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tv   Squawk on the Street  CNBC  November 22, 2013 9:00am-12:01pm EST

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last thought? >> we're talking about the economy, and affordable care act and innovation and all this stuff going on, it's fascinating that slow growth ran the economy, unacceptably high unemployment. now it seems people are starting to doubt and it's time for business to step forward. >> have a great weekend, everybody. see you on monday. "squawk on the street" starts now. ♪ we work hard, play hard, work hard ♪ >> good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. the dow did close about 16,000 yesterday, wants to add a little bit more. we wait for bill ackman to renew his attack on herbalife today.
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and then europe's hanging in there as well, german business sentiment at an 18-month high. our road map begins with the market. more history as the dow closes above 16k. is the world getting ready for the santa rally? >> gap shares falling on news on its quarterly results as we're one week from black friday. >> and pandora shares fall on earnings while spotify could be worth $4 billion. >> people are beginning to pay attention to the percentage of investment people have in stocks, getting close to the levels we had in 2007. >> we can always look back and pick a time where it seems that was the top.
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imagi margin debt is an important indicator for the top. >> what i like about the companies, they are levered to asia and europe. how many times does jamie dimon say we need rates higher. and now you're seeing the move to the financials and goldman sachs is in the financials, too. >> what may be good for the financials may not be good for the rest of the market, if it includes a taper/tightening, a less dovish fed which results in the higher rates. >> speaking about the dow and the dow is lnot as levered to
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taper as we think it is. there's a couple of niches in retail that did well but the majority bad. >> the filibuster move by the senate yesterday could have an impact on fed nominees. it could be more dovish now as a result of only having to get a simple majority. on the flip side, you might get more aggressive epa regulation. it might allow the government to do some things on stimulus that he couldn't do before. >> one the other day said there's going to be a serious bid to get immigration done. give me a break. though i do believe we can get something done with corporate tax, a major repatriation of foreign -- >> since when do you get at that and why? >> i'm hearing a bubbling. >> really?
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>> yeah. >> i've been saying we ought to do -- 8% to 10% the rate, that money bubbles back, starting to hear this is going to happen. >> it would be a great thing. we talked about yesterday. not to mention, by the way, when you read about construction jobs being down for highways, for example, which was the story today in the wall street journal, you wonder about the lack -- increase in the gas tax, we don't talk about that very often, 1993 the last time that went up. it's been 20 years. >> this is something -- i mentioned yesterday i thought this was a good idea. i heard from some people in congress. not ready to gut with it. >> it would be a dramatically positive thing if you had corporate tax reform. >> i think you're going to get it. i think one of the reasons bt market is doing well. there's an undercurrent. things have been going well in
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washington. except for the fed. i think that could be a big game change per. >> -- game changer. >> yahoo! on wednesday, gmc added some yesterday. today it's gps at more buybacks. you talked about a flowed squeeze in the early part of this year. you have huge inflows on the one side, companies buying back on the other side. >> i was looking at bed bath and ross stores. it was a very bad quarter. ross stores is a big buy stock. they have trimmed the floors dramatically. you go with some of the big ones you hear about, they haven't taken back a lot of stock because they issue stock. if you look at the share count of a lot of companies, you go how did that go from having 750 million shares to 500 million
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shares? cracker barrel. you look at auto zone. yes, more people might be coming back being maybe back to 2007. in the interim the companies use these buybacks, viacom, time warner and you say how did that happen? >> and we talked about using the debt fund market to fund those buybacks. when you account for the fact that interest is tax deductible, it becomes accretive on a cash flow basis. but there are those who will argue is that really the best use of your catch tall? you have nowhere else to put it than just buying back your stock? >> it's not clear when i was on the west coast. i would ask these guys what are you going to do with your cash? they said no buy back stock. that's what you do when you have nothing to do. yahoo! is the best example. yahoo! does a vconvertible bond.
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look at aol. there's nothing for sale. >> apple could take its float back, too, if they were to buy back stocks. >> you said that in a brooklyn acce accent. >> queens, my friend, queens. >> it's product, product, product. i keep hearing tablets are selling very big. by the way, intel making a move here. intel really coming on very strong, making a lot of chips for tablet, for cell phones. intel started breaking out yesterday. there's a dow stock that is breaking out. >> interesting. new ceo who we don't know much about. >> no, he's not promotional and i think he's good. from what i can tell, they're making a push to become the source for everything nonapple. if apple ever wanted to change, they could flip the switch and cut off samsung in a nano
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second. jobs called andy grove for once and grove told him to go boxle jet himself. >> one week after sony lauched play stays 4, microsoft's xbox 1 is for sale. video fans lined up around the country to get the product. >> the response has been amazing. any time we put up new information, customers are there. they want to know more. they're flocking to stores to get to see the products, it's been outstanding. >> game stop ceo paul raines will join us live to talk about the x-box launch later on "squawk on the street." >> play station is very popular. i wonder if there is a problem with sony.
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it's hard to get one. if they had all the inventory -- paul is very candid, terrific executive. i know it very hard. i've been trying to get a play station. can't find one. >> as far as the xbox goes, the rollout last night and midnight in new york and europe, we talk about the muscle of microsoft and it was on display. but we have folks, rick shearling comes to mind, have been critical of any kind of hardware. >> you'll get the last poor europe sticking with the shakespeare thing, different play, i know shakespeare. here's what i think is kind of interesting. you come out of "hunger games" and up go buy an xbox. it's like entertainment mecca temperature late sta
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temperature. we do nothing in this country other than be on our hand helds, watch and play games and movies. we have these devices our bosses think we're doing work on but we're mostly doing fantasy and watching movies and netflixing during the day. >> that would explain a lot. >> right? >> apparently we're buying some shoes. foot locker, beats by 2 cents. on top of 10% a year ago. >> apparel -- >> they're going to open at an all-time high. nike will open higher. >> nike increasing dividend. there are certain niches that did well. sports apparel doing incredibly well. foot locker has a lot of good things to say, nike has a lot of good things to say.
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underarmor should go much higher. i know, high multiple. that's a technology company masking itself as a clothing company. >> gap does beat by a penny, down one at banana, flat at old navy. is that okay? >> that is one not unlike lowe's corp where we had high expectations. everyone just kind of got ahead of themselves thinking, hey, this is going to be a great quarter. in the quarter the ceo glen murphy used a word i haven't heard yet to describe the consumer -- fatigued. the consumer is fatigued. i think that unless you have a new concept, the consumer's bored. did you see when they were talking about target yesterday? this was the dumbest thing i've read in a long time. they don't want to go to target because they might spend too much. >> i wouldn't want to join a
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club that would have me. >> no, the consumer doesn't want to go to the store. they could be tempted to spend. >> that is the key. look, when we did our docs on costco/walmart, people spent a lot more than they intended to when they went in the store. >> they put milk all the way at the back end of the store so you can see it but you have to walk through the whole store to get to it. >> there is such a thing as a free lunch. >> there is such thing as a free lunch. it's not just diversification. >> today marks 50 years since the death of president john f. kennedy. a lot of commemorations to commemorate the date. we'll talk a lot about what that meant for the country at the time, what it means 50 years later and what the market response was back then, jim.
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not as great as, say, a 9/11 or a pearl harbor, but we may talk to art cashin in the 10:00 a.m. hour. the exchange shut down early. >> i was on a school bus. i was 8. and they announced it. no one even knew you could kill a president. you knew lincoln was killed. >> mckinley had only been the prior -- >> you just think about it. they said it. 8-year-olds quiet on the school bus. wow, i think that's bad, that's horrible. >> and you went home and. >> -- and everyone was crying. everyone cried. all over the country they were crying. >> in the meantime, pandora does sing an earnings tune while reports say spotify could be worth $4 billion. and athena health up this year. we'll talk about the affordable care act.
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>> he is fabulous! >> one of the best guests we can get on this net week, jonathan bush. eight days to go before the white house fix of one more look at futures on a friday morning. "squawk on the street" live from post 9 at the nyse when we return. the american dream is of a better future, a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. that's what they can do with you. that's how ameriprise puts more within reach. ♪
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♪ last night a deejay saved my
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life from a broken heart ♪ shares of pandora up in the premarket. the online music service posting quarterly earnings that were in line, beat the street on the revenue front. published reports say pandora's rival spotify has secured funding that would value the company at about $4 billion. >> that's tcv, an absolute lif great venture capital company. i know them because they took a big stake in the, which i'm involved in. but they also did netflix. netflix was such a home run. if these guys are involved, i got to tell you, some guys have a golden touch. we don't talk enough about which venture capitalists know what they're doing. when i saw this, i said going higher. >> similar model to netflix? it does appear they're trying to do as much as they can. >> the more song you have, the more royalties you pay.
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>> that's a netflix problem. but there is bubbling talk. they said ad rates going higher. >> a lot of it has to do with whether you play the first 20 seconds or longer. the royalty issue still up in the air. you talked about when apple got into iradio, people wrote pandora off for dead. it has not happened. >> my apple friends thought it was game over for pandora. they're going to continue to tweak apple radio and it going to get there. when you had that run from like 16 to 24 for pandora, that was like pandora is going to do well. then people started shorting it aggressively thinking no one could beat apple and then holy cow, apple didn't work to the satisfaction of the shorts. >> it comes on the heels of the
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snapcat valuation. >> i interviewed houseton, the ceo and i was called and said -- you need everything to go right. you need the consumer to like something and the enterprise to like something so i am worried. vince public today. i don't wear vince. there's bubbling everywhere and it does worry me because we saw that when the whole foods market -- i don't mean whole foods. we saw this with excitement, we saw it with a company violence memorbe -- call violin memory. now i think we're getting too much of just a whole set of areas, an example of the 3d
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printers. yes, we need to be careful. >> that's important to note. i'm sure we'll come back and revisit those comments who knows when. maybe soon. when we return, cramer's "mad dash," we'll count down to the opening bell and get a look at the futures. we'll get that opening bell in just about ten minutes. e, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. [ male announcer ] fedex one rate. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account.
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yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. ♪ ♪ a few moments before the opening bell. let's get cramer's "mad dash." what a week for the biotech index. >> yes. they've circled back. there were a three-week period where this group seemed
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finished. it had bubbled over. biotech, this stock was a bellwether and it started to just meander. now boom. 300 price target. cramer right in the next five days. >> how about gilead as well? >> merrill lynch, this is the sleeping giant. in is the one that bought pharmacet for the hep-c. these are the two bellwethers. watch cellgene and regeneron has new things in the pipeline. a lot of people allergic to
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statins, they have a new drug in the pipeline. >> cellgene already is one of the best performers for the entire year. >> bob is a miraculous ceo. this is all multiple approvals against multiple myelomas. i'm talking about $10 in 2015. it's not expensive. it's less expensive than pfizer and even bristol myers. >> thank you. that makes our week complete. the opening bell coming up. "squawk on the street" is back in a minute.
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who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being get live squawks right in your trading platform with think or swim from td ameritrade. zbrn you are watching cnbc "squawk on the street." the opening bell in just about two and a half minutes. lots going on. we're going to get key economic data at 10:00 out of the jolt survey. a lot of upgrades and downgrades. steel increasingly a war zone as
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morgan stanley upgraded and it gets cut, wells. >> i didn't like wells. the new guy running u.s. steel, he taking the fat out of u.s. steel and i don't want to bet against him. >> operation olympus. sounds like something out of a bond movie. >> no, that's operation grand slam, you're confusing that. report to get fort knox? >> we do see what's happened with x over the past few weeks. he does cut x and new core. >> united airlines, a buy. >> this group i still love. delta way undervalued. the giveaway, when the justice department said we were wrong
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about that the usair. continental has a lot of fat to cut out. spirit still moving up. delta remains a fabulous one with tremendous decision to buy that refinery. >> and returning capital of shareholders, you thought you'd never see that, right? >> they're printing money. they've never done this in their history, they're returning this much capital. dividends. >> the airline history -- >> the airline histoindustry is industry now. all had you to do was create a massive oligopoly. that was key. >> you're going to go to the conference and we're going to hear from bill ackman where reuters says the attack on herbalife will happen again. >> we'll see.
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of course there is this larger issue, bill stiritz owning 6.4% of the company, the idea being once they get an audit, will they get a financing in place that will allow them to buy back a lot of stock? >> a lot of cash flow there. i think that ackman -- look, the whole story about the short side only works if you scare people into selling! shorts think -- you think you can't just go out and say, listen, i'm taking the stock down to 48. you need real sellers. that's been the problem. people just listen and say cry wolf, cry wolf. >> a look at the s&p down here at the big board and over at the nasdaq, endologix, developer of treatments for
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aortaic disorders. >> jim tepper, asked what he was worried about -- >> he's a remarkably honest and forth right man who has been dead right. you have to listen to him when he size he needs more exposure. i know he sold some banks early on. i bet he wishes he could buy them all back. he's a flexible man, a good man. >> comments to reuters on sears talking about more store closures but declining to give a number. they've closed more than 300 since 2010. >> look at best buy. they closed a lot of bad stores. it does work. not all stores are created equal. some stores are more equal than others. who said that? quickly. and that's the last line of "animal farm." >> you're always on the phone. why don't you try googling now
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and then. >> my son just read it. >> it's really good. >> thank you for that update. i appreciate it. >> and we'll see how much we do relative to 16,000. of course 1805 has been talked a lot about over at s&p. 1805 on the s&p is 1,000 points since obama's inauguration. >> holy cow. >> 1,000 points. big debate online about who gets credit for that. >> i was working on t.a.r.p. yesterday. >> how does that work in terms of who gets credit? >> ben bernanke gets credit. >> ben bernanke deserves the credit. >> with the gm sale, t.a.r.p. is now profitable. >> we should have invested even more. >> the nation regrets that it didn't -- that it wasn't 120% long t.a.r.p. >> the idea that aig would pay in full, not to mention fannie
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and freddie is mind boggling. >> they managed the sale of the t.a.r.p. products, bringing the proceeds, tim masset, friend of mine from school, they didn't take any money, they didn't outsource this to morgan stanley. >> they didn't sell early either. >> tim promised on "mad money" he would not break price for general motors, he would sell that and you wouldn't get hurt if you bought it. they've done this very well. but president obama has been reluctant to take credit because that links you to the bailout and nobody wants to be linked to bailouts. >> investors are taking retail back to the wood shed. i don't know whether it's ross stores talking about it, intensely competitive pricing. >> that ross stores quarter was such a tough one to listen to because the analysts love ross stores. it was kind of like please, please say something good, i
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want to tell me people -- and it was like no, no. oh, please, please, what about? same thing with the fresh market. that was a conference call to end all conference calls. the two sacramento stores -- oh really? they opened four sacramento stores at once, okay? i go into whole foods and they only have one sacramento stores. they old four at once. believe me, you don't need four fresh markets in sacramento! i lived in my car in sacramento! you don't even need natural food there. they like packaged food. >> funny, i was just saying that the other day, i was telling my family you don't need four of these in sacramento. >> we think much more alike -- >> we're having a big discussion. >> is that worth taking tjx, gap, target, abercrombie? >> i was telling stephanie lake is there any way we can buy tjx pore the charitable trust? we had it frozen.
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carol is the reason why. she is a star. tjx did great. home depot, lowe's, this is --n s.a.t. question -- >> what's harder? doing this with jim or jeopardy? >> you guys all have like you must plan what you're going to say. >> nobody can beat him but sometimes i don't -- >> i watch your tweets. it's so funny. the last one you had there was like some show that you went to and you were raving about it. and i'm googling frantically who is that? it was something you tweeted.
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it was some song. >> i am in my defense trying to report a story here to break some news. >> you want to wait? >> we're going to wait. >> what, till the 10? >> no, till after the break. >> because i might not be here for it. >> you'll be here. >> when faber works the phones, you know you can't turn the channel. let's get to mary thompson watching what's moving on the floor. >> reporter: a mixed open with the markets with the dow moving below the 16,000 market, hitting a high yesterday. today retail ipos in folks cus, number of retailers reporting results. let's just touch on the dow because it is despite the early weakness we're seeing in the blue chip index on track for its seventh weekly gain. that would be its best weekly run of gains since december of 2010 to january of 2011. the s&p 500 of course also very close to a closing record high
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as well as an all-time record high of 1802. let's take a look at one of the key ipos that we're watching today. it is vince, it's right behind you guys, right behind me, twiced at $20 a share, above the initial range of 17 to 19. they're going to be selling 10 million, a retailer of higher end clothes. this is the one getting a lot of buzz but it's also just an ex-tensiex -- a very healthy extension of companies coming public in terms of numbers and dollars amount. it is the best year for ipos since 2008. let's take a look at the retailers p retailers. a lot of news out today. we did have ann taylor coming out with decent numbers, foot locker beating the street by 2 cents a share. the gap coming out, earnings a little bit ahead of expectations and the company of course also announcing a $1 billion stock buyback program, however, the
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company did not increase its full-year outlook. we want to end with the fresh market. that company came out with weaker-than-expected results, 3 cents below estimates, its revenue missing, too. it cited weaker consumer confidence. and walmart is lowering the prices for free shipping. you now only have to buy $35 worth of goods. earlier it was 50. we'll see if other retailers respond to that. we're watching steel stocks as well, wells fargo downgraded. and weakness in reit as well as in retail and the dow is slightly lower. >> mary thompson joining us at the floor today. our sharon epperson is at the nymex. >> reporter: there's not a lot of support for gold until we get to the 1,200 level.
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a lot of people think gold has further to fall. goldman sachs saying they expect declines in gold. a senate leadership in the u.s. is pressing for tougher iran sanctions and then we're watching gasoline futures and gassing prices at the pump rising yet again. we're up for the week about 4 cents or so and we're looking at 3.24 a gallon. the big mover in the commodities gallon is natural gas. natural gas prices are at a one-month high. the colder temperatures that we're seeing that are bringing more heating demand has caused natural gas to rise. the key is to see whether natural guess will get to the 385 level. that is what traders are watching technically. back to you. >> sharon epperson, thank you. as you can see, david is on the
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welcome back. shareholders in the cable company today probably smiling a bit on reports in the wall street journal that charter and liberty are lining up financing to help fund a potential bid for time warner cable in is a story we brought you here on this broadcast back in june. charter and liberty have been trying to get time warner cable to the negotiating team for quite some time and continue to try too do that. interesting to note that the companies are still seeking engagement here on a deal. what the price on that deal will be, how much of that will be finance to offer a cash portion that some will say needs to be $90 of cash in addition to liberty and perhaps -- or charter and liberty stock, it's unclear at this point. but the question continues to be will they try to make a public proposal to continue to put significant pressure on time warner, whose management is under fire a bit, changing, glen
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britt going out, rob marcus coming in as ceo with the new year. they reported not a great quarries ently at time warner. >> here is the nugs we have for you on this that has not been reported but will be by us, which is there is another potential bidder out there for time warner cable and that company is our parent comcast. i can tell you at this point comcast, which has been looking at this for some time and as always is the case it engages in off-and-on conversations, has sought advice recently from outside counsel and the like on anti-trust and fcc concerns that might arise should it -- or would it to pursue a time warner cable purchase. there are no discussions ongoing between time warner and comcast about a price of any potential deal. although can i also tell you people close to the situation tell me time warner cable has made it abundantly clear at comcast that if it were itself
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to pursue a consolidation path, namely sell itself, it would prefer comcast as its partner in doing that. it is interesting to note that comca comca comcast has chosen to look at what would be the impediments to the deal. while you could only have 30% of the cable households in your system, that's no longer the case. that was thrown out by the d.c. court of appeals. the u.s. court of appeals for the district of columbia. there are no caps at you a. can you go well over 30%. a time warner deal might none even take comcast to that 30% level or would just get them to it. on the anti-trust front, that is not an issue. whether the fcc would have issues that time warner controls a good deal of others, us, for
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example, and would have control of so many households is an issue. the company's ceo tells investors we're not interested in ever signing another consent decree. i will also tell you those same investors in comcast have made it clear they would like to look at a transaction. why? the same reasons charter would look at doing it, it's accretive to cash flow, the geographies line up wellnd you would be able to borrow at extraordinarily low levels and would be able to delever very quickly. that is also the case for charter and that is why charter stock is up and time warner cable shares are up because both their shareholder bases do seem to embrace the idea of c consolidati consolidation, there's an $8 billion net operating loss at
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charter that could be used in a charter time warner cable deal, which would not be available to comcast. we shall see how this develops. the company goes public with the deal given it has been refused to discuss it at time warner cable or that comcast moves ahead. but that's where we stand on this so-called constant conversations about consolidation and a very important arena in u.s. telecommunications. >> you are good. that's a big story. >> i don't know what pulkertude means. >> i think comcast stock is up $1. >> that's an all-time high dating back to the ipo. >> important to bring up there are still conceivably -- while comcast might embrace a potential deal and could you see up to a price of 150 or higher for any kind of a deal given the synergies that would result, politically you just don't know.
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uf don't know. >> you're right. you got the federal court -- the key regulatory court of appeals. that's the key piece of information you brought. >> you can go well past -- no longer is it 30% of u.s. cable subscribers. there's a lot of competition. they put that back in before you had dish and directv, for example, really competing fiercely and owning a lot of those stocks itself. >> those stocks have made so much money and better run, too. >> his remarks in his final conference call were very interesting and we highlighted them a couple of weeks ago where he talked about consolidation. he's soon good deals and bad. time warner and aol one reason you don't want to. >> when people look at time warner cable and what chart ser hope they go will do by continuing to push this is they
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will question management, question whether these are the right guys to run the company and whether they've made decisions, such as cbs that, resulted certainly in subscriber losses and therefore it's a bad management decision. that's what they're banking on, the idea that this combined company, if charter were to prevail, would be run by tom rutledge, john malone would be a significant holder of the combination and therefore you would get a better execution. that would be disputed by time warner cable and ron marcus and also hey, a charter deal, they just want us to lever up our own balance sheet so they can get together with us. the synergies will be undeniable. the question is whether comcast will play a role as white knight or simply a continued consolidator. >> takes your breath away. people get bearish about the market. you look at these -- you pay your bill to comcast, all do you is look at your bill. pay your bill to verizon.
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think about this. is this that hard? are you worried about taper every minute? worried about the federal government? worried about the fed? pay your comcast bill. buy comcast. >> we should again note comcast is the parent -- >> okay, pay your charter bill. >> i understand. >> we make it too hard. verizon is up huge. time warner is up huge. the ideas are in front of you. but we keep getting blinded by what yellen is going to do and bernanke is going to do. let's go make money. let's go make money for people. that story made money for people. congratulations. >> thanks, jim. very nice. we'll keep an eye on those stocks all day long. in the meantime, here's what's coming up next on "squawk on the street." coming up we've got a 6 and we've got a 60. put them together and you get jim cramer, six stocks in 60 seconds. it will make sense when "squawk on the street" returns.
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what a friday morning
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shaping up. let's get "six in 60." >> wells fargo is cutting numbers. thursday they had some day rates that came out for deep water drilling. they're not that strong. >> people worry about cat. what about terex? >> the problem is in excuse. terex is doing well. >> xec. >> the domestic oil companies have gotten slammed. they're saying time to start getting in steeple and buying these groups again. >> a hold do buy deutsche on yum. >> yum just put up 10 points and now you come in fine. >> splunk, a great quarter. this is web, all the things, cloud. we recommended it on "mad money." >> and finally jpm.
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>> there's theme here, vf corp, i've been with them the whole way. >> active wear versus handbags, versus reggae peril. >> -- versus regular apparel. >> michael kors stock is going higher, fossil is going higher. it's a bifurcated market. one of the reasons why macy's is doing quite well is they have housewares, too. housewares is very strong. home depot. there are whole aisles of home depot doing incredibly well. carl, it is the most bizarre thing i've ever seen. some things are not selling. keurigs are sell ing. we're getting away from the idea
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that a hedge company says this is no good so sell it. just because a hedge fund come on and says you have to dump this stock, that's losing luster. people are realizing that maybe these hedge funds are more self-interested in themselves and not out to help you. herbalife, maybe they're betting and making money. we're in a moment where some companies are doing incredibly well and meantime you have ross stores, they don't have the right assortment, they're not interested in people. footwear is selling active wear. ross stores, i listen to the conference call and i think they're saying maybe we don't have it. you have to be careful when you buy retail. target. that was a very disappointing quarter. i had nothing to recommend target. nothing. >> with all that in mind, what are you going to cover on "mad" tonight? >> we're going back, i am doing
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an order of retail. i'm saying here's who doesn't have it anymore or at least they can't figure it out and here's who does have it. i also have a company that is trying very hard to move the web like splunk, it's the original woman breaking all the barriers down. she has bad things to say about two major tech companies. i want people to listen. they may own them and she's gunning for them and she will get their man. she's the best. >> we'll see you tonight at 6:00 p.m. eastern time. let's go to simon. >> mike: however it chips, it will come in a box. we have an interview with the ceo of international paper. and we'll look at how you invest in health care stocks with larry robbins and we'll look again at the pressure on our parent
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company comcast to potentially make a bid for time warner cable. a very busy second hour of "squawk on the street" this friday morning. just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too.
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[ female announcer ] today cisco is connecting the internet of everything. so everything works like never before.
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welcome back to "squawk on
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the street." big news broke from david faber a few moments ago. in david's word, comcast, our parent, seeking advice on anti-trust implications of a potential time warner cable deal, citing sources here. comcast and time warner cable apparently not actively discussing deal terms but time warner cable making clear that comcast, our parent, is their preferred buyer. craig moffett is here this morning. >> good to talk to you. and kudos to david for quite a scoop there. >> it does move the ball forward in a big way. what does it mean for our parent? how would it fit if it were to work? >> well, look, the synergies here are very real and comcast is a better fit probably than charter in some sense in that if charter follows through with the kind of numbers that were reported by the wall street journal this morning, you're
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looking at an entity that would be levered at more than six times ebidta. that's a tremendous amount of leverage. the cable industry was trading at about six times ebidta as recently last year. that's a very aggressive level of debt. i think that's one of the reasons time warner cable would be interested in a white knight like comcast. >> david mentioned that the geographies seemed to work between a comcast and time warner. what do you imagine the anti-trust people who are giving comcast advice are saying? >> there's two challenges here. the department of justice uses a rule of law test. the rule of law test here, it may not be all that hard to pass in the sense that cable operators doesn't directly compete with each other. so what the d.o.j. would be looking at is are you seeing any real reduction in the number of competitors in any given market
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and answer to that would be no. the harder challenge in this case would be the s.e.c. because the s.e.c. applies a public interest test that's much more subjective and what the ftc would be looking at is would a cable company that would have 30% of all subscribers in the united states and 60% of all the cable subscribers in the united states, would that company have too much market power in controlling content and the diversity of voices. it's not an easy challenge to get its head around. >> if it is the fcc with, what kind of control over this
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market, there's already talk about comcast, given the vertical integration model controls too much. would they now allow for the significant addition to their business in that way? >> i think you're exactly right. it's a real hurdle. what they're going to focus on is, remember, not only would you have one company that would have de facto power to give the thumbs up or the thumbs down for any piece of content to exist, that is, in essence if you were a programmer, you either get the distribution on comcast or you just don't exist because without comcast you don't have enough scale to be able to make the economic model work. so you'd have one company with de facto control over whether or not content could be seen by the american public. and that company is also vertically integrated into con -- content and that creates
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concerns at the s.e.c. >> do you not feel as time goes on they will argue that argument is being undermined? >> very possibly. but remember the litmus test wln let's take the d.o.j. is usually to look out two years or so. it's not there yet to the point that either the d.o.j. or the f.t.c. would be able to look at online solution. i'm not saying it couldn't have. i'm just saying those are the concerns they would have. >> can i just pick up one other point they are saying there. are you saying the fact they bought universal and are a contract provider is a additional impediment or broadly irrelevant? >> it's an additional impediment.
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you introduce another layer of complexity to the analysis for both the public interest and for any trust. they have to take that into consideration. >> a large part of why comcast has had a great year has been that vertical innovation, improvement to operating cash flow that have happened, especially since the eintegratin of nbcu. if comcast were a part of it, what would happen then? >> i like comcast quite a lot and it's obviously executing very well. the problem i've had and the reason i'm neutral is simply because it's very hard to find something that isn't already known about comcast. so it looks to me like estimates for comcast are about right and that the valuation is probably about fair. now, if they in fact get bigger with time warner cable and they
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end up stepping in as a white night and it gets through, which is a lot of ifs and ands and buts, there's clearly synergy that would add incremental value. we don't know what the range or price would they be paying and you'd have to do all that analysis because we don't know any of that, we haven't done it yet. >> craig, one final question here because we are seeing names across the space rally, is more consolidation inevitable or are you going to be regulatory hurdles between any deal? >> no, i don't think so. i don't think that regulatory concerns are really the key issue outside of something as large as comcast and twc. cable companies are an unusual circumstance in that they don't directly compete with each other. i think the other combination
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would have a relatively easy go of it in washington. the real question i think is so if you imagine that cable consolidation happens, who participate and who doesn't? my own view is that it is actually highly unlikely that anyone would step in for cablevision at anything like the current valuation. it doesn't make sense for time warner cable to look to cablevision in sort of a pac-man strategy to avoid acquisition from charter if they can't come to some solution with comcast. cablevision unfortunately has such a large overlap with verizon fios, it would make any acquirer situation worse rather than better. so cablevision is probably the odd man out here and i suspect that people would leave cablevision out of the consolidation talk for a long time until its valuation came to something like a level that was
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atractive. everybody else is probably on the table and the question is in what sequence. there's an awful lot of dominos that would have to fall and potentially many years before the consolidation happens. >> interesting that this is breaking on a week where comcast, as you know, craig, turned 50 years old. we are a long way from tupelo. >> we sure are. >> craig moffett, thanks again. >> we want to keep an eye on the retail space. today shares of gap, which are down about 3% this morning after beating the street by a penny on earnings and approving a $1 billion share buyback program. just a week to go until black friday, the question is whether you want to buy on this dip. let's bring in analysts who cover covered. guy, good morning. >> good morning. >> roxanne, first to you, down
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3%. what do you think investors didn't like here? >> it was probably the gross margin run. gap i thought did a good job of managing through the quarter. it was a highly promotional environment. they did need to promote more than expected in order to clear through the inventory and get clean. so they did have a slight beat to the quarter but gross margin was probably the sticking point. >> richard, it's interesting that's almost become the early chorus. we're not even if the holiday season, but gross margin pressure, excess inventory, if everyone's suffering from the same problem, is it fair everyone gets punished for it? >> i think it's going to be a great season for consumers, a lot of discounting for the consumer but very challenging for retailers. to invest in retail today, you have to look out 6, 12, 18 months to look at the growth prospect of a gap, six different silos for growth, international,
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omni channel and franchise and say this could be a much, much bigger company with continuing great cash flow characteristics. >> right, but from what you're say, there will be lower entry points to come. why dive in now to a story that's 18 months, two years off? >> you're looking for an entry point and gambling is today the day or is the holiday season going to be actually worse than priced in today. i've been a fan of the u.s. consumer for 30 years and they've never let me down. they step up to the plate for christmas. they've got the credit card capacity down at 1975 levels today to step up and spend and i think they will. >> roxanne, for the people who wonder if this is an opportunity, they can hang on for the shares, i know you're neutral on them but what's the case for buying gap here? >> there certainly is a lot to like. they are stepping up with a lot more initiatives.
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they have a special feature where now can you reserve product in the store, reserve it that morning and pick it up in the store. they're making a push on gift cards. though should bare fruit. they have supply chain initiatives that are finally going to come to fruition. we're more encouraged if anything. i think we are just waiting to wade through the holiday period and find the right entry point for the shares. >> all right. we'll watch, see if investors respond and the buying public as well. roxanne and richard, thank you both this morning. >> we stay with retail. the highly anticipated xbox-1 debuted in stores at midnight. will the sales be able to match those of play station? we go to josh in san jose, still very early in the morning. >> reporter: simon, this store is going to open up in just
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about an hour. we're told there's already been strong demand that the phones did not stop yesterday. we're told this is going to be twice as big as the launch of the last console and gamers have been lining up coast to coast. >> he's got his. handing them out to the first ten guys in the u.s. >> the line is not so fine. it's pretty cold out here but it's going to be worth it. only six more hours i think. >> reporter: now, there is stiff competition for microsoft. remember sony said that more than 1 million play station 4 units were sold to customers in the first 24 hours. the xbox one costs $499, which is $100 more than the ps-4. but microsoft wants you to think of this console as not just a gaming device but an all-in-one entertainment system, your own
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media center. in terms of hardware features, a wireless controller, 500 gigabyte hard drive and connect with translate your voice and hand movement into control on the console. forecasting global shipments of 33 million console, pegging the market value of $9.6 billion val value. it's predicted sony will sell 34 million ps-4 consoles with microsoft selling 38 million xbox ones. >> thank you very much, josh lipton in california for us this morning. >> speaking of retail, take a look at shares of vince. they haven't opened just yet but when it does open, it appears
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the range will be in $29 to $30. mary thompson has a bill more from the floor. what do you hear? >> reporter: 29 3/4, they keep telling us they're getting close to the open. vince was priced at $20, above the expected price of 17 to 19. this is going to be a very strong open. as some of the traders were saying, they left a lot of money on the table with this one. getting close. expected to be $29.5 to $30 a share when it opens. it is expected to open probably sometime within the next few minutes. back to you guys. >> thank you very much, mary. we'll come back to that obviously. a lot of shopping this year is clearly going to be doneline. and if it's shopped online, one thing you know for sure, it will come in a box. we're going to talk exclusively to the ceo of international paper next. could you benefit from online shopping through paper this
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the online retailers amazon and are starting some of their sales this weekend. one company that stands to benefit is shipping all of that paper. the ceo john faraci joins us.
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when you see walmart is going to lower the minimum spend for free online shipping to $35, how do you feel? >> we feel pretty good about it. online shipping is a small but fast growing segment and it looks like it's going to be up about 15% in the season. >> do you deliver just in time or have they stocked up on their boxes? do you know what the inventory will be? >> it varies by segment. some are on very short lead times and some do some building up for the season. >> fedex, even the united states postal service is doing that, does that worry you? >> the postal service, yes. but in terms of fedex and ups, those segments are growing, too. customers are willing to pay for the value delivered. >> we probably should break away and mens that vince has now traded. trading at -- >> 29.39, just below the mark as
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the clothing retailer opens up just over 50%. simon, you can't help but look at this and think about a lot of the other retailers like a gap that we were just discussing who are under serious pressure as consumer buying habits change. vince up almost 50% on its debut. >> let's just break off and continue our conversation with john faraci from international paper. we were talking about boxes and postage and shipping. it's interesting that the fast food industry is moving away from styrofoam cups. mcdonald's is going to start taking paper cups. what does that mean to you as a business? and what happened to the idea that we shouldn't be cutting down so many trees? >> well, we're well positioned
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to serve that segment. our consumer packaging business, we make both the board and the cup. we're well positioned with customers like mcdonald's. there's a sustainability movement different by consumers. they see more sustainability in paper than in foam. the basis of our business is sustainable forestry. our industry plants 4 million trees every day. >> in the united states? >> in the united states. >> dan lobe of course came out and said you were a core position for him and i think his stake on what he declared before was probably worth about $200 million. you've had a very strong run but you've had a strong run from a very low base. we should remember how bad things were in 2008 and that's why people are making money now. and you are still a low-margin, high-volume commodity business. the weather affects you. the wet weather is still affecting you. >> and one of our big customer
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bases is agriculture. so what are the cost pressures for you now given the weather we have? >> the weather has gotten better. we don't see up inflation in our cost base. costs are inching you but i wouldn't say we have a lot of cost pressure. >> i just want to talk about this big bet that you're making. somewhere in the wild east of russia, $1.6 billion of investment in order to supply pulp so the clns can make paper towels and toilet paper. how much of the pulp in this country goes to china? >> well, 80% of the incremental pulp demand in the world goes to china. the u.s. is not a big producer of pulp. our joint venture with russia is about doing the right things to modernize a part of their industry, outside of oil and gas and the project we referred to
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is the biggest project in ip's history and the biggest project in over 40 years. >> thank you. joining us, john faraci, the ceo of international paper. >> and rocky mountain high is about to go on sale legally. a rocky mountain pot shop has just received sales consideration. we'll talk to the owner of that shop when we come back. you find that certain thing you were looking for here, but actually you get so much more. when you shop at these small local businesses, you support all the things that make your community great. the money you spend here, stays here. in this place you call your neighborhood. small business saturday is november 30th. get out and shop small.
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is caused by people looking fore traffic parking.y that's remarkable that so much energy is, is wasted. streetline has looked at the problem of parking, which has not been looked at for the last 30, 40 years, we wanted to rethink that whole industry, so we go and put out these sensors in each parking spot and then there's a mesh network that takes this information sends it over the internet
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so you can go find exactly where those open parking spots are. the collaboration with citi was important for providing us the necessary financing; allow this small start-up to go provide a service to municipalities. citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally, citi is there every step of the way. so the end result is you reduce congestion, you reduce pollution and you provide a service to merchants, and that certainly is huge. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account.
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> ♪ ♪ >> a small store in denver, colorado. annie's, a a medical marijuana store will become the first store ever to sell recreational marijuana. starting new year's day, anyone 21 years or older will be able to purchase pot without a doctor's note.
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annie, good morning to you. >> good morning. >> i think you brought your license with you, did you not? >> i did, yes. >> can you show it to us? there it is. walk me through some of the rules. you already have to be licensed medically in order to sell it recreationally? >> that's correct. you have to be fully licensed in order to even apply for the recreation license. >> do you have any idea what sales might be like on a recreational basis? >> we've done all kinds of internal projections. it's really hard to say since nothing like this has ever happened before. there have been all kinds of chatter and talk throughout the industry that sales are going to increase by up to 300%, you know.
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but internally we think it could bring the stated 174 million worth of tax money. we're expecting sales to be close to half a billion dollars statewide. >> how much of an ordeal was it to get this recreational license? and is everybody who is in the medical business there trying to do the same thing? >> you know, there's actually about 570 businesses statewide that are eligible to apply for the recreational licenses but only 136 of them actually applied. i think that there's a smaller amount of the businesses actually applying for what the state thought. the license process is very similar to what it was for medical. we basically had to go through an extensive application process at both the state and the local jurisdiction level. >> erin, i'm curious as you open
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these stores and as pot use isn't legal in every state but you're expecting to draw people across state lines, does that involve you guys in having to clear who you're selling it to or how this product is distributed? >> it does, yes. we can only sell to anyone 21 or older, and we have to verify that by checking their i.d. internally that has caused us to put some different security measures in place. all of my staff has had to be trained similar to how bouncers are trained in bars, to check for fake i.d.s. we've also had to install magnetic i.d. readers to make sure that they're not fake. >> erin, what sort of additional liability protection, you have had to take out, liability insurance, not just from a health standpoint for people smoking this but potential for action from other states who may
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see your supply coming across their border? >> you know, as far as that's concerned, we just have our typical general liability insurance on the entire company that we had with medical. for us there isn't a whole lot of additional concern in that area. >> we should point out central city, colorado, where your store is, it's not like you're on the corner of koufax in downtown denver. if you want this, you're going to have to go out of the way, correct? >> absolutely. central city is a small gambling town up in the mountains. it's probably about 45 minutes away from denver, depending on where you live. oddly enough, this particular building that we're in, annie oak live's emporium, also received the first gaming license in the state of colorado when that became legal. >> interesting. talk about a trail blazer so to speak. finally, any limits, if i'm a
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consumer and i make my way to annie's, any limits on what i can buy in the course of a day, a week, a month? >> yes, absolutely. if you are from out of state, you are limited to a quarter ounce per day. if you are in state, you are limited to one ounce per day. >> sorry to deaden your weekend plans, carl. >> time to get residence in colorado, i guess that's the next joke, right? it's like in-state tuition. >> from a municipal tax standpoint, it a big story. thank you for joining us. >> thank you for having me. >> what used to be a small town. >> do you not see that blowing up, give it a decade or so? feels like you're looking back in time at vegas. combine it with the casino. still ahead, our interview with larry robbins.
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he manages one of the top performing hedge funds on the street. you don't want to miss what he has to say. back with david faber right after this. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me.
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friday morning, good morning. we are an hour and four minutes into trade. here are the stories we're squawking about at 7:34 on the west coast, 10:34 here on wall street.
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biogen idec earning promotion for its ms drug. ross stores falling below analyst estimates. it warns off intensely competitive pricing for the holiday season. and an upbeat wall street debut for the high end apparel retailer vince, trading more than 40% above its ipo price of $20 a share. >> now we've reached the final stop on our cross-country tour of america's cities, showing you were urban america is in pretty critical condition. they've gone well beyond cutting fat. many now are cutting muscle, as in their police forces. senior correspondent scott cohn join us us live from trenton, new jersey. good morning. >> reporter: good morning, kelly. here it is trenton, the state capital, it's an historic site in the national history and yet
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it's a mess. drugs and decay are everywhere. it doesn't help that two years ago to balance its budget trenton laid off a third of its police force. they've hired some officers back. state and county police are picking up some of the slack but not all of it. and this year, guess what, a new record, 33 murders and counting. coincidence? community activist darren "freedom" green thinks not. >> officers need to be on their post, walking the beat, connecting with citizens saying you either move on or going to jail. now you're creating a culture of secured environment. >> while trenton is extreme, it's not unique. there are roughly 20,000 fewer police officers on city streets since 2008. we asked the mayor's office for a comment. it doesn't help that the mayor of trenton is under indictment
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for corruption. governor chris christie said the city should disband it's police force and let the city take over. so this is, as i said, not a unique situation across the country. on our special reportline at cnb cnb, you can look at crime rates and whether there is a correlation. >> coming up, the man forbes calls the hedge fund manager of the year. larry robbins will join us live for an exclusive interview when this program comes right back on cnbc. mine was earned orbiting the moon in 1971.
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the dow may not be doing much, up about 5 points, but a huge day in the cable television space. co comcast, our parent, seeking advice on the anti-trust front regarding a potential deal for time warner cable. not actively discussing terms, that's what david faber is reporting. but time warner cable making it clear to comcast they are their preferred buyer. charter is also in the race. we can expect that trend to continue. >> although it all depends on the anti-trust case. can they get that through on an public interest argument if they're going to have 60% of the subscribers. it's a huge hurdle to cross. >> it comes even though there's
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massive disruption to the space. the xbox one console larunched t midnight. sony launched the ps-4, did great numbers. microsoft shares just barely higher this morning as we await word as to how they're doing. the xbox is viewed as much of a proxy for the way people will use and consume media as cable these days. >> they apparently sold out of their allocation. >> wow. when we come back, glenview's larry robbins will join us live, you don't want to miss that. a lot more "squawk on the street" in just a moment. and this will be your premium right here.
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just over an hour ago he broke major news this morning that comcast might be interested in taking over time warner cable and was talking to its lawyers about that possibility. now he's resurfaced in midtown manhattan with a big interview at the robinhood investors conference. ladies and gentlemen, our very own david faber with one of the top stock pickers of the year. david? >> reporter: indeed he is.
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the wonders of the subway from getting from downtown to uptown. i'm joined by larry robbins, the man behind glenview capital, a hedge fund with over $7 billion in value. i want to talk about the affordable care act, otherwise known as obama care. particularly of interest to you because you're a huge owner of a lot of health care related stocks but particularly hospitals, one of the biggest owners out there, whether it's tenet or hma or hca. it's a terrible launch for obama care to say the least. >> yes. >> reporter: what does it mean in terms of the way you view your portfolio, particularly the way it relates to the hospital stocks? >> for investors, it's our job to interpret the policy rather than make public policy. our view is not to say what the policy should be but how it will play out. if you compare the launch to
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what happened when medicare part d was introduced in 2006, prior to that seniors didn't have reimbursement for pharmaceuticals. when part d launched, there were problems with the system, the public's attitude toward it was exceedingly negative. people thought it was a broken bill and two years later 71% of americans had a very positive view of medicare part d and the most important thing was that the seniors did get coverage, their pharmaceutical consumption did increase because they could afford their prescriptions. so from an investment p perspecti perspective, it was really important to drown out the crowd noise and focus on the law. there's no question the implementation of the affordable care act as been atrocious, that's not news. but it's very important to distinguishes between the number of people who sign up for insurance under the affordable care act but the type of people. it's not just from a hospital's
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perspective. it's not whether a healthy person signs up, but does a sick person going to the hospital, do they get coverage? we feel the early adopters will be those who use the system the most, so it will be positive for hospitals -- >> reporter: it's your belief eventually it will follow a similar path as then did medicare part d that, it will be viewed positively and will be used? >> let's break it down into two things. number one, we all know that the wealthy pay higher taxes in the united states and we determined that's fair. can you view the affordable care act as a health tax. they're saying if you're healthy and you don't have insurance today, you nonetheless need to pay it. >> reporter: the concern is the younger people signing up for the exchanges, which doesn't appear to be the case. >> absolutely. human behavior is people won't like paying for something they don't need. from a perspective of the healthy americans who don't need
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insurance today, i don't think that their public perception of the affordable care act will be great a year or two years from now, other than the idea that the wealthy think they should increase taxes on the top bracket. but otherwise it will be seen as a matter of public value. now that we've crossed the transom where we say we're going to offer insurance to all americans, that trend toward universal coverage seems inevitable. the details will change and not everyone will like the way we get there but at least 30 million to 60 million americans over the next five years will eventually find their way into insurance and people will like it because the government is subsidizing the cost of that insurance. for the people who get a same product for much cheaper, i think they'll have a favorable -- >> reporter: we can spend a lot
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of time -- you feel the successful implementation will only be good for the hospitals? >> yes. the hospitals are basic need. the for-profit hospitals are more efficient than the not-for-profit, so regardless of what the competitive environment is, they've fared better in the past. we believe there's an accelerated growth coming. even though there may be a small number to start out. if you look at the outreach of who will sign people up, managed care company trying to sign up a healthy person and getting to pay for insurance they don't want will be ineffective. if somebody shows up at the hospital and needs surgery in a month, right, and the hospital can say, well, we can perform this if -- if we can get you medicaid eligible, or you sign up for an exchange and wait two, four weeks, can you have that surgery. of course, that person will sign up. what you'll see is you're not batting for average, but power, the right hitters are the ones
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that will sign up, and, therefore, that's where you'll see the benefit to uplifting the free cash flow for the hospitals. it will not happen magically in the first quarter. >> well, no, and listen, we've seen plenty of hospitals including when you were the biggest owner of hma, had difficult times in terms of executing on the business plan. >> sure. >> you made a decision to allow hma, i'm saying allow, but encourage them to take a deal on the table with community health. why? >> well, sure, consolidation is important. we do believe there are too many hospital companies, that scale is important, and ultimately, offering a network of delivery systems where you can acquire the basic medical goods for the lowest costs, and, therefore, be more efficient, as well as you request then work with the state-based insurance exchanges to offer what will eventually been books an accountable care organization where can you serve more and more volume. we think that scale matters. you've seen two big deals. you saw the tenet deal for vanguard, and then the community deal for hma.
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the other irrefutable truth is the hma asset was in decline at the time throughout this year, and, in fact -- >> at the time you ran the solicitation to replace the entire board of directors? >> absolutely. and so, there will be an operational turnaround and rolling up your sleeves and doing hard work internally in order to position the company for success. the steam is equipped to do that as part of a consolidation. to us, it made sense for us to make sure the process happened once through consolidation, rather than trying to turn the asset independently and move it towards consolidation. >> you're one of the largest holders of community. >> yeah, 9.9% of community. we're not alone. 60% of the hma are also community shareholders. this is about overlap. it's bringing two companies that belong together all along together. and people will benefit further through the appreciation in the community shares. >> let's talk about the broader market, but i want to do that through one of the longest-term
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holdings and how you see companies operating. that would be miskckesson, whic you've owned for many, many years. >> yes, absolutely. >> how can you connect that to the broader market in terms of the companies you're focused on? >> mckesson fits our business of a good, defensible business. they're in pharmaceutical distribution, so through 2004 to today, grown earnings at 17% rate because they're part of a rational oligopoly in the united states. the more important trend is what's going on in the market in terms of the shift from capital hoarding which we saw 2008-2010, what we call trap-value situations, where companies not only had good businesses, but they had significant excess cash and excess borrowing capacity. and we and others were, of course, encouraging them in this zero interest rate environment. and to use that buying power, right, the dry powder, in order to go out and buy the stocks, other companies, accelerate the
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growth rate. mckesson has done a good job over time with the free cash flow, and recently, i believe a month ago, they announced $8 billion acquisition, which not only expands their geographic reach. they were previously landlocked in north america, and now celesio gets them into europe. it accelerates the growth for years to come. not only the one-type pop from accretion, but the additional growth they can get based on larger scale and purchasing power. that is the story of the market. that it's about -- we all know we're living in a low-growth, no-growth environment where we're looking at 2% gdp growth in the u.s. and investors are scratching their head, how is it our companies will blow? importantly, it will be how well the boards and management teams use the free cash flow, and take the nonearning asset, cash or debt capacity, bring it into the game? it's not a surprise to us the mckesson shares have performed quite well, because the
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investors are reacting positively to the -- >> although, you is well taken although many companies that have deployed capital have done it to buy back their own stocks, as opposed to deploying it to more productive uses, whether that's m&a, or new plants and equipment. when is that going to change, or will it? >> because of the economic dip we had in '08 and '09, very few companies are undercapacityized, so not the 20% on equity for building the new plant. that doesn't exist. and a tradeoff, do they buy their own shares or buy another company? frankly, we think there's institutional preference on boards to buy other companies rather than buy back stock. if you look at john malone and his entities over time, he's been a phenomenal use of share repurchase to build long-term value. everybody says it's about short-term value, creation, no. he's built long-term -- >> knowing when to borrow to acquire, too. given money is so cheap. >> and now, as we hear, as reported in the press, that he
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was looking at making a big acquisition, because there's only so much stock you can buy and charter, and yet there could be value creation through a very, very significant capital deployment, financed by the debt markets, like time warner cable and other things. we don't have a certain prescription of which one we prefer. the history of acquisitions is that many of them don't meet the financial criteria that was initially set out. but in a low valuation environment with cheap money, you're certainly -- >> low valuation environment? many would say we're not at low valuations. >> a couple of things on that. from our portfolio, we're trading 12 1/2, 10 1/214, 15 times earnings, so the companies are cheaper. if we look at the broader market, 14, 15 times earnings on 2014 and 2015 numbers, if you look over the history of time, low interest rate scenarios, when interest rates are between 3%, 6%, the market averages 17 to 18 times earnings. everybody is talking about, what
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will happen if inflation rears its head, or interest rates rise, and what will happen through tapering? one of the things to realize, multiples in the markets don't fall off until actual real inflation -- not even expectations -- but actual real inflation goes above 4%. that's when multiples go from 17 times to about 14 times. we have a long ways to go. the fed has said when the expectations get to 2.5%, they'll start tightening, but that's a long way off. >> similar argument by david tepper, a similar hedge fund than yours. you've had a great year. does it color the way you operate this year or next year given the success so far? >> we operate versus the opportunity side that the market gives us. whether we're down a quarter in a year, up in a quarter in the ye, we'll look at the opportunity sets. it's more about capital deployment and growth on growth, less unlocking untrapped value
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situations. but the opportunity is set not only for us but all of the people speaking today, that are the long/short equity panelists, the set is above average for all of us. >> all right, larry, thank you very much. >> larry robins, glenview capital management. kelly, back to you. >> speaking of which, after larry robins' comments, we'll talk to the ceo of athena health, jonathan bush. we went out and asked people a simple question:
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>> announcer: welcome to "squawk on the street." here's what's happened so far. >> there's a lot that could be done on the fiscal side that would improve the economy on sustainable basis. we're just not seeing it. and i think -- and i think these kinds of hurdles that stay in front of the economy will inhibit people from making long-term bets in capital, employment, a variety of other things. >> why accept bitcoins? >> why not? it's a currency -- a new currency, new, exciting currency. >> this is something i'm -- i heard it from yesterday, it was
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a good idea, some people in congress, not ready -- >> i would believe it when i see it. it would be a dramatically positive thing, one would imagine, if you had corporate tax reform. >> we have these devices that our bosses think we're doing work on, but we're mostly doing fantasy and watching movies and netflix during the day. >> that would explain a lot. >> right? [ bell sounds ] >> here is the news we have for you on this that is not reported, but will be by us, which is there is another potential bidder out there for time warner cable, and that company is our parent, comcast. >> online shift something a small but fast-growing segment of the data packaging business, and it looks like it will be up 15% during the holiday season. ♪ welcome back to "squawk on the street." big news this morning that has lit a fire under shares of time
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warner cable, and our own parent comcast. david favor joins us with news he broke earlier this morning. david? >> reporter: of course, cable consolidation much on the mind of many investors including those at the investment conference here in midtown manhattan, and looking at all of the stocks, not just time warner cable or comcast, but charter, as well, and even cablevision, will give you some sense as to the hopes of investors in the secretary for coming consolidations. whether or not it will happen remains unclear. what we reported, of course, this morning is that comcast has sought advice from outside advisors on whether or not it would face any antitrust impediments, and particularly, perhaps even more so, even fcc impediments were it to try to buy time warner cable. that does not mean that a deal isn't any way imminent. as a matter of fact, it doesn't appear to be the case. there are no discussions ongoing between the two companies about
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price and structure and things of that nature. but that being said, of course, as we know, time warner cable has been in the sights of charter and liberty, something we reported back in june. that story continues to move apace. in fact, the "wall street journal," that charter is tapping banks to line up the financing for a time warner cable bid. we'll see whether, in fact, that materializes. it remains unclear what price it would be at. it remains unclear whether or not they can provide perhaps as much as what would be hopeful for time warner cable, $90 or r a shar or more, plus an equity component that would get you a big number. remember, the initially foray, was for an at-market-deal for charter. they are still hoping that time warner cable will engage with them, perhaps with encouragement from its shareholder base, as part and parcel of management troubles, they view it, at the company.
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but that being said, as i reported earlier, time warner cable views comcast as its favored merger partner were it to go down the consolidation road, and comcast itself, sources close to the company tell me, heard from many investors saying we hope you will entertain and consider an acquisition of time warner cable. remember, no more ownership caps. used to be you could only own 30% of the cable households. that is no longer the case. that would seem to sideline an antitrust issue. however, one would imagine given comcast's significant ownership of content assets and increased distribution platform, that could present problems. we'll see how this develops, but i would, again, end with the stocks, carl, which is when you see reactions like this, and both the shares of comcast in our story, and time warner cable, but in charter and cablevision, you know shareholders are looking for consolidation and will be sorely disappointed if something doesn't come their way. back to you. >> yeah. a lot of moving pieces to be
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considered, david. thanks to you. david at the robin hood conference. meantime, a big day for tech. we want to welcome our newest cnbc contributor, john steinberg, here to talk about microsoft, pandora. welcome. >> thank you. >> pandora near an all-time high. >> i know. >> after some good numbs. >> yeah. >> but also marketing expenses up, too. >> it's a great company, right? it's very much a mobile, social company. 70% of the revenue coming from mobile. the issue is the growth is just not there. 20% year yoe year growth. it's not a big enough idea. it's not a big enough company, they need to innovate in the product to get where they need to go. >> to get scale. >> yeah, the kind of numbers wall street wants to see. it's a little cheap relatively speaking. trades about eight times enterprise value to revenues,
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and it puts it below the ten you would see with facebook. but there's innovation to be done here. >> did they monetize too early? did they not get big enough before they started putting on ads? >> the two forces are running against each other, which is the more hours you listen to, the more they pay, right? and then, they have the subscriptions, where when you're subscri subscribing, they don't do the adds. they brought in this ceo, mcandrews, and he could do ad products, especially local, getting outside icpms. they need to be a bigger media company at this point. >> to play devil's advocate, what if they maintain the size they're arkts whereby you can't get in a restaurant without listening to pandora, whether you realize it or not? for the restaurant owner piping that music throughout, obviously is willing to pay for it, doesn't want to bother with the ads, is that -- you know, they own that space right now. >> yeah. >> is that a good business long term? >> it's certainly neither here nor there. they have triple the revenue now from advertising that they have from subscriptions.
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they could be a muzak type system. but this is the kind of innovation flywheel we need to see happening so they can sustain the price, because otherwise, they'll get whacked. >> a huge week for the xbox one. >> yeah. >> you don't see rollouts like this every day. >> yeah. >> only a company the size of microsoft can do it. how does that change the game? how does this console change things? >> it doesn't change the game from a financial perspective now. the whole xbox business line is 5, $6 billion on an $80 billion revenue company in 2014, right, it's less than 10%. but it's very much a media console. i've used it. you can get your cable on it. you can get your tv on it. your movies on t microsoft could become a media company using the hardware as the trojan horse, and the console is a cut above anything you've ever seen. >> now, it might or it might not, because comcast, the parent company of the world, will do that to make it more difficult for x box to be user-friendly
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experience for people who want one device. >> right. >> and they'll say, we're innovating with our own boxes. we've got all of the other -- all of the other features we can add. so is it really -- should we assume that just because the xbox has these features, suddenly going to supplant the business? >> i think the bid maybe time with time warner plays nicely. the companies recognize they'll be broadband providers. they recognize everything is going over the top. that move plays nicely to the vision if you have an xbox or google console, or apple tv, you're getting the netflix. the networks themselves going into over-the-top programming, and everybody is getting arranged for the new world. >> all right. >> stick around for this next one. >> sure, great. speaking of gaming, lucky gamers around the country are finally getting their hands on a new xbox one as the launch of microsoft's newest device comes a week after the launch of sony's playstation 4. joining us is paul raines, the ceo of gamestop.
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he joins us from the gamestop store in manhattan. paul, good morning. thanks for being here. >> good morning, kelly. great to be with you. >> can you tell us, first of all, what kind of demand you're seeing for the xbox? >> we're seeing strong demand, kelly. we had an event here. i'm at union square in manhattan. we had an event here last night, had over 1,000 customers picking up the xboxs. zumba dance classes in one corner, zombie makeovers in the other, and we're seeing strong demand globally, europe, australia, canada, as well as the united states. >> okay. so if you compared this with the ps4, is all of the inventory you had distributed sold today? >> well, you know, kelly, i have to let microsoft and sony make those kinds of statements, but i will say gamestop has the largest player of both consoles, we'll have dominant allocation of product, and we'll have
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products available for consumers through the holiday. as far as the two consoles, they're both having a lot of success, and they both got a lot of great titles for them. >> all right. with all of the excitement, the two new innovative devices, all of the games that come around them, the shares were hammered after people felt like your holiday guidance didn't quite meet what the street was expecting. so what's going on? why isn't this space expanding as much as people had assumed? >> yeah, kelly, you know, it's an unusual day, right, when you can report 20% comps and have your shares sell off. we understand that's part of the business. i think a couple of things are interesting for investors to understand. the first is, we've increased our annual earnings per share guidance all year, three times and increased it again yesterday. so we were increasingly bullish on the category. here's the thing. i think a lot of investors thought the console transition was an event that would happen quickly and be done at this holiday. what it really is is a multiyear transition of consumers from old platforms to new. that's why we've guided that our industry model shows growth of the industry of 20%, 30% next
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year and 15% the year after that. so whiem our guidance, we believe, gives investors great optimism around the future and about this year, it is going to take time for the consoles to sweep through. it's a very large amount of product and big consumer transition. >> just teasing out -- just teasing out the earnings transcript, which i was listening to today, is the concern that not availability of enough xbox units, that's what was hinted at by lloyd, is it a macro concern that the holiday in general will be weaker? what's the concern for q4, because there's a lot of units that should get moved during the holiday season. is the box too expensive? >> no, it's a great question. i think in our case, i think people look at us and see the dynamics of electronics. but console launches are very unique and different, and we've been through many of them at gamestop. it is always an evolving story on how much units and product we can get into our stores. you know, these are products that just -- just became a reality, just got manufactured.
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they're shipping in from asia. so while we have a very good sense of the allocation, there is always uncertainty about units and flow through the holiday. we're pretty happy with what we see, but we've also been through enough of these to know that you've got to make sure you have enough product for consumers all the way through the holiday. so there's a little bit of that question out there. >> but by the end of today, you're sold out nationwide, right? of the xbox ones? >> yeah, we can't disclose that. that's a microsoft one. they've got to disclose. we're very, very happy with our sale-through on both consoles and with what's happened last night and today. >> hey, paul, one final note. whenever you see a bullish analyst note on a game seller, there's always that line about the timing of the new consoles, right? you make the point that it's not -- i mean, do we need to rethink the way to play some of the companies like yours when a new console is arriving? >> yeah, i think it's important for investors to understand that, you know, it's not a three-week event or a one-night event, even. a lot of consumers show up in our stores more than any other retailer in the world.
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those aren't the only consumers for the consoles. these consumers, and there's millions and millions of consoles out there that they want to trade in at game stop, they will migrate to the new console over time, and we believe that's a three, four-year cycle transition, so i think, when you think about us certainly, you have to think about a multiyear growth trend for the industry. underneath that, there are individual publishers with individual titles. but it will not be an overnight transition. this will take some time, and we think that's a great ride for investors in our stores and for the industry. >> all right. and in the meantime, we'll be waiting with baited breath, paul, with the microsoft numbers. paul raines, the ceo of gamestop. thank you for your time. >> thank you, kelly. when we come back, the clock is ticking for obama care. we're a little over a week away from the white house's self-imposed deadline to get the website up and running properly. is november 30th realistic, and what happens if they miss it? we'll ask the ceo of
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athenahealth, jonathan bush, in just a moment. ♪ [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year [ ding! ] at the lexus december to remember sales event. this is the pursuit of perfection. you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.
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welcome back. we have news on the big launch of lion's gate, and the movie grossed an estimated $32.5 million domestically.
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that's up 28% from the thursday gross of the first "hunger games" film. internationally, the film has brought in about $32 million so far, with most territories opening more than double the box office of the first "hunger games." certainly a strong start to the film this weekend, carl. it could gross as much as $170 million over the course of the weekend alone. >> i'm seeing it tonight. i will see how it is. julia, thank you so much. julia boorstin. as the white house continues to grapple with the i.t. woes of its health care endeavors, critics argue the flailing rollout could have been prevented with sufficient technology. joining us, jonathan bush, friend and chairman of athenahealth, and the nephew of george h.w. bush. good to have you back, onthan. >> hey, carl. >> if the government knows how the government procures i.t., you do. you know park. you have been down this road before. two questions -- what could have been done and what happens on november 30th?
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>> well, i think a lot of things could have been done. but the really important things that could have been done happened long before obama was elected. for years, employers aren't tough with the product management, with the products they demand, health plans aren't very creative with the product design. and so, you have more and more and more kind of lameness, just this co-efficient of drag, the product getting bulkier and more expensive, and finally 40 million people left out, and obama says, guess what, i'm going to make my mark on this thing. and now you have the consequence of that, which is all of the people being marched at the head of a rifle to marketplace themselves in the federal website. there ain't no marketplace, never will be. we all knew that. but it's not really what -- it's masking -- you know, it's been sort of a -- a big parade of masks. you had the federal shutdown mask the fact we were about to be marched into the federal website -- the website called a
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marketplace, which is masking the fact that the law largely makes product management illegal. >> jonathan, the shutdown -- i mean, look, the shutdown was not something that the democrats started with an eye towards heading off -- >> yeah, this isn't -- >> -- publicity from the website. >> it isn't a republican or democrat thing. i'm a bush, and i can't tell the difference between republicans and democrats anymore. i'm just saying that in general what's going on is the marketplace has been wimping out on making health care a product, and really managing it and selling it and we have too many left out, and now the government is turning it into a program, and we think, this doesn't feel like a product or a marketplace. it feels like some horrible federal program. guess what? that's what it s but we let it be that way. both sides of the aisle, kelly. not the republicans or the democrats or -- >> -- true federal program, there would be a single-payer element to it. this, if anything, is a program meant to pull the private sector in -- >> yeah. >> -- you know, create the exchanges where people can shop
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around for plans. >> right. you would think. but first of all, it's illegal for plans to have any real product variability in them. that's why so many millions of people have been kicked out of the health care plans that they bought, right? no, that's no longer sufficient. that's no longer federally approved to be called a health plan, right? so you see that -- those people getting kicked out. and now you see the people who are actually making it through the website, disproportionately are old and sick. so you got 35% of the people who made it through this thing are over 55 years old and are sick. so that's a disproportionate weighting of the folks who will be receiving the kind of wealth transfer, and you have underrepresentation of the young folks, who just want simple coverage in case they get hit by a truck. that's marching us, kelly, inadvertently single payer meltdown. who cares about the website?
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what about that? >> is there anything whether it's marketing or tech related that can lead to better participation at the lower end? >> yeah, absolutely. i think that -- first of all, i think that todd park's going to get in there and clean up the website. it's a federal thing. you have civil servants and government contractors, like trying to build a missile than a website with the federal government. they'll figure it out. forget that. the next thing is, can we let more product management into the marketplace? today, the marketplace just allows you to choose six different guys selling the exact same product. who cares? right? it's like that wonderful wendy's ad where the east german lady marches around in the gray suit, one day swimwear or a -- remember that? it's not a marketplace. allowing the year of the other products is one step, and beginning to allow other -- other ways of wrapping up health care coverage so that people who are young other or older or want mental health more than surgical
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health can choose it and pay for it. that'll bring more people in the tent. >> gotta ask you, jonathan, before we let you go. jeb bush, 2016. think it's going to happen? should it happen? >> hey, bushes -- we're bushes, we campaign, kelly. that's how we roll. my cousin neil has been campaigning for education. i'm campaigning for an open market. we just campaign. that's how we breathe. >> okay. i don't know if that's a yes or -- >> that's jonathan's genius. >> i'm sure we'll have you back. thank you very much. >> bye, kelly. bye, carl. when you think of start-ups, you usually think of silicon valley, but it's grow, and it's growing pretty fast. we'll get a closer look at tech in the big apple with the city's first chief technology officer rachel haot when "squawk on the street" continues.
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when you open ccount. the new york city start-up scene known as silicon valley
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has been gaining traction. in new york city, it became ranked second in the deals. rached haot was appointed by -- jon, take it away. >> will do. thanks, carl. rachel, thanks for sitting down with us. it's been about three years you've been in this position. let me see, $30 billion in wages at the tech sector now contributes to new york. 250,000 workers, tech's now second to finance in the city in terms of job contribution. but at the same time, science, technology, engineering, underrepresented in the workforce, according to a report you put out the end of september. what's next for the efforts to really grow tech presence in new york? >> absolutely. it's truly a phenomenal time for technology in new york city. as you noted, we're number two
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in terms of ecv deals. we had acquisitions this year, and tons of traction with the tumblr and we want to continue to build on the traction. that's why the mayor has unve unveiled really groundbreaking initiatives, like the cornell tech division, which will add students to new york city's workforce, and just actually two days ago, we announced the fourth in that series of nyse-applied schools. and it's what's going to prepare the city for the future. >> in silicon valley, the relationship to educational institutions is key to creating a growth engine. fashion e-commerce and media are some of new york's strong suits, and we're seeing increasingly fashion start-ups related to tech coming up. which one of the areas would you say is growing fastest right now, that has the most momentum? >> there's so much growth happening across the sector in
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new york city. i think as you noted, we have historically really large industries such as fashion, media, real estate, finance. as all of those evolve, they're going digital, and they'll add to the sector. in addition, if you look at the business models that underlie the consumer web market, e-commerce, advertising, these are sectors and these are industries that have their home and truly have the capital here in new york city. we'll see that grow even further. >> what's up with brooklyn? i'm looking at where the start-ups are cropping up, where they're hiring. they have some of the information on the made in new york site, and over the bridges in williamsburg, seeing start-ups crop up there. what's driving that? >> right. and since you noted made in new york, we have more than 1,000 locally headquartered companies here in new york city. those are companies that pay 75% or more of their development here. that's not counting the growth of companies that recollection panding here, like google, facebook, and twitter. >> right. >> if you look at the map, what you see is the growth is happening across the five boroughs. >> well, not everywhere so much, right? >> we're seeing a lot of growth
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in -- we're seeing lower manhattan, a lot of growth. a lot of growth in brooklyn, at the tech triangle. >> yeah. >> in between dumbo, downtown brooklyn, and the brooklyn navyyards, like etsi and huge, really growing and having such traction. but long island city and queens, there's been a lot of growth there. we have songsa, shapeways, and it's part of the additive manufacturing, or advanced manufacturing movement. arguably, new york city's becoming the capital of 3-d printing in the world with maker bot and other companies there. >> what do you do to expand the prosperity here? there's been some criticism, some question, what do you do in public housing, in areas where internet penetration isn't high? how do you look at that problem, at that opportunity for expansion in tech at the lower income level? >> this is absolutely critical to new york city's digital future. so this is why the city has invested very heavily in infrastructure, and if you look at the digital road map that the
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mayor unveiled in 2011 and we announced in 2013, the initial initiatives have all been completed. you'll see that those included achievements like bringing free and low-cost broadband connectivity to 3,000 low-income new yorkers, and 100 different public spaces, whether it's senior centers, rec centers, you can find a way to get online for free if you're looking for that, and find more than 40 educational programs that have empowered over 1 million new yorkers to learn digitally. >> thank you so much for joining us with all of that, and changes ahead for the city. we'll see what's next. guys, back to you. >> capital of 3-d printing, jon. it's exciting. thank you very much, jon fortt this morning. coming up, as we remember president kennedy, art cashin joins us with a unique perspective on what the atmosphere was like here 50 years ago today. n. cme group can help you navigate risks and capture opportunities.
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and find a retailer near you. welcome back. european markets have closed. simon. >> we're drifting higher, and overall, a gain, which means we've ended a three-day sell-off. the german business sentiment was very strong today. if you look overall, the important thing on both sides of the atlantic is that we basically erased the losses earlier in the week over the concern of tapering and the fed. the market at this stage seems more relaxed. at the political level, a big day in europe, as the euro zone finance ministers now scrutinize each other's bridgets udgets in
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brussels. we'll see what was said behind the closed doors. as volkswagen shows off its new cars, the porsche, the audi brands, so the ceo has announced an investment of $113 billion over the next five years as it seeks to overtake gm and toyota, in fact, as well as the biggest carmaker around the world. new plans and new environmental technology. finally, the personal level. paul flowers, the chairman of the cooperative bank in united kingdom, has been arrested by police in wake of a video that appeared to show him buying both crystal meth and crack cocaine, actually filmed by national newspaper. this is actually a big deal in the united kingdom. he's not any longer the chairman of the co-op bank, but it has thrown that institution into huge turmoil, and questions are being asked at the highest level, notably with prime minister david cameron, saying he will talk to regulators --
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forgive me -- about where to go from here. really i mentioned it to make the canadians happier. >> there's rob ford, trey radel. >> a trend. crack cocaine. >> the confluence of the stories, it's amazing. >> tells you something. >> simon, thank you. >> thank you. mary thompson at the big board. >> we've been stuck in a narrow range, modest gains as the market looks to close out the seventh-straight up week this week. it looks like it will be able to do that, now about 9 points, but modest gains, about a 50-point range so far today. the s&p 500, just in the 1,800, and pulling back since then. the sector check. the leading sectors. we're seeing strength in health care industrials, financials, as well today, extending their gains from yesterday. we're seeing weakness in technology, though, and one of the reasons for that, the semiconductors are weaker after intel, a dow component, which is a drag on the blue chip index
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today, forecasts not only flat revenue for 2014, but flat operating profits, as well. the reason being, weakness in the pc market, which it says is overshadowing strength in some of the other growth areas for the chipmaker. of course, another big day for ipos today as we continue what's been a stellar year for ipos, best since 2008. vince holdings, a high-end apparel maker, opened at 29.50, well above the price of $20 a share. as you can see, it has pulled back a bit since then. still healthy gains, up $7.84. also, we want to mention, a chinese internet gaming company. it priced at $13 a share. that was its ipo price. and it, too, is higher. it's opening -- its opening print was $20 a share. biotech stocks are strong. look at bioagain, idec receiving special designation for a m.s. pill that protects it from
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generic competition for about ten years. biotech continues its strong run. kelly, back to you. >> all right, mary, thank you very much for that. mary thompson at the new york stock exchange. tax software company intuit reporting better-than-expected, but shares are trending lower, down about 2% after a weaker-than-expected outlook. joining us is brad smith, president and ceo of intuit. brad, good morning. >> good morning, kelly. >> tell us about the quarter. what were the highlights as far as you're concerned? >> well, the highlights were we came out of the gate strong. in particular, in the small business segment. the cloud-based solutions were up 29% year over year, and we have consumers in the products. >> of course, there's going to be a lot of focus on tax season, because it's one reason why we may be able to forestall hitting
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the debt ceiling until next year if tax revenue is strong. that's on the macro side of things. in terms of people preparing their own taxes, though, is that space still growing? it's getting so complex these day, i'd be amazed if more people don't hand it to the professionals. >> you know, kelly, interestingly enough, it's the only segment in tax that is growing. last year, the digital category grew 3%. those filing with the cpa was flat, and those filing with stores were down. so the digital revolution continue, even in tax. >> and in that case, if that's kind of the core business, what about this acquisition of quickbooks, and what about expanding the company into other kinds of digital services? >> yes. well, one of the things that people don't really understand about the company is our largest business is our small-business segment. it's almost $2 billion in revenue when you put all of the pieces together. we do small business accounting with quickbooks. we do payroll services that pay one in 12 americans, we process payments, about $2 trillion actually flows through quickbooks, about 25% of the
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u.s. gdp. we have a very strong small business sector in addition to the tax business. >> and do i see here that what you're also doing is trying to leverage the access small businesses have to your company and to possibly getting them on a commercial doing the super bowl this year, is that right? >> we are, kelly. we're very proud of this program called small business, big game. they're the backbone of the economies, and someone needs to champion them. we're doing something that's a first. it's the first time ever that a company has purchased an ad for someone else, and it's the first time that we believe a small business will actually be highlighted on the big game. so the winner will end up getting a 30-second spot in the third quarter of the biggest game of the year, and hopefully, it will change their life and also shine a light on all small businesses around the country. >> well, i can tell you if dary pop is the winner, i'm not sure you have to do much more than feature them. >> they're one of four excellent finalists, and now, the world will help us decide.
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it's a social campaign. go in and vote, because between now and december 1st, you can vote on your favorite small business, and at that point, we'll end up producing a professional ad for them and showcase it on the big game in february. >> wow. we will be tuning in for sure. >> winning the lottery if you're a small business owner, i tell you that. >> that's right. and when is the last opportunity for people to weigh in? >> well, between now and december 1st, the world can go on and vote. again, four very excellent finalists, very inspiring stories. and after december 1st, we'll begin to work with all four, because we'll produce advertising campaigns for each of them in their regions, but ultimately, the winner in february will have their ad shown during the big game. >> all right. thank you so much, brad, for joining us this morning. again, on the heel of earnings and acquisition, as well, brad smith, the ceo of intuit. appreciate it. 50 years ago today president john f. kennedy was killed in dallas. we'll talk to art cashin right after the break, and he'll share
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she'll be here. and alex saucerdot has been investing for nearly two decades. he'll bring his top plays to our show, as well. and find out why the street's biggest bull has had a big change of heart. that and much more ahead straight on "the half" live from robin hood. >> all right. thank you very much. the new york stock exchange along with the rest of the country is remembering john f. kennedy, 50 dwreyears after his assassinati asinat art was working at the new york stock exchange the day that kennedy died. art, welcome. >> thank you. >> and i understand you took a phone call the moment that this was all playing out? >> yeah, it was -- it happened maybe a quarter to 2:00 maybe, and stock price has started to move down. and at the time, i was upstairs in the order room of the firm that i work with, and our broker
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on the floor called up and said, is there anything on the news ticker about the president? and i said, no, why? and he said, well, there's a brokerage firm selling madly all across the floor, and when we asked them, they said it had something to do with the president. and i puzzled about that. a month later i found out that the branch manager was really a great detective. he sent the -- the presidents didn't travel that much in '63, so he sent everybody outside to see the parade. and in a couple of minutes, they came back in, kind of sullen, and he said, i told you we were going to watch the parade. they said the parade got cancelled. and what had happened was the parade was supposed to come right down that block, but about 18 blocks up, they heard the sirens go loud, the lights went on, and the parade turned right. and the branch manager was a pretty good stock trader, and he said, okay, everybody, give me a bullish reason to pull a president out of the parade. nobody could think of one. how about a bearish reason?
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nobody thinks assassination. but they think national disaster, a missile threat, nuclear accident, variety of -- so there were scores of bad things. >> and there's a look at the floor on that day. >> that's how it looked. that big board that you see in the back was how in a pre-electronic age they would notify the brokers. they would flap that board up and down, and that day it flapped so often and loudly that the circuit nearly blew out. >> so talk about the moment where you did actually get the news and where the selling began in earnest. >> the news came probably just before 2:00, and the first headline was shots reported fired at president's motorcade. >> this is on tape. this is on the tape? >> that's -- in those days, the dow jones news ticker looked like a small refrigerator, and it would print up in a linear fashion, coming out -- not to be
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indiscreet, but toilet tissue rolling out as it came. so they would ring a bell once for corporate news, economic data might get a double ring to get better attention, and the most important things got a triple ring. so after i hung up on the broker and i heard three rings, i went over. it said, shots reported fired at president's motorcade. i went back and tried calling him and tell him what i heard, and suddenly it rang again. and i rushed back to the news ticker, and it said president reported hit. well, by this time, the selling, which was broad-term, almost ferocious, and the leadership of the exchange was getting together, the viewer should also know that data was so incomplete, that one of the things that was heard around was, and the texan was shot, too. now, that was texan governor connolly, but at the time, people thought it might be lbj,
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so here we were without a president and a vice president to succeed him. and that got the selling very heavy. and then, about 2:07 in the afternoon, they went up on the podium and rang the bell to halt trading. and it was quite a dramatic moment. everybody remembers. and for me, an equally poignant moment came the day of the funeral. they had asked a lot of us to come in, because the trading was so hectic to look at the records. and i came in, and through most of the morning it was quiet. a friend of mine said, things are quiet, we can break out for a quick lunch. we went over to the downtown athletic club, which had a restaurant and bar on the third floor, and there were a lot of people there from the shipping world, and wherever. and as the funeral progressed on the tvs around the room, suddenly the caisson came by with the casket on it in view on the screen, and one of the older
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gentlemen stood up and was -- glass in his hand, said, gentlemen, the president of the united states, and the whole place rose as one and gave a toast to the president passing on tv. >> it's hard to believe we're getting 50 years almost to the moment here in the next couple of hours as to when that happened. art, thanks for sharing your memories, as we always thank you. art cashin, flags across the nation are at half-staff. a lot more "squawk on the street" back in a moment. tdd#: 1-800-345-2550 trading inspires your life.
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>>. >> shares of intel getting hilt, down 5% and floating near session lows. that's after the world's biggest maker of computer chips disappointed investors and analysts at its investor day yesterday. it forecasted sales growth and gross profit margins for 2014 that would be flat compared to this year. the top brass at intel admitted that the company had underestimated the impact of mobile computing, but that they were working on a plan to make chips for cheaper tablets and for other uses, carl, as well. back over to you. >> all right, dom, thanks so much. dom chu, a big story all day long. up next, if you're partying on wall street, you need to have the right cocktail. we will tell you what everyone on the street is drinking this holiday season after the break. so you can get out of your element. so you can explore a new frontier
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♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. the holiday season around the corner, so why not celebrate this year with a wall street-themed cocktail? jane wells covering alcohol once again, joins us from los angeles. hey, jane. >> reporter: carl, i'll talk about two things we care more than anything else, booze and bathrooms, in that order. as we head into thanksgiving, the wall street p.r. consulting
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firm incognito has come up with a list of cocktails. the mary jo white russian, a stiff prescription, feminine, but also aggressive, and the obama cared comes on the rocks. i suggested the jpmorgan marguerite tachlt and on twitter, beth offers the tape arena, it takes forever to be served and keeps threatening to drop you on your butt, but you can magically keep drinking. where do you go after that? you go to the restroom. where is the best public bathroom? i consider myself an expert. one, i travel a lot. two, i'm female. in the past, i've liked the women's room at the airport in ft. smith. i was amazed at the options on the toilets. and then the waterfall urinal in the men's room at the madonna inn on california central coast. somewhere, there is a photo of me in my wedding gown in there.
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but that restroom, as amazing as it is, was only a runner-up to this year's contest held for the best room, the winner -- [ toilet flushing ] -- thank you. the varsity theater in minneapolis, where the restrooms are more like acid trip fun houses with foot pedal sinks and co-ed -- co-ed hand-washing areas, good idea, encouraging guys to wash their hand, and they even serve drinks, in the restroom. they serve the drinks. maybe you can order up a mary jo white russian. have a good weekend. >> we do wash our hands, jane, just fyi. >> certainly. >> thank you, jane. jane wells. good stuff, as always. we want to bring back in john steinberg to talk about how facebook is turning up the heat on twitter. john, what's going on? >> i love i go after the liquor and the bathroom segment, now talking about facebook. facebook is sending more traffic to publishers across the board than ever before.
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we have a monitoring network of buzz feed people to use the analytics, about 530 million unique sites that include "the new york times," "usa today," "us weekly," and "daily mail," went up from 100 million referrals the last month, and now 150 million referrals. this is all about the new battlefield being who is where the media is consumed. as we were saying earlier, the cable networks will become broadband pipes, the social networks become the new facebook -- >> and we had jonah on yesterday. he did essentially say they're turning up the heat against twitter. >> yeah. >> is that a result of the ipo, or not? >> i think the twitter has made a lot of comments that made facebook say, that's not you, it's me. twitter is saying, we're the place where the world discusses television, because we're going after the television advertising budgets. facebook is five times the size. they don't want the realtime
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conversation, the shroud of the realtime conversation to be owned by twitter, because they think it's essential will to marketing dollars. >> fascinating. coke and pepsi on steroids. >> stlutly. >> john, great having you in. >> thank you very much. >> you have a great weekend. >> thank you. >> sounds good. back to headquarters and scott wapner and "halftime." >> thanks so much. good afternoon. welcome to the "halftime" show today. we're coming to you live once again from the robin hood investors conference in the heart of new york city. today, we have more special guests in our lineup. in just a few moment, we'll be joined exclusively by two very successful hedge fund managers who don't do television interviews very often, but will today, and we're certainly excited about that. nehal chopra runs the fund creed by the grade julian robinson. she has returned a profit this year net of fees. alex will be here, as well. he runs wellrock capital. he's an et


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