wine on the go. kevin o'leary tells us about his latest investment as the second hour of "squawk box" begins right now. welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. check out the video that's been coming out of the west coast this morning. there is a massive storm that's been causing power outages, mudslides, flooding, homes being washed away. and more rain is expected to pound southern california. let's get to andrew. >> let's tell you about what's going on. oil prices continuing their slide this morning dropping to their lowest since july 2009. that slide may continue into 2015. the energy agency cutting its global oil demand production forecast. by 230,000 barrels per day.

the iea also warning that weak demand raises the risk of social instability. but goldman sachs executive calls lower oil a blessing. >> there are a lot of positives to the economy from the energy situation to the resurgence of housing to the most important thing of having reversed all the leverage that was in the system and kind of reset the clock. so you can take something that's a blessing, lower price of oil which once you think of like a tax cut. >> take a look at the price of crude. you're looking at wti crude at $59.33. what are you smiling about, joseph? >> how many times have you heard that lower oil prices like a tax cut? i probably heard that a thousand times in my life. but i agree. but i don't know if that's the -- you know? i saw that yesterday, too, that

he said that. i was like, thank you, but i knew that. right? like a tax cut. we know that. >> but it's amazing how many people push back. there was even a guy tweeting this morning meaning yeah you pay 50 cents less for gas and lose thousands in your portfolio. but it gives it to the people who don't have portfolios. >> the people that aren't losing hundreds of thousands of dollars in their portfolio in the stock market. >> people who need it the most. and that helps the consumer. and the consumer is two-thirds of our economy. we should say the drop in oil prices has been putting pressure on stock markets today in europe and the united states. take a look at what's happening with our futures this morning. they are indicated to open lower. it is all but certain this is going to end a seven-week winning streak for the dow and s&p 500. check out dow down triple digits. believe it or not, this isn't the worst we've seen this morning. right now down by about 111 points below fair value. s&p futures are off by 13 points and the nasdaq is down by 34.

and a drop in energy stocks putting pressure on the european averages as well. big declines there with the cac down 1.6%. the ftse down 1.5%. only greece is seeing the slightest of rebounds after a really, really lousy week. government shutdown been avoided. maybe that's responsible for the market selloff today. the house passed a $1.1 trillion spending bill. how long is that $1.1 trillion, how quickly do we go through that? couple of weeks? >> maybe. i think we're back up by january. >> anyway, that will keep the government running through the end of the fiscal year in september. the bill got exactly one more vote than it needed to pass. the senate has to work through some procedural rules before it can give final approval to the bill. but it passed the two-day extension of current funding. let's talk about the slide in oil and its potential impact with us. not larry bird.

larry bosset. i'm trying to figure out your comments because we talked off camera about the slide in oil prices. you said near term good, long-term not so good. because putin invades poland or something? >> i think this. you know, there is a huge transfer to the consumer economy. that's good obviously for all the reasons and all the statements have been made about it over the last couple days. but in the longer term, i hope it doesn't reduce production in the united states to make a big contribution. some of the people track rg not going to be able to make money on it. i i don't want us to lose this energy independence we're slowly gaining by virtue of this price. so on the other hand, the saudis can change this. they caused it by virtue of not cutting last time they met. they don't like iran, as you

know. and they'd like to stick it to mr. putin for awhile as well. if they don't like the price, they can curb production. so i'm more of the mind it's a shorter term phenomena than some of the people are. >> it's funny everything is half full or half empty. to say, you know, that's what we were trying to do here was find a lot of oil. so then we find it and then the price naturally goes down. we should have known that was going to be one of the consequences. >> for the first time there was some people in the world in our continent who wanted high priced oil. it did a lot for the economy. >> instead of a user we turned into a supplier. >> i think we've got an interesting thing going on in the economy. all the economic indices look positive in the united states. not so much in the rest of the world. the fourth quarter is still 2.5%. next year is 3%. that's hardly a blowout. and even in the robust jobs report of 321,000, if they had

seasonally adjusted the way they did november '13, it would have been -- no one can explain why it's so different. you get to a situation where i still think the economy is -- needs to be bolstered. while everybody knows that taxes and immigration are the big three for the congress next year, i think they can do some things to give more impetus to the economy. one would be to detoxify obamacare. you're not going to repeal it as long as the president is in office. but you can get rid of the individual mandate. you can kill the health care tax. >> if you get rid of the mandate, it doesn't work. >> you can modify it opposed to get rid of it. but the way it is now, it kills

small business. they got a medical device tax. if they just do those four things they could help small business. you know, we got the h 1 visa issue where we cap at 88,000 even though twice are applying for it. in other words, we don't bring talented people into the country. we don't pass trade pacts. this transpacific agreement has great potential. i think those things in addition to looking at the regulatory burdens of small business can help the smaller guys and also give impetus. >> you give every grand kid a gift? >> i do. >> the wife do that? >> most of it. she lets me fill out the card and slip a little bit of green back in there. >> you're lighter after -- how many grand kids? >> 31. >> you're feeling lighter after

that. >> it's an expensive time of year. >> 31? god bless you. man, that's a lot of -- >> you're like santa. >> i guess maybe you should have thought about that. >> that's way too late now. >> we'll have much more with larry throughout the show including tax predictions for 2015 as well. there's a lot of buzz surrounding the $75 billion diagnostic lab testing industry specifically one company theranos. they claim they can inexpensively test for hundreds of medical conditions. there's an article this week in the new yorker and it is by ken auletta. he investigates the controversy surrounding the secrecy behind their testing methods. he joins us to talk about. also talk about some stuff going on in the media you've heard about sony and others. but we're going to get to ken's article first. good morning to you. >> morning, andrew. >> congratulations on the piece. tell us, i've now combed through

this piece. what i can't figure out is whether i'm supposed to think in the end that theranos is on to something or they aren't. it sounds like they are. it sounds like there's a lot of money behind something that could make this world cheaper and better. but there's folks on the other side who think it's not as effective as they're suggesting. >> that's because they haven't seen the machinery or the peer review articles attesting to whether the theranos needleless test works. the fact is walgreens has signed up. they now have it in 41 stores. they expect to have it in most of 8200 stores. hospitals are signing up. cleveland clinic soon to sign up. it's a real threat to the existing infrastructure of needle testing blood tests. but there are questions about it. but this young dropout from stanford, elizabeth holmes, who started the company, she's 30 years old. company is valued at $9 billion. she owns half of it.

she is a missionary. and she knows her medicine. and she's got a high powered board consisting of people like george shultz and henry kissinger. so it's a threat to the normal medical system. >> you don't believe what some of her rivals say. >> that is correct. i think she's the real deal. i think there are questions about it and i think the company is overly secretive. they're an 11-year-old company and they're acting like they're in their first year. and they shouldn't. >> some of the competitors say you can't properly test with that little amount of blood relative to the viles that we traditionally have been taking over the years. >> the finger prick actually damages tissue and capillaries and therefore it's corrupted in

the test. that's something that has to be tested over a period of time whether that's true or not. but one of the basic facts here is that between 30 and 60%, she uses the higher number and one of her competitors use the lower number. don't take the blood test. and a major reason they don't take the blood test is fear of needles. not the only reason. it's inconvenient, it's during work hours, and it's expensive. but nevertheless, that's a big number. and if in fact it is based on a fear of needles, her lack of a needle test could get more people to test. >> i don't know as much about -- i, you know, looked at the notes but i haven't read the entire article. so i understand intellectual property and that you don't want to let out any secrets, but this isn't just like some black box where you stick something in there. we must have some knowledge

about the technique she's using. i would think you could take the results of her test and then compare to a larger more standardized test and see what it's matching up. and what is different about her technique. you must have tom idea. how are they doing it? >> they are doing it -- that's one of the interesting questions here. because when i asked her that question, please describe -- and i did it several times -- what happens in that machine. i've seen the machinery that they use. but i can't explain the chemistry that they use. and i asked her to explain it, and that's where she lapses into this secret mode. >> that's very strange. i mean, it could be a -- i mean, you can protect your intellectual property but you ought to be able to have some general description of what you're using. and is there data that shows that they come up 99% of the time with the same findings as a larger -- >> joe, she claims they do. >> claims?

>> the american college do three audits a year. and they won't release it. she claims it is proven to be -- >> that's the most interesting thing about the piece. it's very strange. i heen, i don't know. >> how does it work? you had had your blood taken? >> i had it done twice. you go to a window at the walgreens store and they ask you what blood test you want. you show them your i.d. and insurance card. you pick out the test you want or from the doctors note, you go into a wellness center and they warm your hand with plastic like a band-aid. then they take something and do a finger prick on a finger. you hardly feel it. it's a pinch. two drops of blood are scooped up, put into a refrigerator unit which are then taken to the lab. and the tests are done.

but it's literally two drops of blood. >> i could see -- i'd feel a lot better if it was one of the leaders in the business. i'm sure we'll get to that point soon and it should be there. but it's weird it happened this way with a dropout. how'd she develop this? >> there are a lot of people who won't get the test done, but would she say it's better to do it on if you're not afraid of needles to do it the old fashioned way? >> no, she thinks she has developed a chemistry and the software to actually be more sophisticated in their tests. whether that's true or not will be determined over a period of time. but she believes -- she's afraid of needles. that's one of the impetuses behind this. but she believes her test is better. >> it has the potential -- >> one thing, ken. it's take an long time to come to the market, if you will. and i thought if this is a

revolutionary technology, the big guys buying it. i understand, for example, from one contact i have that some of the big guys are not interested in buying it which causes some skepticism, it seems to me as to how real it is. >> larry, i think she's not interested in selling it. >> nonetheless there might have been overtures. >> i'm sure there have been. but she saint moving on that. she's raised $400 million. she's cash positive, she claims. she won't reveal her revenues or profits. but the fact is they're expanding and they haven't reached out for more money to expand. so they're obviously generating real income. they do a lot of test for major companies who are obviously very pleased because they continue to fund thearanos. >> we should all read the story. there's other news going on in an area you spent a large part of your career focusing. which is entertainment and

hollywood world. i want to talk about this massive hack attack at sony and now all the dirty laundry and nastiness that's been revealed this week unmasking hollywood to some extent. what do you think the real ripple effects are? are heads going to roll as a result of this? >> i suspect they may, but one of the questions that needs to be asked here is we as journalists would not steal a document and publish it. it would be theft and we could consider it. these documents have been stolen yet we're publishing the results of these private conversations. i think it really merits some discussion as to the ethical questions that are involved in that. >> so you wouldn't publish? >> pardon? >> would you publish? >> i would be -- i would think twice. i would want to have a long discussion with my staff if i were an editor whether to publish this stuff. we go through this when we talk about the private lives of public figures. we decided we weren't going to publish it and then various

websites start publishing. and we rush to replicate. and they're setting a standard we shouldn't allow. here it may be the same thing. >> you read these e-mails from amy pascal and rudin and others. are we supposed to take away from all this? >> that they're terribly indiscreet. they're very sorry they did it. but it's -- i mean, any of our e-mails were looked at, we joke. if they saw the light of day, they might be embarrassing to us. >> is there a legitimate business fallout, though were for sony or amy pascal? what happens here? >> first of all, you've got people's social security numbers that are out there. that's a big deal. but "b," for the people negotiating with sony to see how -- what kind of money they're making and what kind of money they're setting aside, that becomes a real business changer for a lot of people in hollywood. >> and you think, therefore, if you are a star or a producer or a creator, you decide i'm not

going to go with sony. i'm going to go with somebody else? because by the way, it may very well be that those numbers exist at other firms, we just don't know it. and those e-mails might exist in other places. >> but they may demand to know what those numbers are at these other studios. by the way, angelina jolie is not going to do work with scott rudin anymore, you can be sure of that. >> we will continue to do work with you. always enjoy your work. and appreciate you being here. >> thank you. another country that could be saying no to uber. in case you didn't know it, today is national ugly sweater day. we'd like you to tweet us the ugliness you are walking around in today. >> where did they do this from? >> gross, joe, you got the worst one. >> i'm digging my sweater and my bow tie. >> not so bad. send us your pictures at squawk

cnbc. "squawk box" will be right back. , aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.

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moves both ways. and it's down 28 where it's indicated this morning. the world's also watching the price of crude dipping below the $60 mark today. this morning it was below $59. right now above that at $59.37. is this is a good thing for the nation and the world? bill richardson gets into the oil shock at 7:30 a.m. eastern time. "squawk box" will be right back. take a deeeeep breath in... and... exhale... aflac! and a gentle wavelike motion... ahhh-ahhhhhh. liberate your spine... ahhh-ahhhhhh...aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just four days. ahh! four days? yep.

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and body, so you stay active and strong. ensure. take life in. welcome back, everybody. one country isn't jumping on the uber bandwagon. at least not yet. this is a company that's interested from china. chinese internet giant baidu. it mirrors alibaba's -- in a new

round of funding. currently that values the company at $41 billion. coming up when we return, america's road to energy independence. but former new mexico governor is going to talk to us about the energy boom app and is the single serve wine business about to take off. kevin o'leary is going to tell us about his big investment in zipzi wine. when we come back. financial noise financial noise financial noise financial noise

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welcome back to "squawk box" this morning. let's get to the stories that are front and center at this hour. looking ahead to the november producer price index. a key economic report coming out at 8:30 eastern time. calling for a drop of .1%. also novartis saying his psoriasis drug performing well in a study of the drug proving more effective than a johnson &

johnson treatment. and walmart slashing prices on the latest iphone. the iphone 6 plus now on sale for $229 and the iphone 6 for $129. i wonder what apple thinks about that. by almost every measure, america is on the road to energy independence. we are producing $9 billiing 9 barrels a day here. now is the time to start leveraging our energy muscle. joining us on the set to elaborate is bill richardson. he is the former governor of new mexico and former ambassador to the united nations and former energy secretary under president bill clinton. thank you for being here today. >> thank you. nice to be with you. >> so we are watching oil prices. we know part of this is supply, part is also demand. what do you think is really combined to push prices so low? >> with supply and demand issue

in the midwest, it's going to go down to about 45. and the geopolitical situation is going to be affected. russia is going to continue having economic problems because of their budget. and its connection to oil prices. countries like venezuela, nigeria, iran. the big player here, the saudis. what will the saudis do? will they increase production? will they keep it stable? opec is diminished as a cartel. but not out of the picture. they're still very powerful. >> so what do we do in the meantime? >> what duo is we export oil. i believe that prohibition, the congress should take it off. export natural gas. approve more liquefied natural gas terminals. i think reach out to the european union and try to get us to be the main suppliers of natural gas to europe instead of the russians. find ways that we use our energy

independence, renewable energy, renewable fuels. shale, oil, and gas. our tech following. and export it to create more manufacturing jobs to create more jobs here at home. >> is that from an economic perspective you're thinking or from a security perspective? >> from both. it's in our enhanced natural security to expand our exports of our energy sources especially oil and gas and renewable. but also economically it creates more jobs for us. we're hurting a little bit right now with the lower oil prices. states like mine, new mexico, that depend on that budget. a lot of small drilling companies are starting to really hurt. a lot of extraction is diminishing. >> governor, what do you think? does $58 oil let alone $45 oil,

does that kill a renewables program? i mean, is this going to delay it, defer it, or in some way discourage it in the light of this oil price? >> no. i think renewables -- you know, when -- i was at the u.n. and close to the 200 countries have said in the long range their main source is going to be renewables. solar or wind or biofuel. long range, i still think natural gas will be a bridge to renewable. shale will be a bridge to renewable. but, yeah, i think it may slow it down a bit. but i think long range we are on a positive road to independence. >> can we call you governor or secretary or all these things. you have a lot of experience. can't you do something? you should do something. but here's the thing. do you ever buy into peak oil?

how did they miss that so badly? we've seen it happen again and again when things get expensive, the private sector starts developing ways to get more. >> you know what i did when i was energy secretary, instead of selling off the petroleum reserve, we put up those oil barrels on the market. and it actually helped us. i think if you put it into the market, into the private sector -- >> we're supposed to be there. now where is it? 2000-what? 2050? 2100? >> possibly. but the good news, joe, is that we're very lucky. not government policy. but technology when we proceeded with fracking which i think you can do safely. although i think let's put strong regulations on it. secondly the discovery of more oil and public lands -- >> none of this sounds lucky. you're not surprised it's not

government that did this, are you? >> i think it was the private sector where you're also very lucky. both. >> keeps happening again and again when you let entrepreneurial -- >> i do think the president deserves credit for saying, you know, let's go with all of the above energy. >> what do you think? >> fuel standards. i think he did the right thing. he's right on climate change. >> he's not on your side in terms of exports. >> larry, i think he is. i think eventually you'll see the energy department saying we're going to support a bill in congress that proceeds with oil eventually. >> haven't done it yet. >> well, i think you're going to see it now. >> do you think in the last two years we'll see the keystone pipeline approve snd. >> i think it's 50/50. on the good side that creates jobs, relationship with canada. greenhouse gas emissions. it could go either way. >> the whole hydrocarbon -- this

extends the use of hydrocarbons. it's going to be used. it flies directly in the face of climate change, bill. and we built no infrastructure. we've been saying let's not do any infrastructure. and that looks flawed to me right now. that looks like thinking that was misplaced and ended up in solyndra and other elements. >> i don't know what the president will do. 50/50. >> how economics of oil prices have changed what keystone is all about. >> we're still going to use hydrocarbons. i don't know if it does change that. anything that's exporting on the continent, it's going to be good. you think it's -- >> i'm just saying, if you actually were to project out that you think oil was going to be whatever it is. if you think oil stays where it is, for example, for some serious duration of time, unclear -- >> we could pass the middle east instead of just tying the middle east. >> that's the danger.

the middle east. i think this arab spring, the april spring is not over. i worry about disruptions in the region. i worry about the saudis. you know, they're our friends, but i worry about some of the stabili stability. >> nothing is unequivocally good, but this is obviously -- >> but the saudis are our allies. so the good news, the good press would be to say forget about opec and now we're becoming energy independent. for national security reasons, we want the gulf states, the arab countries -- >> do you worry about completely destabilizing? >> i think if anything, putin is stronger. if you look at polls in russia, he's stronger. the danger with russia is the ruble is falling apart.

i think eventually -- i've been proven wrong -- putin is going to stay i'm going to stop. i'm going to be a more responsible member of the european union. >> before you go, you kicked up a huge storm about six years ago when after being energy secretary and u.n. ambassador to bill clinton, you supported barack obama over hillary clinton. >> yeah. he still won't speak to me. >> if hillary clinton runs for 2016, would you endorse her? >> well, if she -- i'd want there to be a primary. i'm not one of those that are, oh, let's get behind hillary, we're for hillary. if she's the nominee, i will support her. i think she's very qualified. i'm in the private sector now. i'm not as rich as this guy, but i don't have to go -- >> you don't have buyers remorse at this point, governor? huh? you're the last one. >> but i think she'll be the nominee. but i tell you, i worry as a

democrat if jeb bush is the candidate because of his appeal to hispanic voters. i think he's going to be very strong. i wouldn't say the election's set with the democrats. you know, i -- i don't know. >> one question. you had more success with north korea than anybody i know in terms of influencing them or at least having a dialogue with them. and now, you know, they're allegedly behind this sony hacking scandal. i don't know if they have the capability to do that. >> i don't know if they do. >> in any event, is there any chance they'll reunify with south korea? or does this country ever get a break some day in terms of its people? >> well, is there any chance? yes. it's very -- it's not out there because they have a very strong culture personality. the leadership there, kim

jong-un, the army, they run everything. the people are indoctrinated not to think freely. you know, i try to get google in there with eric schmidt and they knew if the internet went in it would open things up. so they didn't let us in. i think it makes sense for us to reach out to them. they got a lot of nuclear weapons. they've got missiles. and i think there's potential. i like what the south korean president is doing forming a unification commission. i think eventually -- remember with germany people say they're never going to unify. but i think there is a possibility for economic reasons. there's economic misery in north korea. and south korea's technologically very strong. i think eventually it's going to happen. >> governor, thank you very much for joining us. hope to see you again soon. >> thank you. up next, the sharks on "shark tank" biting big on some called zipz. they make portable wine by the

glass. kevin o'leary offered the biggest deal on the show. he joins us next with the brains behind the brand. and then is tax reform on the table for 2015? we'll ask guest host larry bossidy about that and other matters. "squawk box" will be right back. do you

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zipz. it's zipz, right? >> zip-z to me, but zipz to you. >> it's a single serve glass shaped wine container. and it rocked the "shark tank" last week. its product is going to do for the wine industry what the aluminum can did for the soda business. zipz scored $2.5 million deal from says here mr. wonderful. i think you're wonderful. it's almost like we say that in a sarcastic way which i don't think is fair. kevin o'leary is here with us this morning along with andrew murray, consultant of zipz wine. we knew it was ugly sweater day. you thought it was ugly hat day.

>> no this is the regalia of the secret society of wine. we gather around the world in different cities, hire chefs and create fantastic meals around wine. all roads lead to the pinot grape. listen, the one thing i think you have a problem with is we toast the president of france before we eat every meal. >> my favorite city. i love it there, i do. >> but as a wine guy this is why i got so excited about this deal. >> so it's good wine in these small containers. >> the industry has been waiting forever -- this is the only bench in america not available in a single serve. wine is sensitive to air. if the packaging isn't perfect, it turns to vinegar. >> i have tried. i would love to have a single serve. every one i tried is awful.

i'm betting every brand of wine in america is going to use this packaging technology. my wines will also be available in single serve. >> is it understandable why it's different? >> first of all, it doesn't look like a urine sample. it looks like a wine glass. you have seen this before. >> yeah. they're stacked on top of each other. >> andrew, toss one. >> feel the weight to it. it feels like -- >> thank you. >> what do you think the retail price would be in. >> what is the wine maker advantage for this? >> say you go to a football game. this is made of plastic. you're not going to buy a $750 bottle and take it down to the stands. now do it with single serve. let's say you have a lake house and you want to put single

serve. let's say you're doing portion control. >> it's like six packs of beer. >> exactly. now there will be six packs of wine. >> especially if you're at all worried about being fat. i have trouble. i get bloated drinking beer and i'm drinking white wine now. my life has come to that. >> easy. >> see how terrible it is. >> you don't drink beer anymore. >> i don't. >>. >> what matters in the end, if you think about a 750 mil bottle, four of those equal one bottle. >> i'm talking about the manufacturing of this. if i'm the wine maker i'm going to buy this technology from you or buy these from you. >> license it. >> how much is it going to cost me? >> well, again, it's going to depend upon the scale and how much they're producing.

the glass with the wine in it under a dollar. >> i see you have yellow tail. that's a well known brand. >> just announced. >> do we know -- >> the actual plastic itself? >> yeah. >> it's a combo. it's food grade plastic. >> is this patented? >> absolutely. so nobody else can do anything like this. >> they've tried. if you think about three different times people have tried to do single serve. >> what's the patent? on the sale or the shape? what are we talking about? >> it's the shape, the fact the wine goes into the stem of the glass which gives it stability, and it's the actually mix of the plastic that we have that's giving it the shelf life. >> what gives it the shelf life? >> then the plastic itself and the seal. >>. >> oxygen can literally get through the barrier of the

outside of the glass. you wouldn't think so but it can. it's either on the top of the seal or through the plastic itself. >> what's it like to work with this character? >> it's been a blast. you know? >> i love wine. i have fine cellars, i invest in it, i buy futures. to me when i saw this deal, i have to be in it. >> what's a bottle of wine cost 14 or $15? did you see the look on his face? you've never seen a $14 bottle. >> i buy by the box as you know. >> 87% of wine consumed in america is sold under $14.99. >> i was thinking how much does a can cost to produce relative to this. >> we currently retail this one here for $2.99 a glass. the amount of these are that are

going out the door right now is crazy. >> i have seen wine in a can and that was not good. >> that concept is foreign to wine. >> it didn't taste like wine either. >> you can see the actual grape there. you can see the color there. that's why it's a breakthrough. it reminds you of what you drank in a glass and it's a single serve that has an 18-month shelf life. i'm making a huge bet. largest deal ever made in "shark tank." but i think in a year we'll have 30% of the market converted. we've got to change the industry with this. this is not easy. >> this sounds like a great idea. why didn't others participate with you in this investment? >> because they drink beer. >> i didn't mean that. i love wine. listen, i love wine. i think if you actually get into wine and for me i have two

hobbies. guitar and wine. >> will you have the year on here, it's going to be vintage. and that's the wine that's in there right now. as kevin said, this is a licensing play. >> you would say if it came out of the bottle or this, it would be indistinguishable. >> this says 2011 vintage. you said 18 month shelf life. is this bad? >> the wine may have come out. >> so it's recently put in. >> if you ship it to a large grocer or a wine retailer, they want at least 12 months. this does 18, so we're covered. we don't have that problem anymore. it's whether the consumer will accept it. >> how much does a bottle cost relative to six of these. >> four of these equals a bottle of wine. >> how much does a bottle of this make. >> millions of bottles made so

penny. probably 26 cent. >> with wine in it. more like 50 cents. >> you can pour it into a glass if you want. >> the top goes back -- >> you want it for the packages. >> you're sitting there with it in your purse. >> you never know. >> absolutely. >> he carries a man purse, so -- >> no, i don't want mothers in the suburbs having their wine in the purse walking around. >> coming to a grocer near you soon. >> mother's little helper. >> thank you, guys. congratulations. >> thank you very much. >> good luck with it. exciting project. when we come back our guest host larry bossidy sa. and top of the hour, arthur brooks says we should do what we could to keep oil prices at these levels.

and we'll look at disrupters under fire. "squawk box" will be right back.

zblemplts predominantly what needs to be done is the tax lawyer. the tax law has to be written in a way that it doesn't -- it doesn't stimulate the kind of behavior you would like to avoid. people are charged with not evading tax, but appropriately organizing your affairs to avoid

taxes. >> that was lloyd blankfein yesterday speaking about the need for tax reform. our guest host this morning is larry bossidy. he thinks it's possible for congress to pass a tax reform bill in 2015. what puts you in the minority at this point. >> it does. but we've got a new administration. we've got paul ryan in the house, orrin hatch in the senate. they want to do it. the president wants to do it. it would be a business tax reform. it won't affect individuals as least as i understand it. it'll be revenue neutral which means they'll take some of the loopholes away. they don't like bonus depreciation and way of valuing territories. >> don't you have to get rid of research and development on those? >> probably not, but it's up for grabs. then importantly i think we're going to adopt a territorial tax system. to far the discussions have been

that 95% of tax, foreign profits will be exempt. in other words, they're be taxed at 1.25%. and for the $2 trillion out there now, it will come back between 3.5%. >> that still revenue neutral? >> it can be revenue neutral, but the president wants to spend $150 billion on infrastructure and he'll probably get it. so i do think that there's a building constituency across both houses and far change, i've been a skeptic on this but i think it could happen in 2015. coming up, arthur brooks. ? you need to catch the 4:10 huh? the equipment tracking system will get you to the loading dock. ♪ there should be a truck leaving now. i got it. now jump off the bridge. what? in 3...2...1... are you kidding me? go. right on time. right now, over 20,000 trains are running reliably. we call that predictable. thrillingly predictable.

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oil sending stocks spiraling for the first time since july of 2009 we're looking at $60 a barrel. arthur brooks of the american enterprise institute will try to calm investors down and tell them why prices at this level are actually good for stocks. california slammed. rain, strong winds, and even snow hitting the golden state. the latest from the west coast storm is just ahead. and beauty is in the eye of the beholder especially when it comes to ugly sweaters. today is national ugly sweater day. we're celebrating it in style. the final hour of "squawk box" begins right now.

welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. unless you were up very late last night, you may be waking up this morning wondering if the federal government has shut down. the answer is no, not yet. it is done until next year. it's now up to the senate to decide. they could vote as early as today. the new deadline is midnight tomorrow. we'll have more on this story with arthur brooks in just a moment. we are less than 90 minutes away from the opening bell on wall street. look at the futures because it has been a hairy morning. the dow still down about 107 points below fair value. they were down about 150 points below fair value earlier this morning. s&p down by 12, the nasdaq down

30 points. all of this as crude touches its lowest level since july of 2009 again. yesterday we fell below $60 a barrel. this morning we touched below 59 dollars a barrel. it's down about 74 cents to $59.21 for wti. european markets lower after the continued declines for crude oil. the dax down othver 1%. we've seen weaker markets earlier in trading this morning. greece is bouncing back but just slightly. up by less than 1% but at least we can say they're not down today. when it comes to asian stock markets, well, let's see. the nikkei was up by about .6%. shanghai was up by .5%. goldman sachs ceo lloyd blankfein says you shouldn't be too concerned about china's flat growth rate. >> any time somebody is growing in the world, it's great for the

world. it seeps to the benefit of everyone. that incremental growth will result in demand which actually will draw support exports by other players as well. >> and let's tell you about some other stories we're following this morning. a bit more on the government spending bill. has to work through procedural rules first. current funding that averts that shutdown. and we're about a half an hour away from the price index figures. looking for a decline of .1% for november. and a judge says the drug maker activist must keep selling. its alzheimer's drug, that following a suit. they have been trying to transition patients to a new version of that drug. >> that's a common way to try to do it. few stocks on the move this morning.

jpmorgan upgrading gopro on a valuation basis. there's been a drop since the public offering of shares in november. and adobe systems beat estimates on both the top and bottom lines. for the creative cloud sweep. but the software maker, does fall below estimates. and don't miss the ceo of adobe on "squak on the street," andrew nap is at 10:00 a.m. eastern. >> i won't miss that. >> okay. 2015 could be a good year for the gop, says here, with the republican-controlled congress, plummeting oil, and immigration on the table. and we could very well see some big economic changes coming. joining us now with more on this is an independent. arthur brooks is the president of the american enterprise institute. both of us. we don't like crony capitalism

or socialism. it's not about republicans for you, is it? >> you got that right, brother. it's all about thinking for yourself. absolutely. >> thanks for joining us this morning. it's good to see you. i had to think it was kind of funny and i wish you had been here. we had governor bill richardson on. we got really lucky. to guys like us, we just hear it. he said we got really lucky with the oil revolution and the energy revolution in this country. because it wasn't the government that got us here. it was the private sector. and it was, like, seriously? you don't think that that's the movie that we've seen repeated again and again where people are looking for a profit instead of finding the most fast way of doing things. was that new? >> i know. it's amazing. the key thing to remember is that the government's best role in something like energy exploration or economic growth is getting out of the way of private entrepreneurs. private entrepreneurs are

actually going to find something wonderful like north dakota that actually leads the oil revolution, the oil export revolution for the united states and driving down prices of oil. this is all about entrepreneurs finally being able to get out from under the administration. >> we were also just saying -- i talked to you about a lot of different things. then you can take it where you want. but we were also just having a conversation about elizabeth warren. i think everyone is. i think it's funny i read something that they're likening her to a democrat's ted cruz in terms of being an agitator and sort of representing the fringe elements of her party. but she chafes at that. not surprisingly. but if you were a republican, wouldn't the rise of elizabeth warren just warm you right to the core? >> joe, that's what happens. that's what happens with the political parties.

republicans made the mistake of using rhetoric that was appealing to about 15% of the population and didn't do much for them for awhile. i have to say and the democrats are doing the opposite. now, that said, i listened to elizabeth warren. here's one thing the republicans should be afraid of. if you listen to the first five minutes of her speech, she's right on mostly everything she says. she talks about washington. she says, look, everybody says washington is broken. it's working exactly like it was designed to work which is against the interests of the ordinary americans who are in flyover country. ordinary american who is play by the rules and don't have the hard wire to washington. the problem with warren in my view is she gets the diagnosis right but the treatment exactly wrong. she says we need more big government and what we actually need is to take away the troughs

so the crony capitalists have no place to feed. >> in both the books you've written, you put a lot of evidence about where america is right now. you still say it's center right at this point? because we've got -- i think people that back elizabeth warren and think that's the right move for the party, they think the answer is moving further left than we've been for the past six years. and i just think that they've never been between the two coasts, i think. >> if you really never get out of manhattan, you might think that moving farther left is a mainstream move. just as if you're living in a small town in texas, you might think that moving right is the only mainstream thing to do. the point of the matter is 300 million people and it's still a center/right population. the problem is we have a pretty far left social democratic government in washington d.c. and this is the biggest interest group that we have in the united states is the government, per

se. so the cronyism is starting to feed it on themselves. it is the interest group of government that's petitioning government through public sector unions, all the stuff that drives you crazy. >> larry thinks we might get tax reform. i don't know whether you were going to go there. >> fine. what's your view? you think we're going to get tax reform in 2015? >> i do, larry. and i'm very optimistic about this. i think finally given the fact that republicans have both houses and they're acting pretty sane at the moment that we're probably going to get the kind of tax reform that we need the most for american competitiveness which i'm sure you agree with me is corporate tax reform. if you're worried about inversions, stop calling ceos unpatriotic and start taking away the incentives for corporate inversion. the single best way to do that and bring corporations back and to actual create jobs is to have a competitive corporate tax rate. i think for the first time in six years we have a fighting chance of getting that. do you agree with me? >> i do. they're going to get rid of the

word corporate and say business tax reform. it's going to cover small businesses as well as large. i think there's a meeting of the minds and i think there's a good chance that can occur next year. >> yep. i think that's right too. now, i know they're going to try to lard it up. people who are unsympathetic to progress and making it look like the president is getting success or republicans are going to get success, you're going to try to lard it up with stuff that's hard to make it pass. that's what's going to require the republicans to stay really focused on making as much progress as possible. >> i agree with you. >> when you publish an editorial, looking at one, arthur -- >> yeah. >> the brilliant piece he's writing in "the new york times," you're talking about. >> why do you submit it to "the new york times"? you don't need to preach to the people that are already where -- i guess you need to try to help these people. >> he's a contributor now. we're simpatico. >> in one fail swoop they might -- do you weigh 8,000

pounds because they've got a ways to go? >> when i write for "the new york times," there are a lot of people who read "the new york times" who are lurking and don't feel that and they don't really feel represented by the mainstream media very well. i think there's room for all sorts of voices to encourage them like you, joe. you and i are saying all day long think for yourself. that's what we're trying to do. i love writing for the times. you do, too, andrew? >> love it. >> i know you're an independent. but let's say a republican asked you who to run or what type of person to run in 2016. you know, there's a big split in the republican party as well. there's warren and hillary. i don't know, hillary looks more like that. >> democrat. >> yeah democrat. but in the republican party, which way do you go? they lose elections when they put in moderates. >> yeah. there's different views. some say they lose elections

when they run real hard core conservatives. you know, i can crunch the data. logic chopping is what i've been doing for a long time. i can figure a way to work those arguments. the key thing to remember is that republicans need a republican who's fighting for people, not fighting against things. the party that wins, the politicians that win are not those fighting against things because that's how an opposition works. that's the nature of opposing. as long as yao fighting against things, you're looking for the viewpoint. when you're fighting for people. don't fight against obamacare. fight for the people who are being hurt by obamacare and obama-nomics and everything else. that could be ted cruz or jeb bush. the thing is remembering you're a warrior for the vulnerable people who need you the most. then you'll have a fighting chance of winning. >> good advice. thank you. appreciate it. and you working on something for "the times" right now? >> i am.

i got a piece on sunday. i've got the cover essay on the section. it's called abundance without attachment what i learned about christmas. >> did they just hire you without knowing anything about you? it's unblooeelievable. >> that is a good tease. i will read, arthur. >> right on. thank you, becky. thanks, guys. >> look forward to seeing it, arthur. great to see you. >> happy holidays. >> you too. >> it's unbelievable. did you not tell your bosses about him? >> we love him. coming up, disrupters under fire. uber fighting regulatory obstacles. snapchat being criticized for storing old photos even though it insists they aren't. and taylor swift's public rant about spotify fueling concerns about streaming music. we'll take a closer look at how these companies are shaking things up. plus market-moving data on the

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welcome back to "squawk box" on this friday morning. take a look at the futures and see how things are headed. not in the best direction at the moment. dow looks like it would open 108 points down. s&p off 11 points. almost 12 points. and the nasdaq looks like it would open down as well. act 28 points down. they are shaking things up with competitors. some disrupters are also coming under fire. julia boorstin is joining us with more. this has been growing around some of these companies. >> absolutely. a number of our disrupter companies face backlash. uber in particular. san francisco district attorneys sued uber for unlawful business practices. india has banned uber following allegations an uber driver raped a woman. a spanish judge ordered uber to temporarily halt operations. thailand has banned all

app-based taxi services including uber. and portland sued uber. uni-lever has called its mayo just mayo saying it's misleading. some disrupters' challenges aren't legal. snapchat has been criticized for this way it stores photos. though it insists it's not responsible for a leak of images. the ceo apologized for sending explicit e-mails that were leaked. while these disruptors are getting attention, the backlash is proof that the road is not always a smooth one. andrew? >> okay.

thank you for that. and so true. coming up, ppi data. we're going to bring it to you for november. and then a sector that screams bye-bye bye. why he's high on the semiconductor space. here are the futures again at this hour. we have in the red. triple digits on the dow. down about 108 points. we're back in a moment.

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welcome back. yesterday at the dealbook conference, larry fink had this to say about activis investors. >> they're frightened of being targets. they're well run companies. and are they holding back a little? are they -- why don't we have a trillion dollars in cash? they're holding back. this is one of the reasons i believe we have an anemic society. and i'm not blaming it all on activis by any means. but if you act me does activis harm job creation, the answer issiest. >> boom low pressure llarry bos think of that? >> i think activists in times past were called green mailers. they didn't want to change the company. they wanted a way to make some money. i think there are activists now

who make a positive difference in the sense of going to a company for whatever reason hasn't been able to capitalize. >> larry fink with 4 trillion dollars effectively, he's making the argument that activists are holding back job creation in this country. >> i think larry fink's a really smart guy. i disagree with him on that. i can't believe -- i've seen activists make a positive difference in ands. yes, some of them have been negative. >> is that just the messiness of a democracy in the board room? >> yeah. i mean, i can't -- i hope when i was in the office if i had an active investor i'd be able to deal with them. telling me he was wrong for convincing reasons or do something in terms of the suggestions they make. >> we've come a long way -- you know who the original activist

was. gordon gecko. you know what he was called. a two bit pirate. >> and he was. >> some of these guys are. >> they are. but you can't classify them all in the same way. >> i will tell you paul singer, he made an interesting and i would argue compelling argument. we talked about the activists as being short-termers. we often think of carl icahn as someone who's in and out. but if you actually look at the studies and you look at a bill ackman, for example, their ownership stakes are often two and three years long. if you look at an actively managed fund, the average turnover is usually something like 11 or 12 months. so it becomes very complicated very quickly to decide is it the activists that the short-termer or all of us to some extent with these mutual funds? >> you almost have to divide it by specific instances whether

you think there's a contribution being made or just disruption in the the mind of those who pursue it. but look at the paypal situation last year. six months later they did do it. i don't know. i think some of them have made a positive contribution. >> it's possible is that an activist has the wrong idea for what the company that's on the right track should do. that's why you have to do it on an individual case to derail a great future or a great story for a company. >> but if they're wrong, you ought to be able to persuade them or your other share owners that they are wrong. and hopefully you can. so there's cases where it doesn't work. but in general and a lot of cases, they made a contribution. >> all right. coming up, breaking economic news. november ppi data is next. plus one of our platinum portfolio managers scott black weighs in on the market's wild

week. and we've seen them. they are ugly. there are some ugly sweaters. >> that one's pretty bad with the fire place. >> well, you can't paste things on there and expect that -- that's stupid. >> no, the other one that had a fire place that lit up. >> it's got to be in the sweater. you can't put things on top of the sweater. it has to be woven in. we have a ceo on the bandwagon taking on -- >> there you are. >> as we head to break -- i look like i've gained some weight. a look at u.s. equity futures. "squawk box" will be right back. e

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good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. our top story this morning another tumble in crude oil prices. earlier this morning oil -- whoa. it's back below $59 again. $58.96 right now. fell below $60 for the first time since 2009 yesterday. this morning below $59, that is a fast decline. we are now at another five-year low. right now again the price of crude, $58.96. also the international energy agency cutting its global oil

demand forecast for 2015 by 230,000 barrels a day. as for the equity markets, pressure there as well. u.s. futures down by triple digits. dow down 128. s&p down 15. >> it's moving with oil. crazy. we're just seconds away from the producer price index and the futures are down. let's get the word from rick. rick? >> november ppi takes a step or two backwards. down .2%, about double what we were expecting. we were looking for down .1%. last month's up .2% remaining unrevised. unchanged last anytime we head up .4%. that's not revised. we look at the internals, month over month we've just gone over. but year over year on the final demand, i think, is important. that's $1.4. if you look at the year-over-year numbers, 1.8% on headline. 1.5% on core. the 1.5% arguably a tenth on the

light side. these numbers are very fascinating for a multitude of reasons. of course we see what's going on in the energy side. and it should, of course, at some point foster a larger debate. what are the driving forces keeping prices from moving higher? what are the positives? what are the negatives? and i don't know that central bankers are up for that challenge. they can pretty much push much of this data to continue in many ways to try to put their influence, their thumb on the scale. how it works out. maybe we'll see. sunday the elections in japan look as though mr. abe made the right call. looks like he's going to retain much of the power and of course some of the programs that he has implemented known as abenomics. we'll have to wait and see how it settles. i'm sure everyone in the audience is proud of the way government works these days. families ran their finances the way the country runs their short-term comprehensive who

knows who read it, i'm not so sure we'd see some of the improvements that we have seen in the economy. back to you. >> okay. thanks. steve leisman joins us now with more. steve, what do you got? >> a sea of negatives here. it's not just energy. there's a nice -- nice. it depends if you're long or short oil. but there's some substantial declines in gasoline down 6.3% on a wholesale basis. heating down 2.8%. it's the kind of stuff that's going to help consumers. residential natural gas down 1.9%. i have food. food is down. did you notice that? food is down 0.2%. this is a story about -- as i look at it in margins and profits. these are the wholesale input costs. they often do not translate one to one. one is in competitive markets you can't pass them along. i just want to turn to you on

this question here. the market is selling off stocks or did yesterday on the decline of oil. but it's not a model stock story, is it? in the sense that there are some companies that are going to do really well with lower oil prices and some that are not going to do quite so well. and we're seeing that. when you were running the show, how did you feel about what would happen to your profits when oil prices decline? >> you know, there's pluses and minuses to it. i think that's why the market sells off. the uncertainty, unpredictability causes skittishness. but as i mentioned earlier, this is a transfer of maybe a trillion dollars to the consumer economy. that's good in the short run. on the other hand, now we're becoming ever more energy independent. i hate to see the price of oil go down because it's going to have some fracking people stop or at least moderate what they're doing. some of the drill rigs will --

>> there a government move for that. >> no. let it go many the market place. >> let me counter with the following. off group, opec, on the other side that are organized as producers. effectively taking steps to hurt our producers. so we should not do anything? >> yes, we should. i think opec is not just going after us. they don't particularly like iran and they love to stick it to putin too. that in addition to hurting our fracking industry which they'd like to somewhat slow down in their own best interest, i think dictates their action. should the government get in the way of that? no. >> all-time high a week ago. we were at an all-time high. we're down 2%. >> no, no. i'm talking about saving american oil. >> i'm talking about they keep talking about how this oil story is being bad for markets. >> there's a lot of talk about

it. >> i know. and we needed to go down for sentiment and other reasons probably. >> you ask me, i think this is going to be -- this is positive for america overall. >> think about it. >> everybody keeps tells this disaster story. >> think about number one. you got consumers. number two, you've got -- think about just overall power just that we use for everything. because it can even effect things other than just oil. everything comes down. >> that's what this is showing. >> we get a huge break on all that. >> feed stocks and all that. >> i just feel like and i'm alone here and i've got to side with larry. we made a lot of progress on conservation. we made a lot of progress on alternatives. this is going to be devastating to that progress. >> and why don't we quintuple the spi? instead of taking it out, let's did sh. >> can't do that. i just offer philosophically is

there an argument? if opec is playing a game on an organized basis, what should consumers do? >> how about we join opec? >> north dakota is a legitimate number. north dakota is bigger than libya. >> guess what. we would not be welcome in opec. >> and we would never do it. this is ridiculouridiculous. >> save american oil. and there are going to be stories of these guys that are in the fields, these entrepreneurs that are going under because of $60 oil. >> we dreamed about this happening. >> we have. >> they weren't dry deems happening to opec. we dreamed about this happening to opec. >> oh, my. >> why don't we bring in another voice on this debate. >> i don't know. you guys get out of the gutter. >> let's bring another voice in. let's talk to scott black about this who joins us now to tell us

what it means for the markets in the weeks and months ahead. are lower oil prices good for the market, bad for the market, and why do we see stocks trading down as oil drops right now? >> well, lower oil prices are great for the consumer. but it's actually bad for s&p earnings. we calculate that this year the s&p energy sector's about 12.3% of the overall earnings. so some people looking ahead are like $135 in earnings. totally wrong. our own numbers have been around $126. the market's about a 16 p.e. which sing is fairly valued. i think what you have to worry about is whether the decline in oil prestages a worldwide recession except the united states or whether it's just global over supply. i looked at the numbers last night before coming on. the fact is it's really not opec. it's saudi arabia. about 400,000 barrels a day based on next year's projections over supply.

the bottom line is if they could cut back to 9.2 million barrels a day, the price would go back up. i agree with one of the prior commentators that pointed out a lot of this is political. they're trying to undercut putin and iran. but it also hurts members of opec that aren't necessarily aligned with the shiites. we have syria or iran. most of the country's now under water with the exception of kuwait and the emirates. everybody else is below cost here in terms of, you know, 58 or $60 barrel oil. longer term six to twelve months, realistically earnings will be up about 8%, 9% next year. record margins of 10.1%. the u.s. economy is the healthiest. certainly china is decelerating. so i think the case could be made that u.s. equities will do

well given the fact the 10-year bond is around 215. i'm modestly bullish for the coming year. i can't tell you whether the stock market is going up or down, but i think this is the healthiest of the big economies. >> you don't think stocks are expensive here. that's been the argument for a lot of people saying that the selloff should make sense at this point. you don't think that's the case. it's simply based on -- >> not at all. i'm not a technician. if you look at the small cap, the russell 2000 is roughly 22 times earnings. there's a class that's expensive. but large cap stocks as a whole is not expensive. names across the board as cheap as traditional technology. you still have very good top line growth. if you look at people like semiconductors and the distributors. they're all between 9 and 13 times next year's earnings.

they have both top line and bottom line growth. i think technology is still a driver for the u.s. economy in 2015. >> you said old technology. not some of the new stuff, traditional, right? >> right. i'm not talking about palo alto networks and gopro. i'm talking about traditional companies like the skyworks, sandisk. the mundane companies, but they still grow 5% to 10% on the top line and have 8%-plus bottom line growth which is still pretty healthy in a gdp country. >> okay. scott, we want to thank you for joining us today. we hope to see you again soon. if i don't see you before the holidays, happy holidays. >> thank you. you, too, becky. take care. >> thank you, scott. up next, it is ugly sweater day across america and here at cnbc. that's what you're hearing out there. makes people laugh when they look ridiculous. believe me, we've got ugly early. >> wow. >> check out this group modeling

this year's must-have holiday fashion. we've got to sell that "squawk box" sweater. i'm in. >> that's the one sweater i want. i'd wear that. >> it's ugly but it's cool. >> that what is that? oh, it's the lamp shade from "the christmas story." >> and how much money they're pulling in on this fashion fad. "squawk box" will be right back. we keep showing that. that's a big seller there. i'm telling you. moneymaker. you can bring back a lot of things

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♪ welcome back to "squawk box." it is national ugly holiday sweater day. we are wearing them all around the table right now here at cnbc the building is loaded with folks getting into the spirit. google searches for ugly christmas sweater are up 500% this year. now everyone from the nba to the nfl, some of the nation's biggest retailers are rolling out their own line of ugliness. 15 minutes of fame, it could be forever. and this is forever collectibles. they are making them for the four major sports leagues and a ton of college teams. with us is the founder and ceo of forever collectibles michael lewis. also wearing an ugly sweater this morning. how did this happen? what is going on in this country? >> well, we've been in the

license product business since 1999 for all the major sports leagues and colleges. and last year on ugly sweater day and i knew nothing about this -- >> when did ugly sweater day before ugly sweater day? >> i don't know that. research has maybe in 1980s back in the uk, a lot of people say that's where it started. last year all my employees and our average age is 25. 30 or 40 come in and they look hideous. it takes me until 3:00 or 4:00 in the afternoon to say what is going on. they said well, it's ugly sweater day. i knew nothing about it. and at the end of the day one of our young people said, well, why don't we make them for the sports leagues. well, we make hundreds of thousands of items for all the sports leagues. from plush bears to bobble heads to christmas ornaments. so we approached the nfl and said would you like us to make them? and they thought about it for a bit. then they said go for it. then the other sports leagues said we want in too. is then college came along as

well. and off you go. >> it truly is ugly. what kind of investment does it take for you to make all these sweaters? >> well, we import hundreds of thousands of items from all over the world. and we distribute in the united states and in canada and in europe. so we have a huge supply network of things we make. >> the reason i'm asking, there's not a major capital expenditure for you. is this is a forever collectible or is this 15 minutes? >> i think there's different things going on. i think number one the capital investment is de minimis to pick one term you use all the time. but it's different things to different people. so there's a festive christmas jumper trend where you see the people outside wearing one thing after another. and then there's membership and then there's loud and proud. so if you're a giants fan like me, i might wear that in september. i might wear that to an ugly sweater christmas party. so there's membership in a club.

so the quarterback sweaters that we made for yourselves, all of a sudden -- >> take a look at this. can we show you off, larry? take a spin for everyone to see what's going on. >> you got to get lower to see the name. >> i'll tell you one thing. i don't refuse many gifts. i may refuse this one. >> what's the price point on the stuff we're wearing? >> they range from $64.95. >> really? this is made out of a beautiful acrylic. m. >> what's the range of revenues in your company? >> our company in total will do over $100 million in total this year. and the sweater initiative, we only started this year. and the upside is quite substantial. in our first year we did just over $10 million in team sweaters. enormous possibility. >> you're wearing a dan gilbert. >> we got to pick our own. >> and these are all made in china. >> i'm wearing the bucks.

bought for half a billion dollars. and they're worth a billion now. >> i'm wearing the jay z. can i say that? >> sure. >> you're waring the jay z. >> i'm the "squawk box." >> and you're doing the mark hoffman, brian roberts thing. that's good. so where do you think this all goes? >> i think for us and i can tell you i've not seen something like this in my career. if you go on amazon by way of example, and i don't understand how this works. very few products when you get closer to christmas go up in price. everything gets discounted, everything is for sale, free shipping, this and that. as these sell down and i've not seen this before and i've been doing this a long time, they're going up. >> so they're selling out. it gets hard to find. >> it's more profound. in other words, we undersupplied mediums and smalls. we misread the size scale the first time around. there are many teams now where you can go for a medium online

and you have to pay $150 to $180 for it. >> does this fit? >> i would go one size up. i can arrange that. >> because this is a large. this almost feels like it's one of those things that are supposed to suck me in. >> so that's why we couldn't get smalls. because you don't have them. >> there you go. >> is there one just total blockbuster in terms of teams? >> there's one team in pro sports that sells better than anything in the moment. and we watch this and these are cyclical things. but nothing sells more than the seattle seahawks. in the last 18 months in pro sports, nothing is close. >> not even cleveland with lebron coming back? >> seattle is a classic what we call worst to first. so you have a market that's been dormant for 30, 40 years, never had a real winner. now all of a sudden they go to the top. there's huge spending in that market. boom. you get a feeding frenzy for

three, four years. now we saw that in boston from 2004 to 2006. we saw it in philadelphia for three years. and it cycles through. >> and seattle looks like they're going to have the curse. now they're back though. now they're back though. >> very good for business. will that be all, sir?

thank you. ordering chinese food is a very predictable experience.

i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. and often even more. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $89.95 a month. comcast business. built for business. let's get down to the new york -- i don't know who you feel like here. let's get down to the new york stock exchange. jim cramer -- some jell-o pudding. that's the wrong thing to say here, jim. i take that back completely with my ugly sweater. down again today. we didn't hold on to those gains yesterday. >> yeah. it's just oil.

no one knows where to put it. the 9 million barrel number is closer to 10 when we look at january. it's coming out of eagle ford. there literally is no place to put it in the boats, the big suez max carriers are filled up. unless europe comes back online and starts growing, i don't know where the stuff is going to go. >> i was watching again, jim, i can see oil rebounds a little in the market, futures pare their losses, then goes back down. it's weird to watch that. for a while, that wasn't the case. we did get up to almost 18,000. people are back to thinking it could be a negative, i guess. >> we are waiting for a couple. there are very large producers that are not able to cover with their cash flow, cover their drilling budgets. push comes to shove, who knows which ones are going to go under. there will be some that go

under. yesterday we saw halliburton lay off a thousand people. it's overseas but they've been a principal driver of job growth. which firm has lent to the patch? then you have some of the producers that are in marginal pieces of real estate or bought properties the last two years. those feel like people who reach to buy houses with a loan-to-value 130%. some will blink, some will go under. that's what the market is anticipating. >> i ordered a new york giants sweater for you, jim. thinking about you. >> prefer eagles, but that's all right. >> why? eagles. >> that's why i got him a giants sweater. all right. see you in a couple of minutes. the west coast ports slowdown now putting your holiday gifts at risk. maybe you'll miss your ugly sweater. that story when we return.

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yes. we are still wearing the sweaters. crippling cargo backups dragging on for three months now. cargo that normally takes two to three days to flow through now

taking up to two weeks. this slowdown coinciding with prolonged labor talks with dock workers and the maritime association. who is getting hurt? lululemon blamed the port congestion for its lower sales forecast yesterday. other retailers had similar complaints. golden state warriors had to hand out vouchers to 10,000 basketball fans after shipments of bobble head figures were delayed for weeks. mcdonald's says its japan restaurants are grappling with a french fry shortage they are blaming on the port backups. >> larry, quick thoughts how you feel about the markets and commit right now? >> there are a lot of things going in different directions which cause people skittishness. if i could recommend one thing, i hope the republicans when they take control of the congress in january, they do short term things i mentioned to create job creation. i still think that the more of our people who go to work, they

are still 4.5 of the population in part-time jobs. the more improved job creation, the better off we'll be. that's my one wish for christmas. >> happy holidays. have a wonderful weekend. join us monday. now it's time for "squawk on the street." >> good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim faber, david faber at the new york stock exchange. barring a 2% rally today, the dow and s&p will end their seven-week win streak looks unlikely, the premarket much lower as you can see. oil the culprit. broke below 59 this morning. 50% off its june high. the ten-year a cool 12. oil below 60.

>> united technologies wraps up its annual meeting. the new ceo says they are on the hunt for major acquisitions. >> the house passes the spending bill three hours before it expired. key provisions of dodd frank at play complete with personal phone calls from jpmorgan's jamie dimon. >> first up, stocks falling around the globe. futures indicating a wipeout of thursday's gains. oil prices hit fresh five-year lows breaking below $59. international agency reducing to 900,000 barrels a day. fourth time they've done that. now trotting out the 200th month moving out. >> the oil futures were down 57 cents. the s&p futures were off about

half of what they are. at 5:00, oil is down $1. s&p futures are down twice as much. this is just a straight-out algorithm. there is no longer a remote connection with what it's doing with the u.s. economy. and the stock market. this is entirely a question of the debt market and trading. high yield bonds off oil, which then people think will spill into the stock market. there are very few people who understand are buying costco why this could possibly be bad. costco being the terrific beneficiary of a lot of this stuff using that as the paradigm. the answer is you can't see the debt. the debt is going down in price every day. the good rich petroleum debt. costco versus goodrich. i like that. >> right. your point being we talked about the high yield market in energy which is very large. $300, $400 billion. energy alone. how important high yield has been. outflow from high yield funds. it is often seen as a proxy for

equities. it's not like the corporate bond market investment grade. you are seeing it bleed over in high yield, but that said, at some point that is going to play itself out. spreads are rising significantly. there are parts of the market that may be frozen. it will play out. it will be over. there will be some value there. yeah, there probably will be energy company bankruptcies along the way. why should that stop me from buying costco? >> it won't. you have to deal with the futures bringing everything down. then you buy bristol-meyers. exxon has a balance sheet. they can buy -- i'm not going to mention the names. suddenly there is a problem with them. i said goodrich because it was downgraded today. you look at all the companies that make up the guys who bought

permian which is where it is flowing. eagle ford, nine days you are drilling a well that used to take 24 days. you're hitting oil everywhere. those companies that bought properties when oil was at say $90, they are the equivalent of a guy who bought a house for $350,000 that is now $250,000. >> doesn't mean he is going to move out tomorrow. >> right. there is no bank that repossesses the house. exxon says i wanted that eagle ford property. there are buyers with good balance sheets, sellers who are forced sellers. we'll clean things up. we get a producer price index that is so positive for the consumer. i feel like buying myself a new pair of tom brady uggs. >> ppi down 0.2. estimate down 0.1. >> it's incredible. >> it's gas. >> there was a great story i was reading how russia is causing beef to come down because

they're eating less beef because they put embargoes on. if food comes down which is the principle source of this year's inflation, you are going to see the margins in these restaurants explode. all these restaurants have big chicken costs that went up big, big steak, a lot was the drought. if you see demand for international beef and chicken come down, everybody in this country is going to have the biggest stimulus. we did a $790 billion stimulus in 2009. this is so much bigger. it goes right to your pocket. that one went to, i don't know. >> then you bring up russia which makes me think of the geopolitical risk people are starting to grapple with. it may not come to pass but you have to add into the equation. ruble down another 3%. russian ten-year yields are up. i feel as though our conversations these mornings are similar to the ones you hear,

all the good things from the price of oil going down and here's the bad things. feels from my perspective a lot of equity investors as we head to the last couple of weeks of the year, i don't know what to do. i'm not going to do much of anything. >> the russian debt had been marketed by goldman sachs and mike sherlock had come back with a big victory out of moscow. these are the contagion issues of the late '90s, then we should be worried. i do know when i fill up i give them three $20s and i get back $10. i used to give four $20s and got back $5. >> you pay cash? >> they have little charge if you use the debit card. >> by the way, you do it in new jersey where they have guys at the pump. >> they pump your gas in new jersey. >> that's good. you never spill the gasoline. i go to pennsylvania, pump it myself. feel like a real man. >> then you're not using cash.

>> nice. after much wrangling the house narrowly passed the spending bill last night. the vote 219 in favor 206 against. most of the nay votes coming from democrats angry the bill scales back dodd-frank killing some planned restrictions on derivatives trading on large banks. the bill heads to the senate where it is expected to pass, president likely to sign it. barney frank calls it a terrible violation. a lot was driven by regionals who say look, trying to extend credit to a farmer in the midwest is very difficult when you've got to put this into a new entity. >> this was the most arcane battle ever. lost in the arcane notion is that last year at this time, can you imagine we would have been thrilled you got a budget bill done by democrats and republicans? i want to say it's a real positive. am i worried about the banks? i don't know. bank balance sheets are really

good. this is guaranteeing these derivatives by deposits. it's a gratuitous thing. if you want to go after the banks, you split them into, get rid of glass stiegel. >> not to mention bank of america, citigroup. >> cracking down on leverage transactions. >> when that guy was talking about junk he wasn't referring to scrap heap, was he? >> the analyst quoted saying, "i would crawl on broken glass dragging my exposed to get this deal." >> it's another kesha reference. >> and that was toys "r" us which will never happen. that company coming public.

>> i love that stuff. that was one of the greatest stories. between the e-mails out of hollywood and e-mails out of wall street, may i suggest you answer your e-mails with y or n. >> or just use carrier pigeons. they haven't been able to track them yet. >> you bring up banks and main street. here is the cover of "usa today." it's going to seem like a story from last year. the left side is a sad face, right side is a happy face. main street/wall street. >> hold it just a second. there is something else. that's sanchez. sanchez is on the right. >> that's your first read. >> romo should be happy. i look at what's going on with the gloom. i say what does the dow -- what does the s&p have to do to make people less gloomy? how much does it have to go up to make people feel better?

what do they own? they are all in cds? this is the greatest market i've ever seen. >> you're well aware of the percentage of households who own stock in this country. it's not what it once was. >> it really isn't. that's why i told you i was a triceretops. i gave a talk and they said jim you still like stocks. yeah. is that a throwback jersey? i do like individual stocks. look at apple. >> you haven't become a press release yet and i haven't become an algorithm. >> i look at seaworld. is there etf for theme parks? i like individual stocks. they are interesting. they go up a lot, they get taken over. >> i'm not giving up on

individual stocks. if i worked at halliburton, i would be worried. target, i wouldn't be worried. >> oil services has to be very worried right now. >> one of the things i thought was interesting, i'm watching these very large crude carriers, watching the rates go up. people are storing crude betting that crude will come back. the chinese numbers are awesome. they are buying a lot of oil. be careful. i think so many brokers who come on, so many people have come on our network, analysts try to call the bottom in oil. that's been a sucker's game. five guys on our network with a bottom in oil. >> right now i think we are near the new lows. >> $59 again. >> let it come in. go with what boone pickens said. it's demand side. supply side is we're pumping. >> right. when we come back, united technology new ceo outlines his

game plan for growth. a high flier gets a bigger lift. details coming up. >> shares of facebook and twitter heading as you probably know in opposite directions this year. what's in store for internet stocks in 2015? mark mahaney will join us. one more look at the premarket. bumpy yet again. more in a minute. this is a burrito made with chocolate, soybeans, and apricots. what kind of chef comes up with this? a chef working with ibm watson, on the cloud. ingredients are just data. watson turns big data into new ideas. and not just for food. watson is working with doctors and bankers to help transform their industries. today there's a new way to work. and it's made with ibm.

united technology issuing guidance below forecast, expecting a profit drop at its pratt and whitney unit. the new ceo said the dow component wants to get more aggressive on acquisitions and will look at the portfolio in a disciplined way. >> which charitable trust owns it. stock up 8% quickly. people like him. i would say this. i think it's a reset. i think he wants to get estimates to where they can be beaten. this 10 cent estimate, there is readjusting, making the numbers more realistic. i think the issue here is that the u.s. is the only place that's strong in this world than

a company like united technology, ge, any major industrials. they need asia to get better or europe to get better. they have too much business overseas. let's watch that. these are really gdp plays on the world. right now, the china numbers again last night just not great. you need china to do better. otis elevators is very important there. >> no doubt about it. >> i'm not sanguine about it. it would be nice to see somebody do better because oil is down. >> thinking back this week alone, mcdonald's, verizon, sherwin-williams today. >> that was interesting. >> the quarter is not stellar. no. you see retailers and restaur t

restauranteurs. >> denny's is doing fabulous. this is their moment. it may not be the moment for large cap companies. 3m, i'm watching that. i'm watching that stock as a bellwether will people say i am too scared of international. that is the company of the multinationals that is doing the best. i'm watching visa. that is another one that's done well. yesterday, good interview with american express. i'm wondering how that's doing. these companies are doing incredibly well. europe has to do something. we keep -- i know i don't want to be in a 2011 time frame, but you notice europe is not working. >> united technologies did give an interesting interview, mr. hayes, where they talked about

halving off some of the company. in terms of activists, they have $220 billion of money looking for something to do. >> what is that? acknowledging it's a tough couple of years. you just got to keep thinking about activists and what they might say to you or do to you even if you heard nothing about them being in your shares right now. they are looking at major acquisitions down the road. >> united technologies is a big american company that i think they say, all right, listen to you guys. what do you have to say. no. it's like we'll do what you say. >> i don't know they'll do what they say. there is a worry. >> don't you find it

preposterous they take a 3% position? >> they said they are keeping sekorski. >> big helicopter company. >> secret is you will get something well known. the big mutual funds or institutions who oftentimes are the engine for this. that's the conversation that goes on you don't hear about. >> i'm long united technologies, whatever happened to that? i screwed up. united technologies, thanks for nothing. with whatever happened to that? >> you really are a dinosaur. >> i'm stuck in your stupid thing get rid of pratt whitney. he should say sell our stock, clown. you were stupid enough to buy our stock at $120, you moron. they don't do that. they are polite.

>> they are exceedingly polite. >> occasion ideally it gets heated. it may start there. i think it's going to getting youler in 2015. they are going to try to make a last stand. >> in the old days when i was a professional investor, we would say you screwed up. let's just blow out of it. we never thought about calling the ceo, joker, would you buy back more stock? they are calling these guys like he's a real guy. >> or let me take 4%, go on the board and you can buy me out. we won't call it green mail. >> get on the phone screaming at these guys? >> we'll get cramer's mad dash as we count down. one more look at the premarket.

all right. it is a mad dash for friday, 6 1/2 minutes before the opening bell. adobe. >> you said listen this will work its way through the system about oil. >> most likely, yes. >> i mention that only because adobe reported an amazing quarter. 644,000 customers for their cloud product. i was looking for about 500,000.

analysts said maybe they can do $5 in 2017. is this going to go down because of the oil pressures? the answer is watch a stock like adobe. that might be a place to go. the numbers were fabulous for the cloud base. >> we have the ceo on later. >> good. they've done an amazing job. he transformed the company in a way most companies can't go from cloud-to-cloud. congratulations to adobe. now gopro. gopro has been a battle between the longs and shorts. i i'm often cheered, but not when i instantly mention gopro. you are talking about 15.3 million shares. >> last time they had the unlock. they did the secondary. >> right. it crushed it.

that said, jpmorgan says about to go into china. sales are amazing. here you have a possible -- by the way, dean woodman father of nick woodman chairman and ceo, he bought 7 million shares. what is he going to do? >> jpmorgan upgraded. >> don't ignore the supply numbers. >> i'm saying this is supply versus the demand of gopro. the demand is off the charts. the supply that could hit the market is off the charts. >> many names we are keeping an eye on as we open the markets for this friday a few minutes from now.

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which we thought was going to be a positive month. it's been positive for most of the past few years. it's now on pace to be the worse month since january on the s&p. dow only 30 points away from that fate. >> it is to the average person what is wrong with lower gasoline prices and lower food prices. the answer is people can't figure out what the price is to do a deal. it's all about the borrowed money and the debt. if we don't emphasize it, we'll be as blind-sided as those who didn't focus on subprime. it's why people shouldn't think we are totally irrational here. it's happening too fast. >> it's also technicians would argue the seasonality of december covers the second half of the month. it's generally better in the

latter half. >> there was a note yesterday about urban out fitters. the subpar retailer. it's starting to do better. >> i'm an old relic saying this new relic. >> we mentioned sherwin-williams. they do see 2015 below estimates. there is an 11:00 a.m. conference call. you make much of it? >> people are saying it's the raw costs. ppg would disagree with that. we've got to hear what they say on the conference call. i go over what the companies in housing have been saying. there is still a depression in recession in housing.

we are still not building enough houses. the country is a growth country. how could there be so few houses being built with so much household creation? is that sherwin-williams problem? let's hear what they have to say. it was ripe for the sale. even financials, some would have gotten a bounce within the dodd frank as part of the budget bill. >> we take our cue from europe. one of the things i don't like, we are always down as much as europe when we open. europe is in a recession. central banker there is afraid to death about deflation. you have merkel standing in the

way of things. you have the ruble collapsing and we go down as much as they do? we'll have 4%, 5% gdp growth. we are not the germans. there are people drilling in eagle ford right now who are saying wow, we are not getting as much. people drilling right outside of denver. we are hostage to them? i'm not being hostage to them. no. not playing that game. i accept we can go down. i accept the high yield market is having a blip. >> if you're running your old hedge fund are you saying buy, buy, buy? >> no. we are just not europe. we trade off europe when we come in. we are not discovering our banks -- i remember seeing, there was a moment in time i think there was a norwegian school board that had bought

junk. house of cards. fabulous. >> yes. my trip to norway. >> remember that when they had been jammed by some broker? >> the city itself. >> that's not happening. we are not jamming them with paper from xyz oil company. >> high yield -- we'll talk more about it, but it is not securitized in a way home loans were. synthetic ceos spread around the world. >> if you want to buy celgene if it goes under $110, i'm less than that. if you want to buy anadarko, i'm not blessing that. these drilling costs in these countries is huge. >> people are saying get me out of just about anything in oil services. we are watching the 10-year.

they brought up a conversation about that october intraday low. on an intraday level that fell to 1.86%. >> you get a master limited partnership that is subject to the amount of oil that is going through. the pipelines are filled. everybody needs to raise cash. i saw a note on edison international. it raised the dividend. utility stocks have been on fire because they are beneficiaries and doing great. >> another area seeing some green is retail. sears up, jc penney up. walmart and best buy up. >> people are richer who don't own a lot of oil stocks. you have a giant oil portfolio, an etf and thought you were diversified, all you do is own everything you don't want. i did a piece for "real money"

about freeport-mcmoran, copper and gold. when copper was very high and gold was at $1,600, decided to diversify which was smart but they diversified into oil, west texas, brent at $100. that's become the security battleground. fcx is like an etf for everything that is horrible right now in the world. >> that is more than a five-year low if you go back. i took a look. do you touch it here? down another 1.5% this morning. >> i don't want to touch it. i will say they do have premiere assets. i don't like being levered into indonesia where the copper mines are. if you believe we are in a moment where oil has come down enough it's going to boost consumption overseas, you would buy fcx. i don't want to own it.

i'm offering that as the security that people who say i want to bet against the world short fcx, buy fcx. >> if you've taken a bath on energy, maybe you sell costco here. downgraded today. they go to neutral. >> i was telling a research associate, do he tell people to sell costco at $142 buy back at $136? i can't play that game for individual investors. those are the kinds of stocks you're trading them. i don't think costco is meant for trading. it's just a long term company taking over a particular segment of the economy. you want to own it. i understand. it's up a lot. no one got hurt taking a profit.

yum, chipotle. >> microsoft is up, disney is up. >> let's talk disney for a second. what's happened at disney the last few weeks? okay. there is more money because you drive down to disney world, right? >> absolutely. >> you're about to get a four-game fabulous playoff in college espn. "star wars" 2015. the company buying back stock. a big beneficiary of lower oil. >> not to mention selling out all the "frozen" merchandise. >> and i have "star wars." i look at this and i say all

right. let it come down. let it come down because big hedge funds are saying i've got to get out. adjios. cancer cells commit suicide under this plan. again, the stock goes down. someone says why does this have to do with the eagle ford? >> next week we'll get earnings from nike, oracle, general mills. >> general mills, i hope they do better. they bought annie's for $800 million. someone downgraded hain. i find that exciting. rbc downgraded hain. i look at the piper initiations. people buy software.

we have to buy stocks that go down that can be bought. >> big day for ipos. a mixed situation. there are two big winners. we priced several ipos overnight. four priced well below the range. this is a mixed market. buyers are in control. let me show you the clear winner over there in the distance. that is new relic here. 5 million shares at $23. another big winner horton works. they priced $23 well above the $20 to $22 price talk. a lot of other stuff, four came below expectations. we had an aircraft leasing company, avalon holdings priced

below expectations. james river group priced below. they've got to get them out. good for the buyers out there and good for the ipo market. you don't want to have an ipo come out and droops down towards the end of the year. it's very bad for the company and bad for business. utx, this is what slow growth looks like. low to mid single digit growth. they are talking about 2015 to the outlook. eps growing low to mid single

digits here. otis elevator. pratt and whitney, low single digit. if you look at their guidance there, they are talking about 6%, 7% earnings growth if they hit the top end. they were conservative. that is not a surprise this is what slow growth looks like. i know you are going to have the adobe ceo. i'm a big photo shop user. i have not gone to the subscription model. i resisted. but who can argue with success? almost 3.5 million cloud subscribers. this market has spoken. they are successful on the subscription model, everything else. old school guys like me, we are

getting pushed aside here. sherwin-williams. even though guidance may be a tad disappointing. if you look at 2015 sales growth, 7% to 11% is a good number given you've got a lot of do-it-yourselfers in there. >> did want to spend more time on the high yield market. it is having an impact on the overall equity markets. if you are in one of these etfs that tracks performance of high yield bonds, it's not been a pretty ride. yesterday i showed you the jnk, junk. down yesterday. today, there it is. that gives you a sense as to the damage that's been done there or hyg, another of the most liquid etfs to track performance of high yield bonds and barclays

u.s. high yield spread. all moving fairly with some violence. why? much related to energy. when you take a look at the percentage of energy overall and high-yield market, you'll see. it's quite significant. it moved up dramatically over the last few years as we had more companies come to a generous market willing to finance their attempts to explore and develop oil and gas resources, namely those in shale. far beyond the cash flows generated at that point. the spread going from 540 basis points over treasuries, well above that in the last couple of weeks. this has been a dramatic move. we'll see what it means for the overall high-yield market. whether it is creating an opportunity in some of these names. when you've got a thing like sabine oil and gas which got

together with forest oil, eagle ford, they have 9.75% bond that went down 22 cents to 49 cents to the dollar. these are moves people are watching in energy. you watch high yield funds. mutual funds see significant outflows. you've got significant outflows from high yield. it was 1.9 billion in the last week alone. >> here's the issue. those oil companies you mentioned. these are just small companies but when they default, if they default, you are going to read the headline and get scared. all we are saying is be aware someone is going to get scared when the things we talk about every day happen. that's going to be your opportunity. these are not huge companies. already the transports are up.

already retailers are up that are domestic. people put two and two together and recognize it's not bad for them. at the same time when looking through -- i don't want to mention the oil companies i'm looking through. i don't want to hurt them. >> in this environment, it's true. i was looking at a company that has a name similar to a quarterback i'm not fond of. it's a puzzle. >> i'm thinking. believe me. >> is that a hint? >> sanchez. >> i said it, you didn't. >> thank you. not foles. sanchez is a opportunistic good company that bought good properties from eagle ford that has shed, but they paid a high price.

like the eagles could pay a high price this weekend. >> when you're trying to inflate a balloon, look out for pence. there is a lot of search for yield. i don't understand why the pin of energy is so shocking. let's look at what's going on. intraday of 10s. this is important. we had a ppi number that was on the soft side. i don't think anybody expected it was going to be roving to the upside. it had very little to do with the tone of the market today. demand down with things like energy. treasury rates are down. bund rates are down. the dollar is down we see everything is moving together. if you open the chart up, 18 months, that's the last time we

closed, the last time we closed at the low yields that we are seeing today in 10s. who could forget capitulation 15? october 15th the intraday low was 186. we need to keep that in mind. open up 30-year bonds. when was the last time they settled down here? almost exactly two years ago. bund yields never closed down there. boon versus ten-year spread. 1.50 is magic. maybe much is tagged to overseas rates. jgbs, 39 basis points. dollar/yen, dollar closing way down on the week. euro is also way up on the week.

it closed at 1.2283 last week. back to you. >> thank you very much, rick santelli. the past 12 months have been good to shareholders of adobe. the cloud and a deal helping to lift the stock this morning. up almost 8%. new all-time high. we'll have the live interview coming up. how do you beat the number one seed? you just have to win 70% of your points at net. and keep unforced errors under 10%.

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yesterday the question was would oil break $60. today will oil break $59? it did. $58.62. off more than 2%. oil services stocks getting hit. exxon and chevron not the worst performing dow component. boeing is at the bottom of the list. >> they need those planes to be more. exxon outperformed yesterday.

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time for breaking news on consumer sentiment. are they responding to some of these low gas prices? >> it is going to be interesting. low gas prices make people feel better. maybe the aftermath of how all that credit finds its way into searching for yield and that dynamic is the other side of the coin. okay. put your seat belts on. 93.8%. that is beyond huge. just to give you an idea, i had as a wild thought if this was strong let's go back, 91.3% was one of the high water marks that goes back to february '07. this number takes us back to january '07 which was 96.9% since we were anywhere near these. that is a long time. i caution we are looking at a preliminary benchmark against all the final numbers when it comes to michigan.

yields are moving maybe up a smidge on this. i think we answered the question. gasoline, baby! back to you. >> thank you, rick santelli. it is time for jim cramer stop trading. >> lululemon. i love this piece. inflection point. each month was better. these port issues in the west coast prevented them from blowing out the numbers. lululemon is a fantastic brand. i do truly believe it comes back and has much higher to go. >> you've been in on this. this is a good one for you. this is like rivalling facebook for you this year. >> i think lululemon is a fabulous brand. nike reports next week. this is the envy of everyone whether it be nike, vf corp. if they get it right, they don't have to do anything. i don't know if it's the stink pass but i smell a bomb. >> what is on "mad" tonight?

>> we have porch. >> an entrepreneur of the year. >> thank you. i felt let's get him on. i cannot wait. this is what everybody wants to be in life is a great entrepreneur. >> see you tonight, jim. >> thank you, guys. >> fly, eagles, fly. >> adobe betting on the cloud. seeing its stock get a boost. they're coming. what do i do? you need to catch the 4:10 huh? the equipment tracking system will get you to the loading dock. ♪ there should be a truck leaving now. i got it. now jump off the bridge. what? in 3...2...1... are you kidding me? go. right on time. right now, over 20,000 trains are running reliably. we call that predictable. thrillingly predictable. dad: yeah, 20 something years now.

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good morning. welcome back to "squawk on the street." markets today, dow opened down about 100 points. a lot of pressure from oil all morning long. low gasoline prices did bring us a massive beat in consumer sentiment. with that, we are beginning to see some buying going on as the dow shaves its losses at about half. >> let's get to our road map as we head to the weekend. stocks in the red. crude oil continuing to fall after chinese industrial production came in below expectations. >> house passing a spending bill