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tv   Squawk on the Street  CNBC  December 2, 2013 9:00am-12:01pm EST

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>> we don't compete trying to produce high quality and low cost. quite the opposite. we add additional costs to keep alumni happy, create the marginal professor and opposed to trying to produce simply the highest possible quality at the lowest possible price. >> thank you for coming in. >> today. >> nice to be with you. >> that does it for us. right now it's time for "squawk on the street." ♪ good monday morning! hope you had a great thanksgiving. welcome to "squawk on the street." wall street gets back to work with a busy week. cyber monday today. a jobs number on friday. the kickoff of december. historically, the best month of the year for the dow. a lot of data to respond to and manufacturing ism in an hour. some losses in europe despite strong pmis over there. the uk, italy and expansion in
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greece. our road map begins with retailers hoping that online holiday sales click on this sibler monday. will they make up for the thanksgiving weekend seeing shoppers spend less than a year ago. >> lots of business around amazon's package delivery via drones. another month in the books. we'll explore whether the trend is likely to continue in december. a number of wall street firms initiate cover of twitter. we'll have details on the caller later in the program. first up, welcome to cyber monday, the day that online sales surge following the thanksgiving weekend. retailers hope that makes up for the holiday weekend. the national retail federation says total spending fell 2.9% compared to a year ago, the first decline, guys, in seven years. how concerning is it? >> well, look. i think that this omnichannel has taken off. i don't -- classic example. i don't know a lot of people
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went to the mall. you can say it's a groucho marx thing. everyone is there so they don't want to go. i went to amazon. i ordered a fit bit. my kids don't watch so i ordered them and great prices and heck with it. i'll go buy clothes on amazon. they have an amazon.com rewards card. that's less than five pounds. i want that drone. drone me. drone me the card. >> that was just great. jim, though, this is the time of year seems as though we get data points all over the map and things don't agree with the first data. in other words, sales are down and then see something and then you get the credit card data and it's very hard to figure out what to listen to. >> i agree. i mean, there's too many channels to buy. also, i mean, we know that walmart and target are struggling. they are a huge part of spending. where is that money going? away. people aren't borrowing as much as they used to. i hesitate to reach any conclusion other than the fact that, geez, there's a lot of places to shop and a lot of ways
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to get goods and now, of course, from the sky. >> yeah. we're going to talk about bezos' drones in a minute. >> i love him! >> of all the data, we're looking at relative strength apparently in tablets. online traffic for tablets up 90% from last year. phones, people talking about appliances and sears where people are out shopping, ready and armed to buy some stuff for their house. >> i don't know whether hard goods are accounted the way that they should be. here's the kindle fire xds. it's going down as i look at it. exclusive mayday button. hard goods, i still think gme is a buy. game stop. they do that return thing. i think that was effective. best buy stock has not come in after that -- >> i went to a best buy this weekend. >> you did! my god. where? 16th street. >> dire straits. 62nd street. found it on my block at pc
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richards ten bucks less. there you go. i am a loser. thank you, best buy. they didn't break price there. microwaves are pretty cheap. but i got accustom -- akoused by sales there. we were looking at pcs. i was with my son. great salesman. so clearly, it was -- it's been working for them. >> could be anecdotal. >> it is. >> i don't know that i want to draw massive conclusions from your shopping trip. >> we do from your shopping trips. >> okay. listen. all right. get this -- >> we have for years. it's worked. >> we had to buy -- >> we finally make one. >> i microwaved the turkey! >> you just dismiss it out of hand. >> no. i was six and 60 and mad dash going to go over all the places you visit. >> david made it out of the house. >> that is -- >> alone. >> carried the darn box and then i said that's it. never doing this again.
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ordering on amazon. i'm having it come to my house. >> we got to explain this drone thing, david. >> yeah. >> walk us through this. >> hopefully -- i don't know if we have video. >> how could we not? >> it's incredible. i happen to be watching the show, as well, last night and saw that. as it was being broadcast. amazingly enough. amazon is testing delivery of packages using drones. now, the unmanned jets, i guess, they could call -- they're not jet engines. >> optic copters. >> packages that weigh up to 5 pounds. that's 85% of the packages they deliver. here's what mr. bezos said about the drones on "60 minutes." >> not before 2015. that's the earliest that we could get the rules from the faa. my guess is that's probably the optimistic. could it be, you know, four or five years? i think so. it will work. and it will happen and it is going to be a lot of fun.
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>> looked like fun. the video they had of it being delivered over beautiful farmland to a gentleman's home. i thought was interesting. >> how's that going to get to various residences that we have in major urban areas? drones sort of hitting -- >> apparently lights. >> they don't need to be manned. you plug in the gps, hit go and it will deliver it on a day by the way where goldman does up the price target. >> you have to just on the commercial. "60 minutes" commercial. probably takes out terrorists, too. multi-purpose. >> that thing is great. >> that is just great. >> it is -- drones are here and gps. >> listen. he's talking about it being green and the fact that, you know, again 86% -- weigh less than 50 pounds of their deliveries. >> i know. >> you can take out a lot of gasoline-powered truck that is are making those deliveries right now. >> u.p.s. and fed-ex, immediately -- the committee to
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protect us against drones -- i don't know. you say, listen. drones they'll crash on the highway and drones can hit people in the head. >> i would imagine it will be years. and also, what will manhattan look like if the skies are filled with drones? >> holy cow. could be like world war z out there. >> i'll say this. to those who talk about amazon and more interesting part of the profile or the story last night on "60 minutes" business bezos discussion of being a disrupter and expectation of being disrupted and trying to avoid that fate for as many years as he possibly can and something like this, whether it happens or not, they continue to think about the future of this company. >> right. >> in different ways that they can avoid or continue to just -- >> i think on two front. >> r&d element could have only come from them. it is not coming from fed-ex and the rollout of the story on a week, on a monday where we're talking about nothing but retail is a public relations coup.
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>> brilliant. that's why i dismiss all the numbers of last week because i think amazon is such a major part of commerce it may turn out to be a good four-day stretch. i mean, i was surprised the five pounds -- i mean, i guess -- i don't know. like books? what's five pounds you order from amazon? everything? >> phone. any -- many electronics. ipad, mini, tablets. >> all those from amazon. yeah, right. >> fascinating storiment talking about it all morning long. trust me. want to talk markets. after posting gains for three consecutive months, both are in the midst of an eight-week winning streak, the longest for the dow since january of '11 and longest for the s&p since january of '04. the dow needs 18 point farce 3,000-point year to date. >> i went over the charts this
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weekend. i thought the market looked so extended and yet i'm so reluctant to use the term bubble. i'm so reluctant to say it's over just because they're extended because they have been extended for weeks! >> what motivates somebody to sell in december? we had potential sales -- >> right. >> don't have that this year. >> say you own amazon, all right, let's maybe the most extended stock in the chart book. what are you going to sell it today? you just got the hoopla. can you let it go? are you going to let go any retailer with the idea that maybe, like, you know, like the worst is already over. you talk to meg whitman. i want to buy hewlett-packard. >> you do? on those numbers. people did buy them after that quarter better than anticipated. though the turnaround still to come in the all-important 2014 year in terms of really will they keep getting it done. >> i think that's fine.
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look at the dow stocks. i can make -- i can craft an analysis for 25 of them that's positive. i mean, morgan stanley downgrades 3m. many you read it, it's relative valuation. i'm not going to sell 3m if i read that. it's a major roll here. it's multiple expansion. listen. maybe they have a bigger year next year. asia's pretty good. >> fifth biggest gainer for the dow 3m. we are beginning to see, though, jim, price targets for year. putting a 2014 year end target of 2014. is that not an indicator of something? >> we'll come back and say, look, i have so many, so many of these value groupon valuation. open table valuation downgrade. trulia. apache. goldman. why? because of valuation.
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i mean, dover. buy to hold. these are all very strong stocks and suddenly we should sell them because they're over valued? versus what? >> well, the ten-year treasury a year ago yielding 176 and now 276. that's been a pretty significant change. >> a big move but at the same time economy a little bit better. >> unless you count jobs numbers, right? which we'll get another look on friday. >> you want to go against the autos? >> i think gm will have great numbers. there's momentum that's difficult. david, you made the best point. do i want to sell anything other than the losers? five stocks in the dow up less than 10% and clunkers. okay in maybe you want to sell a clunker, caterpillar. a clunker, ibm. otherwise, why take the gain issue? >> i talked to a couple of guys who believe we will have a technical melt-up in the winners for this very reason. >> why would you sell them?
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you'll buy more or conceivably because nobody has a reason to sell them. we look at the supply. i look at the quarters to me the most important thing is not the revenue growth, not the earnings growth but the shrinkage. companies bought their own stock hand over fist and not a lot of stock for sale. i think it's major. >> looking for clues as to how business news, working into the overall american psyche, check out "the new york times" over the week. i think the crossword puzzle. "the new york times" magazine. the clue -- >> jim cramer's network. there are other people at the network. i'm looking at 58 down. wow! holy cow. >> best one to be in for the week. >> high distribution. only one i got in that whole puzzle. >> when we come back, on this monday morning, i-banker ken mullis is here. also ahead, goldman's chief u.s.
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equity strategist will join us live with his outlook. another look at futures. s&p not fallen in december since 2007. >> really?
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a a number of wall street firms out with the first calls on twitter since the company went public last month. all initiating coverage of twitter with buy ratings. morgan stanley has an equal weight on the stock and jp morgan is neutral on twitter. price targets there, jim, in the 40s and 50s. >> yeah. >> below might be jpm at 40. >> we have goldman, two great contrasts. goldman with a buy. compelling user growth and opportunities. don't see it making money any time soon including 2015. and then i like this one. this is bank of america merrill. revenues taking off and grounded on valuation. this is an incredibly positive piece except for when it comes to the valuation. i think that's what people are struggling for. in other words, people like it but they can't justify paying this price. this is a very sobering piece and especially because this -- the bank of america merrill, what a great contrast. they have it making money while
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using the bloomberg estimates but the -- you could argue that they're not really making money but basically what i'm saying is that even the bulls, they think it's expensive. >> little uneasy here and the notes come with various base case scenarios. a base case, one upside scenario. they're trying to hedge that. >> yeah. i mean, i think that twitter is -- when you're watching sports now, you almost always expect every communication to be twitter first. it is incredible. my friend adam is 2.7 million twitter, twitter followers and i find that sports is a -- espn, constantly. watching the auburn game. okay? just the twitter -- just from all the -- >> you can't keep up. >> you can't keep up. i call it the over game. no offense to saban. i find that twitter is a thing, when you're watching something, you are on twitter so i totally get the upside to the story but
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i also think if the stock if it's 28 the stock going higher but it's too high. >> i've seen you watch an eagles game. >> during halftime i tweeted. >> really? >> i tweeted that i was looking at the charts. and i tweeted the mad money team in the box. but no. i do not tweet during the game because that's bad luck. that's bad karma. and remember, my karma, what i wear determines whether the eagles win or not. >> of course. >> except for one time when i went to tammy reed and i said she was the former eagles head coach's wife. i said the reason i wear is i wear number 87 every week. she said, i checked with the coach. he disagrees. it is weird even if it works. >> whatever you're doing, keep doing it. four straight. >> oh yeah. i'm wearing the silly hat, the jersey and the silly throwback jacket. >> breaking team records. >> just -- it's miraculous. it's miraculous. it's decker-like.
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>> four touchdown passes i believe. >> i'm raising price target decker. >> yeah. >> i'm going to buy, buy, buy josh gordon even though he's in cleveland. these are important recommendations i'm making right now. >> seriously, what a weekend in sports. >> sports is just -- but that's why, really mention it in terms of dovetailing with twitter. that's the defacto watching sports tweeting and kind of an amazing thing to happen so quickly and not dismissing twitter but the price. >> yeah. when we come back, markets coming off their third month of gains. how should you be playing them in december? cramer has some answers. one more look at futures before the opening bell and just over ten minutes. don't go away. tdd# 1-800-345-2550 searching for trade ideas that spark your curiosity tdd# 1-800-345-2550 can take you in many directions. tdd# 1-800-345-2550 you read this. watch that. tdd# 1-800-345-2550 you look for what's next. tdd# 1-800-345-2550 at schwab, we can help turn inspiration into action tdd# 1-800-345-2550 boost your trading iq with the help of
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we have about eight minutes to go before the opening bell. december 2ened, how did that happen? >> i have no idea. >> let's start off with ebay. >> this is an interesting call. we have ebay neutral to buy at suntrust. channel adviser. a company that forecasts things saying ebay did well over the week. why is this important? it was a great mystery to people, david. on friday, people buzzing saying it must be bad, got to be something and ebay's below 50. it looks like nothing was wrong. this is a very tough trader. but the idea that they had a good cyber weekend tells me the stock's got some room to run. >> you believe that to be the case? >> i do. >> the stock -- they came into a
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quarter, reported not a great quarter and people expected it to be better than it was. the stock suffered as a result. >> i spoke to them two weeks ago today and he indicated nothing wrong and the fact that this channel adviser said things are good gives me hope -- i say hope because i think it's a very well run company and driving people crazy. >> yeah. retail, of course, you look at -- let's call it flat for the year and the likes of amazon. urban outfitters. >> speaking of retailer that is are driving people crazy, this is a three-legged stool. they have got three people. it is doing incredibly well. they've got anthropology, a fabulous house. and then their flagship urban outfitters, not doing well. people want to bail from this thing. if they get a season right, david, this stock goes to 45. but it just -- it really is one of these situations where they're missing the holiday so i mention this because, you know, a lot of -- >> what is that about? merchandising? >> merchandising.
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>> making the right decisions? having the right person in place to do that or do they not? >> all of those. i think this is one of those where it's always going to be -- look at this. it's -- this is when it reported -- looked like to be better and then right here not to be good keeping -- this is one where maybe they separate the companies or online business is so good to do something. urban outfitters has become the biggest conundrum of the high growth retailers i follow. not a department store but a once great company and then fell down getting rid of the ceo. brought back the founder. looks good again. i would not trust this stock. i would not trust urban outfitters. >> all right. i'll keep that in mind. all right. we have the opening bell just a few minutes away and keeping an eye on retail as you might expect on this cyber monday. more "squawk on the street" when we return. [ male announcer ] once, there was a man
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straight months of gains for the dow and s&p. eight straight weeks, something the s&p has not done in almost a decade, guys. coming off a november, almost 3% or better. and then december historically the best month for the dow and that's going back to 1896, jim. >> again, that's people i think not wanting to take tax -- not wanting to have to pay a tax bill. really, again, "usa today" wall street looks like pamplona. you think this is an article which says bubble, bubble, bubble. instead it is about how broad the advance is. it's a very positive article how the advance is different from some of the advance that is have led to big falls. very smart piece. >> the dow's gained year to date three times the gain of last year. do you expect that trend to continue into 2014? in any way? >> i think it's very hard if we forget we will have another washington bruising. right? do you think anything's gotten better there? i mean, we don't mention the
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health care. everyone talks about the health care site. i saw oracle mentioned as a possible problem in the "the new york times" piece and a thing that dazzles me is how we forget. right now. that there's a republican party that hates the president. but in another month we'll talk about that ian good for 6%, 7%, 8% decline. >> without a doubt and facing the same issues we faced a couple of months ago. >> yeah. >> potentially. one hopes that will not be the case. you can hold out a sliver of hope. >> they have the health care thing to run against the president, they have a lot of momentum off this thing. the republicans want -- might have been worried at one point that we would get rid of gridlock. right? well, i like gridlock for the stock market. i'm presuming it's a major reason other than bernanke why the market's going up. i don't like to see a non -- you know, unlocked but now, geez, the republicans how could they not be ascended and come in with
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guns blazing after this fiasco? >> a lot of discussion about the house gets back to work today. senate next week. very little time in december to get a budget framework done, to get yellin confirmed, a farm bill passes. >> i think the hatred is back and then some. i think it will be -- there will be viciousness. >> i know. any bill passed. >> any bill passed. >> immigration, remember they were going to talk about immigrati immigration? >> such an important bill and a bill business would love to see passed. >> there can be so much anger down there. >> infrastructure spending. so many things we need to deal with, gridlock is not necessarily a good thing. >> true. and remember, i'm just saying gridlock, the conclusion is it is playing a role. same time, i don't know why anyone doesn't think it's the worst of -- the worst of the fights. we are so close to 2014. >> big board, by the way, brazilian metals and mining
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company with the investor day at the nyse and nasdaq, online jewelry retailer blue nile with cyber monday. talking to the company ceo later in the show. >> my trust owns this. a disappointment. this is a company that has been doing everything it can to try to cut back expenses. very small capital expenditure budget this year. it's in brazil and brazil has been a horrendous market. brazil is probably the most challenged of the bricks. and that's saying something because russia is in there. india with good numbers of late. china pmi this weekend strong. india doing better a month high and china with good numbers. i don't know if we want that ipo chute to open again. challenged market. >> really quickly here, forest labs the biggest gainer on this restructuring. you mentioned the dow restructuring of sorts. wonderful to see the year-end push on that. >> we saw how great it was for
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ppg to get out of commodities. dupont with a stock rally. really laying it out and i thought it was very, very positive. >> unh with an investor day today. in new york. they reaffirm the guidance for the year below the street. that's the third best dow stock in november up 9% in the month alone of november. >> i think people feel that the companies beneficiary of the chaos with the website. again, i mean, we are just beginning to find out what companies are involved with the problems of the website. so many different companies screwed up it looks like. really. i mean, it is like just a vast cornucopia of companies that didn't get this right. >> well, it may also have been the fault of who was employing them to try to do it, right? not that they were -- >> blaming the government, are you? >> just saying there's so many fathers of this defeat it is rather extraordinary. i continue to believe a month from now we'll sit here and say
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can you believe how thick the hatred is? how impossible it is to get anything done and that's what can cause january spill. >> a couple of quick hollywood notes. disney is up on "frozen." pretty good box office over the weekend. lions gate better than 2%. people with doubts about "hunger games" the first weekend, people are saying the doubts have been taken care of. >> staying power is what's necessary and looks like it has it. i did not go. my bad. i love the books. i love the first one. >> have not seen it. you, however, did take in "frozen". >> and "hunger games." kids loved "frozen." >> didn't take the kids to "hunger games"? >> no. larry king had no idea the concept. i don't understand this film. >> for those with kids in high school, this is something that i read with my daughter. like doing a public service here. big deal. but i read it with my daughters. read the series and it is just
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great. you know? there's a lot there. a lot there for -- for dads and daughters. not moms and daughters. >> the stock is up 4.3%. so it is getting -- that's quite a move for ebay at this point. >> a shot of covering there. such a winner on the short side. hard to find shorts winning among the large cap nasdaq stocks. nasdaq is a terrific short. >> yeah. it's been as you point out extraordinarily difficult if you want to hedge or at least pretend to the clients you're trying to hedge. you're happy if you can stay flat on your shorts. >> november for bio tech was extraordinary. you know? gilliad. one of the great horses of this era. it's a very big company now. a very, very big company versus major pharma. >> put in mind of herbalife. shares of which are up able i
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believe 111%. >> it was near the end of the quarter and year and bill stears and it was the auditor itself with a problem. >> right. >> not -- you know, similar -- you know, there's magnet hunter i like with the same thing. >> investors are focused on when the audit is official and made because there is still this belief that they'll then undertake a large recapitalization. >> remember, 80% of the sales from overseas and the idea to have a government company try to shut -- i'm sorry. government entity try to bring down herbalife is dimmer and dimmer and dimmer. >> you pointed out -- that's a 13d by the way. he's an active investor in herbalife and put 400 plus million dollars of his own money into it. >> i was with a food executive recently saying that con-ag struggled with the acquisition of bill stears. people forget, carl, this is a
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guy i revered because the food group used to have all this, you know, all these different buy and sell them, split offs and he is at heart of so much. here he comes back. this may be his last big run. he wants something happening here. >> a final note on ackman. jc pennny was the topper forming stock for november before it was kicked out of the s&p. 36% gain in november giving some back this morning. >> i didn't shop there this weekend. >> we'll keep an eye on stocks over the next few weeks and capital markets activity in general, this is the last big push for what's been an extraordinary year with initial public offerings leading me to today's "faber report." hilton, arromark aenl another lbo coming public. but as for hilton this morning, we did get the agenda for the company's road show. they will begin it tomorrow in
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both mid-atlantic region and then coming to new york on wednesday. boston. usual. as you might expect. sort of around the country. new york luncheon. chicago. wrapping up around december 12th where it's expected they're going to price and again that road show, hlt is the ticker. as it used to be before it was taken private. in that leverage buyout by blackstone and 112 million shares. see it right there. 57% primary. 43% secondary. that meaning the selling share holder in this case blackstone. 18 to 21 the price range. it will be an important, certainly, initial public offering. we are talking about 10 to -- i think around 12 to 14 times ebitda. spli slight discount to marriott and starwood. not that big a discount. this is the business that's finished up this year in the next couple of weeks. in terms of, again, big capital
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markets year. and the continued push there for the likes of hilton from blackstone. blackstone with a lot of successful launches this year in terms of public offerings. >> been a great stock. >> blackstone is also they have been behind whether it's -- there's been a lot of public offerings of blackstone that have been coming back to the public markets and performed quite well with the stock for the company itself in this case being blackstone. >> the group has been good. cesars, you know, gaming obviously, initially a bust and then came back. they can refinance. i mean, it's been a house time for ipos. just another area that's worked although a lot of ipos, going over them this weekend, going to focus on them on the show tonight and a lot came back down and wasn't always a great thing. a period to own them and sell them. a lot of them to sell. >> all right. with that, let's get to bob
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pisani. hi, bob. >> hi, guys. happy monday. the big story is when's going on with retail sales and there was a lot of interesting commentary by some of the analysts and traffic up. sales down. at least i didn't see any tremendous push up. mobile sales pretty good overall. spending down from last year according to the national retail federation. johnny capital with a great comment, they said losses were big, profits were scarce and the big prize is the bragging rights an ena few people appear to be getting some kind of modest share gains overall. there's a great survey, 70% of the 31 companies they surveyed were more promotional than last year and that's the big problem. opening on thanksgiving did not create sales that would have existed otherwise and in addition to that, prices were low but it didn't translate into tremendous more volume. here's a great example of this. walmart. walmart is expected to sell about 2 million television sets
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this year. that's according to janney capital markets. that's a tremendous increase in tv sales. 53% up. but because they've been cutting prices so drastically on the tv sales, the actual dollar amount of the sales is only up 20%. there's the problem a lot of these companies have even when they get increased sales, the dollar value isn't that great because of cost cutting. here's the one thing that's very noticeable, however, online sales are really growing here. beard talking about an ibm report. increased year over year on black friday and i have seen other places up 15% for the overall year. but still, 19%, this's a pretty good increase for online sales and something more important -- mobile traffic estimated at 20% to 25% of online sales, the people walking around in the mall with cell phone now, they
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could be 15% to 20% -- 20% to 25% of online sales, a tremendous increase. that's a real headline grabber in my opinion. here's the big worry that everybody's got. what happens when now and the last weekend before christmas? around the 14th, 15th, those kinds of days. we have all of these great discounts going on for black friday. we saw tremendous promotions going on. do they keep the propotions up? if they don't, you know what will happen. there's an enormous dip off. people go away until the last weekend and then they're going to have tremendous sales. and that's the big problem. one retail trader i talked to said 50 pst off is new 25%. people responded to apparel sales all over when they had them this weekend. whether or not they respond to more modest percentages off going forward two weeks is big issue and i think that's the concern that people have got right now. so lots of competition and discounts and some very choppy traffic out there. guys, back to you. >> all right.
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frank, thanks very much. let's head over now to the bond pits and for that rick san tete. >> good morning. many people talking about retail or what's not going on in retail. and we continue to see that interest rates although not pure veil of major upside level are certainly snugging up to some important test potentially of 280 looking at a 2-day chart. we have tested 280 and the 199 high yield close. that still stands. open up the chart to september 1st and see the pattern. if you take a look at what's going on not only here but let's check out what's going on in terms of interest rates in japan. japan in the news about everything. 70-plus billion equivalent for the month with the economy one third the size of the u.s. and continuing to see the markets want more. well, their interest rates move lower and not only the interest rates, that's the ten-year looking at hovering just above
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60 basis points but think about the foreign exchange side of this. if you look at the dollar-yen, the dollar's strength back to about the third, fourth week of may but look at the euro-yen. these are basically the best levels against the yen for the euro going back to the last part of 2008. no different for the pound versus yen. as uk had some decent data. what does this all mean? their interest rates aren't going up. it means the foreign exchange levels are under pressure to help exports and the carry trade is alive and well and continue to monitor all that is japan. carl, back to you. >> all right. thank you so much, rick. want to show you live shot of a fed-ex facility in tempo, arizona. fed-ex is just now responding to the amazon drone story featured on "60 minutes" last night. they say they're always interested in new technology. while we can't speculate, we can say that making every customer
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experience outstanding is our priority and anything we do from a technology standpoint will be with that in mind. our people have been instrumental in the success of our company over the past 40 years and will continue to be what makes fed-ex special. >> anti-drones. drones against drones. what do you think? >> drone wars. >> drone wars. >> yes. and the nsa will control them all. >> nsa knows everything. >> put in the bid and making you to first survives? like "the hunger games" of drones. nice. >> i like that. district what? >> screenplay. >> what district would that be? district 13? >> district 13. >> when we come back this morning, the retail sector outperforming the broader s&p for the month of november. is that going to continue? on this cyber monday, we will be joined by the co-ceo of warby parker. hi honey, did you get the toaster cozy?
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yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. [ male announcer ] fedex one rate. is caused by people looking fore traffic parking.y that's remarkable that so much energy is, is wasted. streetline has looked at the problem of parking, which has not been looked at for the last 30, 40 years, we wanted to rethink that whole industry, so we go and put out these sensors in each parking spot and then there's a mesh network that takes this information sends it over the internet so you can go find exactly where those open parking spots are. the collaboration with citi was important for providing us the necessary financing; allow this small start-up to go provide a service to municipalities.
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citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally, citi is there every step of the way. so the end result is you reduce congestion, you reduce pollution and you provide a service to merchants, and that certainly is huge.
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yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. ♪ ♪
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welcome back. i'm sharon eperson. we have seen choppy trading. brent crude prices around $110 a barrel. chinese data coming out this morning seen as somewhat positive in terms of the manufacturing level that is we saw for november at a 18-month high and awaiting, of course, wednesday's meeting in vienna among leaders of opec and whether or not there's consensus about the changes in their production levels. right now, we are looking at production from opec at about 30 million barrels per day. keep in mind, though, u.s. production continues to soar at a 20-year high and still watching what is happening in terms of libyan oil production. that is something that has caused a pop somewhat in the oil market. also looking at a mixed picture here in terms of metals market and gold down significantly. some traders say we continue to
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see gold and other commodities take a hit as we see taxlaus selling here. equities and for gold, you can see the big divergence there and the reason why some may want to lock in gains and sell the losers. back to you. >> thank you so much, sharon. investigation is under way after a deadly train derailment in the bronx left at least four passengers dead and more than 60 injur injured. mary thompson joins us with more from that story on the weekend. good morning, mary. >> reporter: good morning, carl. this is the first time in 31 years there have been passenger fatalities on the nation's busiest commuter railroad. here on site in the bronx, the ntsb is leading the investigation which it expects will probably take anywhere from seven to ten days. the ntsb telling cnbc to analyze the train's black box, inspect the tracks and talk to passengers and then the train's engineer will be interviewed today. >> we want his recount of what
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the situation was, what actions he took, and any observations that he has. >> the train was heading south to new york city early yesterday morning when it jumped the tracks about 11 miles north of grand central station. reports say the engineer tried to break before a major bend in the track. on "today" andrew cuomo says he expects it comes down to the train taking the curve too fast. >> i'm not an expert in the field. working with the experts over the past day, i think it is going to be speed related. this was a tricky turn on the system but it's a turn that's been here for decades and trains negotiate all day long so it's not about the turn. i think it's going to turn out to be about the speed more than anything. >> reporter: now, along with the
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four fatalities, 63 people were injured and the train's engineer and the accident disrupting the commute of 26,000 passengers who take the hudson line of metro north on a daily basis during the work week. the disruption is expected to continue until after the investigation is concluded here in the bronx and then the mta will have to come in and fix those tracks. carl, back to you. >> mary thompson in the bronx for us this morning, thanks so much. 6 in 60 with jim is next. [ male announcer ] this is george.
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6 in 60 with jim. six stocks 6 in 60 with jim. six stocks in 60 seconds. >> the revenue will axel brat for this dream company. not something people are looking for. >> price target up at deckers. >> people worried, cold weather is good for vf about to split. >> hold to buy on marathon. >> finding spreads have been big in this country and this is a player in the refining business. >> barricuda. >> people like this firewall security story. i still like palo alto. >> goldman marceto.
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>> they're competitive. i'm not sure about this. >> bernstein on weatherford. >> will miss again. the whole group is very -- the oil service group, just under some pressure. >> talk about what's coming up on "mad." >> first time, i absolutely love animal health. it is a great growth area. i cannot wait to speak to them. i think the growth is undervalued and now we have to start looking at the ipos because now you see all these companies became public. they do not have a lot of sponsorship. we're rank them, tell you what to do with them. a very big class of ipos ignored by most of the firms. we put it altogether. >> you mentioned the top of the show this idea. you got some winners. you don't want to pay the tax man and don't sell. what is the counter argument to that, at least for the next month? >> you could sell some losers against. ibm is under pressure today and will continue to be under pressure. other than warren buffett i
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don't have a good case to own ibm. owning something of warren buffett, look at exxon. starting to move. i'm curious to see the real story behind this and breaking down and sell this against something a gain, that's not a bad idea. i don't have a lot of stocks like that, though. >> we'll talking about that dynamic all month long, jim. see you tonight. >> thank you, buddy. >> simon's here with a look at the next hour. >> good morning to you, carl. goadman's david kostin will be here and rising 6% next. the man who was the cfo of fannie mae is breaking his silence joining us live on this program. and which stocks in retail will work for you now. on the first trading day in december. a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others.
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my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. welcome back. we have a quick market flash here. starboard sending the company a letter repeating that it thinks the stock is deeply undervalued and significant opportunities exist to unlock value there and also said it wants a new board and management team. watching the stock up nearly 2%, $8.02. back to you guys.
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>> thank you so much. let's head over to rick santelli for the numbers. rick, take it away. >> yes. we are going to get september and october for construction spending. and of course, as important as that is, i think the big number everybody's looking for is ism manufacturing. this is for the month of november. it's coming off a level that was best since april of '01. 54 points -- i'm sorry, i'm sorry. 57.3, 57.3. and that just takes out that 56.4 i referenced and continues to be the best level since april of '11 because that comp has a 59 handle. now, let's look at september construction spending. that was up -- excuse me, that was down .3 and if we look at the current read of october, it was up .8. we get two reads. september down .3. october up .8. the ism much better than
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expected and looking at the marketplace, the ten-year still hovering right at the 280 mark and we are looking at continued downside for the equities. why downside for the equities? think fed and quantitative easing. strange bedfellows. strong data, weak stocks. carl, back to you. >> interesting number. dow at session lows on that. thanks again. goldman sachs is out with the 2014 equity outlook and sees market rising 6% to 1900 at year end next year. a 67% chance, though, of a correction. david kostin joins us this morning. david, good to have you back. >> nice to see you. good morning. happy thanksgiving. >> same to you. it's said that great years are often followed by pretty good years and seems to be what you're seeing for 2014. >> the forecast i have is a couple of parts to it. the first is market likely to rise about 5% or so to 1900. and the road to a higher market
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of 2100 and 2200 if you look out multiyear until 2015, 2016. that's sort of a first part of it. generally speaking, earnings are rising. economy is better. that's a positive backdrop. second issue is the probability of a draw down. the market is up now almost 50% in 18 months with no 10% correction. it's been basically straight shot up. modest 6%. that's the biggest draw down and the likelihood, 67% probability is a draw down of 10% in the next neyear. >> how do you get a 67% probability for the market to correct? >> simulations and path of the market given the volatility and the price target and the distribution of price movements over three, six, nine, 12-month of time and gives us an expectation. now, if you're a portfolio manager, you have to think how do you manage money in a market
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that broaddy trades at fair value? multiple of the market from around 13 times forward earnings last year to 15.5 times earnings right now and that's a pretty solid multiple. forecast over the next year or two to have a multiple maybe expand toward 16. right now we are looking at a fair -- sort of fair value and the strategies we look at, companies investing in cap x. a high degree of operating leverage and companies executing self help. buying back the shares and that's a strategy in the market around fair value. >> people at home and not really trading, in it for two or three years, are you say it's a one-way bet overall? >> i'd say the probability and the likelihood of a path is the economy's getting better. economy's likely to grow to around 3% gdp in 2014, 2015, 2016. sales correlated and earnings are likely to grow. there's no margin improvement. margins peaked, plateauing for
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three years. so we're not expecting -- i'm not expecting an improvement in margins. it is really earnings slowly rising and that's what essentially takes us to a higher market so this year 2013 we just have about 1$108 in earnings. likely to grow for 2014 and $125 if you look into the following year. a sown the idea of the market generally following the path of earnings is really the story as the portfolio managers and investors need to be thinking about. >> looking at the internal recommendations in the report. i like this idea the companies that bought back a lot of stock that dynamic continues to work. >> over time has been a positive indication. northrop grumman has a strategy of buying back stock. announced the strategy to do so. a colleague of mine covering the stock. a buy rating on the company. they spoke at the goldman sachs industrials conference and talked about that as a use of cash in the coming year. they had a 13% buy back yield in 6 months.
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that's a strong indication so in general companies that buy back shares over time that's a positive indication. >> you are talking generally about capital deployment. deploys capital whether it's for the thingless or other ways to generate growth. >> think about it. s&p 500 companies spend about $2.1 trillion. that's the use of cash. mergers, you could do research and development, capital spending. three different ways to invest for growth. return cash to shareholders. dividends and buybacks. various ways for different ways to spend the money. >> we have seen and fuel use the stocks and and it's a more efficient capital structure and companies have a historically a lower degree of leverage to increase leverage and enhance returns to shareholders. capital spending if you think about it, companies have been
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spending a lot of money, 2010, '11, '12 and 2013 was only a 2% growth in capital spending and the economy -- companies were reluctant to invest. my forecast is there will be an increase of about 9% in the coming year. >> in cap x? >> 9% increase in capital spending. that's an important indication and as the economy gets better, the companies invest. oracle, a company basically focused on that. a colleague has a buy rait tong shares. where they're basically investing in their business. that's a business strategy. >> why are you so relaxed about the fed? >> you haven't mentioned the fact that interest rates for the companies could rise substantially over the next two years perhaps? >> the likelihood, there's two parts. we have the short raits likely to be unchanged.
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on the fed fund level, low. the forecast for the ten-year treasury yield likely to rise modestly. for end of next year. 275. modest increase over the coming year. there's trending higher above that. most companies have operated, they have refinanced the debt. they have extended the maturities and taken advantage of the very, very low unprecedented low -- that's an important issue. the market trades around fair value. so, relative to bonds, it is certainly much more attractive and not as though that equities are, you know, unusually inexpensive relative to bonds. over time, you're likely to get a much better return from stocks and bonds and not they're meaningfully undervalued. >> and trade at a multiple and expand or contract depending on how much fear there is around. if when the taper starts and not factored in, presumably the
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multiple to trade at could deflate and people are not sure that the economic recovery is there or the full case is so carefully underpinned. >> we can look at the economic data this morning with ism manufacturing, a strong indication. we are getting some more information that the economy is getting better. >> yeah. best number since april of 2011. thank you so much for coming by. good to see you again. >> thank you. black friday might be over but today, of course, is cyber monday and workplace productivity falls and online sales skyrocket. fed-ex expects today will be its busiest day of the year. courtney reagan is live at a distribution center in arizona. good morning. >> reporter: good morning to you, simon. we are here in tempe, arizona. ibm says online sales over the thanksgiving weekend grew 14.5% so if you think about all of those mur chass and the ones made today and you have fed-ex's busiest day in history and at this location they fin
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initialled the largest sort of the day. the packages are being loaded up on to the fed-ex trucks driven away to make the deliveries to make room for the any packages that will be coming into the system through cyber monday today. fed-ex is forecasting a record 22 million packages through the sam that is a 11% increase over last year's biggest day so what's in the packages? well, ibm says categories like home goods, apparel, health and beauty products with some of the biggest surges over the black friday weekend. department stores, online sales grew 60% according to ibm just on black friday alone. the national retail federation expects 131 million americans shop today online but ibisworld says $1.8 billion will be spent and pales with black friday with both in store and online. so we're going to follow the
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action here in arizona as these trucks pull out to make the deliveries from the weekend's purchases, we are going to move to an amazon fulfillment center to watch the cyber monday orders that are being placed and shipped out to fed-ex and along the supply chain from there. >> that's what we call a live shot right there. thanks so much. talk about doorstep delivery, jeff bezos reveals they're experimenting with drone-based delivery. take a listen. >> i know this looks like science fiction. it's not. >> wow. >> this is early. this is still years away. drops the package. >> there's the package. >> come and get your package. we can do half-hour delivery. >> half-hour delivery? >> half-hour delivery and carry objects we think up to five pounds. >> that service amazon prime air could be ready for use in four or five years and could carry objects to discuss merles within a ten-mile radius of a
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distribution center. when's the worst that could happen? tweet us. we'll get your responses later on in the morning. people had ideas already about worse worst-case scenarios. >> try landing in the streets in manhattan. >> yes. >> the other thing is have you noticed how innocent they look? cute little drones. as time goes on, you can see it's the future. presumably they're armed or they'll -- >> hellfires on there. >> did you see quot blif i don't know" with tom cruise? >> no. it was a part of "homeland." >> i won't give away more. >> thank you very much. they keep innovating and, carl, we have seen apparently they're not the first to think about drones. >> yes. >> i think australia, delivery of textbooks perhaps has taken place for at least been thought about, as well. >> fed-ex who thought it was talked about enough that they had to issue a statement saying they're interested in pushing the envelope coming to
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technology. >> it's been five years since the financial crisis and an insider is exposing what he calls the perfect storm of money and power that led to the crisis. former cfo of fannie mae himself, something of a controversial figure, tim howard will join us live here at post 9 after the break.
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welcome back. take a look at shares of 3m
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pressuring the dow today. morgan stanley moving down on the company. its price target $122 a share. you can see we're at 130.11 down 2.5%. back to you. >> thank you very much. it's over five years since the housing crisis began and the u.s. treasury took over fannie mae and freddie mac and pledged hundreds of millions of dollars to stabilize them. looking back, what have we learned? timothy howard is former cfo of fannie mae and an author of "the mortgage wars." good morning. >> good morning. >> up until now, of course, you've been gagged with the court cases going through. what does this book tell us that we didn't know before? >> i think the main thing that's new about the book is that i try and explain that the mortgage
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crisis was a result of a fight between fannie mae and freddie mac and its supporters and banks and regulators over control of what at the time was the largest credit market in the world, the mortgage market. they had been the major sources of financing in that market. large banks and regulators for different reasons thought that was not the best way to finance mortgages so they set out to replace fannie and freddie with private lending mechanisms and ended in a way nobody anticipated and took the participant douns at the end. >> you do admit in the book and i haven't read it but only from reviews so far you admit i believe that you were too slow to realize the growth in the size of the portfolio and the over reliance on derivatives. there was a mea culapa what. >> what ended going wrong was
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the credit risk. fannie mae did extremely well throughout the time i was there which ended in 2004. >> and what do you say about that? how do you feel about the bush administration forcing you out, suggesting that you mishandled new rules on mortgage-backed securities? >> wasn't so much the bush administration but fannie mae's regulator at the time who said that we committed deliberate accounting fraud which after eight years of reviewing of 67 million pages of documents and interviewing over 100 witnesses, a federal district court judge found that was completely invented and once that rauling was made last year -- >> not prooufb. >> correct. there were no evidence to support the claims. >> but that had the affect of giving the opening that the private securitization market wanted of taking more and more market share. >> private securitization took over before the chairman of fannie mae and i were forced out. it happened in the second half
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-- >> but market sharewise it true through '04, '05, '06. >> very rapidly from the end of 2003 to the end of 2004 and then stabilize for the next three years. and the fact that you had the private securities where you could have participants in the process, whether it was brokers, lenders, rating agencies, wall street issuers, all able to make money off mortgages even if they weren't repaid, that's what caused the drop in lending standards. >> which fannie mae and freddie mac chased after. one of the key things is they made a fateful decision, didn't they, to play the game and not walk away from it and lower our standards, as well, to compete. >> they did very late in the game. starting around 2006. >> the worst mortgages made by the way. >> timing was terrible but still if you look at what happened after the fact, fannie mae's loss rate, the rate of mortgages
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going bad, about half that of the banks and a quarter of the loss rate of private label securities so that's reflective of the fact they did get in late. >> now we're left with mel watt and whether or not he's confirmed to oversee. does the right regulator change the game? how much risk is left in the system? >> i they regulator will play an important role in deciding how to reform the system. right now, the current consensus on mortgage reform is let's do away with fannie and freddie and replace it with private market mechanisms and the point of my book is, wait a minute. that's exactly what happened starting in the late 1990s, early 2000s and produced the crisis. we need to understand what happened in the crisis so that the reforms we make actually work and don't repeat an outcome that none of us want, whether it's home buyers or economists. >> very big money. they're buying up the 20% of the
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common stock that was left on the table when the government put them in conserveship. there's a belief they cannot say that moving forward they get 100% of the proceeds when there is this common stock still outstanding. what is your view? you know the technical picture very well. do you think they'll win? >> that's more of a legal question and whether the current regulator were right to amend the terms of the preferred stock agreement made in 2008. >> what do you hear? do you hear they're able to do that and win? >> i hear that they can win. >> that's big news. thank you very much for joining us. >> quite welcome. my pleasure. black friday is over and the first read for the season is not good. can cyber monday save retailers? experts weigh in on that after this break. thrusters at 30%! i can't get her to warp.
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more more shoppers hit the stores over this thanksgiving weekend than last year but according to the national retail fed case, total spending was down nearly 3%. the decline in spending is in fact the worst in seven years. but today, of course, the attention shifts to online. which retailers come out on top this cyber monday? laura champaine epa joining us is ruma. laura, let's kick off with you. what is going on here? because the national retail federation said overall spending likely to rise 4% for the season. but these first four days are a huge disappointment. what's happening? >> right. so the nrf is betting that consumers have done what they have done years past is wait later and later. consumers learned the game and although discounts heavy this holiday weekend, they weren't enough to drive spending increases. traffic was up, not spending. >> so ed, in realtime, what now
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happens to those retailers? how behavior terms do they change what they're doing and degree of markdowns and the landscape, the patterns of those patterns moving forward? >> we are seeing it on the fly today. for example, if you walked into a store to see 40 off and on top of it additional 15% off today only and seeing starting this morning was an addition allayer of promotions that obviously is manager you don't want to see and retailers are acknowledging that tough holiday weekend and responding with more and more promotions. >> laura, you say the high end is still where you want to be but is there a good way to -- i mean, i'm looking at a list of retailers and it's like they were scattered into the winners and losers buckets. how do you screen for who did well over the course of the given weekend? >> sure. i don't think you can necessarily look at how stocks reacting today. we would not want to own the monthly reporters going into thursday. that's gap and l brands but wait
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for the dust to settle. november was a lot fewer shopping days this year versus last year. i don't think it makes sense to own them this week. >> ed, you know, how serious is the discounting? is it enough to permanently damage the industry? the small to medium-sized businesses who are suppliers to some big retailers? retailers most realize most guaranteed a gross margin and then slashing below that, they seek to recoup it from suppliers and could go out of business or find it very hard. >> i mean, look. that's clearly a major head wind. many of the vendors are offshore and clearly there's a pressure really across the supply chain as people try to drive some of the promotions and consumer is demanding that deal but they want the deal differently. there's fatigue. we are seen 40 off, 20 off. looking for a different type of hook to drive them in the store and usually that hook she a
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bigger promotion. >> where do you think investors should go? >> we really still like tiffany. the stock hit record highs and we believe they're focused on giftible items. it will be a winner this holiday and obviously we think it's well positioned at the high end and they don't need to offer promotions. >> laura, one thing you noticed over the weekend, there are discounts and not extended until infinity. i wonder, are we looking at heavy promotions and more disciplined promotions going into the month? >> retailers usually enter the season with a good, better, best plan. right now, we think that they're looking at pulling all the stops. i think that promotions will get more intense as we move through december. we think it's going to be a good holiday season for the consumer, not for the retailer. >> okay, guys. leave it there. have a great week, thank you. coming up, the founder and ceo will talk about the m and a
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thesince since the founding six years ago, moelis and company is one
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of the top independent investment firms on wall street. advisory role, of course. founder and ceo ken moelis joins me now. nice to have you, of course. >> good to be here. >> i like to talk to you about financial services, trends. but i haven't often focused on the growth of your own firm. you have almost 600 employees. i know you won't give a revenue number. some report it as high as $300 million. are you going to continue to grow and have you done most of the hiring already that you will have done at moelis and company? >> no. look. i think the opportunities we have are bigger than i thought when i started the company. and i -- >> why? >> i think the model we have where clients can talk to us confidentially about their most important strategic plans is exceptional and i think as we do it more and more and people realize they have a confidant, an adviser to give them all the information from around the
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globe, we have 14 offices around the globe, david, so i think we can bring everything a large bank can without the breaches of confidentiality. >> you have chosen not to try to venture into the capital markets arena. very often we see sort of advisory and capital markets and those banks that offer both argue, well, we need the capital markets to tell you where the stock will be and that things of that nature. >> if you asked me seven years ago when i started i might have said that's an interesting idea. it is no longer of any interest to us. i think the big capital markets providers are getting by on scale. you have to be large. the transparency of information leaves very little value added in the trading markets now so it's all scale function. and we love the idea that we get to go in the boardroom and have no other agenda. we are not going to underwrite your securities. we won't do the debt financing. we are just going to tell you the best thing to do in this situation is. >> you're able to hire a lot
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during and after the crisis. certainly a number of talented people were available. give me a sense as to what the talent pool looks like right now. off lot of guys and ladies who were perhaps stuck because they got deferred stock coming to them over a number of years. does that make it for difficult? >> it does. it was a good time in the market. it was chaos in '09 and '10. >> you would have liked there to have been more. >> there was enough and i tried to take advantage as much as i could. looking back you realize how good the economy's recovered. i think m&an is on a long, slow steady improvement and having the people is important and you cannot hire people and go right to a relationship. you have to hire people five, six, seven years ahead of the clients doing a transaction because you have to build trust aenl get to know your clients so the answer is, i think the market will be very good. i think the regulatory
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environment will pressure people to have one on one relationships with clients undisturbed by the oversight that's meant for balance sheets and i'm not saying it's bad. >> i'm not following you. >> think a lot of oversight in place is to stop massive errors, balance sheet errors. if you have a trillion dollars of derivatives, multiple sites of oversight is important. i think it's in direct contradiction. the most important thing is multikl points of information, transparency where everyone knows when's going on. this is the exact opposite. we sometimes working on a transaction right now where i would say five or six people in the firm know about it. that's the way we like it. secrets are often betrayed solely because of the number of people involved. not because anybody has a bad, you know, a bad idea in their head. it's just the number of people.
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>> interesting. you know, you mentioned slow, steady progression in m&a but the slow is one to emphasize. this is not a good year by many standards for merger and acquisition activity. >>s no at boom year by the statist statistics. we are up year over year and probably our best year ever but you can feel the dialogue. you can feel it happening. i think one of the things holding it back is if people felt like they could have these conversations and explore interesting ideas, without reading about it in the paper -- >> you think leaks and a lack of confidentiality are leading ceos and decision makers to pull back from the idea of entertaining m&a? >> i think they're worried if they talk about something innovative and read about it too early, your board could be upset, shareholders could be upset.
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it is very -- pours cold water on innovation whether the ideas come out half baked and i think we have worked on three very large transactions this year. one was the new york stock exchange. no leaks right here in the heart of new york city. >> that's true. >> i know you were unhappy about that professionally. >> yeah, you know, i'm unhappy. you are attacking my franchise. it's the first time i have heard that as a reason we haven't seen more m&a and other things that go to confidence and unwillingness of ceos to make those kinds of bet the company decisions because they could be fired and why take a chance. >> what's even worse than that is before it comes to fruition, reading about an idea you had. and how many transactions -- >> that may go to a lack of journalistic sbintegrity. you won't see me do those kinds of stories. so you do think things are going to continue to improvement? >> oh yeah. we are in a steady -- look, i think the best thing for the m&a
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market. it is steady. it's slow. the conversations are picking up. and i don't -- look, i'm not predicting a boom. i'm just saying it will steadily improve and probably healthy. >> what about your company? a lot of reports that you will eventually choose to go public. >> well, look. we'll make that decision, myself and the partners of the firm own the vast majority of the company. and we'll make that decision. >> what would be the benefits to being a public company? >> you know, there's some ben filths of being -- having liquidity in the stock and some negatives. and those are the kind of decisions to evaluate. >> i think of greenhill and both public. they've done fairly well. you consider them competition? >> i consider them comparable companies. we actually compete, interestingly, just because of the size, we compete with the large universal banks way more often and just a size thing. they have three, four time it is number of bank earls so we'll see them more often. >> all right. finally, next year going to be
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better than this year? big picture, better than this year? >> yes. look. i think you will have slow gdp growth. there's nobody i'm talking to expecting this economy to boom. but i'll tell you all the companies, ceos, vast majority, very optimistic. they're making the numbers. i think it has to do with the productivity of technology today. how people get to the bottom line and not basing it on an economic recovery and seeing slow growth but they're all pretty optimistic about their own companies. >> ken, as always, appreciate your time and insights. thank you. >> good to see you, david. >> carl, over to you. >> thanks so much. it's one of the hottest start-ups and warby parker is teaming up. there are rumors planning to go public. we'll talk to the ceos of the e eyewear company when we come back. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution,
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welcome back to "squawk on the street." states like phlooking better afr the fixes down over the last month and a source familiar with the situation says even before the self-imposed deadline to have the website working well today about 100,000 people were able to select plans on healthcare.gov. taking a look at the graphic, we have had the states which have confirmed to us their enrollment numbers about 230,000. so all told to date we have an estimated 330,000 people who have been able to select plans and or fully enroll in insurance. of course, simon, the big issue is whether or not all that paperwork, all of that technical back end situation is working well and that's what we'll be talking about coming up. back to you. >> thank you very much. big news on the ipo front this morning.
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hilton worldwide is planning to return to the new york stock exchange next week under the ticker symbol hlt saying it will price 112 million shares and the beginning between 18 and $21 a share and raise about $2.37 billion valuing the company just over 20 billion and looks fairly conservative and may see that's raised. the company says that it will price after the close of trading on thursday, december 12th and start trading here presumably friday the 13th. the road show starts tomorrow. over to you. >> thanks so much. we're joined by two co-ceos and expanded to bricks and mor or the presence. popular eyewear company warby parker, co-coes and join us here this morning on floor. guys, happy cyber monday, i guess. >> great to be here. >> you look excited.
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>> i have to imagine holidays are not as critical for a company like yours. is it? >> that's right. we started three and a half years ago because we thought glasses were overpriced and wanted a brand and sell them -- cut out the middlemen and glasses direct to consumers and great offer every day and not offering any discounts on cyber monday but still seeing a big uptick in sales as there's energy around shopping in general. >> obviously, the cyber monday thing, neil, is invented by retail. we understand that. we get that. is it a day where you have to have more engineers on site and the serves don't crash? >> there are. definitely our team is ready and we sort of run through drills leading up to the holidays. we were prepared on friday and sort of black friday, black friday is quickly becoming cyber friday, as well. so we sort of think about it the whole weekend and the weekend sales were probably 2.5 x what they were last year. >> man, that is crazy. i'm sure you are seeing the
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stats from the nrf showing that spending is down first time in seven years. the sense is that if retailers hit the target overall, i mean, then it's a success. are you that pessimistic or room for upside? >> we think for companies offering great value that consumers are voting with the wallets and so for us we're seeing a huge uptick in sales. the five highest sales days in the last two weeks. >> of course, you added mickey drexler to the board and created the gap and j. crew and maybe the most known fashion icon in the country right now. how's he changed the experience online or in the stores for you guys, neil? >> one of the things is we're opening up more stores and opened up four stores in six months and finding that this convergence of bricks and mortar and e-commerce is mutually beneficial and we see web sales increase, we see convergence on the website increase. >> does mickey want to see you
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go heavier bricks or clicks or weighed in on that yet? >> i think he sees the future as both and opening up more stores and full steam ahead on the e-commerce platform, as well. >> if promotions don't come in the holidays, necessarily, dave, when do they come? when's christmas for industry? >> we are seeing a big uptick in sales and we think glasses are a great gift and offering a fun gift card experience. >> talk about that. what is that? >> people have an e-gift card to e-mail or if you go to the website, you can order physical gift card and send a personalized note along with a make them snowman kit to make a snowman and instruction booklet and if you live in a warm weather place, we offer instructions to use mashed potatoes instead of snow. >> you have to put your glasses on the snowman. >> yeah. finally, you're here on the floor. and i ask you every time you're on. but i'm sure you look around the
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new york stock exchange. there must be some part of you that wonders if, when you will go public and under what circumstances. have you given more thought to it lately, snooel. >> i think it's an exciting time for the tech industry and we're definitely sort of part of that world so we're still trying to sort of build a strong foundation for sort of continued growth so right now we're still sort of laser focused on sort of the fine details but yeah. hopefully one day we'll be back here. >> i got the exciting time this time. that's progress. thank you so much. >> thank you. >> from warby parker. simon, over to you. still ahead, are diamonds retailer's best friend? blue nile ceo joins us live on the show with the state of retailer, the consumer and making the best of cyber monday. we'll be right back. i love having a free checked bag
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and get a free foundation. find a store at tempurpedic.com. good morning. welcome back to "squawk on the good morning. welcome back to "squawk on the street." i'm jackie deangelis. lionsgate and disney moving higher over the five day holiday weekend. frozen took in $93 million.
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if you recall lionsgate sold off after "hunger games'" record breaking opening weekend. both beat the former gross of $8 $82.4 million set by wgs harry potter" back in 2001. carl, back to you. >> that's a big record to break. thank you so much, jackie deangelis. to the cme group and rick santelli. >> and the mon day edition is mostly about tomorrow, tuesday, and the likelihood that illinois, the worst underfunded pension in the kcountry at over $100 million might see a vote to rectify the situation. it's a very interesting scenario and it really does represent a litmus test potentially for the entire country from so many different levels. first of all, just on the generic level, 401(k).
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that will be debated even though what potentially are will be put forth in a vote tomorrow will not be the style to it yourself. it's going to be modifications to the current public pension system. in two major areas. one is cost of living adjustments. the other is raising the benefits age. we've heard it on 0 the state level or a national level. but the real issue will be the details. we already see in illinois organized labor threatening to say no way and pushing a constitution constitutional test to any type of changes. why? and this issing something everybody on the national level will will be paying attention to and that is just the general constitutionality there needs to
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be a give and take. here's the most disturbing fact of all. it harkens back to to another time over another program that really isn't delivering and that's, of course, obama care and i will call it obama care. many call it the affordable care act because it's so unaffordable in its current shape. remember nancy pelosi and her comments if you want to know what's in it, you had to vote for it? there are so many of them. there's been work ongoing all weekend to try to come up with the final details says house speaker madigan's people. why do we elect people, put them on staff? if that's the way it is, i understand. i'm a pragmatic realist. in the end, i would think it's important that somebody reads it before they pass it because i
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think all the surprises in obama it's not fair to put many public workers back in this kind of gray area again. this is supposed to save $150 billion over the next several decades and all eyes will be focused on illinois because it's the worst and it's trying to get better. back to you, simon. tweet time. jeff bezos reveals they are experimenting with drone-based delivery. the service amazon prime air could be ready in the next four or five years and could carry objects to customers within a ten-mile radius of an amazon distribution center. is it a great idea? what's the worst that could happen? tweet us @squawkstreet. [ female announcer ] thanks for financing my first car.
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radius of an a.m. does center. what's the worst that could happen? david writes, what's the worst that could happen? have you seen the "terminator" movies? i envision delivery and a haircut. laguardia departures will have to watch out for flocks of drones instead of geese. lawsuits galore. some little brat geek hacking the system and having everything delivered to his house which isn't hard to imagine. it's given us lots to talk about today. as we talk about a.mazon and retail in general, stocks not reflecting too much weakness. a lot of retailers are on the winner's list. >> we've to see how cyber monday goes and how many people are transitioning not just to their laptops but you mobile devices. did you use your mobile? >> i used our stunned.
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>> i'm surprised the amount of purchases that get done not be on a tablet but on a phone. i'm sure you might have used it even in the store. >> i should have used red laser in the store and i could have had a better price right next to my home. i don't like to ever be taken advantage of even over $10. >> guys, we'll see you later on. if you're just joining us here is what you missed earlier on. welcome to "squawk on the street." >> exiting chemicals is the move today. we've been working on this for a better part of the year with our board, our advisers. this is a complex carveout for tou. >> we're making pickups for local delivery. and that's one way that brick and mortar retailers can compete with great companies like amazon. >> the r&d element and the rollout of the story on a week,
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on a monday we are talking about nothing but retail is a public relations coup. >> when you're watching something on twitter, i totally get the upside to the story but the stock would be going higher but it's too high. >> is the market likely to rise by 5% or so to 1900 and the road to a higher market of 2100 and 2200 in 2015 and 2016. >> we need to understand so that the reforms we make work and don't have things that don't work. >> the countdown to christmas is in full swing. ho-h ho-ho-ho. ♪ it's the most wonderful time of the year ♪
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good monday morning. we're live here at post 9 on the new york stock exchange. the dow up for three straight months, walking into its best month of the year, the month of december, and the s&p which has not been down since 2007. some mixed markets. ebay is up more than 3%. sun trust upgrading from buy to knew you tral. different story for 3m the biggest decliner on the dow is down 3%. down grading to underweight from equal weight. after a big runup there's potential for 3m to lag its peers. there's so much buzz about amazon testing drones, even fedex is putting out a statement, we're going to explore how much of a game changer this could be for retail. >> improving the troubled
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healthcare.gov website. could there be more land mines on the way? >> and just in time for cyber monday, qualcomm's smartwatch. a look at the device which we have here at post 9. and it's cyber monday. plenty of big tech names are kicking off the week with hot deals and steep discounts. more on the deals you can nab today. josh, how important has cyber monday become? >> kelly, your friends and neighbors, they can't get enough tech. walmart said its top sellers friday online and in stores were television, tablets, and gaming consoles. big tech is offering big discounts. amazon will be the destination for many. it was the most visited online retailer on black friday. today new deals as often as every ten minutes. 20% off tablets, 30% off lapt s
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laptops. tech companies are hoping discounts can jump-start sales for devices that haven't been as popular. microsoft is offering its surface rt tablet, 32 gigabytes, for $199. normally that would run you $349. the company has had a tough time grabbing share in tablets. they didn't even make the list of the top vendors during the third quarter according to icc. motorola unit thinks a discount might get you to buy the moto-x. only about 500,000 were sold in the third quarter. remember, samsung said it sold about 10 million galaxy s4 phones in the april release. the motorola is cutting a full $150 from the off contract price of the smartphone. for today only, that phone starts at $345. >> thanks, josh lipton on the
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west coast. you might receive your amazon delivery by drone in under 30 minutes. jeff bezos revealed they are looking into drone package delivery to tlifr within a ten-mile radius. just when this might be a reality, jonathan a. >> it's going to be a while, carl. convenient timing for bezos to get on national tv right before cyber monday. >> the most watched show in the country. >> their name is all over the place. it will be a long time not only because the faa isn't going to give its recommending for commercial drone regulations until 2015 but it could be a while after that before we see them certified. it's an interesting space, though. how much they could contribute to the economy.
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amazon spent more than $5 billion on shipping alone. this year they're on track to spend more than $6 billion. and that's what they're pay iin to fed, u.p.s., the postal service,s and others. maybe do it more cheaply with a drone fleet as the business continues to expand. >> where do you think this ranks on amazon's r&d list? is this play money? are they playing with some house money on this project? >> i think they're playing with house money. >> really? >> chris anderson, former wired editor in chief has them working on some of these same problems, figuring how to get the drones to fly on automated way, get them to swarm so that they all are aware.
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controlling the drones that will get them to be able to go to those locations. it's logistics. >> it feels like the kind of thing we need to have hearings on next week. >> try this afternoon. >> there are isolated cases in china where some people have been able to deliver products via drone. regulators cannot get behind the ball on something this important. >> you can think about grandma's out there. it could get ugly. that's some of the stuff they're trying to work out. >> bezos loves to disrupt. does this disrupt others or more the fedex of the world which is
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up 1%? the market not taking it as something that will happen tomorrow. >> i think it puts pressure on other retailers to use a.m. ston's infrastructure. now they make more money from third party retailers. there's that $5 billion, $6 billion they are paying out to others. >> an underground lair where he comes up with these ideas. >> how do you know he tonight have one? >> exactly. >> thanks, jon. >> working on one in space, too. >> looking for deal today because it is cyber monday, who better to ask than harvey cantor. he joins us now for a first on cnbc interview. good morning. good morning.
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>> we came off a great holiday weekend. the next three weeks are critical. cyber monday is the start of these three weeks. >> perhaps owing to deep discounts or bargain hunting mentalities, they're not spending as much. do your own numbers confirm that? traffic to the site is great. and actually we are accelerating conversion with our newest launch of our check-out agnostic platform. it's easy and simple to shop. >> that with be up threefold from last year. what's fascinating, too, this indicates the level of trust and comfort people have with using mobile to buy things.
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talking about a $250,000 diamond ring. people aren't afraid to make that purchase on a tablet. >> almost 60% was on a mobile device and 25% of our revenue. customers are getting more comfortable. >> average ticket up or down? >> flat. >> does that concern you in any way? are we at a point where we expect the ticket to go up every year? >> we have a ticket that's twice the average. seeing some level of growth, we're excited about the increased penetration of traffic and especially to mobile. >> harvey, talking about your monday promotion being high quality diamond stud earrings up to 40% off, an unprecedented
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deal from blue nile and an industry leading offer. what are the takeaways coming out appears to be that either you're offering something at 50% off or the customers are just not interested. >> the next three weeks are really important. it's what will propel our business. >> a buddy of our writes, how do i block blue nile from all the internet devices in my household? i'm sure that's a joke but at what point do you flood customers with e-mails they don't want? >> we have had a great result with the consumer and they're engaged with the brand and we're a great gift giving retailer. we don't have the concerns. >> would you be comfortable putting that $250,000 ring on a drone? >> we're comfortable selling that $250,000 ring.
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>> and you'll leave it at that for now. okay. we have a couple of years to explore the topic. thank you so much. >> have a great holiday. >> you, too. when we come back, a look back at what was the biggest collapse in u.s. business history. some of the lessons that have been learned 12 years after the bankruptcy of enron. also ahead, rick santelli at the cme in chicago. rick? normally i only want to be thinking cuomo. with buybacks, it will be a harry month instead. the fed buybacks, what it means for december and what it may mean for 2014. all the bottom of the hour. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office,
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to get your best night's sleep [woman] aevery night.t's like [announcer] why not talk to someone who's sleeping on the most highly recommended bed in america? [woman] ask me about my tempur-pedic. [man] ask me how fast i fall asleep. [woman] ask me about staying asleep. [announcer] tempur-pedic owners are more satisfied than owners of any traditional mattress brand.
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tempur-pedic. the most highly recommended bed in america. save up to $300 on our most popular tempur-pedic mattresses and get a free foundation. find a store at tempurpedic.com. welcome back. welcome back. dow transports hitting a new record for a third consecutive day. jackie deangelis back at headquarters with more on this move. good morning, that's right. the transports are up about 37% year to date. on pace to having their best year since 1997. we're looking at package deliverer fedex and delta and southwest. also for the railroads union pacific is up. 1 years ago today enron is
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still the most shocking, books, movies, countless articles written. some say the true story has not been told. a look at that. >> it's still relevant because there were so many post enron refor reforms. the conventional wisdom is that enron was a house of cards held together by a fraudulent accounting but lawrence weiss says that's not quite right. he joins us this morning from boston. good morning. good morning. thank you for having me. >> i want to put some of it up on the screen. enron had approximately $2 billion in cash and no debt coming due. why did enron go bankrupt?
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the accounting was legitimate, might have saved the company if they allowed it to play out. they were fixated on the stock price. what do you mean by that? they did have financial misrepresentation. when they had an operation, their trading operation, absolutely had to maintain an investment credit rating. if ken lay had focused on that and made sure it was maintained perhaps enron would still be alive. >> you right there were safety valves that they had in some of the financing structures. that basically could have saved the company by issuing more stock. that would have made the stock price go down. what was going on there? what didn't they do that they could have done were they not so if i can ate e fixated on the sales price? >> the lenders of these special
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purpose entities had agreed to take shares. that would have diluted the share price. the ratings agency says if you're not living up to commitments we'll add all these items onto your balance sheet and at that point you don't deserve the credit rating. your trading operations are out of business. >> they had the structures in place that were put in by the former cfo, convicted and confessed fraudster, an alumnus of your university, tufts. you've talked to him. he seems to be adescribiscribins theory. >> why is do it a firm go bankrupt. did enron have viable, profitable businesses? the answer is yes. if they were able to maintain
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the businesses, the profitable ones, then i think there's a good argument to be made enron might have survived. there was another part of the story. f focusing on short term share price is also what led to the financial misrepresentation. >> we've confirmed these statements are from fastow. he had an argument with lay about the decision not to issue sto stock. he says he can't say with certainty why lay made the decision he did but lay did have a personal wealth tied up in en-on-. you're putting a stake through enr enron's heart. was ken lay's fixation with the stock price really what was going on here? >> well, i think that's a large part of the story. i don't think it's just true for enron.
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a lot don't realize they are damaging the firm long tirm. term. >> there are so many post-enron reforms that came out of this. and these accounting rules that you say weren't necessarily a bad thing. what have we learned from all of this and did we take the wrong lessons away 12 years ago? >> i don't think we've taken away the wrong lessons. i do think we've had all these regulations and yet continue to have financial chicanery in the marketplace. you continue to have excessive amounts of off balance sheet debts. no one appears to be prosecuted for these games whereas back 12 years ago a lot of people were. perhaps new rules provide cover for management and allow them to avoid criminal prosecution and
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if that's true maybe we have to think about moving to a more principles based approach and away from the rules based approach. >> 12 years later we're still not done talking about enron. lawrence weiss, we thank you. >> fascinating. coming up, the deadline to fixing healthcare.gov has passed. the debate rages on. we'll talk with former republican senator and former economic adviser to v.p. biden to get their take on all of it. plus, an up close lack at qualcomm's new talk smartwatch. can this make the category hot?
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we're here to keep our promises. to help you realize a better tomorrow. from the families of aig, happy holidays. welcome back to "squawk on the street." i'm jackie deangelis. gold falling nearly 2% today below $1 ,230 undermined by concerns, of course, that a stronger u.s. economy could lead the fed to it reduce its
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stimulus program. that sending the gold stocks lower. take a look at the board here. yamana, barick, all these stocks are getting hit hard today, c l carl. the white house this morning saying healthcare.gov is night and day from where it was on october 1, working more than 90% of the time. is it too little too late for a lot of americans? a former economic adviser to the vice president, senior fellow for the center and budget and policy prarts and of course kay bailey hutchison is a former senator from texas. good morning to you both. >> good morning, carl. >> good to see you again. night and day, we've been telling the white house not the to overpromise. is this doing just that? >> no, i think they're actually calling this one straight. they are saying 90% of the time in terms of website functionality up from 43% a month ago. page views are taking about a second. their goal is to get it down to half a second.
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their error rate is around 1%, but they're also saying, by the way, the front end, the part consumers see, the portal you log on to, that's what i just described with all the positive statistics, there are some issues with the back end, that insurers are getting, still needs work and that's very important as well, of course. >> senator, where do your concerns lie if, in fact, the end referenced is working most of the time now? >> i think what we're going to be looking at is the big picture and that is is this going to offer people the insurance they're expecting? certainly there are still glitches in the verification issue, but i think we need to look at the whole thing. and decide what needs to be fixed in this insurance before people just either can't get it or they are disappointed with the level of coverage. >> i want to go to the delay of the small business piece of this for the national exchange because that's an issue that
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will affect a the lot of people in that they're only really starting to understand. how much of a factor and a disappointment is that going to be in the months ahead as some people on the state exchanges, small businesses, are able to take advantage for getting access here in new york and getting their employees up and running? >> it's just another one of these glitches, as you said, and a temporary problem. now it is the case, by the way. what you are describing means the small businesses can access the shop function, that's an acronym for access to the internet piece of this. they can go through brokers or insurance companies directly. so that part of the system is just not as easily accessible as it should be. these are all transitional problems. i very much agree with the senator. the question is, will this work in the sense of the much larger guarantees versus the kind of road to -- >> the reason i raise it, this becomes very important for
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exactly that issue you mentioned, going into next year and beyond when we want to see if this is keeping premiums from going up in the years to come, it's going to depend on getting everyone involved he so that you can bring the rates down. i mean, what's going to happen if you're an insurance can company that sets those rates in the spring will have no eye tea really about participation for many more months beyond that. >> all i can say about that is thus far we have quite persuasive evidence the affordable care act and other things going on in the industry, a lot of moving parts there, is doing exactly that, keeping down health care inflation, keeping down health care costs. competition in the exchanges that are working is bringing down costs. i think that will be a positive story once it rolls out. >> senator, the political story here, you are famous for telling republicans to shoot with the bullets they have. is this a bullet for the gop now? >> oh, i think the level of frustration of individuals and small businesses right now is so
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high that there's going to be an issue in 2014 elections. we don't want it to be a political issue. we don't want to talk about the politics of it. the fact is people are scared to death especially people who have had their coverage canceled and no guarantee that it's going to come back and you can't force companies to bring to back. and if they do, they don't know what to base their premiums on. so it's a very tough situation right now. and people are being affected individually and they're scared to death. >> senator, though, that's why i wonder if it's not a dangerous issue for the gop campaigning next year because to the extent that you remind people what a disaster it is now, the status quo that prevailed wasn't exactly working for everyone either. in other words by drawing attention to the issue, are they drawing attention in a positive way if there's not really the ability to follow up and say here is what we're going to do differently? >> oh, absolutely. i think there are so many things that could be improved on this
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without losing the good parts. for instance, i think the whole thing has fallen in many ways because it was too prescriptive and people lost their coverage because the companies didn't offer exactly what the government was requiring, this government requirement that everything should be exactly like the government prescribes is killing this whole obama care system. and i think that's what needs to be fixed, and i think the republicans certainly will have alternatives if these things are still not available or they're available in a very diminished circumstance, say by march of next year. >> we're not done talking about it, not by a long shot. good to see you again. thanks so much. >> thank you, carl. now europe's trading day is about to wrap up as markets here are under a little bit of pressure this morning. we'll get you details on the close. simon hobbs will join us when he we return.
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back.elcome welcome back. european markets have closed. data was a little bit better. >> the data was good overall across europe but the standout was that spain is now contract ing again. and if you look at this map carefully, you'll see that you have quite big losses, disproportionate losses on both spain and italy. spain doesn't have the domestic
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demand. you'll see greece, an upgrade from moody's overnight. it's now the third agency to start upgrading greece but certainly with international creditors you'll be aware they canceled a trip at the end of last week. looking for sectors that are moving today, the uk retailers are moving to negative broker comment coming through there in in advance of a trading statement from t he esco. the biggest loser has been able to sell out here in the united states to nippon but could sell its brazilian unit and will try to bolster up its position. finally let me mention the controversy continues at eads, the maker of airbus planes. i'm not sure if you caught the scenes over thanksgiving when 20,000 german workers protested job cuts. now we learn from the french prosecutor that the former industrial shareholders in eads,
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daimler, will and largardere will be prosecuted for insider dealing. essentially the notion here, this is a huge deal, they knew that the super double decker jumbo jet would be delayed and yet they traded on that as a company and as individuals. that is a massive story. guys, back to you. >> the steel story, too, is interesting for activity in this country. >> they spent something like 12 billion euros in north america and south america and it's come to nothing. >> thank you, simon. our simon hobbs. let's bring in bob pisani. happy monday, everybody. the important thing today very narrow trading range, 50 points or so on the dow, the case for the last week and a half. let me summarize the retail trading situation.
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a lot of numbers on what happened over thanksgiving weekend. it's a simple story, thanksgiving traffic overall was strong. black friday was notably softer and we have pulling forward some of the traffic that would have been friday came in thursday. this jumped out at me. many, many stores had 50% off sales. that seems to be the big standard today about whether you have a real sale or not. you can see the effect on some of the junior apparel companies this morning. for example, one of these bogo sales, buy one get one free or get one off 80%. buy one, get the second one 80% off. essentially 40% discount if you bought the two of them. wet seal is down. urban outfitters, 70% of the 31 retailers they looked at had promotions much stronger this year than last year including urban outfitters and they downgraded urban because of the amount of discounting they're
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doing. a eropostale and buckle. look at the department stores, you can see jcpenney and sears, concerns about them losing market shore. macy's and nordstrom's still low on the flat side. the story is about interest rates, the ten year creeping up. 2.8%. strong ism numbers this morning. now we're at a two and a half month high. that's changing the stock market a little bit. bank stocks strong the last five or six days as interest rates have crept up. the regional banks that are strong, traders believe high er interest rates will help a lot of the bank companies. elsewhere if you look at interest rate sensitive sectors, there's where the pressure is. you see housing starts, telecom, and consumer staples, all on the weakside. so independent of the retail story here it's the interest rate story that's making a big difference. carl, back to you. >> thank you so much, bob pisani. for more on the pashgts over to rick santelli in chicago as
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well. interest rates are where it's at. i'm never going to argue with bob pisani or rob, my fwes today. you go to the store and buy kool-aid, you read the directionses, tear it open, add the powder and a gallon of water. we're going to have a much more powerful gallon of kool-aid in terms of the buying at the federal reserve is going to do. explain. >> they are going to compete by december 23. they are doing six promos this week. interesting to see what the reaction of the ten year and 30 year with all this buying accelerated into the first part of the month. >> we're simple guys from the midwest. i look at the board after listening to you and reading all the things you've sent along these lines and see a ten year. have they not gotten the memo? >> long-term mutual bond funds have seen a redemption since
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june. >> let me stop you there. i talk about peeling the onion back. no matter what is going on with the fed, what type of communication may come from janet yellen when she takes the job, in the end, the onion we peel back are people, real world people like you viewers who decide i don't want to be in those funds anymore, for the interest rate moving up for obvious reasons. they're liquidating and whatever fund they're with has to sell the appropriate bonds. that's automatic, right? >> yes. on the other side of the coin the s&ps are up 28% on the year. investors and hedge funds and other investments are going, why should i take 3%, uncorrelated hedge fund that's returning 2% or 3% or 4%. the money has to flow that way. it's going to chase returns. >> what have you seen on some of these flows of late? >> the flows are moving out of bounds and into long-term equity funds. >> be careful there. we're not sure they're moving
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out of bonds. bond redemptions are going on. maybe into money markets or mattresses. we're not sure. it still doesn't look to me as though you can once and for all make the argument it's coming out of one and into another. continue. >> i would agree with that. i have spoken to other hedge funds and i can tell that they're tired of having the low four and five returns. people are dying for returns and they're seeing some of these hedge funds that are returning 70%, 80% this year being long 2-1 and long equities. >> maybe we need a 28th amendment, not that it says the government has to do everything themselves that they legislate for us which are the kind of e-mails, but make promo promo. if everything just keeps going up and there's no down side, what are the unintended consequences going to be? carl, back to you. >> thanks a lot, rick.
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rick santelli. straight ahead, a brand-new smart watch on the market. this one is from qualcomm. we have one here at post 9. an up close look at the new gadget after the break. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year [ ding! ] at the lexus december to remember sales event. this is the pursuit of perfection.
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yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. ♪ [ male announcer ] 1.21 gigawatts. today, that's easy. ge is revolutionizing power. supercharging turbines with advanced hardware and innovative software. using data predictively to help power entire cities.
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so the turbines of today... will power us all... into the future. ♪ coming up coming up on the halftime
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show, there are only 20 trading days left in 2013 so make your money count. we'll talk to top investors about how to play the rest of the year. plus, how you can take advantage of the 3% drop in black friday spending with a five star fund manager who has returned more than 40% this year. and the truth about twitter, the underwriters of that ipo releasing their calls today and hardly any are actually buying. that and much more straight ahead. see you in a bit. >> all right, scott, looking forward to it. thanks. qualcomm's tuck, connects via blue tooth, features like wireless charging low color display, and allows you to swipe through text messages, phone calls and other notifications. the device has been open for preorder since november 26. officially launches today. wow. i think you could have a second career,>> joh
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career, jon. >> yes, indeed. >> let me get the under hand here, right? can i do that, ladies. >> what do you think? >> what qualcomm is trying to do with the talk is sell the display. and it's really -- let me turn it around. it's low power, color. so this watch can last for multiple days as opposed to the hours that the samsung galaxy gear will last. that's the main advantage. it works in sun light quite well. there's a chinese watch manufacturer just announced last week, i believe, they've adopt ed this display. the watch is already doing its work. so people out there should keep in mind this is really for the gear heads. it's not something that qualcomm intends to move into and make a multibillion dollar business out of. >> i was going to ask you, what does it mean that a component maker is going this vertical, right, granting their own product, their own hardware. >> i think it means they weren't
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able to get others to really take that nibble the way they wanted. i would liken it to microsoft surface. when they came out with the hardware, yeah, we're making this, at least at first, but we really want to show others what you can do with our software. it's laike what apple has suggested with the apps they have come up you with for the iphone. we don't want this to just be our platform. we want to you build on it. >> how much is the watch, by the way? >> a couple hundred bucks? >> $200-$300? >> yeah. >> in that range. there was the samsung galaxy gear and that was a couple of hundred dollars? >> that one is more expensive. like $399 and it had to pair with a specific galaxy note 3. they have since expanded so you can compapair it with more of t phones. whether this needs to be a stand alone device or if, like this
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one, people will be okay with pairing it with a phone. >> speaking of which, the problem is it only pairs with an android phone so we had trouble finding someone without an iphone. >> it's a race against time. >> how does this compare? >> the galaxy gear has many more bells and whistles. this is very basic. it's going to be key among all of these watch makers who are trying to get stuff out there to see how they choose what to do well and whether they just try it to do everything. the more you try to build into it, the bulkier it gets. >> can we try to call it or should we not attempt it? >> i'm not doing it. >> we'll try it during the break and let you know. >> thank you, john. let's get to jackie deangelis for a quick market flash. check out web md. goldman sachs raising its rating to neutral from a cell. they found recent signs the company is beginning to monetize its mobile inventory at pharma
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advertisers, $40.38. kelly, back to you. if people are browsing maybe they'll check out their health as well. coming up next, where handmade is the norm and putting millions of americans to work and generating extra income. $895 million worth of merchandise next year. what's ahead for the company and what are they seeing on this cyber monday? the ceo joins us live at post 9 after a break. ♪
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it's it's an online marketplace and a big business. already crossing a billion in annual transactions this year. among its 30 million registers users, historically occurring the week of cyber mon day. the ceo joins us this morning at post 9. i don't know how he has time. >> our sales up 60%. >> 6-0? >> 6-0 the. mobile traffic is going really well. >> almost half, right? >> the majority of visits over the weekend have been on mobile devices. >> majority. >> it's been a very mobile holiday. very successful for our sell er. >> you've been around since
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2005? >> 2005. >> the sales base of almost $900 million and increase that 60%? >> we were up 60% this weekend. it's a strong holiday season so far. >> wow. >> we keep asking everyone about average ticket, are you sensing that among the individual consumer they're spending less, as much, more? >> actually not. we're seeing consistent spending patterns. people are spending at the same levelses as last year. seeing more buyers than ever. >> i was telling you my first experience with etsy was a gift. your point about the who wiholi you will try to buy a gift that has some meaning. >> we really believe the economy is changing and people want more connection when they're buying things. when you look at the retail online landscape it is the only place to find this type of good, actually buying from another person. everything you buy has a story behind it and a real person
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behind it. >> as you grow there's this gray area where you've announced recently you will allow sellers to sell things that they've produced with manufacturing partners, they can hire staff and use outside companies to ship their goods. explain that thought process. it does risk alienating some buyers. >> you've always been able to work with outside production partners. we called it partial production assistants, but we've seen the development of 3d print iing an new types of technologies, so 400 years ago people were using sewing machines and that was a revolutionary type of thing. we've really opened up opportunity for our sellers and we're allowing them to use some third party services to help them produce their items, but they always have to produce a story and tell us about the facility they're using and where it is. transparency in knowing where your items are coming from are essential to etsy. >> we talk to young retailers,
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they're all about scale and getting big and the mon at thisization point will come later on. have you gotten past that tipping point? >> since 2009 we've been profitable. the business is inherently profitable. >> are you in a stage of maximizatio maximization? >> no, we're not. i mentioned 60% this weekend. we're still a relatively young business at 8 years old and are continuing to grow. >> and of the following, which drives the most to etsy, twitter, pinterest? >> facebook drives quite a bit of traffic but pinterest is ahead of facebook. >> maybe facebook should buy pinterest then. >> you'll have to talk to mark zuckerberg. >> it's about more than just sharing what you had for dinner, as the times said the other day. >> and etsy buyers and sellers are using pinterest at high levels and consider them a
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friend. >> i know you've been asked about an ipo down here at the exchange, a couple of times we've done this today. the ipo market is great and would provide a lot of capital for employees if you wanted to build out more, where is it in your thinking? >> we are focused on building a long-term business. we don't have immediate plans to go public. it's something that we will consider in the future. >> if amazon came to you and said we'd like to make an offer, would you accept is? >> amazon and etsy are very different companies. i have respect for amazon but i think etsy is about rehumanizing the economy and connecting people, not just about price and convenience. >> so you're saying you won't be shipping via drone anytime soon? >> we will not be shipping via drones. on etsy you are much more likely to get a handwritten personal note with your delivery. the drone concept a little interesting. >> chad, it's great to have you. >> thank you. >> good luck this holiday season. chad dickerson, ceo of etsy.
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our chief international correspondent, michelle ka reca cabrera just got back from mexico. take a listen. >> reporter: ahead on cnbc why for the first time in 75 years american investors may finally get a crack at mexican oil. just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before.
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[ female announcer ] today cisco is connecting the internet of everything. is caused by people looking fore traffic parking.y that's remarkable that so much energy is, is wasted. streetline has looked at the problem of parking, which has not been looked at for the last 30, 40 years, we wanted to rethink that whole industry, so we go and put out these sensors in each parking spot and then there's a mesh network that takes this information sends it over the internet so you can go find exactly where those open parking spots are. the collaboration with citi was important for providing us the necessary financing; allow this small start-up to go provide a service to municipalities. citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally, citi is there every step of the way. so the end result is you reduce congestion, you reduce pollution and you provide a service to merchants, and that certainly is huge.
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welcome back. huge welcome back. huge protests in mexico over the weekend as thousands took to the main square. mexico city opposing changes to the oil industry. some signs including don't sell our oil. michelle is back. what's going on down there? >> reporter: there's a lot going on down there this week. the parliament debates changes to its constitution to allow foreign investment in the oil industry. despite the protests that you saw, big changes are likely to occur providing big opportunities for major multinationals. 55 miles off the coast one of the few deep water drills controlled by the mexican government's oil and gas company. it is an exploration drill. what they really need is
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production drills, lots of them, to get to as many as 50 billion barrels of possible energy reserves they estimate to be in the deep waters of the gulf of mexico. carlos morales says quite simply they don't have the money. >> the investment required for the resources is huge. >> reporter: the required investment is $60 billion a year, to be exact. pemex spending $25 billion a year. it's a critical situation because mexico needs new sources of oil. production is down sharply in the last ten years from 3.5 million barrels a day to only 2.5 million barrels a day. up until now halliburton has only been permitted to have service contracts in mexico. but the country's new president wants to change all that. he is pushing the country to change the constitution to allow the necessary foreign investment. it's a controversial move. mexico kicked out all the
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foreign oil companies in 1938, something that many mexicans are still proud of to this day. and that pride is what they will have to overcome. you can read more on this on cnbc.com to see the contracts to get multinationals in there and a renowned oil expert. back to you. >> that's a big story, michelle. thank you so much. michelle caruso-cabrera. let's get back to headquarters and check in with scott wapner and halftime. the store score, who won and lost the shopping weekend and how to trade that drop in total spending. the truth will twitter with the street finally speak iing. why are so few ipo underwriters actually buying? we begin with a look at this amazing market run. stocks now on an eight-week winning streak with the dow about to score its biggest annual point gain ever. so with only 20 days left in 2013 to make your money count, what will december have in store? a month that is usually very good

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