The new Prime Minister of greece is looking for allies. Others want the Prime Minister to stick to the terms of the existing bailout. Here is the finance minister. We have assembled drug addicts craving the next dose. It is not that we do not need the money, we are desperate because of certain commitments and liabilities that we have. Greeces new government wants it written down so i can increase government spending. Peace talks broke down over the weekend. Fighting between ukrainian troops and rebels has intensified. In the super bowl, a miracle finish. A blown play call a few room for seattle. Patriots win 2824. Tom brady was the m. V. P. I watched and i understood the game. I want to break exxon and mobil coming out. Earnings coming in at 1. 56 a share. Oil equivalent production fell 3. 8 . It may be making millions and billions of dollars, but it has a hard time keeping up with production. Earnings did wind out at 1. 56. This past weekend marked an important deadline for General Motors. Gm had set aside money. The man making the judgment call is can find bird. He joins me now from washington. Total claims filed came in at just over 4100. Does this relate to what you were expecting . Yes. That is not a final number. The last 10 days, we received hundreds of claims. It will take us a few months to process those claims. Right now, at least 4180, the total number of claims filed. You said it will take a few more months. When will they get results . We have paid about 130 claims. As we process the remaining, it is too late to file. We have to catch up with the inventory. The breakdown of the claims looks to be about 3700 injury claims and a 455 desk claims. How do you determine what is legit . Was the ignition switch the proximate cause of the accident resulting in death or physical injury . We look at Police Reports maintenance records, contemporary photos of the accident. Insurance investigative reports we will try and build a circumstantial case from the evidence. That this switch shut off while the car was moving power off airbags did not deploy. You have a broader definition of how you define whether or not the claims were legit. Have you been in talk with gm about that . We agreed on the protocol months ago. Gm was looking at evidence. They looked at the car. They looked at the black rocks data with the car. We are much more generous and lenient in applying a judicial approximate cause based on circumstantial evidence. I am not surprised gm found 13 deaths attributable to the switch and we are at 51. We are using a different standard. Had you determine how much aid death or injury is worth . The same way judges and injuries do in every court in this country. What would the victim have earned over a work life . Add to that pain and suffering. Added together, that is the amount that is payable. What is your best guess at the final price tag . Ask gm. Once we determine a claim is eligible and we put a dollar value next to it we send it to General Motors for payment. General motors has agreed they will abide our determinations and they have done so. There is not one claimant who we have found eligible who has turned down the compensation. How many have you turned down . Hundreds. People who write in and offer a claim without any documentation. We have about 1500 claims were a claimant files a claim and did not attach any documentation. That is going to be ineligible. If they cannot supplement it. I think we have turned down and found in eligible about 400 claims. If people agree to all the claims, to the payouts, do you expect no one to sue gm down the road . If someone expects if someone accepts payment, they waive the right to sue. That is voluntary. I suppose someone could reject our amount and decide to sue. There are hundreds of other claimants who are not eligible because the automobile was not one of our eligible vehicles. Gm has to confront the possibility of litigation. A have set aside about 400 million dollars. Is that enough . I am processing claims in a manner designed to help claimants who are eligible recover compensation. How much the total will be and how it will be paid, turn your questions to General Motors. I process the claims, not cut the checks. Some analysts have said it could be over a billion dollars liability for gm, but you are making the decisions. Not on the basis of what we have seen so far. Again this filing deadline puts us in a place where we still have to draw down over the flames have rushed in the last week. The ultimate price tag can make that better than i can. We are looking at claims. We do not even consider contributory negligence. Was the driver speeding or as the driver to much to drink. Was the driver texting. All of that is relevant in a courtroom. Totally irrelevant to us. We are looking at the switch and whether the switch was a substantial cause of the accident. Do you talk to mary barra about this negotiation . No. I have not talked to her in months. She made it clear and told me once you start processing the claims, we back off. It is your call. You make the judgment. You value the claims. We will have no say in secondguessing or repealing. General motors has lived up to what it said it would do. Is this a departure from other claims . No. Bp turned the function over to me. Attorney general ashcroft said you process these claims and we will step back. You know how to do this. We will abide by your decision. General motors has provided me as much independence as the program needs. We will continue to be very busy in the weeks and months ahead. Thank you for speaking with us. This morning, president obama will send congress a 4 trillion budget blueprint. Peter cook also has a busy day and more on the plan and the reception. A couple of questions. What is the Biggest Surprise for you . The president s proposal with regards to infrastructure. The fact he is asking Corporate America to put so much of the bill here. The numbers are bigger and the rates going to catch a lot of peoples attention. Money would come in and Fund Infrastructure investments. It would fund about half of the money the president wants to spend. The president would propose a 19. A 19 minimum tax on foreign earnings. That is a big number, but less than the 35 percent had line rate that companies are paying now. This is not a total surprise but in the realm ofs ability. It has to be a part of broader business tax reform. We at least know the president s opening bid. I wonder what the white house is doing to lobby companies to get behind this and say we like the tax hike. They have been talking for months with some of the Business Trade groups here. They know they have a fight on their hands. For every company that will benefit from a lower Corporate Tax rate 25 for manufacturers. There will be some companies that are going to be hit by the president s attempts to close loopholes. It will be a knockdown drag out fight. If the president and republicans gain a closer on the same page this is in the realm of possibility. I cannot underscore how big a challenge is, but it is possible. It is interesting that obama focused on that slice. It is something that people would like to see. New roads and bridges. It is going to be a tough fight for anyone who stands in the way of it. Corporate community could be a roadblock here. Some democrats may have some questions as well. Peter cook, thank you for joining us. Lets look at the world News Headlines. Our australian and a stranger in a less has been released. Hes got 400 days behind bars. He was arrested while covering the crackdown on islamist protests and was tried on the charges of spreading false news and aiding the muslim brotherhood. A former imf chief and french president ial hopeful accused of procuring sex workers for an International Prostitution ring. The case was later dropped. Budget Airline Ryanair warning Lower Oil Prices could bite into its bottom line. It could trigger price wars between carriers. Profit for this fiscal year will be about 950 million. That is the latest world news. We will have another update at 45 after. A change at the top of a company that sells boots, sweaters jackets. What is happening at lands end. Plus, a Super Bowl Ad gets emotional. And emotional blitz of Super Bowl Ads. Overall, commercials appeared away from funny and goofy and towards the serious and somber. Dove took on fatherhood. Daddy. Daddy. Daddy. Brendan greeley joins me. This commercial may me cry. I watched it. I counted 4. 5 dadthemed ads. That one broke my heart. It is not even fair. At the end it is just thrown in dove. We know that adds that resonate emotionally will play for a long time after the super bowl. It seems a lot of the Product Placement was thrown in at the end. Nissan did this long at about an absentee father and in the end, it is ok because he shows up and he is driving a nissan. I am confused. I am confused by the nationwide ad. You ended with a dead child. It was a terrible image, but that is all twitter talked about for 60 minutes. It made me wonder, does it matter if your ad is good or bad or just that you are talking. I think go daddy is learning you can make a tasteless ad in people will talk about it forever. This felt wrong and awkward to me. I like thinking about catching my kids in the pool, not about having them died. It does not mean because we found it entertaining had a bunch of former nfl stars make their favorite websites. These are webbased businesses. It was a perfect blocking and tackling. Launching your brand using nfl stars. Thanks. I am going to talk about commercials all day. We are going to take a look at stocks. They indicate a higher open. Minutes away from a key economic report. Personal income will be out in a few moments. You are watching in the loop. I am alix steel, in four betty liu. Top company news. The Justice Department stepped up an investigation into movies. Whether movies inflated raising during readings during the housing boom. Readings ratings during the housing boom. Lands end ceo resigning. He says he has accomplished what he set out to do at the company. They will replace him with the president of dolce and bono usa. Dolce and the bonner dolce and gabanna usa. Ryanair is being helped by cheaper fuel. It is 26 past the hour. Bloomberg television is on the markets. Scarlet fu has more. Time for features and focus. Last month, 1. 9 billion in gold related funds. Is gold 2015 run poised to slow down . Lets take a step back and look at what has been the recent driver in gold in 2015. Gold under normal circumstances, would be under higher pressure, also a lot of chatter about the u. S. Raising rates. We have seen a big deterioration in the eurozone, questions about whether not greece will maintain within the eurozone. Whether or not they do, if they stay within or leave gold prices are going to get the boost up because the fiscal situation is going to continue to deteriorate. There is going to be a lot of question around the u. S. Recovery. Will it be able to read will it be able to maintain . Gold got an immediate boost. With the etf influence it shows gold is starting to gain confidence. Are investors find it . I do not think so. I think they are jumping on it. Gold had multiyear decline. They are getting it at a good value. There is a lot of question, is it the best commodity to trade . It is something you need especially with currency wars going on. We saw the Euro Currency breaking down. The swiss franc through in their towel. The dollar index is at outrageous levels. Gold makes sense to get involved with. One thing that is not there is inflation. How would you look at trade gold right now . A standard call front, going along the futures it is too risky and i want to have time on this. Look at december, purchasing the 1350 call, calculated risk. Gold prices once the eurozone starts to buckle under some pressure, we will see a peek around 1425. If you simplify trade, you see get to 1425 at the end of the year, but will we see lots of swing between now and then . Below low we saw last thursday, that will continue to hold. Gold downgraded their outlook. The day after that, we saw the inflow back into it. I thing that low is going to hold. I think that gold prices will start to work their momentum upward. There are a lot of headwinds. What will happen once it raises rates on friday we see the jobs number come in the bust, gold might have a little bit of a setback. Options are the way to play it. We have a word of the week and we want to talk about backwardation. What does this mean . If we look at that, the further you go the cheaper it gets. That is because mine supplies are coming in. That will put a little bit of pressure on gold but it will be something that is here for a little bit. Thank you for joining us. Breaking news. Our report numbers just out. Julie . Thank you so much. Rising a little bit more than estimated. You could potentially call it wash year. A revised 3 10 of 1 in november. It is more comprehensive than the average Hourly Earnings number we get in the jobs report 30 looks at all kinds including marketbased compensation, for example, rental income etc. Personal spending is falling more than estimated, down 3 10 of 1 . We have to go in and see in more detail where those are centered. The other number we have to watch, the preferred inflation gauge the Federal Reserve tends to look at. Yearoveryear, that is only up 7 10 of 1 . It is still far off the market at least if you look at it by that measure. Teachers indicate they will open higher today. Lust, the president getting ready to send his budget blueprints to congress and why it could be dead on arrival coming up next. President obama is handing over a 2016 budget plan to Congress Today and his multitrillion dollar which list is likely to ignite at least a sixweek battle between democrats and republicans. Joining me now to discuss is the Deputy Director of the management and Budget Office over at the white house. Also with us is someone who works regularly on the economics budget and tax policy, the president of the committee for a responsible federal budget, a Bipartisan Group focused on fiscal policy matters. For joining me. I want to start with you. What is your take on the budget . I have two different thoughts on the budget. What the president has done which is really important, is he has paid for his new initiatives. There are a lot of the president s priorities in the budget and they are first they are responsibly and not adding to the debt. That is the unfortunate thing is it is a huge missed opportunity. Our debt level is still at record highs and that would remain the case under this budget. The president seems to walked away from summing he did earlier, which is to focus on why we have medium to longterm debt issues little underline our strength and help the middleclass. He does pay for things but he does not tackle the existing problems and they will persist until we deal with them directly. How do you respond to that that the deficit would be stable but not reduced under this plan . I would say first, the budget tackles the most important economic issue in front of us today. It does it by providing targeted tax cuts for the middleclass. It does so by expanding opportunity for our workers with proposals like Free Community college, and by investing in things like a half trillion dollar infrastructure of rate which would be great for our economic competitiveness. Imris bonds, we do take pains to make sure exactly how we would pay for everything, but we go beyond that as well. You see 400 billion of health entitlement savings in the budget that go at trying to make further progress on reducing the rate of growth in Health Care Costs which is the biggest threat to our longterm situation. You will see a budget that shows you can do both. You can help grow the economy and have a responsible fiscal position as well. To be fair, the debt would not be reduced. It would just a thought just stay flat. You will be promoted to be a Senior Advisor for the Obama Administration later this year. Any sense on how the president will renegotiate these offers . What you see in the budget is deficits come down to 2. 5 of gdp. We do put that on a declining path as a share of the economy. You also see pragmatic proposals were you already see republican support. Paul ryan reiterated his support for a proposal the president supports. There is rod bipartisan support for doing something on infrastructure and coupling it with business tax reform. There are a number of places where we will make progress. Do you agree with that . This is an opening bid. What do you think republicans will do particularly when it comes to the tax overseas earnings . It is an opening bid and it will be a long process with different points of view. The priorities with the budget are ones that are shared. The president is focused on making investments helping the middleclass, and reforming the tesco. I think when it comes to the missing fiscal pieces of the budget, you cannot make the investments we need, if we have too much debt. That is why you need to focus on that. You cannot really make the middleclass secure if you do not focus on effective visibility is slated to run out next year. We know we have to shore up the program and it is very important they do make changes on Health Care Costs but we have to do more. I think we have to make the goals last, not for this year, but beyond. For tax reform, i think we could see some progress is an republicans in the white house. That could help competitiveness and generate revenues if done right. We do have real challenges to work out on both the entitlement side and the tax reform side. Yes tax reform is a positive and dirty word in washington at the same time. 90 of Corporate Tax on future earnings for companies that president obama floated, that is better than the 28 here in the u. S. What will actually push businesses overseas . Right now, we have a situation where companies have an incentive not only to move production of jobs overseas, but keep it there indefinitely. They never pay taxes on those earnings unless theyre brought back to the nice spirit of proposal the president is putting forward is to say, lets find a better way to provide more incentive for companies to bring back to the United States and also make our system more competitive. The idea of having a minimum tax rate on all four and earnings is just that. Rather than having incentives to hold them abroad but bryant, 19 is that her than 20 in the u. S. Wont that incentivize companies to continue to make money overseas instead . Right now, the rate is zero if you keep your earnings overseas. What we are trying to do is find a balance that will generate revenue to support a longterm revenue neutral business tax plan, and also make our economy competitive globally, while also shifting incentives that currently exists to bring resources that. What youre seeing is that the idea of coupling program is missed pass reform with a major upgrade in infrastructure is an idea gained momentum. We are enthusiastic about the idea of trying to make progress on that this year. We have to leave it there. Thank you so much for joining us, and Deputy Director of the management and Budget Office at the white house. Thank you both. Little less than an hour until the opening bell. Scarlet fu has a look at names to make some moves. We will start with a lot of energy companies. Exxon mobil. You broke the news earlier and reported a 21 drop in fourth current fourthquarter profit. That stock has been bouncing around all morning in the free market trade, currently down. The coal miner up by 8. 4 . Still trying to figure out a reason why resources will be reporting earnings after the close. Shake shack, 21 thursday night and more than doubled in its debut, 119 , surges building on that debut. One thing that is known all here is the price to sales ratio of shake shacks, 1406. Five companies in the s p 500. By that measure, 495 stocks in the s p 500. And a nonprofit in massachusetts, and not a big company but the fda granted one of its statements, breakthrough therapies, a big boost by 18 . Finally, netflix 1 billion in two parts. Also, the goodwill generated after last months earnings report, progressing ahead of schedule. The proceeds will be used for general corporate purposes content acquisition we will see what happens. I did see how netflix did buy a show about hot girls, women prostitution, the pornography industry. Ok. I do not know if i will watch that. Someone will. Thank you so much, scarlet fu. Still to come, the greek Prime Minister will travel to paris and rome today in his fight against austerity. Details on that trip is coming up next. How much does it cost to build an oil well . Get excited. That is coming up next. Lets take a look at our world News Headlines this morning. It leader aiming to recruit 100,000 robbers rebels. He called for full military mobilization fighting between rebels and Government Forces have intensified after his talks broke down. Meanwhile, the New York Times yesterday said president Obamas Administration considering providing Ukrainian Forces with weapons. You kind government is looking for allies. Greeces finance minister was in london today for talks with its u. K. Counterparts, reported to be meeting with 100 banks and financial institutions. Greeces government wants to write the terms of its bailouts increased public spending. The chips are down. Casino revenue fell more than 17 in january, slumping an eighth straight month. The Chinese Government continued corruption crackdown. Casino lost about 73 billion in market value last year. That is the latest world news. A Global Oil Company made 6. 5 dollars last year but profit is struggling. We see how net income continues to fall and here is why. It cost millions to build a well. I got an estimate and it is pricey. First, you have to drill the well, though roads, by mud, chemicals, tools. That costs 5. 7 million dollars. You drill and now you have got to fill it. You pump water and sand into in the rock, and that costs 3. 2 million. Add it up and you have got a grand total of 9 million. Joining me to discuss bloombergs oil and gas expert david, 9 million is a lot. What are the chances they close up shop and go home when they already spent the money . Part of it depends on where they are in the acreage. He may keep towing, partly because they have got all the money sunk into a pad site where you drill multiple wells from one location. That is a nuance we have not done the past with conventional wells. So we have the technology to find a centralized. And build multiple wells in one location so why not keep going as long as the production is good . It raises the question if Oil Prices Fall out, will we not see that . It depends. Part of it is the high rates that shale wells have. You have to drill a lot of wells just to keep up with the petering out of the shale wells. Some as much as 60 in the first year. If all you do is let up on the throttle a little bit and you do not drill as many wells that are on the fringe and not generating as good of a production, very quickly, the high supply could fall back. That is one school of thought. The other is that we are getting really good at drilling shale wells and doing it at a cheaper cost, so we may keep adding to the production. The costs could come down 1020 because Oil Producers have a lot more clout with oil drillers. Talk about how easy it is for exxon to turn the switch on and off when it comes to shale. Yes, there is a little bit of a problem trying to turn it off if they want to just walk away from the wells. Part of it is because there is such a mentality to really go go, go. You need to Service Companies and the rates, you want to hold onto them otherwise, you have to fall back to the line if you give up the rigs. Some of them do not want to let those go so they keep showing. That being said they could also let it fall back very quickly by just dropping off some at a time. Crises made really good cases for why they will keep production going and why they will stop production. One thing ive heard is that right now, demand is more or less holding in there. There is not a huge fluctuation. If jim and drops a big amount, it could cause a little bit more concern and could cause the drillers to say, i cannot hold up for the short term and this could turn into a longterm situation. So i need to just drop back there the other thing is they go until they need to go bankrupt. That could cause the companys to stop drilling as well. Thank you so much. I encourage you guys to read his article there it is oil nerd land, where we are. Coming up, americans cash in on the oil collapsed. What companies will benefit. Plus, new ways to pay for your mac big mac. The windfall americans will receive in the collapse in oil prices. It is not just family that will profit. That windfall is also likely to benefit massmarket companies that have struggled like Family Dollar stores, mcdonalds, popeyes, all saying theyre benefiting now or will in the second half of the year if their costs go down. Walmart and disney are likely to go down as well. Their stocks around record highs. Coming up, mcdonalds new plan, you may have seen it on the super bowl last night. We will plan to talk to our guest host to the hour on if this will work. Bo peabody is here, everyone. Plus, a new way to avoid the register and still have fresh ingredients to cook with. Youre watching in the loop live on bloomberg television. Here is a look at the top story this morning. Mixed results in new Economic Data today. Consumer spending fell more than expected last month. At the same time, personal income rose more than forecast. A big drop in fourthquarter profit for the Worlds Biggest Oil producer. Exxon mobils earnings beat estimates. The collapse in oil prices have made producers billions in costs as well as thousands of jobs. The new Prime Minister of greece is lining up allies against germany positive man for austerity. Will visit rome paris, and brussels. Rewritten so greece can boost public spending. Germany is opposed. A blizzard has made life miserable in the midwest. It is likely the same thing in the northeast. The chicago area more than 4000 by fiona present world to does not know how to say the name. Six more weeks of winter. We are under 30 minutes of trading. Hitting our radar before the bell today. Well peabody and bloombergs Olivia Sterns joins us now. Really, groundhog day . Yes of course. Showing me up. Victory last night, bad news for the stock market . Are we just going to blame everything on them . No, i am a patriots fan. The s p ended the year with nearly 84 loss on average. Is that because everyone was too hung over to trade the next day or the next year . Every time the patriots win, the stock market falls the following year. This is a relation and not causation. We have a diehard fan on set with us. I will blame everything on tommy and bill. When will it end . It is unbelievable. Unbelievable. It has been cemented. I am a yankees fan. My question is does deflate gate make it a little bittersweet . Im sticking with the party line on deflate gate. Hold on. On friday, he could not tell the difference between a deflated ball and a regular ball. It is very possible you just cant tell. A deflated ball does not make up for 40 points. Number nine, the chips seem to be down and so the gambling territory, it fell 17 last month, extending a dramatic eightmonth losing streak and followed a whopping 30 drop in september. Does this mean they just have less rich people to spend money . Or less rich people who want to stay rich. People are worried because of the big crackdown on corruption and that is why youre seeing people spend less. Plus, there is an issue that they will actually outlaws poking. Can you believe that . That is a big deal. More important, vip players who will be dropping millions, or the little guys who just want to gamble a little bit . I think these are built on the little guys, ultimately. It will probably not lose on the on that end. We will see. The holiday week where everybody has off, they think februarys gambling revenue could drop 40 . That is bad news for sheldon. Yes. Enough said on that. Number eight alibaba and artificial intelligence. At an event in hong kong today, robots present a great opportunity in the next 2030 years. What industry will alibaba not take on . It just takes the amazon playbook and pushes it back a year. Just bezos was talking about robots six months ago. We will see. I think they will just get into everything. They have got to look for growth. We have talked about how that can be bad for some companies to diversify too much. Would that be the same case for alibaba . In the case for google, it is still the case that 90 of profits for google come from search. All the things they have done from industries has not amounted to much. It is something we are very excited about. Has to give google a little more slack than you give jeff bezos. A little bit, given that google makes more profit. One question, do you like alibaba . Yes. It is hard to get a grasp on it. But yes, we Like Companies that by our companies. We certainly like having a company like alibaba out there that are looking for the innovation. Number seven, a ceo stepping down. His successor is the former president mark yanni. She got that. Leaving after forecasting last month a 20 drop in earnings in the holiday quarter. I think these old preppy glance brands it is really a sign of the times that people want higher designs. Is there i am not familiar with . We are just freeing up the designs. I am excited, to your point, they appeared to have a lot of brand value. It has been a great couple of years and i am very excited to see what it can do. What you think . I do not know specifically. Guys who want to spend 30 on a button down. You are totally mismatching your consumer. [laughter] they were stuck in sears for so long and now they are out. They have made bad decisions with a brand and that is the move here. Number six, more than 4000 claims filed for the Compensation Fund ahead of saturdays deadline. Ken feinberg, the lawyer handling payments, told us it will likely take until spring. I will try to pin them down and he dodged me for five times. 1. 5 billion for gm. Gm set aside 400 million. These other things in the Big Companies that nobody plans for. You have that many employees and Something Like this comes up, it is a big deal. The claims went to over 4100. 300400 possible claims. I do not mean to be glib but i was talking to a Bank Executive who said, we get multibilliondollar fines for what we did very did. These have 51 confirmed deaths. It is interesting to think about whether or not the proportions of these fine meet. And the qualifications have grown as well with ken feinberg. Gm was much smaller. Looking at a lot more things to make sure the airbags were the actual issue. All right. Still to come, after disappointing fourthquarter sales, mcdonalds still trying something new. With some loving. Mcdonalds shares the love appeared in new form of payments for burgers and fries. In the ad, customers are told to call a loved one instead of handing over cash. Hey mom. Just wanted to let you know that i love you. I get emotional. The ceo changed amid slumping sales. You can dance and buggy. Lets im going to do a lot of Different Things to get a hamburger. What you think about this . I wonder, is it connected to don thompson being fired . Was this his last great idea . This has been in the works for months and months before. It seems they are trying something, which is good. The problem is the food quality. Food awareness is unbelievable. Organic at walmart, i just do not know if they can get past that. At the end of the day as well, its mcdonalds too big of a company . You have over 100 products, you have 36 house in stores all over the world, most of them franchise operated. A lot of other companies are doing that. Starbucks and subway. But starbucks is not franchise owned. Theyre owned by the company. I think it is a matter of the food quality. The world is going in a different direction than mcdonalds and may have to change. They cannot do it wholesale. Obviously, it will be a difficult thing for them to do to fight against the cultural shift to Higher Quality food. You think mobile will also be able to help them . Can mcdonalds benefit in the same kind of way a smart i do not know if the demographic of the mcdonalds customer, i do not know if they will be an early adopter to those platforms. I do not think that alone will save them. I think it comes down to the product. Talking about product, i cannot deny that on the table we have red velvet oreo cookies. We are basically talking about promotions going into valentines day, oldschool products like oreos and mcdonalds that hope you will buy them. Do you believe in this . I think the brands are interested people. And i think you can bring them back and get a lot of mileage. These old brands around the holidays and new product launches. Again, it is a good tribe. Message kind of brings me to the days of the Super Bowl Advertisements. People are talking about on twitter and you did your social outreach. Today how important is it that i walk into a store or i want and i want to buy a budweiser or Something Else advertise . Classical told Super Bowl Advertisements are getting about getting into the subconscious of a consumer so that last for a long time and make an impression. I do not know if they measure the impact date. For online products, there is so much video game advertising. It is amazing to me how many mobile games were advertised. That is where you will see real impact and that is what you have to measure it. On Something Like budweiser four years and years, the brand will grow. Plus what about the power of social media. Remember 2013, that was free. No one spent 4 million on that at. Ad. Super bowl money will be dead. I do not think so. Tv is still growing. Tv advertising is still growing and i think the reason is because it is the only place you can really tell a story about your brand. It is very hard to do that online. As we get video advertising online, that will be easier. But television, getting 30 seconds to tell the story of your brand, it is the only place to do it. Small companies you hope will be bought by bigger companies. Are you noticing Larger Companies are having a difficult time growing . They do. And also, they have to buy innovation. People are paying high multiples just for technologies and innovation. It is more so the talent and intellectual property that that is how was created. It is not necessarily equipment and the stuff we invest in, but yes, they have to buy innovation and growth. You see some of the buying growth. We do not invest in companies that generate a lot they generate a lot of fast growth with various products. We will talk with one today, nic tarantino. They have an amazing product going with the macro culture of food. A lot of Big Companies know what theyre doing. I will make you one of take one of these nasty oreos. I will take it might as well. Youre sticking with me. Not that . All right. Klassen says cream cheese frosting. Its amazing what they can do. It tastes like a little bit of red velvet. We will be back. Stay with us. Lexus stoxx 600 is lower for a third day. The election in greece antibailout party seems to be energizing a Similar Party over in spain. Meanwhile the euro is up gaining as members of greeces new government to reassure they will abide by financial immigrations oreo cookies here. Want to bring in one of the most important stories ahead of the opening bell. Olivia sterns is here, who also had a cookie. Number four, the greece Prime Minister has begun greeces new government appealed to the bank not to shut off the money cap. Is this a good cop, bad cop . Yes. That is what i am hearing a little bit of. There is no meeting on the books yet with the german counterparts. Those are the people we really need to convince. On a personal level, greece is really annoyed and they want new people to oversee the debt. He just met with a new greek finance minister and George Osborne in london. George osborne said nothing to the effect of, yes, i think we should renegotiate the debt. Own will say that. The question is whether this will go down as the final hour again. Classroom click, it seems like the finance minister as saying we will not take your money because these be will back us up and they will not let our greek banks go belly up, but will it . Will the ecb actually do that . The National Central bank of greece might. At the end of the day, they probably will. I think they have to. They have to. Number three, venezuelas deepening economic crisis may cause Corporate America billions of dollars. General motors together carry at least 11 billion in assets and the venezuelan current on the bounce sheets, again, the fast do with oil. Minnesota was struggling before oil prices when 50 or 60 . Now, how do you make money . This is wild. The black market is 190one. How does that make any sense . Everybody is celebrating the prices at the pump. There will be a lot of downsides to it and this is just one of them. A lot of analysts i have spoken to say they think venezuelans would rather default on their debt dan hughes oil assets in the u. S. Because the future oil will continue to be so important to the country. That is interesting. Our reporter says it is not a question of if but when its a false where the oil company defaults. Classify kobe 1000 i have a problem. I owe you 1 billion, you have a problem. [laughter] number two, oil workers, 10 of u. S. Refining capacity, a reflecting day in the biggest lockout since 1980. Here is the deal and this is what im hearing from my guys. It will not affect capacity right now because these guys are automated. A Skeleton Crew that his salary. The issue, though, is if it continues to persist for weeks and weeks, there are turnaround happening and you need people to actually do that work. He in the near term the refineries choking on the supply and they are also able to bring nonunion workers on a Skeleton Crew. If it persists for three months then it could start to move the needle. We have to take into account as well that this will increase the mass amount of oil in the u. S. We cannot get anywhere to be used for something. That is why we saw Oil Prices Get a little funky earlier today. We will have some more oreos and we will be right back. Locum doctor left get back to bring you the most important stories you need to know before the bell. Olivia sterns is here. Talent number one story of the day, Spanish Banks leading european stocks lower sharp declines amid uncertainties surrounding debt negotiations in great spirit oil prices are rising from a sixyear low and did get hit earlier this morning on workers strikes. Talk to me about european stocks. Spanish banks. But the ecb cannot stop the slide, basically. Announcing qe not being able to help that this point. On the streets of athens, the antiausterity party in spain. There is fear this assesses the successes trying to figure out whether or not they can pull off an election. When they can, although some air talking about spain renegotiating the terms of its debt. That looks more than whatever happens in greece. Close corporations in the u. S. Get a lot more money from the bond market than say countries in europe. That is a lack of venture capitalists money. It is amazing how underdeveloped europes capital system is. They are not doing innovative stuff. Germany is doing some stuff and there is some stuff we have seen in london, but for the most part spain, it is nonexistent. No economy pretty much at all. Last as stocks start trading, want to bring in jonathan, the chief u. S. Market strategist. Good to see you. Good morning. Your s p target is the same, but you have lowered your earnings estimate. Tell us why. Two big things have gone on. In the last eight weeks, oil prices have continued to fall. Low prices are down by one third and the dollar is stronger. Both of those are weighing on profits. The question is, why arent we taking our price targets down at the same time. Energy stocks, their stock prices are actually holding up pretty well. Pushing investors. People think they can hide stuff and avoid foreign exposure. You will see large caps like an exxon here. They work in totally different environments. That is betting that oil prices will rise, which im hearing is not a short ring. A sure thing. Yes, we do have a great indicator though where you can buy and sell oil for year or two from now and the market is telling you that oil is likely to be 1012 dollars higher a year or so out. Saying, heres what i think. I did not say the words, but exactly. He said Large Companies do well. The dollar index, it is up 20 in the past 12 months. Currencies up 7 . You heard microsoft you name it. All the Big International Companies Say the reason they missed estimates is because of the dollar. If i miss spoke and said companies, the profits are hurt by strengthening dollars. But the amount that you pay for earnings goes up when you have a dollar strength. You have the money flows into large caps. If someone were to pull up bloomberg, they would look as if they were pictures of each other. It is really funny. We sent out a note this morning. Our director of Research Says to me, what was the comment on your earnings zone. I said we have 10 notes on super bowl comments and two on earnings. So there you go. I asked people their Favorite Team and i got somewhere between, you know, rain down some of the sectors. He talked about the Falling Oil Prices hurting exxon for example. How would that be helpful for Consumer Discretionary stocks, for example . We look back over time to see whether on days when oil rises and falls, what happens to each sector and what we find is not only does the whole market tend to move up on days were oil rises, but all 10 sectors also move up together. The reason is it is not a supply thing. Lower oil tells investors we have some kind of weakness in demand and therefore the market does not like it. In fact, on days when oil goes up, Consumer Discretionary delivers a positive return, not as much as materials and energy but it does quite fine. It is a signaling mechanism. Will is probably the single best signal on a Global Growth and global health. Go ahead. We of the fed president saying the economy is actually in pretty good shape. Which one do you believe . 2014 was the ninth year in a row of gdp. I think we are in really good shape as long as good shape is not 2. 5 gdp estimate. I think a lot of folks are hoping we will snap back to something more robust. I think the economy is fine. Great shape . No. But it is fine. What does it look like . Not just the tech land, but the early stage venture community. Things are very strong prices going up and people willing to pay a lot more for innovation. Big companies are stepping up. We were sort of concerned about a bubble in the private investment community. Does that then mean it is high yield and risky asset helping business and creating that bubble . I do not see the bubble but it is two groups of stocks one which is things like consumer staples, which have a decent yield and trading at 19 multiples, but at 4 earnings growth. I am a broad market guy, but you think about companies in the consumer space, high multiples because they have high yields. Then you look at companies that have biotech or internet ma may have 30 growth, but they are trading at a 30 multiple. I look at that and say, which would we rather hold . I would rather buy media tech. Yes, they have a high multiple. One thing we are excited about, we do not see the Public Market. It is great that Companies Like uber can raise the lanes of dollars in the private market. That is good because it keeps them out of the Public Market while they work out their business model. It is not a lot of exposure for risky stocks. We think it is a good. There is a lot of risk. Have a cookie. Everyone had one. We all did it. All right. Thank you so much. Take a cookie. You are sticking with me. Coming up, u. S. Manufacturing pmi numbers will be out and we will be looking at them and be right back. Plus, we will sit down with cofounders of the website. A few minutes into the session stay in the loop. Can you mark ecommerce change a 600 billion grocery business . One Company Hopes so plated. Com. They helped cook up tasty dishes without the hassle of shopping at the store. Joining me is our cofounder. Our guest host for the hour, an investor for plated. Can someone like me who cannot cook it all do this . You are well along the way. Here is the thing. 95 percent of the country, four Fulfillment Centers. How do you make money . The beauty of the businesses from tec. That is why bo and his team and other hightech investors have put the money behind us. A huge amount of data to take out the waste normally incumbent in a perishable food business. Many Grocery Stores see upwards of 4 goes to waste and with us we see less than 2 . He still have to account for things like, if you have to keep something frozen keep it frozen. Delivery will be a big cost as well. How do you manage that . It is all in the software. We take pride in not only eliminating the waste from a humanitarian and environmental standpoint, but that is where the businesswise as well. A lot of companies are trying to do in terms of delivered groceries and things like that. Why do for this country has it though question mark though . There is not much difference between being wrong and being too early. A lot of the stuff that came before this is too early. The market came ready for it. We talked earlier about the macro trend of better food. People wanted to eat and get better food. These guys fit right into that. Talk about mobile and transacting on mobile. They fit right into that. The fact that you can do this and get it easily is the logistics of delivering food works so well. The timing is right. He just raised a lot of money. 50 million in the last year. What will you do with it . We are spending it. I want it. [laughter] part of that is going into our Fulfillment Center network. We now have over 200,000 square feet of space across the country and that is allowing us to cover 90 5 of the country with less than 1 error rates. And we are putting a lot into marketing as well. A brandnew category. Goldman sachs just without guidance last week. They think the meal kit category is going to be 3 billion to 5 billion in the next 10 years. Right now, it is maybe nine figures. A huge amount of territory. We are Building Brand awareness and touching millions of consumers across the country for whom this is a good fit. 15 million sounds like a big number and it really is not what we are trying to redefine an entire category. One of the things we measure is the capital efficiency of our entrepreneurs. How much they have accomplished in the capital they have. When to we want our money back . 57 years, but it is about when the company is ready to be exited. It is not even close. You look at this company what is a good fit for them . Old foods, bought by amazon . When you look at them, what do you see . It will be interesting to see how it plays out and the types of companies that want to get into this type of business given how they revolutionized it. It is not a Grocery Store business. They have taken it to a technology business. We think it will be a lot of different types of buyers and not just the usual suspects. We will have interests, but logistics companies, google we talk about companies and we look for places to grow and this is a big growth category. Given the size of the market, you said 500 billion in groceries spent every year. That is increasing by double digits every year. Online ecommerce penetration is still around 1 . If you look at more mature markets like spain and france where online food has been the same for a decade, those numbers are closer to 67 penetration. We see tens of billions of dollars of value to be created here over the next five years and for us, that is more than enough to be a standalone public business. A tech company and not a food company . If you took hold foods and amazon and they made a baby, that is what we are. [laughter] we work well together. A kegger before 10 00 a. M. , i do not know if you can do that. Only red velvet. Thank you very much. We appreciate you coming out. My guest post for the hour, it has been a blast having you. We have some breaking u. S. Manufacturing pmi numbers. Scarlet fu has the details. A slightly better read than expected for the u. S. Pmi according to the Market Economics index. 53. 9, a little bit higher than the preliminary read in january. The initial read, a oneyear low. We have it take a little bit higher. The yield has already been at session highs of 1. 6972 . Not Much Movement there, but there is a slightly better read than anticipated for pmi. We will get manufacturing on top of the next hour. I will bring those to you. Thank you. A mix to read their on the stock. We will be right back. Could there be a housing turnaround . With me now to discuss, erik schatzker. Is there . Well, alex, there are some trends favoring the firsttime homebuyer. The firsttime homebuyer is, so to speak, the problem here. Fewer than 30 of previously owned sold homes in 2014 went to firsttime buyers. 29 is the figure. The lowest since International Realtors started tracking the data back in 2008. Why is it so difficult for these people to buy homes question mark is because theyre living with mom and dad . They tend to be young people and young couples, most of the time. They have got a lot of student debt, for example. Credit conditions, the underwriting standards the banks are demanding remain tight. It is harder for these people to get loans than it was in 2008. Several things happened that may allow these to rise. A mung them, the federal government has dropped at a minimum of 3 , the amount of money, the limit on which you have to put down in order to get a federally insured mortgage. Thats 3 down payment is not available for all mortgages, but it gives you a sense of where it is down to 3 from 10 . There is a smaller mortgage Insurance Premium being charged by the fha, for example. And of course, the economy has picked up some steam and there is the Unemployment Rate has dropped, wage growth, jobs being created. That is a big question mark. 0 down payment and 10 , the other homebuyers that is a huge risk. It raises the most important question of all should we be trying to incentivize more Home Ownership . Does the fact that the percentage of americans owning homes, does the fact that it has dropped Say Something bad about america or the American Economy or bad about the economy the way the economy has been managed . I do not know, but here are things to consider. If you buy a home, you are stuck with liquid assets, to begin with. You are highly leveraged and at the very least, highly indebted, and if you are born with a 3 down payment, highly leveraged. If the house value drops by 3 , you are underwater. And finally, it creates an illusion of wealth when peoples home values rise, they tend to be feel good about spending. Borrow more. Get more loans, and then you would have to repay more loans. We are talking about it with the cofounder. We will definitely be tuning in. Thank you very much. Americans win big at the pump. We will see an we will discuss what theyre spending their money on. Proven to be a boon for the American Consumer has gas prices plummet. The average price per gallon is now close to two dollars. Unbelievable. The collapse at the pump is equivalent to 20 500 billion tax cut. So what are americans spending their money on. Joining me now, our reporter has been looking into this. I look at the Consumer Spending and income numbers we got today. Spending down and up. That says to me we are actually saving the money we are earning here. It is quite interesting. What we found is that the gas prices convinced more people to spend more money on gas. They are not necessarily spending more money on retail and restaurants right now, which might come later. But they are seeing lower gas prices, doing more weekend trips, driving traffic in vegas is up in the Fourth Quarter after falling most of the year. Right now, it seems people are spending the money a little bit and theyre mostly buy more gasoline. Does that i into more because there is a lag . Yes, historically what happens is in the initial boost in gasoline purchases and maybe about a year later after the drop in prices begins Historical Data shows it filters out and the majority of spending goes to broad retail. If you look at gas prices, they started falling in july of in july of last year, that is where we are expecting that you will really see a boost to retail as a whole. Is the spending shift permanent . If we see another shift in a rise in gas prices, is it sticky, the spending . That is usually not the case. The one interesting thing is that gas prices are supposed to stay relatively low through 2015 and 2016. Not getting above three dollars. If the gas prices stay at that level, we could see a substantial shift in Consumer Spending toward more to scratch an area purchases, more going out to eat, more clothes, stuff like that. Even the ceos of some of the chains that would benefit from this like Family Dollar, said they expected but have not seen it yet. What is the total number were looking at . Goldman says a 125 billion dollar tax cut. Look at the travel level. What do you think . 225 billion could equally to 700 and 52 1000 750 to 1000 dollars each family. 100 a month basically. What about savings . Do you think we will not be stupid and save it instead . We talked to consumers across the country and some said i will spend it now and some say i will not spend it at all. Matt townsend, thank you but thank you very much. Nearly 30 minutes into trading, scarlet fu is looking at some of the big movers. What do you think . I want to start with that sellers. Apple will be pricing later today and will sell 5 billion, a fiveyear floatingrate. Netflix Just Announced a plan to sell 1 billion of senior unsecured notes. A negative outlook because of those plans. What is notable here is these companies are adding debt to preserve their overseas cash hoard and also taking advantage of low interest rates. Lets move on to casino shares. Their eighth straight month of gaining revenue decline. You see declines of at least four straight days. Thank you so much. That does it for today. For tomorrow, we have a nobel prizewinning economist on obamas budget and europes is austerities fight. We will talk to him. Have a great day. Live from bloomberg headquarters in new york this is market makers. Taxes on corporations and top earners. More money for infrastructure and education. President obama sends his budget to capitol hill. How do you get firsttime home buyers back into the market . Well ask the ceo of a real estate giant. It is like a license to print money. Today, we will start profiling the worlds bestperforming hedge fund manager. Good morning, everybody
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