy two years ago. Theres good and theres bad. Employment is good. I know the Hedge Fund Community wants rates to be at 4 so bonds get killed and stocks get killed. Right now the fed at the fed meetings, there were messengers there from cleveland. Do you sit there and say, we got to crush this market . Another guy says, i dont know, theyre long this market. They dont care about how the hedge funds are positioned. Theyre thinking about the American Worker and business. So theyre the ones. Theyre the ones. Because nobody else in washington does. Best government money can buy except for them. They cant be bought. The fed has not been able to be bought so far. So far. They have a lot of gold in that building right up the street. Talk about a lot of gold, they made it, facebook. Shares are down sharply in the premarket despite what was better than expected quarterly results. Mobile counts for twothirds of this companys ad revenue. That started about a year ago. The social network says it sees Revenue Growth slowing this quarter, adding it does plan to ramp up spending in 2015. Facebook ceo Mark Zuckerberg addressing the spending last night on the Conference Call. One thing that im particularly pleased about is that while were investing aggressively and making progress towards our big longterm goals, we also continue to execute well against our nearterm priorities. Thats not a good quote. The best quote in the whole thing was when he said, over a fiveyear time frame, we have a number of services which we think are well on their way to reaching 1 billion people. Once we get to that scale, then we think they will start to become meaningful businesses in their own right. Heres what you have. You have one guy with a fiveyear plan. Its about to grow revenues. Lets contrast that with ibm. A fiveyear plan to buy back stock. The market wants somewhere in between. It doesnt want a fiveyear plan where youre spending a fortune, giving away 100 million shares to whatsapp. I will look at the facebook call and i told people sell some stock ahead of this quarter because theyre going to do this. A lot of stock is going to come to market. In the end, people are going to come back to facebook. Split the different stock is the one everyone hated two weeks ago. Google. Sells at 14 times earnings, fantastic Balance Sheet. They have much more financial discipline than facebook. Just they are not as articulate. Google has much more financial discipline . The whatsapp deal, until they figure out a way to monetize it, just blew up financially. As you point out, stock is going to be coming to the market now the lockup has expired. Free to trade. Thats why perhaps they did give us revenue guidance for the first quarter. Although, they bracketed it. That is worrying people. Historically, theyve been very conservative. I think when the smoke clears, this stock is a buy. Yesterday i took a lot of heat for my comments on twitter, saying why are you short twitter . These stocks, twitter, facebook, google, in the end youre stuck with them if youre an advertiser. But your point on twitter had to do with execution. You questioned the ceo. Youre not at all youve never done that on google and or facebook. I think facebook has a fiveyear plan and i like it. You have to trust zuckerberg. Same way you have to trust sergei and larry. And i totally trust them. I just do not have that same level of confidence. I am being such a diplomat here. This lowers your blood pressure. I was aghast. I think of these three franchises, twitter in many ways has the most room to grow. Yet, it had the worth growth. And its interesting, of the three franchises, it is the one company thats not controlled. Of course, google is. Facebook is. Alibaba is, more or less. When i posed the idea that yahoo could buy twitter, neither that nor the idea that coslo could be replaced was sniffed at. Yahoo by the way, has so much money after whats happened with alibaba. They could buy netflix and twitter. They will not do either of those. No, although yahoo yesterday hitting a high it had not seen since september of 2000 with alibaba reaching a market capitalization e waqual to that walmart, which it was close to on day one of trading. Marissa mayer doesnt know what shes doing. Gives you a triple on your stock. Dan more than doubled his money. She bought it all. The stock is up huge from that. Then again, she doesnt know what shes doing, right . Dont we have to caveat that . I want to circle back to facebook before we move on. Theyre coming up to a quarter where mobile had then surged. The comps are going to be somewhat difficult because we already saw the surge in mobile from that year ago quarter. Theyve got some head winds from the euro, no doubt about that. They talked about that a bit on the call. And youve got this bracketed revenue guidance. You only have no eps guidance. Theyve never given that to you. In fact, its the first time theyve given us any real guidance at all. I was looking for 250 next year. Now im kind of screwed up. And they are going to spend an awful lot of money and more than had been anticipated. Its not the stock deserves to be down. It deserves to be down because they ramped up the expenses dramatically. Theyre issuing a lot of stock. At the same time, they gave you revenue guidance that was not as good as we wanted. However, all that said, this is an Amazing Company. Its doing incredibly well. Execution is superb. I happen to believe when the smoke clears, were going to think everything they guided was conservative. I mean, this project atlas they talked abouted a bit people shrugged about that. Now i hear from people about it. Cookieless way of trading tracking people across devices, tracking it relationships, and it will be very competitive in monetizing display on others platforms. That to me is a google. Straight across. Instagram, google. Theres a lot of antigoogle stuff in this Conference Call. Its subtle. Theyre very subtle. Zuckerberg comes in. Hes big think. Then sandberg is kind of harrison ford, so to speak. Going back to star wars. Got it. Im there. The new cfo, just buzz kill. Just giving all that stock away. You set the expectations low. People come in, maybe they do a big secondary. Stock at 68. Come in and buy the stock, then you sit back and watch it go higher. Sit back for one moment, because i think we have phil lebeau on the phone about some news about a fiat chrysler. Phil, whats going on . Thank you, david. Fiatchryslers board has decided it will be spinning off ferrari, offering 10 to the public in an ipo. The remaining 90 will be issued to shareholders of fiat chrysler. At the same time, theyll be offering another 100 million shares to the public as they are clearly trying to raise capital here. This brings up two questions. First of all, why spin off ferrari now . If you are the fiat board, youre looking at ferrari saying this is our most valuable asset that we can spin off to raise capital so that we have, a, enough capital for our own investments over the next five years, and also to further invest and expand into asia, which is their weakest spot. Also, when you look at ferrari, it is not the brand they believe theyre going to push on a global basis when it comes to the upscale market. That is maserati. When you agree with that strategy or not, thats long been the approach. But again, ferrari being spun off by fiat chrysler, 10 in an ipo. The remaining 90 will be issued to shareholders. Wow. Phil, any idea what ferrari is conceivably worth . Does that make sense as a stand alone Public Entity . Well, its a more crowded space. Let me take the second question first, which is can they compete as a standalone entity . Yes, they can. They have enough of a certain niche within that upscale market that they can exist as a standalone entity. Its going to be more difficult, but they can sustain themselves. The first question, in terms of how much youre going to get for ferrari for that 10 , at least a couple billion dollars minimum is what youre looking at. Remember, while its incredibly valuable, its a low volume manufacturing auto. What youre looking at is their global sales are capped. Id have to look at the number. I think its like 7500. Theres a limited number there. But it is highly valuable. There will be people who will look for these shares once its spun off. Right. All right, phil. Well be following this story. Thank you, phil lebeau. Thats quite a story. Still trying to understand. Again, phil said 90 would be given to shareholders. So youre an existing shareholder, you get a stake in new, so to speak. Then 10 sold to create the market value for it. Its not clear to me what ferraris market value would be. It wouldnt be 20 billion. Its a handbuilt car company. I mean, obviously the cream of the crop car. I would bet the margins are pretty good. I think so. At the same time, i would want a stake in jeep. That you can just buy. Were going to talk Buffalo Wild Wings, posting upbeat earnings and sales. Ceo sally smith joins us live and first on cnbc. Also ahead, the next chapter in blackberrys turnaround plan. An exclusive interview with the ceo coming up. Were also going to talk about another ceo exit. More squawk on the street coming up. A change at the top of san fi. Chris viehbacher is out as ceo of the french drug maker. The chairman will serve as interim ceo while the Company Searches for a successor. Viehbacher sought to dismiss speculation about his future. In fact, we discussed the situation during yesterdays show. Dont you think this is a little embarrassing . I like christ viehbacher. Hes been on the show very much. The dont fire me approach has this, well, maybe i shouldnt buy that stock. I get when you get to the point of asking not to be fired, youre probably going to be. Its like geno smith, intercepted repeatedly. Well see if that prediction came true. By the way, yesterday the stock suffered, of course, but of competition in the diabetes franchise particularly and this concern he would conceivably lose his job, which they followed through and did fire him. It does have a hewlettpackard feel to it. Who wants that job now . Who wants that ceo job, david . I dont know. I can tell you a search has been going on for a while. While he was the ceo, they did a behindhisback search . They had already undertaken a search. To those who would say it had to do with his effort to potentially close down factories in france, i hear no. They were smiling in his face. It was performance issues, promises that were not met, and his attempt to split the board seemed to unify them. In other words, by saying dont fire me and thinking youve got some of the board that doesnt want to fire you and others that do, they all get together and say youre fired. He came in, the stock was at 28. Went to 48. Does have a good yield. The drug index during that period went from 239 to 519. It has underperformed. Its not like, you know, hes been in the playoffs year after year after year and suddenly they fire him. He was not in the playoffs. He didnt make the playoffs. Thats true. In an interview that mr. Weinberg, who stepped in, he said governance is not just about dealing with difficulties when theyre obvious to everyone, its about anticipating risks in the future. Wow. Okay. All right. And up next, its cramers mad dash as we count down toward the opening bell. Were awaiting a big announcement from hewlettpackard, holding an event in new york. Whos on that . Cramer is on top of that. Youll call in if you have to. More squawk on the street from the nyse after this. In a world thats changing faster than ever, we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. An Unprecedented Program arting busithat partners businesses with universities across the state. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov all right. Its about 23 minutes after 9 00. That means seven minutes until the opening bell. Time for your mad dash. On hump day. One of the things that really distinguished this reporting period was everyone expected the industrials to blow up, so to speak, and its why you had to be away from all the big companies, because of europe, because of russia. U. S. Steel, its been a long time since we talked about letter x marks the spot. They blew in a number last night. Its on flat rolled steel. Up 56 . This management came in and basically said, listen, were going to scrap all the pie in the sky stuff weve been doing. Were going to take out costs, and were just going to become a much smaller, leaner, meaner steel company, and its succeeding. Congratulations to them. Its really good quarter. Wow. They have a lot of cash too. No longer liquidity issues. Just a really good story. Keeps going from here . Great comeback story. Its not going to go back to 170, 180. If auto, truck build continues, it could do well. Its not an expensive stock. Lets get to a name we do often talk about. Heres where people are clustered. Gilead is hard to understand because theyve got another version coming up. The sales are run believable. Heres a good headline. Piper jaffray loves it. Third quarter, not pretty, but not important either. Reiterate overweight. That really is right. Its just not an important quarter with an Amazing Company that has a fabulous life cure pill that no one seems to be able to really come near yet that i think will have on a salable franchise where theyll be buying back a lot of stock. I would not give up on gilead. Now, beyond hep c, what else . The idea is that theyre going to this is a little bit yahoo like with growth. It used to be macular degeneration. Oh, that was regen. The earlier stuff was for hiv. Theyre a remarkable company. They have so much capital you have to figure out how youre going to deploy it. They can do a lot of good things. Gilead is the opposite of sanofi. The moves on these stocks are so significant at this point. This is like sales at ten times earnings. The multiples are always falling behind versus a merck or pfizer where the earnings are coming down. Theyre ibmlike. Thats really the template of how to make your earnings look a little better than they really are, just by shrinking. Of course, ibm also sold a lot of stuff. Theres two models for stocks. Theres the ibm merck pfizer model. Then theresed gilead model and google, facebook, maybe twitter model. I think the market likes to find the ones that have great growth and discipline in spending. There arent that many of those. All right. We got a lot more stocks to watch. Of course, the opening bell four minutes away. Stay with us. Squawk on the street is coming right back. p youre watching cnbcs squawk on the street. We are live from the Mark Zuckerberg<\/a> had to say in his companys defense. Again, an example if you put it in front of me, i will read it. The greatest Growth Company<\/a> of our time, other than alibaba. And maybe google. We tossed the idea out there yesterday. Now it is a reality. Chris veeboker out as ceo. What . He didnt want to be fired, david. He did not want to be fired. That may have actually been why he was fired. All right. One of the nicest guys ive ever had on mad money. Not anymore. Fed policymakers are set to wrap up their twoday meeting hours from now and issue a statement at 2 00 p. M. Eastern widely expected to announce an end to their bondbuying program. Investors will also keep an eye out for clues about a possible timeline for Interest Rate<\/a> hikes. This all on the day after a stock market rally that put the s p 500 within 15 points of 2,000 and the dow is now back above 17,000. So much for that volatility. Here we are again. The fed is not unimportant. That Balance Sheet<\/a> is quite large. It is not as though theyre going to start selling down. Theyre simply going to stop buying. What a shame theyre not selling. Boy, we could use a little inflection in the curve. It would help a lot of savers. It would do great for the people who constantly say the fed is a bunch of knuckleheads. It would solve a lot of our problems, but they wont do it. They wont do it. The question is, are we going to get anything today that we dont expect . You know, theres focus on considerable time being eliminated, but that may be the next meeting. I guess whats the december meeting before year end. I think this is a parlor game we have been playing for years. The parlor game has made you no money, so i have let other people play. I play sorry. I play clue. I play battleship. I let other people play fed. These are all equal ly they dont mean anything. The data, david, not so hot. Not so hot, although not so bad. If youre looking at employment and where we are with the Unemployment Rate<\/a> in this country, one has to wonder your we still have 0 Interest Rate<\/a>s. I looked at durable goods. Its not a madeup number. That wasnt so good. Retailers are telling me that october is not such a great month, but it was also quite warm. Seasonal does seem the seasons havent changed yet. We had Superstorm Sandy<\/a> two years ago. Theres good and theres bad. Employment is good. I know the Hedge Fund Community<\/a> wants rates to be at 4 so bonds get killed and stocks get killed. Right now the fed at the fed meetings, there were messengers there from cleveland. Do you sit there and say, we got to crush this market . Another guy says, i dont know, theyre long this market. They dont care about how the hedge funds are positioned. Theyre thinking about the American Worker<\/a> and business. So theyre the ones. Theyre the ones. Because nobody else in washington does. Best government money can buy except for them. They cant be bought. The fed has not been able to be bought so far. So far. They have a lot of gold in that building right up the street. Talk about a lot of gold, they made it, facebook. Shares are down sharply in the premarket despite what was better than expected quarterly results. Mobile counts for twothirds of this companys ad revenue. That started about a year ago. The social network says it sees Revenue Growth<\/a> slowing this quarter, adding it does plan to ramp up spending in 2015. Facebook ceo Mark Zuckerberg<\/a> addressing the spending last night on the Conference Call<\/a>. One thing that im particularly pleased about is that while were investing aggressively and making progress towards our big longterm goals, we also continue to execute well against our nearterm priorities. Thats not a good quote. The best quote in the whole thing was when he said, over a fiveyear time frame, we have a number of services which we think are well on their way to reaching 1 billion people. Once we get to that scale, then we think they will start to become meaningful businesses in their own right. Heres what you have. You have one guy with a fiveyear plan. Its about to grow revenues. Lets contrast that with ibm. A fiveyear plan to buy back stock. The market wants somewhere in between. It doesnt want a fiveyear plan where youre spending a fortune, giving away 100 million shares to whatsapp. I will look at the facebook call and i told people sell some stock ahead of this quarter because theyre going to do this. A lot of stock is going to come to market. In the end, people are going to come back to facebook. Split the different stock is the one everyone hated two weeks ago. Google. Sells at 14 times earnings, fantastic Balance Sheet<\/a>. They have much more financial discipline than facebook. Just they are not as articulate. Google has much more financial discipline . The whatsapp deal, until they figure out a way to monetize it, just blew up financially. As you point out, stock is going to be coming to the market now the lockup has expired. Free to trade. Thats why perhaps they did give us revenue guidance for the first quarter. Although, they bracketed it. That is worrying people. Historically, theyve been very conservative. I think when the smoke clears, this stock is a buy. Yesterday i took a lot of heat for my comments on twitter, saying why are you short twitter . These stocks, twitter, facebook, google, in the end youre stuck with them if youre an advertiser. But your point on twitter had to do with execution. You questioned the ceo. Youre not at all youve never done that on google and or facebook. I think facebook has a fiveyear plan and i like it. You have to trust zuckerberg. Same way you have to trust sergei and larry. And i totally trust them. I just do not have that same level of confidence. I am being such a diplomat here. This lowers your blood pressure. I was aghast. I think of these three franchises, twitter in many ways has the most room to grow. Yet, it had the worth growth. And its interesting, of the three franchises, it is the one company thats not controlled. Of course, google is. Facebook is. Alibaba is, more or less. When i posed the idea that yahoo could buy twitter, neither that nor the idea that coslo could be replaced was sniffed at. Yahoo by the way, has so much money after whats happened with alibaba. They could buy netflix and twitter. They will not do either of those. No, although yahoo yesterday hitting a high it had not seen since september of 2000 with alibaba reaching a market capitalization e waqual to that walmart, which it was close to on day one of trading. Marissa mayer doesnt know what shes doing. Gives you a triple on your stock. Dan more than doubled his money. She bought it all. The stock is up huge from that. Then again, she doesnt know what shes doing, right . Dont we have to caveat that . I want to circle back to facebook before we move on. Theyre coming up to a quarter where mobile had then surged. The comps are going to be somewhat difficult because we already saw the surge in mobile from that year ago quarter. Theyve got some head winds from the euro, no doubt about that. They talked about that a bit on the call. And youve got this bracketed revenue guidance. You only have no eps guidance. Theyve never given that to you. In fact, its the first time theyve given us any real guidance at all. I was looking for 250 next year. Now im kind of screwed up. And they are going to spend an awful lot of money and more than had been anticipated. Its not the stock deserves to be down. It deserves to be down because they ramped up the expenses dramatically. Theyre issuing a lot of stock. At the same time, they gave you revenue guidance that was not as good as we wanted. However, all that said, this is an Amazing Company<\/a>. Its doing incredibly well. Execution is superb. I happen to believe when the smoke clears, were going to think everything they guided was conservative. I mean, this project atlas they talked abouted a bit people shrugged about that. Now i hear from people about it. Cookieless way of trading tracking people across devices, tracking it relationships, and it will be very competitive in monetizing display on others platforms. That to me is a google. Straight across. Instagram, google. Theres a lot of antigoogle stuff in this Conference Call<\/a>. Its subtle. Theyre very subtle. Zuckerberg comes in. Hes big think. Then sandberg is kind of harrison ford, so to speak. Going back to star wars. Got it. Im there. The new cfo, just buzz kill. Just giving all that stock away. You set the expectations low. People come in, maybe they do a big secondary. Stock at 68. Come in and buy the stock, then you sit back and watch it go higher. Sit back for one moment, because i think we have phil lebeau on the phone about some news about a fiat chrysler. Phil, whats going on . Thank you, david. Fiatchryslers board has decided it will be spinning off ferrari, offering 10 to the public in an ipo. The remaining 90 will be issued to shareholders of fiat chrysler. At the same time, theyll be offering another 100 million shares to the public as they are clearly trying to raise capital here. This brings up two questions. First of all, why spin off ferrari now . If you are the fiat board, youre looking at ferrari saying this is our most valuable asset that we can spin off to raise capital so that we have, a, enough capital for our own investments over the next five years, and also to further invest and expand into asia, which is their weakest spot. Also, when you look at ferrari, it is not the brand they believe theyre going to push on a global basis when it comes to the upscale market. That is maserati. When you agree with that strategy or not, thats long been the approach. But again, ferrari being spun off by fiat chrysler, 10 in an ipo. The remaining 90 will be issued to shareholders. Wow. Phil, any idea what ferrari is conceivably worth . Does that make sense as a stand alone Public Entity<\/a> . Well, its a more crowded space. Let me take the second question first, which is can they compete as a standalone entity . Yes, they can. They have enough of a certain niche within that upscale market that they can exist as a standalone entity. Its going to be more difficult, but they can sustain themselves. The first question, in terms of how much youre going to get for ferrari for that 10 , at least a couple billion dollars minimum is what youre looking at. Remember, while its incredibly valuable, its a low volume manufacturing auto. What youre looking at is their global sales are capped. Id have to look at the number. I think its like 7500. Theres a limited number there. But it is highly valuable. There will be people who will look for these shares once its spun off. Right. All right, phil. Well be following this story. Thank you, phil lebeau. Thats quite a story. Still trying to understand. Again, phil said 90 would be given to shareholders. So youre an existing shareholder, you get a stake in new, so to speak. Then 10 sold to create the market value for it. Its not clear to me what ferraris market value would be. It wouldnt be 20 billion. Its a handbuilt car company. I mean, obviously the cream of the crop car. I would bet the margins are pretty good. I think so. At the same time, i would want a stake in jeep. That you can just buy. Were going to talk Buffalo Wild Wings<\/a>, posting upbeat earnings and sales. Ceo sally smith joins us live and first on cnbc. Also ahead, the next chapter in blackberrys turnaround plan. An exclusive interview with the ceo coming up. Were also going to talk about another ceo exit. More squawk on the street coming up. A change at the top of san fi. Chris viehbacher is out as ceo of the french drug maker. The chairman will serve as interim ceo while the Company Searches<\/a> for a successor. Viehbacher sought to dismiss speculation about his future. In fact, we discussed the situation during yesterdays show. Dont you think this is a little embarrassing . I like christ viehbacher. Hes been on the show very much. The dont fire me approach has this, well, maybe i shouldnt buy that stock. I get when you get to the point of asking not to be fired, youre probably going to be. Its like geno smith, intercepted repeatedly. Well see if that prediction came true. By the way, yesterday the stock suffered, of course, but of competition in the diabetes franchise particularly and this concern he would conceivably lose his job, which they followed through and did fire him. It does have a hewlettpackard feel to it. Who wants that job now . Who wants that ceo job, david . I dont know. I can tell you a search has been going on for a while. While he was the ceo, they did a behindhisback search . They had already undertaken a search. To those who would say it had to do with his effort to potentially close down factories in france, i hear no. They were smiling in his face. It was performance issues, promises that were not met, and his attempt to split the board seemed to unify them. In other words, by saying dont fire me and thinking youve got some of the board that doesnt want to fire you and others that do, they all get together and say youre fired. He came in, the stock was at 28. Went to 48. Does have a good yield. The drug index during that period went from 239 to 519. It has underperformed. Its not like, you know, hes been in the playoffs year after year after year and suddenly they fire him. He was not in the playoffs. He didnt make the playoffs. Thats true. In an interview that mr. Weinberg, who stepped in, he said governance is not just about dealing with difficulties when theyre obvious to everyone, its about anticipating risks in the future. Wow. Okay. All right. And up next, its cramers mad dash as we count down toward the opening bell. Were awaiting a big announcement from hewlettpackard, holding an event in new york. Whos on that . Cramer is on top of that. Youll call in if you have to. More squawk on the street from the nyse after this. In a world thats changing faster than ever, we believe outshining the competition tomorrow quires challenging your Business Inside<\/a> and out today. At cognizant, we help forwardlooking Companies Run<\/a> better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. An Unprecedented Program<\/a> arting busithat partners businesses with universities across the state. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov all right. Its about 23 minutes after 9 00. That means seven minutes until the opening bell. Time for your mad dash. On hump day. One of the things that really distinguished this reporting period was everyone expected the industrials to blow up, so to speak, and its why you had to be away from all the big companies, because of europe, because of russia. U. S. Steel, its been a long time since we talked about letter x marks the spot. They blew in a number last night. Its on flat rolled steel. Up 56 . This management came in and basically said, listen, were going to scrap all the pie in the sky stuff weve been doing. Were going to take out costs, and were just going to become a much smaller, leaner, meaner steel company, and its succeeding. Congratulations to them. Its really good quarter. Wow. They have a lot of cash too. No longer liquidity issues. Just a really good story. Keeps going from here . Great comeback story. Its not going to go back to 170, 180. If auto, truck build continues, it could do well. Its not an expensive stock. Lets get to a name we do often talk about. Heres where people are clustered. Gilead is hard to understand because theyve got another version coming up. The sales are run believable. Heres a good headline. Piper jaffray loves it. Third quarter, not pretty, but not important either. Reiterate overweight. That really is right. Its just not an important quarter with an Amazing Company<\/a> that has a fabulous life cure pill that no one seems to be able to really come near yet that i think will have on a salable franchise where theyll be buying back a lot of stock. I would not give up on gilead. Now, beyond hep c, what else . The idea is that theyre going to this is a little bit yahoo like with growth. It used to be macular degeneration. Oh, that was regen. The earlier stuff was for hiv. Theyre a remarkable company. They have so much capital you have to figure out how youre going to deploy it. They can do a lot of good things. Gilead is the opposite of sanofi. The moves on these stocks are so significant at this point. This is like sales at ten times earnings. The multiples are always falling behind versus a merck or pfizer where the earnings are coming down. Theyre ibmlike. Thats really the template of how to make your earnings look a little better than they really are, just by shrinking. Of course, ibm also sold a lot of stuff. Theres two models for stocks. Theres the ibm merck pfizer model. Then theresed gilead model and google, facebook, maybe twitter model. I think the market likes to find the ones that have great growth and discipline in spending. There arent that many of those. All right. We got a lot more stocks to watch. Of course, the opening bell four minutes away. Stay with us. Squawk on the street is coming right back. p youre watching cnbcs squawk on the street. We are live from the Financial Capital<\/a> of the world. The opening bell will be ringing in about a minute from now. Oil, oil, and earnings from whether its apc or hess. Good quarter. Phillips 66, good quarter. Bp, not so hot. You have mixed. Everyone thought it was all bad. That was wrong. Its mixed. I think hess really delivered. When your man elliott got involved, that went from being a Company People<\/a> hated to a Company People<\/a> loved. That was an example where avtavis succeeded. Theyve been stronger since. All right. Were counting down to the opening bell. You can see the realtime exchange back at hq getting itself ready for the open. Looks like its going to be a mixed bag. There is that opening bell for trading on this wednesday. Here at the big board, by the way, representatives from blackrock are ringing the opening bell. Over at the nasdaq, we have sientra, a medical aesthetics company. That is going public today. Hence the balloons and confetti. Mostly confetti. I dont see any balloons. Its incredible when i look at these oil stocks. Everyone just decided theyre all at 80, no good. You have companies that have worked to lower their break dramatically using Great American<\/a> companies. Theyre making much more money per barrel than people realize. You may throw these companies away. Believe me, theres someone lurking that wants to buy one of these. Continuing to sell assets. Your point is an interesting one. Consolidation. When names come up about a major acquisition in energy, this has always been one of them at a 46 billion market value. You could imagine it would be quite large. With the retreat in price, one has to wonder whether it becomes more attractive or whether consolidation at least is a possibility within the Energy Industry<\/a> becomes more likely. And i think the answer is yes. Yes. Im going to bring in qe2 for a second. The biggest weakness in our economy right now, if you wanted to ask me, is in the highyield market revolving oil. Theres a lot of highyield bonds and preferreds done by Oil Companies<\/a> that are now very stressed at this level. Do you wait for some of these other guys to go under and pick at the carcass . Thats going to be the issue. Exon and chevron, when they report on friday, youre going to hear about Production Growth<\/a>. Now that said, anadarko saying, why are you picking on us . These American Companies<\/a> have done great things. Everyones throwing them away because they think they cant make any money at 80 a barrel. That is so wrong. We just need more refinery capacity in this country and theyll make a fortune. Or if we can export. Have you seen the czar, by the way . I have not seen the czar. Youre talking about the ebola czar . Have you seen it . No. Just checking. I think hes in the winter palace. I thought you might have seen him. Hes in the winter palace. We have some motorcycles here. Coming into town. Shares of hess are also up 3 this morning as you referred to. Of course, all these stocks have come down rather shoarply over the last month. They all come down, then we find out who really did remember, we want Production Growth<\/a>. Eog has the best Production Growth<\/a> of any of the Oil Companies<\/a>. Thats starting to come back. Problem is, head and shoulders. Its the head and shoulders patterns. Youre going to hear that. The hedge funds, what do they do . They look at the charts, and the charts are bad. Panera, your old favorite. I had the call on panera. Why are we buying . Very easy to understand. This is a company thats about panera too. We suggested on mad money this company was going to get killed when it reported. You had to start buying it. This company on the Conference Call<\/a> saying all the right things about 2015. Yes, theres some rawcost dairy, not so good. Dairy is coming down. Forget about dairy. Ask dominos pizza. So i think panera, down here youre going to get a lot of upgrades. And 2015 is going to be the year when panera 2. 0 takes over the country, and theyre good. No longer in a mosh pit. Dont be a dope. Hershey, not a great response to its quarterly numbers. Why dont you put out a release that says dont buy me . Im not kidding. You should be shorting dean foods if you believe these guys. I think dairy is going to come back next year. Grain price being down is good for dairy. In front of the biggest day of the year for candy. Its coming up friday. I know your kids arent little anymore, so youre not as focused on halloween. More focused on singles day. Singles day is november 11th. By the way, talking about alibaba, lets go there. I havent even taken a look. Its down a little bit. 98. 80. When you have ten firms come out and recommend a buy and goldman says neutral, are they siding with goldman or are they realizing, you know what, this was the most predictable recommendation series . Remember, its amazon versus ali baa be. One has good Revenue Growth<\/a> but not a lot of money. Incredible margin. Right, sorry. Amazon, Revenue Growth<\/a> and not much else. The other is no inventory, fabulous Revenue Growth<\/a>, fabulous earnings. Talk about investments endleen endle endlessly. Amazon is the poster child. They will keep doing it. We dont talk enough about what alibaba is doing with its cash. Theyre investing a lot. Theyre like also a venture capitalist. Theyre a onestopshop stock. Thats throwing money away from a lot of erothers in the group. Well, with a market cap approaching roughly that of walmart, you can imagine why. Were not talking about a Small Company<\/a> by any means. What movie will jack think about when this stock goes well above 100 . Forest gump from him and the bodyguard. Old yeller . Could be. Maybe he hasnt seen that one. I would bet shane . Come back, shane. Alan lad, right . Wow. Oh, yeah. Only 54. There you go. Got him beat. You know, its never good when the rocket blows up. I mention that with orbital sciences. That stock is down rather sharply. You want to keep that in mind. When the rocket blows up, not good. That wont affect the deal. Orb shares down over 14 . Unmanned. Thats why. Unmanned rocket exploded a few se seconds after liftoff in virginia. All right. Should we get to mr. Posani . Why not . Lets do that. Bob, take it away. Well, were being led dow is only up 25 points. Oil, exploration production, any of the midstream guys, mlps, theyre all moving big time right now. I want to note we got two days the trader belief is the two days going into the fed are almost always up days. That seems to be true. And were continuing to repeat that pattern. But this is all about seasonality. Everybodys passing around, slicing and dicing the last two months of the year a million different ways. Youve seen this before. Week before midterm elections, up 75 of the time. Thats been passed around all week here. Since 1928 ive seen numbers november and december up over 80 of the time. Depends how you slice and dice this. Then 25 of the buybacks occur in november and december. My point is, everybody is doing seasonality now as a justification for buying up the market. So you can say, sure, theyve got to sell off after the fed announcement because thats what they do. Theyre up in the two days going in, they sell off. Traders are arguing you got to move down then back up immediately on the seasonality play. Theres a lot of cross currents going on right now. Let me move on to oil because we are starting to get some of the Oil Companies<\/a> here. What everybody cares about is whats oil going to be like in q4 in 2015 . Thats all anybody cares about. The Companies Generally<\/a> are shying away from making those kinds of projections. Hess had very good numbers. They said lower realized crude oil prices were the main reason their net income declined. That makes a lot of sense. Thats kind of obvious. Average selling prices for crude down 8 . They were one of the few people that came out and said this. From a year ago. That includes the effects of hedging. Thats interesting. Not Many Companies<\/a> have ever separated this out. Their prices are down 8 , including the effects of hedging. Remember, the big drops were still in this quarter, in this month, rather, in october. So that was a very revealing comment. Remember, hess went, what was it, 95 to 75. Now its back to 82 or 83. Still not all the way back. Most of the companies arent saying anything about where crude oil is going. Phillips 66, they had a great number, a great beat. They were quiet about where oil will be in fourth quarter. Generally not commenting here. Theres a lot of other companies to report. So far what i see from them, no major changes to capital expenditures. That obviously is going to affect the oil services company. Nothing there. Everybody seems hopeful oil is going to drift back into the 90s. The consensus price for west texas intermediate right no uh is in the low 90s. Were in the low 80s. So somebodys wrong. But thats why analysts are taking down their numbers for these companies. They think oil is going to stay down here in the low 80s and possibly the 70s. Well see whos right about this. By the way, you want indication that things are less worrisome than a while ago . Shell midstream partners, this is a big mlp that shell owns. They own pipelines. 40 million shares at 23. Holy cow. It was 19 to 21. They own oil pipelines. There was worry this thing was going to be a mess if we had oil continuing to decline. This is a sign of real confidence here and a big sigh of relief for the mlp and oil industry. This is the biggest mlp ipo of the year. Were still waiting for it here. 33 to 36 are the indications now. Speaking of ipos, the etf for the ipos, that Renaissance Capital<\/a> one, has made a nice comeback. Their Biggest Holding<\/a> is alibaba. Alibaba going to 100 is a big hope to those kinds of companies. Finally, david, before i toss to you, marriotts numbers were absolutely incredible. Revenue up the . Room rates at 5 . Theyre getting more people in the rooms, and theyre charging more. This is a fantastic number. Marriott, i think this is an historic high for marriott. I believe that is 73. 97. Finally, eaton did okay, but they talked about things being a little slower over in europe. Guys, back to you. All right. Thanks, bob. I have eaton on tonight, i want to point out. This was the first good quarter. Stocks up because margin expansion, a lot of different areas. Aerospace was really good. Getting good numbers. This is finally good. Europes been weak for them for a long time. This is the reason the stock is up, because they didnt blow it. We ran the animation for the faber report. I more or less want to talk to you about it today. American Realty Capital<\/a> properties. This is one of the disasters du jour. A lot of fear here certainly about a company that says you can no longer rely on our previously issued Financial Statement<\/a>s. Weve also made some changes in our accounting personnel. This has been a you know, under the microscope to a certain extent. The executive chair was nick shores. Still is for now. Right. Not the ceo. David case the ceo. The key paragraph thats a concern, people, even though they did not restate gap, is that they believe the company incorrectly included certain amounts related to its noncontrolling interest in the calculation of adjusted funds from operations. Socalled affo. A nonu. S. Gap financial measure. As a result, they say they overstated affo for the periods in question for the three months ending march 31st, 2014. They believe the error was identified but intentionally not corrected. Other affo and Financial Statement<\/a> errors were intentionally made, resulting in an overstatement again of socalled adjusted funds from operations. One of the key metrics by which this companys progress is judged. So that is the paragraph that is very much concerning people when it comes to this stock. One has to wonder whether theyre going to get more active now. Red lobster. They did the red lobster deal, this company. May remember us mentioning it because they were the buyer, remember, of the real estate. Leasing it then back to red lobster. When i read that this morning, it was like your heart jumps out of your throat. Some of the words in there, the verbiage that they knew and did nothing just reminds you of some of the larger you always wonder for these cases. People will sell first, ask questions later. The concern theres more to come. They did not change their gap numbers. I know. But well see what happens. Yeah. But this is a pretty widely held name. Were not talking about a small were talking about a 12 million market cap, at least before today started. Now losing 20 of its value. You put that well. Ive been struggling over how to say it. You just put it much better. That was really good. Ive been saying all morning, how do i bring this one up . As a journalist, you try to figure out you just put it right. I dont know how much more there is to be said other than way wow. All right. Well head to the bond pits and Rick Santelli<\/a>. Lets throw up an intraday of tenyear note yield. Were moving through a very important zone. Yesterdays highs. With the fed meeting and statements, second day of course today, traders are a little trigger happy. So the fact that were moving above yesterdays high yield is something to Pay Attention<\/a> to. If you open the chart up a bit, you know, youll see that were close to threeweek highs. First, look at the difference between the twoday of that ten you just looked at here and the twoday of boon. Obviously they correlate very well. But today, bit of a difference. Not anywhere near challenging yesterdays high yields high on the bunds. Lets go back to the tenyear, open the chart up to 10 1. Were welcoming the statement close to threeweek highs. And whats more, we can see a lot of discrimination in the yield curve. If you look at an august 1st chart of 5s to 30s, which is a highly played cross trade, spread trade on the yield curve, its basically been flat. Were basically flat after reaching the flattest level in six years, it is not flattening anymore. Its in a range. This is something to Pay Attention<\/a> to because the flattening was a surprise. Just like lower yields for 2014 was a surprise. Those are correlated. Lets look at august 1st charts of the hyg, which is the highyield etf. You can see that it rebounded so well from two weeks ago today exactly. That rout of stocks and the drop in yields on the 5th of october. But look at the credit differences. Theyre both rallying. Last chart dollar index since august 1st, after having a big rally, were also going a bit sideways, but good levels based on where we closed last year. Back to you, david. Thank you, Rick Santelli<\/a>. Hewlettpackard holding an event in new york city. Theyre going to have a new ceo. Its a long way away, the split into hp enterprise. Thats the head of printing, by the way. Oh, thats the fella from stanford. Smart guy. Heres what you need to know. The reason why 3d systems is going down is because theyre unveiling a 3d printer thats faster, cheaper, and for corporate coming out almost immediately. They also have a new enhanced printer. It is very much science fiction. Its science fiction. This is their first real entrance into the 3d marketplace. Yes, it is. And its going to be a big one. No holds barred. This thing is just very exciting. And weisler is going to join you on mad money tonight. Were going to look at things you can make quickly. Its a game changer. Im not kidding. It is the game changer in the 3d printing and also in this enhanced printing. Up next minority report, david. Thats all i need to tell you. That movie freaked me out. Up next, wings, football, profits with Buffalo Wild Wings<\/a> ceo sally smith. The franchise looking to maintain sales momentum as it prepares to raise menu prices amid higher chicken wing costs. Well be right back. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. I have a cold with terrible chest congestion. Better take something. Theraflu severe cold doesnt treat chest congestion. Really . New alkaseltzer plus day powder rushes relief to your worst cold symptoms plus chest congestion. Oh, what a relief it is. Here we go tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives you the tools and resources to get it right. Are you type e . Shares of bdubs sizzling this week after the Company Reported<\/a> better than expected Third Quarter<\/a> results. Joining us in first on cnbc is Buffalo Wild Wings<\/a> ceo sally smith. Always good to see you. Good morning, jim. People in community was very concerned about the rising price of wings. But you did something that i think took peoples breath away. You were able to took price. You put a 3 increase on your menu, and that pretty much has solved any of the worries about your margins, hasnt it . I think it has. That price effect will actually go into effect midnovember when we roll the new menu. And i think we had room to take price. We typically face rising wing prices in the fall. And this year is no different. But we see it being sustained over the first half of the year. So we felt that a price increase at this time was probably the right thing to do. Yeah. Now, lets get to whats really driving things, nfl. Youve got more thursday games. You have fantasy. I was curious to know, do you also have people playing fan duel at Buffalo Wild Wings<\/a> . Well, you know, we unveiled a new proprietary game called game break. You request load the app on your phone, android or ios. You can play it on your tablets in restaurant. And it actually there are three different games. And we do think thats helping propel sales as well. Can you give me a sense also about the importance im trying to build it into my model of pizza rev because suddenly heres a business that was a Small Business<\/a> in the time since we started talking about this that now 19 stores is this going to be a big National Rollout<\/a> . And im missing the point that Buffalo Wild Wings<\/a> is incubating a whole new idea under its roof . I think theres a couple things. We look at our investment in emerging brands which now include two. Pizza rev out of los angeles and rusty taco out of dallas as a longterm strategy. With the thought that if we invest now, help them grow, because weve done it before, that gives us the opportunity to have another Buffalo Wild Wings<\/a>type concept in our portfolio. We think that both pizza and tacos certainly play to the American Public<\/a> and taste profiles, and were excited about both brands. Okay, sally. Also, i wanted to ask you, your decision to be able to have this captains, which we talked about a lot of time, you were spending a lot about having captains in the store. It looks like thats now also done. Wont that also produce better margins in 2015 . We have made an investment in labor this last year by rolling the captains. Auto well have them in all Company Restaurants<\/a> by i think the end of this month. And we do believe that well start to leverage on labor in 2015. I think that and we believe and our Analysis Shows<\/a> that having the captains in place really helps create that unique guest experience, gets the guest to come back in, stay longer and probably spend a little bit more. Well, it makes all the sense in the world. I see your revenues going higher. Thats exactly what i want in a growth stock. Thank you so much, sally smith, who is the president and ceo of Buffalo Wild Wings<\/a>. Jim, thank you. Good to talk to you. Always interesting to hear from her. Only up 2 this year, so probably has more room. Up in exstop trading with jim. Plus, a big announcement. Weve kind of already you know, previewed that. Big announcement killed statuses when i mentioned 3d systems. Squawk on the streets coming right back. Being a keen observer of the world has gotten you far, but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. This guy could take down your entire company. H . Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Its a fresh approach on education superintendent of public instruction Tom Torlakson<\/a>s blueprint for great schools. Torlaksons blueprint outlines how investing in our schools will reduce class sizes, bring back music and art, and provide a wellrounded education. And torlaksons plan calls for more parental involvement. Spending decisions about our education dollars should be made by parents and teachers, not by politicians. Tell Tom Torlakson<\/a> to keep fighting for a plan that invests in our public schools. Its time for cramer and stop trading. Often they ask me what people do in their spare time. I do often ask you that. You always accuse me of shopping. I dont accuse you. I recognize that you do a lot of shopping. Ockay, i do. Joss main the other day. The one thing i dont do enough of is play video games. So therefore im out of the mainstream. If you look at Electronics Arts<\/a> today, ea, this was a struggling company for a long time. This has got football, its got soccer. This Company Reported<\/a> 73 cents per share. Thats looking for about 55 cents. Mobile and tablet. Mobile and tablet. So they are succeeding in making that transition . Theyve made it. Now, i remember four or five years ago when i thought that they couldnt, but they really have. Facebook has figured it out. Google has figured it out. Electronic arts has figured it out and twitter not yet making money on it. These guys have figured out mobile. And Electronic Arts<\/a> ive got to tell you, this is a very wellrun company and very wellrun industry. So gaming is so important. You know, i go back to what microsoft said. They didnt do enough. Microsoft did not do the kind of call. That stock should be much higher because xbox is often the key to a lot of these things. On mobile, they figured it out. Youve got to hand it to some of these managers because that was doubted. People didnt this think that they would be. And the tablet, so unsung because tim cooks numbers werent so great for the tablet in terms of growth at apple is a device thats well loved in this country, as will be apple pay. I didnt get to that but walgreens taking share. The paper saying rite aid and cvs is going to win. Wrong. The battle going on there. By the way, on mad, youre going to have dion weisley. We have a look now at that 3d printer. I dont know if we have it theyre going to recreate me. Theyre going to recreate me. Im actually not kidding. They are. You can do anything with this stuff. There it is. And they also have an enhanced printer. Speaking of machines that are incredibly cool, i have polaris on tonight, pii. Youll see much of the materials. Talking about atvs. And then ive eaton. Remember i said first good quarter in a long time. The hp thing like i told you, its very cool. Youve got to watch tonight. Youve got to watch every night. Every night. Right. Every night. Every night. World series, they finish that thing yet . Game seven. Maybe a few people will watch. Its like the most important thing in america, american pastime. Past being the key part of that. I like the royals. Thats kjim cramer. Theyre still after me. Get to the terminal across town. Are all the green lights you . No. Its called grid iq. The 4 51 is leaving at 4 51. They cut the power. Itll fix itself. Powers back on. Quick thinking traffic lights and self correcting power grids make the world predictable. Thrillingly predictable. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com an Unprecedented Program<\/a> arting busithat partners businesses with universities across the state. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov twhat do i do . You need to catch the 4 10 huh . The Equipment Tracking<\/a> system will get you to the loading dock. There should be a truck leaving now. I got it. Now jump off the bridge. What . In 3. 2. 1. Are you kidding me . Go. Right on time. Right now, over 20,000 trains are running reliably. We call that predictable. Thrillingly predictable. Are we out of the woods yet a fed decision on Interest Rate<\/a>s coming in just a few hours. But will there be an end to qe . What to expect. Plus, facebook without a lot of friends. Today on wall street. Shares down sharply after Third Quarter<\/a> results. Find out what you should be doing with that stock today. And billionaire and real estate mogul rick caruso joins us live here at post 9 for an exclusive interview. The Federal Reserve<\/a> set to deliver a decision to Interest Rate<\/a>s in just a few hours. Will it be the end of qe . Cnbc senior economics reporter Steve Liesman<\/a> has more on what we can expect. The end of an era, steve. Absolutely, sara. And a pretty good certainty its going to end. Two years and 1. 6 trillion later. Fed set to end the third round of bond purchases known as quantitative easing. All of that lost in the wake of the great financial crisis. So the Balance Sheet<\/a> standing at 4. 4 trillion. That compared to under a trillion dollars before the crisis and the various rounds of quantitative easing. Just because qe3 is ending doesnt mean its effects go away. The fed said its going to hold on to the current Balance Sheet<\/a> at least until it starts raise Interest Rate<\/a>s, and thats not expected until next summer. The fed has purchased trillion dollars of longterm maturities and mortgagebacked securities. Now has an average duration of about seven years. It will remain that way while it reinvests for securities that are rolling off. So all that longer duration paper is going to remain off the market. This should continue to make loan rates lower than they otherwise would be if the fed were to sell them. That, in turn, should support the stock market since investors will have to choose between equities and lowyelleding riskfree securities. Reinvestments and after rates rise, thats what the fed says in its policy statement. The timing of the ending of the reinvestments or letting the Balance Sheet<\/a> wind down depends on the Economic Data<\/a> and there are no plans to sell mortgagebacked securities. Now, to be sure, some argue that its not the stock of assets that the fed owns that has an effect but the monthly buying or the flow. So its a stock versus flow argument. And well get a real test of that now that the fed is not buying any more securities. Simon . Steve, just before we let you go, so the statement comes out at 2 00. This time theres no News Conference<\/a> at 2 30. Does that mean we dont get a publication of the dots as to when members think Interest Rate<\/a>s will go . Right. You dont get dots until december, simon. Thats the next round of forecasts from the Federal Reserve<\/a>. And whats interesting about that is that the fed and the market are increasingly far apart. On where the fed believes Interest Rate<\/a>s will be or the fed funds rate will be and where the market believes. You saw the fed survey yesterday. Almost a percentage point between the two right now. Okay. Well pick that point up a little bit later. Steve for the moment, thank you very much. Lets bring in diane swann, senior manager with mazero financial and managing director and head of fixed income. Ladies, welcome to the program. Its nice to have you here. Thank you very much. Its nice to be here. All right. Diane, let me kick off with you. We should remember that through this market turmoil, we have risen about 9 on the s p 500 from the intraday lows. One of the major reasons, diane, for that is because James Bullard<\/a> suggested that qe would be extended. Now, nobody thinks qe is going to be extendeextended, but how handle that . Leave it hanging in the air as a possibility, or diane, are they fearful that they may be putting a put under the market which shouldnt be there . You know, at this stage of the game, theyre hemging their downside which means they leave a crack in the window open to additional qe, if necessary. Now, the threshold on that would be extremely high. It is, again, one of their few tools in their toolbox. If something were to fall apart. And of course, since weve had the last fed meeting, weve had more worries and concerns about low inflation in europe, deflation risks in europe, and low inflation in the united states. The fed welcomes lower prices at the pump. They dont welcome a deceleration in inflation which we also saw political backlash to when those c. O. L. A. S were set for 70 million recipients of everything from disabilities to veteran benefits. Its only 20 bucks a month for them. And for them, inflation is not as low as the overall measures. But, of course, that has gotten some exposure to the low inflation environment as well. Indeed. Margaret, let me pick up the point that we were making with steve, that theres no publication of the dots of when members think that rates are likely to go today because theres no News Conference<\/a>. Through the turmoil of the last two or three weeks, whats happened is the market, as steve referred to, has begun to discount, to move back the idea of Interest Rate<\/a> rises. Initially into 2016, now i think were at december. Now, i think that its fair comment that that is probably not where the fed is because theyre data dependent. Do they correct that today, in your belief, or do they leave it hanging in the air as perhaps a misconception . I think they leave it currently in the air. They have moved away from the datebased guidance. And the datebased guidance was pretty much june 2015 for the last two years. And while the market gyrated around that, it becomes more and more important, the changing in pricing of the date as we move closer and closer to the first tightening cycle. So we do think that the fed is on target for june 2015. We still think the risk is that its later. But ultimately, the pace is really going to be more important. I dont think the fed will give us any guidance with regard to that. Its all about the data. And midnext year is still quite some time away. We think the markets overpricing probably to the Downside Risks<\/a> with regard to inflation, with regard to the liftoff of the cycle. Right now, as you said, its pretty much september and october for the first liftoff thats priced. Its extremely gradual. The markets pricing 25 basis points every other meeting with a skip in early 2016. We actually dont get the real fed funds rate up to a zero zero real rate until early 2017. And its 28 months from now. So this is an extraordinarily long period of time until were while the fed is still very, very accommodative. Right. On this inflation, you guys have been talking about it, diane, what is does the Federal Reserve<\/a> do about the toolow inflation and the fact that its missing its target on 2 prices ridesing . It has been missing it for a long time. I mean, i think this is one of the issues were really going to be see highlighted today as opposed to labor market issues alone. Were worried about inflation being too low again. And this is one of the issues. I think one of the things the fed is worried about hedging against is that it is talking about gradualism. It has said were going to move gradually. Wed rather go too slow and overshoot. Charlie evans who will be voting next year has really made a point of that. John williams of the San Francisco<\/a> fed has also made a point of that. And the chair herself has made the point that its worse to have to raise rates and then lower rates again. That would leave the fed sort of bare and with fewer tools than to go too slowly. In fact, lets face it. The fed does not have in its owning if, you know, until very long out, actually 2 its target, let alone any higher which it has argued it should have a little overshooting. Diane, can i just ask you one quick question . Do you think the fed is psychologically damaged by the crisis . We talk a lot about Retail Investors<\/a> not coming back into the market. We talk a lot about bankers having tootight Lending Conditions<\/a> particularly on mortgages. To the point theyre scared that if they raise rates, they might have to come back to lower rates, is that an irrational terror do you think on their part . I dont think its irrational at all. Theyve got history behind them. You can hear everyone from ben bernanke who is now a past chair to janet yellen to many within the fed, Charlie Evans<\/a> made a speech about this. History has told us that those Central Banks<\/a> who tightened too soon have a lot of consequences that they then cannot deal with after a financial crisis. Really critical here. Markets are thinking about this being a normal recovery. I think markets have gotten the point now that the fed doesnt think of it as a normal recovery. And the biggest mistake they can make is repeat 1937, repeat the japanese situation or repeat many european missteps more recently, and they dont want to be there. Okay. Six years and counting. Thank you very much, diane swann and margaret kerens. Tune into street signs at 2 00. The end of qe may mean the fed stops buying bonds, but there may be other behindthescenes buyers. Kayla tausche is here at post 9 with that story. This was a concern about the Federal Reserve<\/a> exit. To your point you just made, simon, one of the fears is that if you take a big buyer out of the market, then prices of bonds fall, and yields rise a little bit too soon. But that fear might be a little premature because there is a big group of net buyers stepping into the market. And thats the banks. Take a look at the buying activity on behalf of u. S. Commercial banks. Just since the fed began its taper last december. You can see that chart is going up and to the right in a very decided fashion. Banks now hold more than 600 billion in treasuries and agency securities. If you add in mortgagebacked securities, the number is near 2 trillion according to data from the st. Louis fed. So why is this happening . You may think theyve been taking advantage of this years unexpected rally in bonds, but in fact, its actually a consequence of regulation. Ironically, the fed passed this year that goes into effect over the next two years. It requires banks to hold enough liquid, easytosell assets to cover 30 days of operations should their Balance Sheet<\/a> or the economy get into another bind. Treasuries count. So to kmcomply, banks need to stock up on cash and other liquid assets. Mortgagebacked securities, they dont count, so we have seen banks start taper down their positions in those. But for treasuries, just look at what bank of america has done. Last year at this time, it had 2. 8 billion in treasuries which might sound like a big number, but as of september 30th this year, that was nearly 58 billion. And theyre not stopping there. B of a cfo said it would keep buying treasuries as a way to actually manage their Interest Rate<\/a> risk. Now, roughly, onethird of the feds buying this month was in that duration the b of a was talking about. Though its average duration has been nine years. So at the very least, it means some of these effects of the fed leaving the market should be muted. Now, we also have some new regulation coming out of g20 leaders next month. And that could mean that now International Banks<\/a> start stepping up their bond buying, too. So we have a lot of buying thats going to be happening in the market even with the fed stepping away. Plus we havent seen lack of demand for u. S. Treasuries at all. Not in the least. Also we should mention they got the bet wrong. They derisked from treasuries in the belief that they would fall. Jamie dimon said it. Thats where they were, wasnt it . Just reversing that risk aversion. To a certain extent, yes, they did. They had outsized positions in other socalled safe assets, but now theyve realized, look, treasuries are the most beneficial to their Balance Sheet<\/a> in the long run, so thats where theyre going. So it shouldnt be a void. Kayla thanks. See you later. Up next, facebook falling sharply after warning of rising costs. So what should you be doing with the stock . Is it on sale . Down 6 . Rbcs mark maheney weighs in when we return. G synchrony fina. Bringing new meaning to the word, partnership. Banking. Loyalty. Analytics. Synchrony financial. Engage with us. What if we finally had that would be amazing. Hey, what if we took down this wall . What if this was my art studio . What if we were preapproved . Shut up from finding to financing, howd you do that . Zillow. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Firing its ceo yesterday over what some have called his solitary management style. According to the companys chairman. This just a day after zeebocker tried to dismiss speculation, essentially pleading for his job. It didnt work. Meg tirell has more on the story in new york. Reporter hi, david. This was a unanimous decision by the board saying the chairman is going to be the interim ceo. A search for the new ceo is already under way. Were hearing that this was a lot about cultural clashes. Some clashes in the management style not being communicative enough with the board. Theres been a lot of questions to the company about whether the next ceo will be french because Chris Viebacher<\/a> is canadian and german, not french. Some of the cultural clashes, some political issues happening there in terms of an outsider dealing with french culture, some layoffs in france, just sort of an insensitivity potentially to running a french company, kind of a jewel of trance. France. Weinberg saying theyre not necessarily looking for somebody french. Theyre just looking for the best executive they can find. Analysts downgrading the stock on uncertainty with the management situation, also with their diabetes franchise. Weinberg trying to make clear that the strategy is the same. They wont let this interrupt business operation. Theyre not going to let this be a hiccup for them. Clearly a lot of uncertainty about whats going on at sanofi now. I was just going to point out, this is also the difference between free markets and capitalism in that youve and its about pricing of diabetes drugs in this country. Youve got a duopoly. If theres only two of you in the market, you should be able to resist that pressure. Thats an issue being discussed for why hes out. People say thats a systemic issue. That shouldnt be the reason the ceo necessarily gets fired. Thats why theyre pointing more toward cultural issues. Interestingly, it was just a year ago that we saw a similar situation at teva. Thats an Israeli Company<\/a> and a very Important Company<\/a> to israel. With a ceo who was not israeli getting ousted there. Similar situations here. Although, ive heard, and weinberg pushed back on that, meg, a bit saying it was much more performance issues and promises not met from wiebacher than anything to do with whether he was french or not. Thats what they were saying and that it was a kmaukz issue. I think folks really believe that. There probably were some sort of political clashes going on with personalities, respecting french culture and that the next person really needs to understand that. Yeah. Never good when you also proposition the board and say you want your job and then try and split them. Thats when they kind of come together. Meg, thank you very much. For the drama at sanofi. Meantime, facebook shares are tanking right now, despite an earnings beat and hitting an alltime high this week. The stock now falling almost 6 . Its off the worst levels of the session. When it was down 10 , that weak guide ens spooked investors. Ceo Mark Zuckerberg<\/a> spoke about facebooks longterm strategy on the call last night. Have a listen. One thing that im particularly pleased about is that while were investing aggressively and making progress towards our big, longterm goals, we also execute well against our nearterm priorities. Should you be buying . Lets bring in managing director at rbc. Mark, are you as concerned as other investors are right now about the spending binge that facebook is on . No, actually, our concerns been the opposite. This is the company thats been running very high margins, you know, 50 , 55 ebitda margins. Our concern is that they werent investing enough. So we think theyre doing the right thing here. Both near term and long term in terms of increasing their level of investments in 2015. These margins should come down. And theyve got a lot of interesting growth opportunities. Theres video, instagram, facebook app network, ad network, and then finally whats app. Theyre doing the right thing. Were buyers of this dip for that reason. So youre not worried about costs rising as much as 70 next year. You say thats the prudent thing to do. Yeah. The 50 to 70 . Our guess is by the end of the day that that increase in op ex spend next year, 70 , youre talking about spending 3 billion more, i think its going to be hard for them to hire and spend that quickly. Our guess is more 5 and thats what were assuming in our estimates. There were a lot of dazzling data. Mobile continues to be impressive. 66 ad revenue from 49 last year from virtually zero at the 2012 ipo. To me, it can really keep up with these fastchanging Market Dynamics<\/a> that a lot of the tech ceos talk about. I think youre absolutely right. Look, this was the major overhang at the time of the ipo. It took them 12 to 18 months to solve it. They have. This is one of the two best plays on mobile advertising out there in the internet. Google being the other one. And just step back. Forget the guidance. Look at the internal look at the trends this company is putting up. 63 yooefroveryear ad Revenue Growth<\/a>. Theres no change in the growth here at this company. Its a good, solid business. Actually, its one of the best growth businesses. And they just gave you one of the cleanest quarters weve seen to date in internet land. Its why we like the stock here. Well, there should be a change in growth, shouldnt there . I mean, just talk me through the valuation that youve got here at 92, mark. It says youve got 92 here. Yeah. On the one hand, were guessing at whether theyre going to employ 4,000 or 5,000 more people next year. You say theyll have difficulty doing that. On the other hand, how can you possibly quantify the step change that that investment will make in future earnings returns . Oh, youre right. Its a very hard thing to do, unless you have a strong point of view about what the end markets are. We published this report. Where we really looked at each of those four new areas that theyre going into. Auto play, video ads, et cetera. We think as a bucket, thats 3 billion in incremental revenue that can be generated in 15. I dont think op ex is going to grow. Then youve got additional growth levers beyond that. I guess thats where the conviction comes from. We know what the end markets are. We think theyre appropriately investing against those. You joined us on twitter, too, which i know you like. And what stands out is that twitter also came in, wall street expectations. It met. And yet the stock sold off sharply. Are the expectations just getting a little too high with these social names, twitter and facebook . I will tell you, ill correct on you one thing. We did downgrade twitter. The metrics are moving in the wrong direction at twitter. Theyre moving in the right direction at facebook. The valuations much more demanding at twitter than it is at facebook. You know, facebook gives you 30 to 40 very likely Earnings Growth<\/a> over the next three years. We think the markets should be willing to spend 30, 35 times earnings for that growth, right in line with the pe growth rate. Facebook is the best way to play social media. Were not buyers of twitter here. So you did not like the quarter twitter put out. Finally, 1. 35 billion Monthly Average<\/a> users. How big can that number get for facebook just when we thought the market was saturated . I want to be reasonable. Its still growing year over year. That growth rates been steadily decelerating. In this case the law of massive numbers. Whats key is look at engagement trends. This is different than twitter. Youre seeing more and more people use facebook more and more often. The number of monthly users on a daily basis is rising. Thats the real positive usage indicator for facebook. Its one of the reasons to buy the stock here. Were buyers. And sellers of twitter. Mark mahaney, thanks. Rbc capital. Up next on the program, how uber and its ceo are transforming road transportation around the globe. And later in the show, billionaire and real estate mogul rick caruso will join us live for an exclusive interview. Find out what hes telling the industry today about the state of the economy and how to win in retail. The cnbc realtime market snapshot. If youre up there, i could use some help. Smart sarah. Seeking guidance. Just like with your investments. That sets you apart. It does . It does. Youre type e. And seeking another perspective is what type e s do. Oh, and your next handhold. Is there. You dont have to go it alone. E trade gives you the support and guidance to make informed decisions. Are you type e . Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband<\/a> network and Custom Communications<\/a> solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. You can bring back from a trip around the world. But you cant always bring back customer data. Because many customers dont like it when their data moves around. Can i go now . If youre going to do business globally, you need a cloud that can keep your data where it needs to be. Today, theres a new way to work and its made with ibm. I have 40,ney do you have in your pocket right now . 21. Could something that small make an impact on something as big as your retirement . I dont think so. Well if you start putting that towards your retirement every week and let it grow over time, for twenty to thirty years, that retirement challenge might not seem so big after all. For that moment, where right place meets right time. And when i find it i go for it. announcer at scottrade, we share your passion for trading. Thats why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so youre always connected, wherever you are. Because at scottrade, our passion is to power yours. Regular viewers will toe this year marks the 25th anniversary of cnbc. Weve been revealing some of the biggest a cons and leaders in the world of business both in the past and for the future. Andrew ross sorkin is back at hq with more on that. Hi, andrew. Thank you, simon. One of the people we expect to be talking about in the next 25 years is travis calanick, ceo and founder of uber. Of course, the company that is upending the taxi and limousine business. But really creating a new sharing economy and possibly upending many more businesses as well. Heres travis in his own words. Our motto says it all. Were everyones private driver. Basically a smartphone app. You push a button. In five minutes, town carols up, takes you where you want to go. You can have a really big impact with a really creative idea. But it has to stand out. Right . So for us, pushing a button and a rolls royce ghost coming and picking you up, thats stand out. And people tweet about that. People get excited about that. Were still in the process of finding out how small a Community Uber<\/a> will work in. We have gone to cities as small as 90,000 people, and uber does great. As were moving out to smaller and smaller places, were going to find out how small we can go. As long as we can get the price pretty low, we might be able to get to communities of 20,000, 30,000 people. Any successful business is going to have clones. And thats part of the situation. They keep you honest. They keep you competitive. The last company i did was crazy stressful because i didnt have any money. And i was always trying to make it work. And i like to say i got 100 nos a day for 6 1 2 years straight, which is hundreds of thousands of nos. This is a different kind of stress. And so you have to find ways to find that center, to find balance and to find sanity because were getting bigger. And people look at us that way. We have to find that new balance. Right now thats stressful. And were working hard to find it. Simon, uber already worth 18 billion. But it does have competition in the form of lift and, of course, then there are regulators and regulations. A number of cities trying to keep uber from breaking through. Nonetheless, whatever happens to uber, we do imagine that what Travis Kalanick<\/a> has done is going to change the face of business one way or another over the next 25 years. True disrupter. Andrew, thank you. Thank you. Lets get to Jackie Deangelis<\/a> with breaking news at the nymex. Good morning, sara. Oil prices continuing to rise after we got a lessthanexpected inventory build from the department of energy for weekly crude stocks for last week. The number, 2. 1 million barrels. Traders were expecting around 4. And we are seeing prices rise, about 92 cents on the day. Traders also telling me theres a lot of technical buy here. We did dip under 80, that got people to get into the market. Also spurring Short Covering<\/a> there. But a couple of other factors to consider. You did have the opec secretarygeneral saying not to panic about prices. They are making a push to try to push the u. S. Producers to cut supply. And traders think that we may see that in the coming weeks. So the builds weve been seeing may go away. Another thing, john kildoff pointing out we did get a decline here in gasoline and also the distillates. So that bearishness is working on the market here and offsetting what were seeing in crude. Pardon me, that bullishness is offsetting the bearishness in crude and sending those prices higher. Again, crude right now, 82. 35. Sara, back to you. Thanks for those breaking numbers at the nymex, jackie. Straight ahead, he is the ceo of one of the largest privately held Real Estate Companies<\/a> in the united states, owns the famous grove in l. A. And other luxury shopping properties. Not to mention hes a billionaire. Rick caruso joins us next after the break. Means keeping seven billion ctransactions flowing. G, and when weather hits, its data mayhem. But airlines running hp endtoend solutions are always calm during a storm. So if your business deals with the unexpected, hp big data and Cloud Solutions<\/a> make sure you always know whats coming and are ready for it. Make it matter. Our next guest has been widely quoted as deeming the model of the traditional mall extinct and certainly has a thing or two to say about the future of retail. Retail and real estate mogul billionaire and expert rick caruso, founder and ceo of caruso affiliated, one of the worlds most successful Lifestyle Developers<\/a> of residential retail and commercial properties. The grove in l. A. Americana here on long island. Luxury retail. And glendale, california, the americana. In glendale as well. What does a mall look like in ten years, rick . I think the mall is evolving quickly. It cant stay the way it is today. I mean, ive been very open about the fact that an indoor mall, unless it gets reinvented, i think goes away. You already see that happening. Theres a huge move by retailers to the street to open air. They want to be able to connect with their consumers, have a broughter experience. And i think were going to see a lot of the malls closing up, and theres going to be a reuse of malls. I think its going to really narrow down. The existential threat facing retail with the surge in Online Shopping<\/a>. Still, 94 of retail sales in this country are brick and mortar. So how do you separate the winners from the losers as this shift evolves . First of all, i dont think Online Shopping<\/a> is going to hurt brick and mortar. I think brick and mortar is alive and well and its going to continue to grow. What you do see happening is online opening stores. And youre going to see more of that. Theres going to be a convergence. I think the buzzword in today is hybrid. Retail is all about being a hybrid. A car is about being a hybrid. Youre going to have great retailers are going to have unique experiential brickandmortar stores along with great online sites. Can you name names of stores, retailers, that you think are doing a good job at bridging this gap . You take a look at the grove. Were opening up revolve. Its an incredibly Popular Online<\/a> site opening its first brick and mortar at the grove. Amazon is opening a brick and mortar right here in new york, right . Let me drill down the presentation on womens wear daily. You dont believe that the battle is between ecommerce and bricks and mortar. Its been retailers and merchants. I agree. Its what you do with that space that wins ultimately. Precisely. Talk me through that. Being a storekeeper, i think all of us have had experience in restaurants or retail where the person knows you, remembers you, understands what you like and what you dont like. What actually greets you, the store itself has a great experience to it. Great retailers are more storekeepers and merchants so theres an experience. A broad example is from early time cavemen liked coming around the fire. There was a sense of community. People still want to do that. I think fundamentally, people like connecting. And retailers that connect will do extremely well. My question for you would be whether theres enough talent in retail. Or theres enough opportunity for the talent to come through at the store level for that to happen. Because a lot of these guys cant in apparel cant even find a decent ceo. They keep going back to the one they had before. Might be tougher to find a decent ceo and salespeople. Maybe they should look at their great salespeople to become ceos. Youve got restoration, hardware thats reinvented the box. Youve got merchants like tory burch. Go to the nordstrom at the grove that just got remodeled. The Nordstrom Family<\/a> continues to resolve and reinvent the box. Inside the four walls for brick and mortar becomes critically important and powerful. It used to be that the mall was a place to provide that sense of community. People would go there in part to shop together and to see their friends conceivably, suburban communities. Why are you so negative on the future of that form factor, if you will, for retail, and what will these things become if, in fact, youre right . First of all, its not within human nature to go inside a box and shop. People want sunlight and trees and see people and energy and experience. Name an indoor mall anywhere in the world that does more in sales per square foot than a great street in the same city. Name a mall in new york that does more per square foot than fifth avenue or madison. Maybe that Columbus Circle<\/a> mall probably does pretty well. Its small. Its very small. But it doesnt do as much volume as fifth avenue or madison avenue. Theres an energy to it. Last night i was at bryant park. People are out. The evenings great. Theyre on the street. Theres a sense of activity and connection. Thats instinctively human nature. That retail connection. Thats a bigger trend towards urban living. Its a box of retail. Its a carnival of retail. Theres nothing natural about it. Isnt there a bigger problem that we see with business at the moment . For years, for decades its driven for volume. Right. If you look at whats happening with mcdonalds or p g, theyre looking to cut down the offering to customers. Right. And actually, what seems to be winning at the street level is divergence. Each retailer wants Something Different<\/a> in their store. And the two are clashes horribly. Theyre going to different directions. But the future of retail is back to what it used to be. Smaller stores, more curated, a better experience, differentiate yourself. Thats where retails going. Not more stores. I dont think more stores mean more sales. I think Better Stores<\/a> mean more sales. Speaking of the future, we just profiled uber as one of the cnbc next 25 disrupters. I understand you have a new partnership when it comes to your malls and uber. So this is a good example where were taking the lead on that Customer Experience<\/a> because the one thing that we all need, that we dont have and cant buy is time. And as a developer, if i can give you back time, i create that emotional connection. Thats why we have concierge. Uber, you hit the app, we pick you up, you go to the grove or the americana, and we bring you home and youre my guest. I pick up the tab. Whats the future of rick caruso . You didnt get the dodgers. You didnt get the clippers. Is there another sports team you have your eye on . I dont know. Can i be a regular here . Yes. Okay, thats my future. You can. All right. Thanks for having me. Thanks very much. Coming up on the program, blackberry announcing the release of the classic for december. Squawk alley will have an exclusive interview with john chen with the product a little later on. Well be right back. You know how fast you were going . About 55. Where you headed at such an appropriate speed . Across the country to enhance the nations most reliable 4g lte network. Hows it working for ya . Better than ever. Howd you do it . Added cell sites. Increased capacity. And your point is. So you can download music, games, and directions for the road when you need them. Whos this guy . Oh thats charlie. You ever put pepper spray on your burrito . I like it spicy but not like uggggh spicy. He always like this . You have no idea. At t. The nations most reliable 4g lte network. Hi, are we still on for tomorrow . Tomorrow. Quick look at the weather. Nice day, beautiful tomorrow. Tomorrow is full of promise. We can come back tomorrrow. And we promise to keep it that way. Driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. What a day. Cant wait til tomorrow. E financial noise financial noise financial noise financial noise take a look at the utilities sector. Continuing to move higher. In fact, its one of the best performing sectors on the s p so far today. With the dow up 22. Lets send it over to dom for more. All right, simon. Up by about a quarter percent to far. Its the third best performing sector. If you look at some of the star performers today, pg e, also American Electric<\/a> power, nrg energy and entergy up from a percent to almost 3 on the trade. Its also worth noting that the dow jones utilities index is near record highs as well on the day. Utilities, sara, certainly a sector to focus on especially on a fed day when Interest Rate<\/a>s are front and center. Remember, utilities one of those sectors thats very interestrate sensitive. With that Interest Rate<\/a> sensitivity in mind, lets go to chicago to the cme group, Rick Santelli<\/a> with the santelli exchange. Reporter thank you and good morning, sara. Id like to welcome my guest. Dr. Lacy, thanks for taking the time this morning. Glad to do it, rick. All right, im going to ask you a simple question first. Given the information we currently know today, do you think the fed will raise rates in 2015 . No, i dont. We have a lot of company in that camp, i guess. All right. Now, considering that ive seen three economists on our channel, im talking good economists that have Great Respect<\/a> for, but withdraw names. Talking about thank goodness, you though, with the bumps in the Economic Growth<\/a> weve had the last several years, good thing the fed didnt raise rates because oh, my gosh, they might have had to lower them again dr. Lacy, what is wrong theyre not really data dependent, then, if we make those statements. Theyre weak data dependent. Whats wrong with the symmetric approach where you move subtle changes in Monetary Policy<\/a> based on overnight lending rates up and down depending on the data . Whats the matter with that . Well, basically, theres nothing wrong with it. As a matter of fact, one of the problems with Monetary Policy<\/a> is that the fed, by its past policy errors, has basically put themselves out of business. They allowed a massive buildup in private debt to occur over the last 20 years. Theyve spawned this buy now, pay later approach of the american consumer. But there becomes a point when the pay later overwhelms the buy now. And when that happens, Monetary Policy<\/a> is basically ineffective. The Federal Reserve<\/a> can make statements. They can hold press conferences. They can do this and that. But Monetary Policy<\/a> is almost impotent. Theres nothing they can do im going to make a statement, dr. Lacy. You tell me why it is or isnt correct. The 2014 fiscal budget deficit is going to only be about a half trillion dollars. So were on the right path. Is that an accurate statement . No, were not on the right path. Were going to have the numbers that you cited for this year, thats correct. But the problem is that we have very adverse demographics over the next 12 to 14 years. And as the demands and requirements to make Social Security<\/a> and medicare payments and even payments under the Affordable Care<\/a> act begin to mount as aging baby boomers retire, the federal debt is going to move significantly higher. Were very illprepared for what the future is going to bring. Last question. When it comes to whats going on in the indebtedness as a function of gdp, youve recently called it debt sclerosis. In the last 15 seconds, summarize why debt sclerosis is something we need to worry about. Well, debt is an increase in current spending in lieu of a decline in future spending. And the fact of the matter is, the entire world is now very heavily leveraged. In 2008, in the years leading up to 2008, the debt increase was in the advanced economies particular to the united states. None of them have deleveraged to any significant degree. And since 2008, weve had a massive leveraging in china and the emerging economies, and for you the wornow the world is significantly more leveraged than 2008, significantly more leveraged at any time in our future, and that points to weak growth, low inflation. Thank you very much for taking the time this fed day morning. Thanks again. Simon, its all yours. Thank you very much, rick. Big day on cnbc. Up next on the program, a wave of analysts initiating coverage on alibaba this morning. Well talk to one who calls the stock a buy after this break. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Just want to mention a couple big movers this morning. One down, one up. Starting with the blood bath. Arcp. Triple net lease. Had a 12 million market value. Not anymore. Losing 26 after the company said do not rely on our previously issued Financial Statement<\/a>s and talks about intentionally but not corrected errors the company has found. Fiat chrysler, the company spans to spin off ferrari. 10 sold to the public. 90 distributed to shareholders. Got back to phil. Hard to say exactly what the value is but probably call it around 6 billion. Question, do you think they are trying to smoke out a trade buyer for 6 or 7 billion dollars to make a Capital Increase<\/a> for the Group Overall<\/a> less likely . I dont know the answer. Another company stepping in and buying the entire thing. Absolutely. Look at the cash gm is sitting on. They could buy it like that. Several phones initiating coverage of alibaba. A number rating the chinese ecommerce giant. Lets bring in ken. Why is it a buy . And why a target. Alibabas business has a lot of structural advantages that remind us a lot of google, amazon, paypal. And on the enterprise side. When you look at the china. Its a big opportunity rising incomes. But i also think there is opportunity within china seeing greater broad band connectivity in lower tier cities and mobile predominate. Interesting. What about the international opportunity. Jack ma is off to hollywood to broker deals. What do you think they will do here . I think when you think about what they represent they are very much about efficient connection between buyer and seller. If you were a seller of content and looking for an audience, i think what they are building there in terms of integration and data they have, i think it does leverage well into other vertic verticals. Content is one. And there is a natural connection between content and commerce and we see that here. I think for them it is still early to view that as their bigger opportunity. But if you think about where they stand in terms of building a efficient marketing channel for their sellers and ultimately helping them even manage their supply change it is something you dont see in the west very often. You are not alone by the way. Even if you are impressed by the numbers and valuation metrics just how big and profit blg this company is. What do you tell an american investor that is spooked by the lack of transparency on Regulatory Risk<\/a> and markets in china . There is certainly a protectionist layer in terms of Foreign Ownership<\/a> of alibaba. But think i there is also a protectionist interest around competitive hainterest as well. Which i think can benefit. They off set one another somewhat. I think investors should be at least aware there is an outer layer of separated control. And you do get that to some extent even with the Internet Companies<\/a> here. So i i dont think they are competely new to that concept. But again when you look at the ability for other competitors to come into china to challenge them, whether a amazon or google or other i think alibaba benefits from that. It was a busy night because facebook also came out. Talk me through where you are on that. We had mark muhaney and he was as bullish as ever. How do you feel. I think it came a little earlier than expecting as well as a little outsized versus what we were expecting. But when you think about what they are investing in particularly on the ad tech side. They really are moving i think the Industry Forward<\/a> in Way Investors<\/a> should be excited about. And i think particularly when you think about that higher op ex number they gave for 2015, assuming they are successful and handle a lot of the data complexity issues that advertisers are having to deal with and they roll out better formats and so forth, well, they are likely to place those ads on Third Party Sites<\/a> too. Not just facebook but partner sights and that would drive higher acquisition costs and push them toward the higher owned it have guidance but at the same time gave them a big revenue opportunity. Ken nice to see you. Take care. Over to jon fortt with a look at whats coming up next on squawk alley lee. Jon. A big show coming up. Blackberry ceo john chen. Were going to cover why the blackberry classic wont be another fire phone. And finally the Google Wallet<\/a> creator and the future of payments. Ng. Ng. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. I just talked to ups. They got expert advise, special discounts, new technologies. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome all awesome i love logistics. Can you start tomorrow . Yes sir. Alright. Lets share the news tomorrow. Today we failrly busy. Tomorrow were booked solid. We close on the house tomorrow. I want one of these opened up. Because tomorow we go live. Its a day full of promise. And often, that day arrives by train. Big day today . Even bigger one tomorrow. When csx trains move forward, so does the rest of the economy. Csx. How tomorrow moves. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com good morning. 8 00 a. M. At facebook headquarters, 11 00 a. M. Here on wall street and squawk alley is live. Welcome to squawk alley on this wednesday morning. Joining us, larry chang. One of the First Venture<\/a> capitalists to talk with Mark Zuckerberg<\/a> in the early days of facebook. Lance, good to have you here. We have to start with facebook and i want to start with the head line from the New York Times<\/a> in just a second. But shares have been selling off today despite","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia904705.us.archive.org\/18\/items\/CNBC_20141029_130000_Squawk_on_the_Street\/CNBC_20141029_130000_Squawk_on_the_Street.thumbs\/CNBC_20141029_130000_Squawk_on_the_Street_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240620T12:35:10+00:00"}