Twoday fed meeting begins tomorrow. Crude prices, bouncing off the new 5 1 2 year lows. Looking to come back since their worst week since 2012. Consortium led by bc led by petsmart. Latest on the continuing hostage situation in sydney, australia. Futures on the rise, so are crude prices which fell to 5 1 2 year lows stock markets seven week winning streak ended with a thud and the selloff on friday. Last week the dow fell 3. 8 . S p down 3. 5 , almost every major average, jim, every major sector, was down except utilities, barely got into the green for the week. I went over the chart this weekend and they were amazing. The number of companies, stocks rolling over here, maybe it can be reversed but i see the oil futures hanging by a thread. We go to 57, 56, s p futures will be down. Were just not in a moment right now where people are actually distinguishing between winners and losers. Utility move was part because people feel u. S. Will need more power because they are bond market equivalents and worldwide recession, except for us. You move into utilities. And i found the move to be kind of stunning, because you have a lot of utilities that had like 3 yield that were going for everything traded as if the recession is back if this country. And thats just not true. Right. What might be true in russia soon. The ruble. The ruble today at 60. People are tweeting pictures of ruble hats, ruble 60 hats. Its a real country. Yeah. Its not a lot of nuclear weapons, big army. Yeah. No. Wed feel more comfortable if it was another country. This is a dictatorship right now, its not teetering, theres no sign of any civil unrest there. No, no, i think the question becomes, does the leader do something unexpected . Perhaps something that is destabilizing, beyond whats already been done. That can be said not necessarily for leaders in other countries impacted by the enormous decrease in the price of oil, but nonetheless how destabilizing will it be if brazil has issues in terms of its fiscal reality, petrobras and bali, most important countries, they argue. They go down almost every day. Could be worse than oil and iron ore or mexico. Look whats going on with the peso. Mexicos been destroyed. Mexicos just i mean this is a Strong Economy thats based on a lot of changes, structural change that are good but people perceive it as being a giant oil company and its not. The russian thing, its part and parcel with the idea were not going to get anything from merkel. We get theyre not using their balance sheet. They want to have a balanced budget. At the same time that theyre having a pseudowar with russia, at the same time china cant sell anything into europe like it used to. Its become an import its a consumer economy. And thats why iron ore goes down. The United States fueled by low gasoline. We dont know what to do other than keep buying restaurants. Yeah. Darden earnings this week, its going to mean the feds going to have to act only this wednesday, yes or no . I think so. Theyve been looking overseas and dont want china start slowing to six. They dont want to go back to a Great Recession in europe, which seems like theyre going to. I dont know if theyll comment on the individual stress of the Oil Companies in this country because theyre not that big. But there is a lot of junk out there that is related and that junk spillovers will make it hard to get financing. Petsmart deals, maybe im too negative. Its the largest lbo of the year. Petsmart agreeing to be acquired by consortium, led by bc partners, 83 billion in cash. Coming after pushing for a sale of the pet supply retailer. Second biggest lb of of a u. S. Company by a foreign buyer ever. This was a this is not to to be too pun oriented but it was a dog. It was one of the great Growth Companies and had the category to selfand people perceived it was losing on food. Thats a big business for them. Right. They hadnt been able to figure out the omni channel. Were talking about online. Theyve been selling out of their stores, their competitor, petco, taking market shares. Yes. Petco, also a private company. There had been discussion whether the two would get together. Certainly a lot of synergies there and cost saves. That being said, 83 numbers pretty good number. Ive talked to a couple of shareholders, ive talked to them through the period, and theyre quite happy with 83. The feeling is, in many ways to figure out the omni channel strategy, perhaps it wont be better as a private company to do it in that fashion rather than buying back a lot of stock, taking on debt, staying public and figuring out as they transition at this point. So well see. By the way, get used to 8 billion being around the biggest in lbos. So nanny exits not entrants. But the funds they are raising are smaller, to a certain extent, than older funds. Perhaps much as 25 , 30 smaller. Means smaller equity check for the deal. Also lps frown on club deals. Weve talked about this many times. Three, perhaps two or three or more private equity firms were to get together to meet the big equity check that would be needed to do the gigantic deal. So youre not going to see that often. Sometimes they call them their own lps to participate. But this will be your new sort of normal, i think in terms of size for getting toward the b bigger end. Only a delltype deal when you have the owner of the company participating, and a significant owner, as that was the case there. You know, not a huge number talking about synergies here. I would point out that the last quarter was a good one. Theyre getting petsmart at a nice time. They have made a terrific acquisition on the web. I criticized them directly. When i buy dog food, you went to their site, it was almost im penetrable penetrable. They fixed it. Made a great acquisition. They were getting momentum. I understand. I think this is a good deal for everybody. Very impressive. Yeah. Likely to be the high water mark. For a year that has not been. Its been all about strategics, buying company. Private equity cant compete when there are synergies available to strategic buyer. Not to mention lack of banks participation in the leverage market because of the crackdown by the fed. A lot the spilling over to the junk market which raises questions on financing for future deals because things are frozen right now. They are. The second point on petsmart, felt that you cant ship pets by amazon. But you always live pets . Put them on a bicycle, you might have onehour delivery. It was always about ancillary products. And the food turned out to be something that they didnt see that they could just it could be taking away so easily. Bags are heavy. Yes. Cans are heavy. Unless buying for a chihuahua, look some of us are. When buying for two big mutts, its amazon. The chinese have not put american flags on their food. No. No. Dont do the chinese stuff. Media reports reporting they have been warned by sony to stop publishing information stole bin hackers who hacked the network. New york times, Hollywood Reporter say the warning came via a all right from david boies, who demanded publications avoid or tried documents stolen information. This on a day where more victims, david orussell, george clooney. Erin sorkin arguing what the media has done with the information theyre gathering from these leaks is treasonous, dishonorable. This is not the pentagon papers, jim, its not like sony was trying to mislead the public. No, but david carr has a column in the new york times, theres a blogger, able to put stuff out. You dont know whats truth, you dont know whats fiction, you dont know whats facetious. We make jokes, look at transcripts of some of the things we said i was looking at tape of david looking askance at me. Took take hours, days. Say something hyperbolic and its obviously meant to be a joke. When you read in an email, its like, wow, those guys are really horrible guys but obviously joking around, acting as if theyre talking to each other. Again, when you put something in email, think about it, its going to be on the front page of the new york times, no expectation of private city email but we always think there it is. The bigger takeaway, this probably the worst hacking of a u. S. Corporation, and i say its japanese but on u. S. Soil. Talking about u. S. Operations here, that weve ever seen. There may be more to come when the movie is movie comes out, theres an expectation theres going to be even more. But its shocking. It goes to something weve been talking about here for years now and yet theres no stopping them, it would seem, if they want to get in. Whether the North Koreans or some everybodys whomever may have been behind it. Theyre so nasty. The movie producers, executives or the hackers. Is it news to you hollywoods a tough town. I dont know. I thought there was a little i remember when goldman talking about muppets. You can play rough, sometimes, those guys out there. The hackers do say that theres more coming, a Big Christmas present is coming. Really . Weve not heard the last. Theyre just having fun with us, hackers . Having staging their rollout. I think saying with unbroken. How many warning bells do we have to go off . What if it was a bank . Weve seen it, jpmorgan. Have we gotten the full story on what happened this summer . More on sony in a bit. The latest hostage situation in sydney. Later, a live interview with Klaus Kleinfeld in a minute. This is a burrito made with chocolate, soybeans, and apricots. What kind of chef comes up with this . A chef working with ibm watson, on the cloud. Ingredients are just data. Watson turns big data into new ideas. And not just for food. Watson is working with doctors and bankers to help transform their industries. Today theres a new way to work. And its made with ibm. Time for industrial production. Rick santellis in chicago. Rick . All right. Here we go, november industrial production, double expectations, up 1. 37 if we look at utilization rates, they are also significantly better than we looked at. And they leaped a handle, now at 80. 1. Granted, we normally look for revisions to maybe mean revert, not necessarily the case on utilization. Moved up from an originally released 78. 9, now 79. 3, mean us in onetenth on production, moved up to 1. 10. Looking at october, november, production numbers firmed up following a weak manufacturing, first november number, week sense january 2013, last went negative. And, were still going to have tick data and housing data to come. But at this point, look for stocks to be rebounding and Interest Rates to follow that move up. Carl, back to you. Well see you for Home Builders sentiment in a little while. Well get cramers mad dash count down to the opening bell after trading gets under way, live interview with alcoas chief Klaus Kleinfeld. Dow futures up about 100 points. For trading never stops. E so if you get a trade idea about, say, organic food stocks, schwab can help. With a trading specialist just a tap away. Whats on your mind, lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move, wherever you are. And start working on your next big idea. And start working on your next big idea. And cialis for daily useor you. Helps you be Ready Anytime the moment is right. Cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. 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They are nowhere versus some of the other guys in the business that they basically have the big runway, talking about 284 monthly active users and saying engagement is good. This is the first piece ive seen which says this stock could be, if run well, if the company run well, could join the rest. Theyre getting ad load of 1. 3 . Most companies are getting two, three times that. Theres a lot of ability to have upside, wait i look at. Theyre looking at it like a raw company, if someone comes in, starts running it better, thats my read. Youve been mildly critical of the management team. I mean in the end, its all its like the hollywood notes. I mean, you know . I feel like the things i say are like sony, except you dont have to hack them because i say them out loud. You do, you do. Theyre hash, too. This is the way when you have a company that people who watch the show, stock has gone down a lot, youre not making a lot of friends. So anyway, its not about friends. Its about making money. It is. Heres one about making money thats interesting. Opk, opko, phil frost the chairman and ceo, you may know him from some of the great. I do, i remember that name, yes. A lot of deals in his time. I have had him on mad money a number of times. I know hes for real from previous jobs. A lot of people doubting him. Today signs a deal with pfizer 295 million up front payment for long acting human growth hormone. This not a primary drug. It happens to be something that phils had. I think phil is so bankable, a lot of charity, if you go to the u, you know phils there, ive always i think hes a great guy. Bought a ton of stock here. Always said he had something. Looks like he does. Congratulations. The stocks going higher. All right. They have a lot of drugs about different kinds of cancers and detection. I know. Taken me back to last weeks deal with cubist and merck, i dont know why i thought of that. People are saying cubist isnt trading, its not where it should be than deal was etched in stone. Carved out of the merger agreement any bad decision, which they got immediately on cubism. Thats not true. There was at least six hours between when they bought it and discovered it was worth a lot less, maybe seven. Shocking. How about with can we hack into their emails . Whose. Frazier, mercks. I dont think we should do that. Stay away. Opening bell a few minutes from now. Well have a live interview with alcoas ceo Klaus Kleinfeld. Well be back on squawk on the street. Youre watching cnbcs squawk on the street, live from the Financial Capital of the world. The opening bell in a few minutes, after a rough week last week, to say the least. 700 points on the dow to the downside, biggest loss in three years. Fridays volume, down here, the biggest since halloween, as we closed offly close to lows. And tenyear well watch, biggest drop in yield in two years. Deutsche out saying its going below two. That changes banks were trying to make a stand, they need higher rates and they were rebuffed in the last day. Friday was i was going over this within where the oils could go, going back to where they were in 2008. Some of these, 2009, really the low. All of these could go. Halliburton went to 20, schlumberger went to 50. Noble, a nice article about israel, 28. Exxon went to 60. Chevron went to 64. Marathon went to 17. A piece about marathon. Oxy, substantially lower from where it is. Goldman recommends sell. Oxy at 62. Bmo, upgrading exxon. Yes. But they they had a sell on it. Well reasoned piece, saying, listen, numbers are way too high. The reason i mention this, when i go over these, few firms have cut numbers yet. You cant bottom fish until the numbers are cut. With the bmo piece the first piece that said numbers are coming down 25, 30. Horrendous piece. Bmo cuts their 2015 forecast on west texas, i think, by a third, to 67. Yeah. On friday, he said no one talks marking in oil, you meet oil hes natural gas you meet oil guys, they say its spewing, its great. Hes been asking us, whats the market for oil . And theres always a mark for oil theres no market for oil. Right now, theres no big. Hes saying marketing, opec allowed it to whatever you produce has always been able to be sold, until now. And not only that, everyones full up with gasoline. Refinery capacity added around the world. Were selling a lot of gasoline. Unless we export oil, oil can go lower. Production will come down in this country. Yes. And na boxen, youve got wells not as productive, each year you lose wells. 5 depletion. Whats interesting, why does it correct . In 2016, no major oil companys going to want to go to iran, they wont be able to pay bills, they wont go to the companies dont have money to pay bills. Why would you risk drilling there . You have a natural attrition, so you have a bottom. But its out in time, not just price. Because theres still a lot of oil coming out. Its going to be a while. Thats a predictor for 2016, not for 2015. If your airline, as long as somebody doesnt buy a gasguzzling airline, theyll make a lot of money. Congress investigating high fares. How about the fact you allowed every airline to merge. Theres no competition. Whenever you fly, its like, who else who else no. Nobody, that is it. Dayton, ohio, my daughter went to dayton, ohio, like 1,5 o 00. I said get in the car, drive all night. Getting pricier over the past few years. We want the latest on the hostage situation in sydney, australia, unfolding across the world. Now in its 15th hour, possibly indicating a new stage in this standoff. Additional police, medical personnel have been deployed to a cafe, where a gunman is holding unknown number of hostages. Five have been able to escape. The Prime Minister tony abbott says gunman is claiming political motivation, appears to want Islamic State flag in australia, a conversation with the Prime Minister. This is very, very tense situation. And its been going on for about 12, 13 hours. He does appear to be a lone wolf. Whats interesting, is a lot of the australians in solidarity with muslims, a hashtag going called ill ride with you if you wear muslim garb ill sit with you on a bus to guarantee safety. This is another within where you just say, thank heavens im not at the lindt shop, whatever. I saw up when the hostages ran out, the horror, you know, just another just a terrible situation. In the meantime, the opening bell set up here. Down at the big board, again, coming off of that rough week for the dow and the s p. Only two dow stocks up last week, home depot and utx. The worst boeing down 11 for t