Congress. Julie hyman. Taking another drop lower. Another drop lower. Another expectation that they will show an uptick and supplies that will show more bad news for oil. The fifth straight day of losses for the s p 500. The longest losing streak in 13 months time. It seems as though good news in terms of the drop of oil has definitely turned to bad as we have seen the ripple effects from the drop in oil. The s p down for. 5 since a last hit a record on september 29. Crude oil still trading below 50 per barrel and extending losses. Whereas before we were just seeing Energy Shares take the brunt of the selling it has really spread to other industries. Interestingly when you look at what stocks are doing today, financials are some of the worst performers. Energy also doing poorly. Any rituals on the list. There seems to be mounting concerns about some of the investments these Financial Companies have made. Energies also on the list. Also we are seeing in small caps it is exacerbated. The worst performance since september 10. Basically the bottom line is a broadbased selloff. A lot of it comes back to royal. At the same time were seeing yields fall as people buy treasuries. Investors looking for what a perceived as safer areas to be. This goes for gold also. The overarching theme is people are trying to get out of it what they perceive as risky assets. Bill janus coming out to say that he think Interest Rates where they have been is not enough to boost Economic Growth going forward. He thinks they will see assets not continuing the performance we have become accustomed to. Of course, gross has made some wrong calls before but that call getting attention today. Markets correspondent, julie hyman. I am joined by gene jim polson. Welcome back. Happy new year. Not the started 2015. When will oil hit bottom . I would have thought 15 or 20 ago. I think it has gone the work than anyone really thought. Dropping below 15 per barrel has proved. In the shortterm it appears fairly clear we will have to bottom the oil markets and take the bottom dollar. They will probably take together before you can get the stock market put in the bottom. I am fairly optimistic that were fairly close to that. If nothing else, the magnitude of the daily declined, alstom almost backtoback declines suggest this is getting toward the tail end. I think in the short run i would look at a bottom and maybe popular balance over this week and maybe the payroll numbers will help to do that by friday. If the major indicators show growth no Inflationary Pressure on the horizon and the fed does keep Interest Rates low how does oil throw a wrench into the mix . I am with you on that. Longerterm, we go into the year worried about the deflationary spiral into the globe. I think by the middle of the year we will see a pop in growth everywhere. Not only here in the United States but euro, japan, the emerging world. I cannot think of another year in this recovery that we have dumped him that as much to the list as much stimulus as we have in the past year. Look at the Massive Energy prices made available to consumers across the globe. On top of that, we have already employed the envy of all quantitative easing programs a massive drop in sovereign bond yields, not only the United States but all across the eurozone, japan, and the emerging world. I think the combo package of Fiscal Energy tax cuts, massive drop in long yield will each will pop in Economic Growth. Surprising when people are prepared for it deflationary spiral. You use the word pop a couple of times. What number . I think in the United States the real gdp is north of 9 right now. I think we will grow for the year close to 4 this year. I think it will be the strongest year of growth for the recovery. Overseas i am talking about europe going from zero. 51 . Japan doing likewise. From zero to 1 . If you show that policies are successful, suddenly the deflationary spiral concern in the United States with the Unemployment Rate at 5 will turn into over heath pearce and is the fed behind the curve . Bill gross of Janus Capital group wrote the good times are over. He added the next 12 months will probably see a turning point in the bull market. You believe the major theme for 2013 2015, 1 of them will be refreshing the bull run. Does the market still have legs . I think were headed to a year that will be more volatile in stocks. I take a broad range. We may see a 10 correction this year as well. I think the purpose of the year is to refresh the run. We just had a tremendous advance in the stock market. 15 in maine earnings increase. This was the columnist and most confident and has been in the entire recovery because main street is looking better. Values are up in the fed will have to start resetting rates. Priceearnings going into 2016 might be back to average. Sentiment will be improved and europe and japan will be doing better. That might set up the base for what could be another multiyear run before it ultimately ends several years from now. Joining us from minneapolis, minnesota. Always a pleasure to have you on. Thank you so much. At 12 gain in retail sales in december. We will talk to mike jackson about the games and get an outlook for the new year. Bottom line on Bloomberg Television continues in just a moment. John boehner elected reelected speaker at the house with 216 vote but not from hearing from a small but noisy group of conservatives who opposed his third term as leader. Our things off to a bad start in an already gridlocked washington . Joining me to discuss is peter cook on capitol hill. Our White House Correspondent Phil Mattingly. Peter, let me start with you. John boehner survived a vote for speaker but is he damaged goods as the Congress Gets underway . He did survive. This was a closer call than perhaps he and the rest of the Leadership Team had anticipated and embarrassment for john boehner. 216 votes is not even half. There are a number of house members not here because of the snow, problems with travel. Some are as mario cuomos funeral. At least 24 republicans in the house who voted for someone else or simply voted president present. That is assignee sign he will have to deal with the right flank going forward. Embarrassing for a day that shouldve been a triumph. The speaker about to speak shortly. Phil mattingly, the white House Keeping a close eye on this to see if there were any republican defections that may signal if there is dissension in the race, the white house could work with them . No question. I think the concern is the scenario peter laid out is more problematic than any other. They wanted to see him have a strong vote that would give confidence to come to the table with them and talk. Granted political he they take no short amount of lee watching him struggle. That i think they understand the fact that this is a core group of conservatives that is problematic for the speaker. As long as that is the case there will not be any major deals in the house. The big question becomes what can Mitch Mcconnell do in the senate. The first up, the keystone five glanville they will consider. The white house announced they would be toe the bill. Already contentious issues. The white house announced they would veto the vibill. What are the issues republicans are considering taking up first . Phil mentioned the keystone pipeline. We will see a vote in the senate and about in the house as soon as friday. The question will be for supporters, do they have the 67 votes to overcome the voteto . Maybe 63 in the senate. It looks like that battle will lay out and looks like the president is likely to prevail. Funding for the department Numbers Department of security. This is the one issue they did not resolve before because of the fight over immigration. Look for the new fight over executive action and funding over the agency. A couple of the smaller issues includingover the health care law. Look for a big vote on repealing the medical device packs as part of the law and the showboat to reveal the entire law come of both they know will go down in the u. S. Senate because they do not have the 60 votes they need. What are we going to find out when a record to find out if some of these areas of agreement can move or word . I think the early week are important. I think what the president decides to do on keystone and the travel weary he leaves tomorrow for detroit. Then phoenix and the knoxville tennessee. A sickly previewing the january 20 state of the union address. Basically previewing the january 20 state of the union address. There are possible areas of agreement. Maybe republicans will try to come to meet him on the issues. If he comes out and attacks and does the same thing in the state of the union, it just will be really difficult. The odds are stacked against if he tries to take the town. It seems in every new congress there is some breakout stars if you will, folks that come to the floor. As we look at a live picture from capitol hill, nancy pelosi the minority leader about to pass the capital to john boehner again. God bless you, mr. Speaker. God bless america. [applause] thank you, thank you. Friends, colleagues, countrymen especially the people of ohio eighth congressional district, thank you for sending me here. Lets today welcome all of the new members and their families to what we all know to be a truly historic day. [applause] john boehner once again the speaker of the u. S. House of representatives opening for one hundred 14th congress. I would like to thank my colleagues peter cook and Phil Mattingly for their contribution during the roundtable. We will continue to follow the developments in congress in the coming days and weeks here on Bloomberg Television. Turning our attention to autonation. Reporting doubledigit sales or december. Chairman and ceo mike daschle joins me from Fort Lauderdale on the florida. Welcome back. Fort lauderdale, florida. My pleasure to be with you. The 12 increase due in large part to consumers buying premium luxury vehicles. Did you have to entice them to go to dealership or is this climate of low Interest Rates and falling gas prices getting Consumer Confidence . The consumers coming in on their own, the economy is genuinely growing now. Probably at a 3 4 rate for 2015. We still have pentup demand for the great crash of 2009 and 2010. Credit is readily available at very attractive rates. Now all of a sudden we have very low gasoline prices. If i look at the Industry Sales being up 6 last year, almost all of that in trucks with trucks 10 plus 10 and 55 of the mick in december. Imagine last year Sport Utility vehicles outsold sedans. You just spoke about credit. Credit seems to be loose right now. The number of borrowers following falling behind on car payments is on the rise. Are you concerned about the increasing number of subprime auto loans and are underwriting and its too loose right now . Not at all. If you are moving from a very minor fraction to a slightly larger fraction tom at a really does not make any difference. People pay their car loans. They pay them quickly and on time. Certainly we solve during the 2008 and 2009 crash that this was the ultimate stress test. This was paid first before the mortgage, childrens education or the credit card. So we still have less than a trillion dollars outstanding with a fraction of them 3060 days late, a very small fraction ever moving into default. Another thing the Auto Industry never did was abandon Underwriting Practices. We have always kept our disciplined never made an assumption that it was an appreciating asset for ever like the housing industry did. We have always been much more conservative in the Underwriting Practices so i see no cause for concern. Do you have concern gas prices are falling too far, too fast . Well, it is a two edged sword situation. I think for the overall economy this is one of the most effective things you can do for middle and low income individuals as a reduction of gasoline price. It is really meaningful to them and think it will be very helpful for the economy. I daresay look at the Auto Industry. Washington is a bit jennifer schizophrenic and mandated we sell dual efficiency. Industry is investing untold aliens in fuel Efficiency Technology but with these extremely low gas prices people have very short memories and quickly forget about fuel efficiency. So there is a major disconnect coming if the low gasoline prices continue. Autonation is breaking new ground. You were using an online storefront with set pricing. How has this been received by consumers and what impact has it had on competitors . The challenge and opportunity we see and the disconnect is the consumers are having on experience in the Digital World and another in the brickandmortar or when they come to the store. They really want one experience where they can seamlessly move backandforth. That is the opportunity we are bridging with the digital storefront. The stores and dealership still have validity. They want to come to the store for affirmation and confirmation they have done the right wing. They want all the work they have done digitally to be captured. The key is the website has to be transactional. We are up and running himself lord a. At tremendous technical ability to be able to do it. Mike jackson joining us from orloff or dale, florida. Always a pleasure to have you on the rock cast. Thank you for your time today. Next, we continue to follow the equity markets. Julie hyman returns within on the markets update. Later, a discussion with Nobel Laureate Joseph Stiglitz. And its 26 minutes past our work. That means bloomberg is on the market. I am julie hyman. Taking a look at where stocks are trading. We have had a pullback heading for a fiveday losing streak for the s p 500 and off 4. 5 from the record on december 29. When it comes to individual movers ale well one of them. Shares are rising on report that verizon is exploring a potential joint venture. We are also looking at shares that have fallen by the most in almost a year. The company manufactures Digital Telecommunications equipment and downgraded to hold and removed from the conviction buy list. Though shares up about 35 over the past year. More on the markets in 30 minutes. Ah, got it. These wifi hotspots we get with our Xfinity Internet Service are all over the place. Hey you can stop looking. I found one. See . What do you think a wifi hotspot smells like . Im thinking roast beef. Want to get lunch . Get the fastest wifi hotspots and more coverage on the go than any other provider. Xfinity, the future of awesome. Quick welcome back quick look back to the second half hour of bottom line on Bloomberg Television. Im Mark Crumpton. Bloomberg news is just learned that alan brandon is the new choice alan landon is the new choice for fed governor. The fed board has had to empty seats since the departure of governor Sarah Bloom Raskin and jeremy starks. The fair has the fed has not nominated a vicechairman. The Consumer Electronics show has kicked off today in las vegas. Bloomberg businessweek Senior Editor brad stone is there. He is standing by with the ceo of dish network. Crack here with joe clayton, is ceo of dish. With joe clayton, the ceo of dish. How disruptive is your new subscription . There is a market that the paytv industry is missing today. Talked to 1835yearold, the millennial market, if you will they are not watching Satellite Television or give a television today. They are mostly younger welleducated, urban dwellers, and have different taste than you and me. We figured it would be complementary to our core satellite users. You dont worry that someone will no ahead and cancel their dish subscription because there are less expensive options . Class one plus one equals two and plus one equals three. There will be some but not majority. Will the Premium Sports like mennonite football be included in this package . Lets like monday night football be included in this package . What you know as espn today will continue. Especially among millennials, that is the number one watched. Its all about ultrahigh been television. Talks about how you are supporting that. What we think we are leading the way with four k grant. 4k grand. This one will allow you to watch ultra hd or 4k, the same thing along with these other units. This will work with any tv. And what do you have to do with your satellite infrastructure to support that bandwidth transmission . 4k uses three times more satellite capacity than hd does. There will be some tradeoffs we have to make, or indeed by more spectrum. Im a subscriber command this year has been characterized by disagreements with content providers. There was cnn, espn, now fox taking turns. Threatening to disappear from the dish lineup. What is going on . We have always been known as pioneers when it comes to technology. We feel strongly that if we do not stand up for the rights the consumer, who will . And that is in terms of technology, making it easier for the consumer to use. Our Remote Control had 57 buttons on it. This has 17. That is an example of what technology can do in terms of the economics. How many people will be able to afford to pay over 100 a month for satellite tv cable tv, etc. . We use technology to make it easier. Are you hurting the profits by removing content . Of course, we are. All we can ask is for patients as we work out a favorable agreement for both sides. It is a negotiation. We will come to terms with fox or whomever. Which is agreeable to both parties, economically and technologically. In 2014, you spent a bit of capital on wireless spectrum. How are you going to use it . We are trying to take the cash flow we have generated from our core satellite tv business and invest it in new growth initiatives. One is the satellite, which we have over half a million rural subscribers. Number two is the wireless spectrum auction taking place. And third is video, which we discussed earlier is a growth market. This is an asset that you will use to sell. That will be our pathway into the vocal communications market. One more question. Everyone is worried about core cutters, and how quickly the tv distance changes. How long does atv have . Is it a business that goes away eventually . There will always be a paytv business. It depends on what the consumer wants and needs are. What happens in urban america, whether it is ott it will be Satellite Television. Whether it is Cable Television or broadband, the consumer does not care how he gets it. He wanted easytouse affordable and multiple. That i know. Thank you, joe. Your friends are here. We will go back to mark. Thank you both so much. Coming up, it seems the nobel prize in economics isnt good enough for some commissioners on the securities and exchange commission. We will explain when bottom line continues in a moment. Welcome that. Its time for todays latin america report. President obama is hosting mexican president and make a Pena Joe Henrique and yet so at the white house. White house is moving to reestablish diplomatic ties with cuba. There had been strained over diplomatic ties with other countries, including mexico. Nobel laureate Joseph Stiglitz gets barred from an sec panel, that panel meant to advise regulators on issues facing the u. S. Equity markets. His partner at sec, Mary Jo White working to improve oversight. Professor stiglitz joins me. Thank you for your time. Quite nice to be here. If you told my print colleagues that those blocking nice to be here. You told my print colleagues that those blocking her nomination were your nomination work working for industry. Do you think that is all there is to this . I would hope that when you join the commission, you would hope to get the best expertise that you could, knowing the point of having a commission is that there will be disagreement. People do have differences of view. But by having the best people you can try to reach Common Ground to try to understand what the arguments are for both sides, the best arguments and try to come up with solutions to what are clearly some general concerns. I find it difficult to understand why they would not want someone like me to be part of the discussion. Unless they were afraid that they wanted to shape it in ways that were proindustry rather than a more balanced discussion. Professor, speaking of the balance discussion, what in your opinion are the major issues facing the u. S. Equity markets that you would have raised had you become a member of the panel . The fundamental issue that i raised in the paper, i gave to the atlanta fed, the Federal Reserve was that erratic changes in the equity markets, highfrequency trading in particular have actually undermined the ability of the banks and Financial Markets to perform their critical function. They have actually led to less price discovery in a meaningful sense, and less liquidity in a meaningful sense. And by the i mean by that i mean, yes, there is a lot more trade, but as we saw in the flash crash when there was a need for liquidity, it actually dried up. People in the industry like to talk about, oh, look at all of the trade going on and its a more liquid market. It the flash crash illustrates this is not meaningful liquidity. If not liquidity that really helps the market function the way its supposed to. Professor stiglitz, how do you go about regular knitting Financial Markets without intervention, or can you . I think you need without state intervention, or can you . I think you need regulations given by government. We now know that the Banking Sector without regulation undertakes excessive risks. And without increasing the Overall Economic performance. It is widely accepted today very different than, lets say, six years ago that some form of banking regulation is required. And i think its also true that we need some form of regulation of the equity markets. The general principle that you need regulation is well accepted. The notion of front running is a bad idea and undermining of markets is widely accepted. What i think has not been fully accepted the has not been fully appreciated is that some of the advances in technology have allowed more sophisticated versions of front running, but with effects that are very similar to front running and that is part of what is going on today. This is not just part of the natural progression. Obviously, technology does have a role to play. Was this something that folks do not see coming, that as you have mention in your concerns about highfrequency trading that sometimes the technology is too good and it encourages people to take on, as you mentioned, excessive risks . Not only excessive risks, but in this particular case, if you have sophisticated front running , which is part of what was going on, it undermines the returns to those who are doing research basing their on the basis of fundamentals that make the market actually work better and which improve the price signals given by the market. So in fact, it discourages those who are doing deep research and it makes the market less informative, undermining its ability to perform its basic societal function. That is exactly right. There was a naive view that technology always makes things work better. In this particular case we have learned that was not true. And by the way, this was also true about a lot of the socalled financial innovations. We now know that many of the financial innovations that marked the Financial Sector in the years before the financial crisis made the market and our economy more unstable. It could not of been said better than by paul volcker, who pointed out that there wasnt a single one of these financial innovations that led to a to an improvement in performance of the economy. It enabled them to extract more risk at of the economy, but not increase the overall performance. Nobel laureate Joseph Stiglitz joining us on the phone from new york. Thank you so much for your time. We appreciate it. Thank you. Still ahead, the selloff on wall street continues. We will have details on the biggest looters losers when bottom line continues in a moment. The class of 2015 for the Baseball Hall of fame is official. The final ballot given to the Baseball Writers Association of america featured 34 names and holdovers from including 17 holdovers from previous locations and 17 newcomers. Among the holdovers, former dodger and new york Mets Mike Piazza fell 28 votes short. Something is wrong with that. But turned back to the markets. U. S. Stocks extending the longest losing streak in 13 months. Trish regan joining me now with more on the market anxiousness. I think people are coming off of a couple of terrific years and looking around right now and there might be a little bit of profit taking. People taking the money off the table and saying, let me wait and see. Let me see how this shakes out, given the european situation given the lower oil situation. That said, i have maintained all along, and i still think there are some benefits to having lower oil. A lot of concerns about the lack of investment you will see in some of these shale booming towns the dakotas for example, or in oklahoma or texas. On the flipside, you have to remember that the consumer is the power behind us economy. The consumer is two thirds of this economy with Consumer Spending making up almost 70 stop youve got to see, or at least i see in some ways, the bright side of all of this. There is a Silver Lining in people are feeling more confident. And their dollars in part because of the strength of the u. S. Dollar, are going further. And the lower gas prices is like a get a gas tax rate. Break. All of this bodes well for overall Consumer Confidence and if the consumer feels good then that feeds upon itself. It is a more muted reaction i think in the markets today than what we saw yesterday. We will see whether or not people start to want to get back in, especially when they realize to a certain extent the u. S. Seems like the only game in town. Sure, what do they say the cleanest dirty shirt . Are you going to be your money in europe where you can sit new to see the currency weekend continue to see the currency weaken . That role reserve that for the foreseeable future and you also have a Federal Reserve that for the foreseeable future will continue as is. What you have coming up . We have the new book for Mark Zuckerbergs new book club. The power of facebook your behind you. He cited a book club and this is his first choice. He will be joining me from miami and we will talk about the book and was meant for sales. Get the latest headlines at the top of the hour on Bloomberg Radio and streaming on your tablet and on bloomberg. Com. That does it for this edition of bottom line on Bloomberg Television. Im Mark Crumpton in new york. On the market. On the markets is next. And julie hyman. Lets take a look at where stocks are trading. Its about an hour before the closing bell and there has been a lot of volatility today. Right now, we are actually up considerably from the lows of the session, but there is no telling where we will and because we have seen volatility levels follow the vicks above 20 today. And financials and industrials are following along with the plunge and oil. The s p and spider etfs following along with the market this week after closing out 2014 at new 52week high. Joining me with a look at the Industry Expectations this year an analyst that provides Realtime Research on companies and industry. Drew, lets look lets look back before we can look forward. How would you characterize homebuilding when you look back at 2014 . But by all accounts through november, industry volumes up about 1 . The Public Sector did a little bit better, up about 8 . They did take some share. To this point in the recovery the focus has been on pushing price. Builders have taken a couple years of pricing, so there hasnt been a lot on the lower price point and buyers have been priced out of the market. Will that start to change at all . I think it starts to by the end of the year, depending on where builders are building. As you go through the year, you will see man purchases take place land purchases take place in tertiary markets. What about more broadly here . One would think that you have a good formula for homebuilders this year, rates that remained low, and at the same time the economy is starting to in june is starting to improve. Will that matter . The two things im focused mostly on our, one, the continued strengthening of the market, and that includes jobs. And the second is to what extent the banks start to lend to a wider pool of buyers. That does not mean we will see a switch and demand floods back into the market. That is something that will develop gradually through the year. And in terms of mortgage rates, that has not been much thus far. And you tend to get people when they think that rates are going to go up to my maybe you get a little bit of surge of demand ahead of that. How are people factoring that in to the equation . I think there is one upset of the wages, and that his income growth. One is not accounting for the home prices. Where would we be if wages were not at such low levels attained of the year, we will probably approach 5 by the end of the year. Where would we be if wages were not at such low levels . By the end of year, we will probably approach 5 . California, nevada, texas thats where the populations are growing and the jobs are growing stop are growing. One market you would not pay close attention to his texas. We know how Important Oil is to that economy. Oil prices could eventually spill over into housing demand. Street smart is next. Welcome everyone, to the most important hour of the session. Im trish regan. Stocks extending their longest losing streak and 13 months. Oil sinking below 49. Still, well off the global sessions. Things like government bonds people are looking for safe havens, things like government bonds. And we will be speaking to a Saudi Arabian minister. I will speak to moises naim, the author of
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