Transcripts For BLOOMBERG Street Smart 20131212

A good half percent, we are back to the flat line. Over three days if you look around e low was today 12 30 that was 1. 6 . Phrbgmarkets down enough you will find buyers. Year, you see the yield up because retail sales came in expected up. 7. If you have retail sales better and means tkpwroefrpt higher yields and a sooner taper lose interest in big go gold. There you have it. No longer all the fed money sloshing around. Selloff. That is the worst day on gold weeks. We go to the beg three. We go to the record i. P. O. 2. 35 billion. For shares and today. They are rising by 9 . We have seen consistent gains the session, not a lot of volatility and relatively facebook are higher on the news it will be as teradyne s p 500 instagram willnd let users send photos and videos friends and groups to be able to discuss them. Lemon looking for comparable sales to be little holiday quarter. Been looking for 8 on bad weaker results p. R. I think we may have had something to do with that. We will talk about that later in it means for hat that stock. Now the big story. Tech companies that are cheating on china. The past week two Tech Companies ave shown their shifting production. Google will plans for three data taiwan andsingapore, hong kong but scrapped hong kong doubled china and samsung will shift from china to vietnam margins and ofit gets lower wages. On is big tech bailing china . We are seeing this move out of china. Has it gotten too expensive . It is. T is what we have seen wage inflation. One great thing for local is they were being paid more. City where wage in a a lot of manufacturing is done 2 and the Companies Like apple and samsung are looking at ays to manufacture the next generation of smart phones at a close,ost and vietnam is it is a Great Company and the wage is about half or a third of china. That is part of the reality of any economy. That here. Ough as an economy becomes more sophisticated workers demand wages and Companies Often ill then try to seek labor elsewhere. It is the added cost. More sin take a confidential view. Cory if you are driving somewhere. Rising demand he for human rights of workers. Laws limitnding some apple says they have been having workers on hours a week and they are trying to push that down. We dont know what is going on Hewlett Packard and others and dell who do manufacturing there. Part of the sophistication of an economy. Become better off part of that means they will start demanding more. That is good for china because they want to create the middle class. So it cuts both ways. We know s the same day apple september investigateers to china to look at the reasons people died working in a factory including a 15yearold boy who was legally factory because allowed died of pneumonia is it yes. He say it appeared that died because of working conditions. Corey highlights this story today. D out of china does apple, do american sourcing so t are much product overseas in china need to be more responsible, do need to take ownership of the situation we are seeing overseas . Absolutely they do. The reason is there is the human rights side of it and the press issue that apple has been past year withhe some of the things you have been discussing. Side but s the human the business side of it. Five s why apple deployed people on a medical team to look this because they realize if they dont it could escalate. Magine if somebody else happened and somebody a month from now at apple had not looked into it would be a p. R. Disaster. One thing apple has done is they have listed their suppliers and they are holding them to we dont have so people committing suicide. We have people that are in safe working conditions. The key issue is about gross margin. We have seen apples gross decline because of wage inflation. Good for local workers. One big trend in smart phone is end. Trength of the low a lot of volume is from the low 200 price point. Ne thing samsung is doing is looking out to see how can i at a lower or 300 price and keep a gross margin near 40 . Only way. E wage we look at monthly differential, u. S. , china, vietnam, in u. S. A. A factory 3,100, china, 466, 135. M may produce amsung 40s in of phones in vietnam so oes that arbitrage disappear and the reason tag to vietnam no longer exist . I think that apple thinks bout this in terms of a decade yield, the sustainability and reliability of some of the suppliers. It is good for apple if samsung builds in because apple can look more seriously at that. To get ly you are going dichotomies and wage increase as ore manufacturers go and then they will finds some other place to go. Can youany other places keep going . I dont know. Africa is still open. There is also the u. S. We have seen some that. Onshoring of manufacturing coming back here. There is talk it could be cost competitive to manufacture the e u. S. And ship products. Productivity. For certain products. They will build a 3,000 but we wont see low ends products in the u. S. Arizona soing one in we are seeing some manufacturing come back to the u. S. But a lot building will never take place in the u. S. Positioned . Est is it vietnam . Evidence the best that it is. Places that were like china 10 years ago and undiscovered that skilled workers that are great with lands and a government that is willing to business to for move in. Apple p. R. Disaster that had to deal with and you work hold the ose and suppliers to high standards and if they dont meet the standards because theres another guy waiting. I really think that as much it is disconcerting it is appropriate to say apple is highlighting shoot when they to lose by doing so to the benefit of their workers. Samsung and everybody else is not talking about the issues and not doing steps is roactive worth noting. It is also worth noting this under tim cook and not steve jobs. Gene munster, google, trish mention mentioned google, they have gone to singapore and taiwan. We can talk about apple but here is plenty of company and we have seen intel and nokia moving out of china. What do you think of the google move . I attribute it more to their strategy in china. Three years ago they shifted away from being more focused on china and doing it hong kong. I think this is just probably all part of the same theme. Feel like they have laid their groundwork in china. Stuff is e samsung very really about wages and this is more about googles strategy strategy. Ic taiwan is probably the most technologically advanced country manufacturing. Japan is close but you are getting leadership in taiwan. Thanks, guys. New theme for next year. Growth. We will explain next. Gives going bal dutch a whole new meaning today. A theme is emerging for 2014. Global growth. Let me show you wha we have hours the past 72 hearing from a number of companies. Good l motors, we feel about the economy and their momentum. Iata the international airlinesion overseeing record Airline Profits 5. 4 more next year. And deutschebank a leap back to Global Growth. That is above 3 . They put a 71page report out about rning talking return to growth. Deutschebank has plenty of company. Stanley, chs, morgan all agree we are going to have a return to Global Growth next year. Before 3 . What i have done is shown you global g. D. P. Year over year and highlighted this flat line to zero. Above 3 . That is pretty heady. 15 years that is before the tech bubble. Barely above ere 3 in the 2005, 2006, 2007 when that ody thought everything was just fine with the world. If we get above 3 that is big deal. The question for us as investors to which sectors are going rise the most . We looked at the world index, Earnings Growth by sector. We tracked this and found if you look into 2014 financials are supposed to have the best growth sectors, 12. 8 . Ut Consumer Service and goods . E number two, 12 and 11. 3 we will throw out financials because a lot of growth in just the is still reinflation of bad assets on balance sheets. Loan growth. I will focus on just the consumers. Goods. S and there are two ways we can play there there. We are talking with staples Companies Like check, unilever. Ly, who iscretionary the guys luggage andcy louis starbucks, toyota. There are multiple ways to play consumer trend. If you have an economy 3. 4 lating and growth of you want to bet on the consumer. Know what that louis vitton stuff is. The theme is getting selected because not all markets and are equal. He helps manage 400 billion. That he held positions at wells fargo and private wealth management. Welcome back to street smarts. Lets talk about emerging markets. Certainly not a good year for emerging markets. Do you think next year will be different . Do we have something to look forward to . Im a little worried heading into next year. You look at what happened this year with once tapering was announced. E. M. , the line in white. You see everything is outperforming emerging markets. Suspect that next year we will see a little bit of the same. Strengthening. And as a result some emerging market weakness. Dollar gine the strengthening has it do with the fact that the fed is tapering so go up which ll means commodities go down and rely on markets commodities. First you need to look at the flow of capital. When Central Banks have said we are going it keep rates at zero forever. Investors gone it find yield. A ton in emerging markets. When the fed says well unwind just a little bit of this you see some capital come back. It punishes those accountants on urrent account deficits and commodity exporters are hurt. Do you want to be ultimately . You want to focus on current account surpluses and exporters. Korea, singapore. Think of the manufacturing exporters that are likely to from growth in the developed world. Sounds like vietnam. We were talking about vietnam earlier. Samsung moving there. A lot of technique business. That is a Perfect Point but hink of where they are likely to benefit. It is a rebound. Look at u. S. And europe. Think things there are going to improve over the next year and i suspect that for the second year in a row you will developed markets outperform the emerging markets. Stay with the u. S. And europe emerging markets . Yes. There is an argument to be made term. Pan near ong term we are in the sure if abe knowledge mix. The most surprise will be out of europe. Coming up Liberty Global looks abroad for a deal. Hat is part of our global outlook. We have more street smarts in moments. This is street smarts on Bloomberg Television also on tablet, phone and bloomberg. Com. We are talking about going dump splitting the bill but shopping there. Joins us. Chman iberty media might be going dump, jon. We are friends, we can split the bill whenever. You talk about cable consolidati consolidation. At the center of it whether in the United States or abroad. Liberty this interest global has in making a full of a dutch cable operat operator. As we continue a european buying decade. Ver the last the reasons are not dissimilar to what we have seen in the u. S. You own more of these assets you can cut some research e of those and Development Costs and just the realities of building up big infrastructure businesses. One of the key differences the European Market and the American Market is that since you are dealing with a lot languages depending on what country your assets are the cost more about synergy and here it is saving to y and also about trying control these sky high content costs that the Cable Companies complain about and keep getting into fights over. Nd malone has been the instiga instigator for more cable dation and companies are competing with the likes of facebook and it makes story. Obal cable has the challenge of being local when facebook is to more e available than a billion people rolling out more video and competing subscriber. We havent really seen cable crossborder. They tend to be regional. Way of the future we see Global Distribution companies . Challenge that the will be the language barrier. Distinct t has content. But here in the United States if you think about what likely will happen you expect that could markets, more global just the idea of comcast having such a large size and a lot of players being smaller relatively speaking, and because have fewer ller and subscribers the content Companies Like disney charge them more. You have to pay more for the conte content. Jon ehrlichman. Up next is it a new era for facebo facebook . T is entering the s p 500 next week. Facebook is the newest member s p 100. P 500 and faculty has returned with a vengeance. Of as managed a year profitability and shares up almost 90 and not one analyst to sell. Should you be betting on a new era of facebook . Our panel. Photo rning facebooks sharing app announced it is aunching the first private messaging tool. Is this product a game changer for facebook . Game changer i dont know an focusing on instagram is important thing to do. Think what it does with develop its really own service and with its own sort of user base that sometimes from facebook. I think that it skews a lot younger and the notion of direct messaging with photos on suggests they are thinking not just competition ith twitter but with snapchat which is one of the hottest star startups in silicon valley. Eeping in the platform of instagram could cause more it use it. They are thinking not necessarily to send ads but they keep people in an environment are the ads are. There are the risk too many social media platforms . Twitter accounts, facebook, linkedin, it goes on and on. We going to run into any is just a few that really survive . I think what you are seeing all things to the everybody social networking phrorpbl. Realtime short orm mental message and instagram the verbal tphrrpl. So i think you are seeing a differentiation by how the the social l use network. I think that is an advancement. What do you make of this . S p ook being added to the 500 and 100. Networking ocial company that you could argue king of all of them being added to an index. What does that signify is it of age uggesting coming for social networking and stocks. Facebook, twitter and linkedin now have three large cap social networking stocks. Huge k this is a advanceme advancement. Adam, what do you see in terms of stock price . Growth ou look at sales you understand. Ad re showing you Internet Sales back several months and facebook is in yellow. Coming up even as linkedin has google has been sideways, facebook is the winner. And we are talking about north of 60 . That is incredible growth. Why it is having the his. Corey, i guess the big it continue . Can it has done lots to increase its revenue. That is really seen as the future. Companies if hese you are going to lump them into the social Media Group Facebook company that is kicking off Free Cash Flow and making reaccelerate d revenue growth. Market seems to love everything. Cry a slight tear teradyne. But it shows you the way our focus on what technology from technology that goes in technology to technology that people use. Point. Good tom, it also makes you a little to your ed in that point it shows how the social networking space is becoming and we know once anything becomes more mature and top he business line is tougher. O, are we reaching potentially a top on some of these social media technique companies . Look at nk that if you twitter they have the advantage of being able to grow user base monetization. So they are at an earlier stage. About you for facebook i think be about int it will video advertising on facebook appealing sually advertising via instagram. Hey have done a wonderful job of building the mobile advertisi advertising platform. The future of ly video advertising . Is it going to pop up on the to watch you have whether you like it or not . Or give you the ability it after watching the first 15 seconds or so. Is i think video advertising where we are heading if were oing to get some of the tv advertising dollars it shift to the internet space. Stocks, 52week cart. When you look at faculty it story. Uch a you have the i. P. O. Back there at 38 and it went down and it get back to that we are above this up trend so we toward that alltime high. That chart looks pretty good. Come has been quite a back story. Everyone likes that. There. Leave it up next obama care is getting star treatment. How the white house is using hoeuldz in the latest for the latestod acceptance. Ron burgundy is so big that he is everywhere. The f. C. C. Has just voted on inflat phone w calls. This is a nightmare. Put up with o people yap being next to me . Ing next to this is just a first step. This is a preliminary vote. To public it up comment. You can bet they will get an earful. 32 vote. Some commissioners said they were holding their nose at this. To see the ant person next to them making calls. The uestion is, is this f. C. C. s role. What would the airlines role be once they have decided that this is ultimately safe. He technology is there for people to make phone calls. Would airlines then make the ban you have the department of transportation taking a look at behaviorals making a rule. Congress is also considering legislation to ban passengers making phone calls. The calls we are talking about would go through specialized on equipment, not through cell phone towers. T would only be above 10,000 feet and it would be an airline call if it went through and if we didnt see anything from d. O. T. Or congress. This is one of the first moves f. C. C. Chairman who says this is getting serious unnecessaryg rid of regulations. This regulation dates back to no1990s. He said this is about getting regulation. That is his bottom line. Obama care advocates are kicking off new enrollment with people like adam president. A rapping im in the Oval Office Call barack. Ident my critics get an attitude i tell them to stop, i tell them to stop. You need that new health care, sign up because it is hot. Hot. Up because it is command er in chief said im strong and i have the healthcare that has it going on. On this bli ails blitz. The white house is getting the word. S to spreads are they confident in the site or do they need people to come and help endorse it in a big way to get the word out . Get was just starting to drop it like its hot from day. G it in there all what the white house is feeling website, about is enough to start driving traffic there. Whether they are still concerned balancing the risk pool. E know 365,000 people enrolled in the federal and state exchanges through november but he white house is not telling us the percentage of the socalled young invincibles. What keeps youem up at night it is making sure pool is going to be balanced out with Young Healthy the premiumso keep down. That is what the success of the law rests on. Who will be participating . Whole point is to try to create some buzz to reach out to. Oung people so adam levine, peoples sexiest alive and you have tatyana penn, the obama impersonator rapper. What they will do is a lot of social media, web individual yes, sir. In january an eighthour live stream event. Peop all about educating people, not that one tweet will result in millions of people signing up for obama care but it is the beginning of a conversation. Thank you so much. Watch for those. The president relying on no one knows how to do that better than ron our favorite anchorman. Campaign whether the is working. Let me get this straight. Nine yearst came out ago and earned 95 million is a sequel that may be the hit of the holiday season. That is the dumbest thing i have ever heard. Obvious out ofhe way. Anchorman was a cult classic tv and netflix. I dont know if anchor machine two is any good but it juggernaut. Ng in the year and a half since it was announced there is a music exhibit, book, tv commercials. A mobile game, tv cameos. A college. Enamed to another aking it level. This is ron burgundy espn or espin. Is because they are no strangers to digital media. Website makes more than 30 million a year. Burgundy comes along once in a decade and will genetically wired to play him. Ith that combination you can put burgundy in the real world and we love t. We love he is dodge durangos and there is an ice cream flavor. I guess anchorman two could tank but it probably wont. Can see thisat you marketing push attached to lots of other movies but a strategy work unless you have the s and i im kind of a big deal. He is kind of a big dale. A big deal. I want to go. Almost 25 but our closer has a couple of is ts to show why the rally not over. We have a couple of charts to show you as to why this rally could keep going. Earnings yield you say this is keep ce the market can going. You notice by looking at the which is another measure of valuation the equity markets over ust for inflation time we are still not at levels that most people would consider expensive. At it, earnings yield is basically just the p e so weflipped up side down are talking about earnings divided by price and higher it it is. E cheaper right now somewhere around 5 to 5. 5 is the yield if you byou b stocks. But this is a real earnings yield. For every period in history not take that but subextract inflation. Stocks today not as cheap as a couple of years ago. Ut this would suggest that potentially there is room to run. By the way the average you 2. 4 and we are at 5 . That is is serious room to run. Is taking a step past that and what happens after you hit average valuation. Hear so many say equity valuations are getting closer to average. That mean we are done. You have chart number two. Talk the viewers through there because it requires a little bit of explanation. We have essentially looked to the markets back 1960s and said what was the return in the s p 500 prior to aluation hitting average than is the red portion. From the dip that we have the past since 2009 that us back it average. Then the blue is what comes next . That is what comes after markets have hit average valuation but continue higher it is sold off. As you look at the chart, how much ur sense for longer we can go . I think when you look at the chart a few things should be clear. One, the majority of the rally is probably behind us. Clear. Ould be pretty two, it doesnt necessarily mean it is over. Suggests that even once we hit average valuation markets going higher. Ep you define average as what multiple . 2. 4 you saw in the previous chart. Even if i look at a p e ratio about 16 times we are not there yet. We are getting close. Forward, about 1. 16 next generous . E we are starting to get close. 14. 5 times. That is the point of the second chart. Average it get to doesnt mean the market is over. Great, joe. Thanks for being here. We have stocks you need to know next. Colorado legalized pot. Now uruguay. Who is next . New york could be the place. If you missed anything we you up now on the only stocks you need to know. 3 as shares fell almost it was downgraded. And worries over i. T. Spending and growing competiti competition. Aetna Health Shares sliding nearly 4 as earnings and disappoint. Ance he company says it expects adjusted earnings to be 98 cents of 725 on revenues million to 755 million. Cienna dropping fter a drop and missing analysts of 24 cents and saying it will transfer from the nasdaq trading on the nyse on december 23. Sun edison ven, lowering sales forecast. Says it plans to sell notes to restructure debt. Southwest airlines up 4 . Bank of america upgrading it to buy from neutral with a price 23. T of American Airlines down nearly planes. Ng deals for new t will buy 90 new jets from bombardier. American is replacing smaller aircraft that are kreld for retirement. Those are not the airplanes we are talking about. Those are the big airplanes. The smaller ones, this is a big deal. Said that he down tely would not shut American Eagle the smaller regional carrier and they are ow buying the new planes says he is true to his word. They want to expand those hubs. Nine new hubs. They will be bigger planes. Slightly bigger but these airplanes. L they will be too small for me. You are a big guy. Im a regular american. 64 . E you im 63. Bottom line, they build the abnormally small people in aircrafts. I dont know why. Torture. Ost like julie hyman fits well in an airplane. Home dont realize i may be 51. So tall. Em good things come in small packages. Liberty Global Trading flat controlled by john malone talks to acquire a dump broad band provider. Earlier liberty was rejected. Facebook rising more than 4 . In the replace teradyne s p 500 as of the close of trading december 20. A vote of confidence to facebook which met s ps requirements after achieving one of profitability. Cisco falling nearly 2 . Reiterated today that a slowdown in emerging markets was a phaeupbmajor reason it issed First Quarter revenue expectation. Hilton climbing nearly 9 as returns to the market in its largest in the Largest Hotel ever. Billion and is offering shares at 20 each. Trading, e close of s p here we are at the close of trading. This is the weakest level we have seen since december 7. The second day of triple digit losses on the dow. We had a pretty steep decline yesterday. A third day of losses for the market. We will get in contact with julie hyman. There has been economic news. There is not a lot of bad news in general but there seems to be some concern that perhaps the good stuff will result in a taper. Yields have gone up today in the treasury market and that is something that investors have been watching. You have retail sales coming in better than estimated. You have jobless claims coming in worse than estimated. Which might the a seasonal issue. Historically, they are a little funky. They are trying to gauge what is going on in the job market. Economy more broadly. The data has been getting stronger enough that people are selling treasuries. We have seen some end of the year rotations. Staple seeing consumer stocks pull back, Health Care Stocks pull back. When you are rotating out of something you can take your pick. Everything has done well nearly an terms of the groups in the s p. You see that as people try to take profit on things that have done really well. The s p 500 is up 24 and a half percent last year. You can understand. Maybe you just log those profits. You can understand why people are putting something in the pocket. You think . Thank you, goodbye. Here are the stories that we are looking at. We are joined by jeff hazel. Jpmorgan may pay about 2 billion to resolve claims that it ignored ignored the schemes. The u. S. Attorney has been investigating how jpmorgan handle the funds controlled by made off whose multibillion dollar fraud was the biggest ponzi scheme in the nations history they accepted a deferred prosecution agreement. The firm recently agreed to a record 13 billion settlement to end investigations into the mortgage bonds. Jpmorgan has cited eight separate investigations. Asideave had to set north of 20 billion dollars. Jpmorgan, which was the fair haired child, everybody thought that jamie dimon was just terrific. Do you feel like it is a bit of a target right now or is that the understatement of the year . It is one thing after another, every day, seemingly enough. 20 billion set aside. I know that they are not responsible for that. What you are seeing with the company is that they are tearing the bandaid off fast. They are trying to get into the new year with something better. That is what they are doing in the c suite. As a former c suite guy yourself, the chief marketer at a 500 company, is that the best thing to do . Yes, i would try to do it as quickly as possible. A lot of companies are setting aside money, even wells fargo. They set aside money for these kinds of things. Every good company out there does it. One ofbond market, he is the worlds most respected and influential central bankers and it looks like he is headed to the fed. The former bank of israel governor Stanley Fischer is the leading candidate to become the vice chairman at the Federal Reserve. He would replace janet yellen as the fed 2 official. He has already accepted the position. As was made jointly by the president and yellen who is awaiting Senate Confirmation to replace ben bernanke as the fed chairman. It is hard to overstate how much this guy is respected. It is like the most institution for a countrys economic stability is a central bank. He ran one country and now he will run another. The bank of england. You would not go grab a general from one or or one army over to another. It almost seems unamerican. He is a dual citizen. I think that is ridiculous. , youu are a true economist are somewhat of an academic, you are concerned about economic policy. That is the most Sensitive Data that this country sits on including the nsa and the cia. He is almost an american citizen. Why do they have access to this . What are you talking about . They can change monetary policy. Is a smart guy, he is respected by everyone. He was actually a professor at m. I. T. And he taught the central bank president. And ben bernanke . Are we going to see a last chance parent fed with him at the helm . Make sense to not forecast two years out. Adoptedy case, the fed a Forward Guidance policy that seems to have been succeeding but the important thing for a central bank to do. These are mr. Fishers own words. Ficshers ownr. Words. A lot can happen in a couple of years. The lemon fell the most in six months after forecasting quarterly profits that trailed analyst estimates. Lemon fell the most in six months after forecasting quarterly. The ceo and founder stepped down owing a gaffe that he told womense show, some bodies do not work for them. He implied that the fallout over. Hat interview impacted sales lets face it, we have had a lot of pr issues this year. That was just one of them. There was a problem with the transparent pants. There was a problem with product issues. He mentioned the economy more broadly. It is like these guys have their pick of things. There are pr problems, it is really growing pains for this company. They got to a level in which they need to bring in people that know what they are doing. They are having production issues. The pr problems are a distraction and takes the pressure off of them in terms of of getting the right type product, getting the inventories to the stores on time. Finally like theyre tapped a professional to make this this happen for them. Is transparency a good thing or bad thing . Are we talking about pants . It depends on if you are doing downward dog and who is looking. One of the wings that could ceo is thatfor the expectations are now set pretty low for him to come in and be the white knight and improve things. Think about the company that he had been running, toms shoes. You buy a pair of shoes, you give away a pair of shoes. Would you give away a pair of transparent yoga pants . This is a very responsible person that looks at the way that businesses are perceived by customers. That is a brilliant move on the lulu lemon. General motors has completed its stake in allied financial for 900 million. They said that the sale of their former financing arm will result in a gain of about half a billion in the fourth quarter. Allied is seeking to regain independence after getting the u. S. Bailout that was designed to keep the industry afloat. Gm sold its stake in the european automaker più zhou. They will stop producing chevrolets in europe. Gm sold its stake in european peugeot. This is like a crash diet. As they expand to sell their cars around the world, they hire another 5000 workers in the u. S. , General Motors is ramping up. It seemed like the peugeot partnership did not work. They are getting back to their core business. We go out, we come back, we got on, we come back. Theyre getting back to america. We are going to get it right. Once they get it right, guess what, we will go to china, we will go back out. Theyre getting back to the core. A former u. S. Senator is stepping down from his ceo role the biggest lobbying group. Why . I spoke to him and he said quote i was spending to much time out. New hampshire president Kenneth Benson will take over as ceo effective immediately. His point about prosperity comes from peoples willingness to take risk. That is what this economy has been founded on. He is only there for seven months and then leaving. Does he sign up for stuff and back out very often . It is a bad sign when you see that. You dont see someone get into a job like that at that level and then back out. You to do you think you are going to be traveling quite a bit New Hampshire . I take him at his word here. We have some breaking news. Another large appleshare holder has come out against carl icahns my back plan. Backup plan. She is the head of Corporate Governance at calpers, roughly 270 billion in assets under management and a major apple shareholder. When i asked her about carl icahns plans him and he is pushing for some major buybacks. Heres what she said, we arent comfortable with a raider she did say, when it comes to where capital is positioned as this whole thing plays out, we reserve judgment until apple decides what their own resolv responses. Aresaid we like what they doing. They have a program for returning money to shareholders. O icon is late to the party im not sure what his proposal adds. Icahn is late to the party. He isf the reason that making his push is that there is so much money coming in. Thank you very much, jon erlichman. We will of new york, look at legislation to legalize pot next. This week, uruguay became the first country to legalize the growth, sale, and distribution of marijuana. A risinglizing pot is trend with washington and colorado taking steps this year. Piece ofa new new yorkon in the state senate. You may despair but the day that uruguay pass this legislation. That you made this public the day that uruguay passed this legislation. I had no idea that they were doing this. I had been watching this for year. I had been watching carefully what is happening in colorado and washington. Other states have moved forward with variations of marijuana. Nudist is and by the obama white house. The fact is that the public does not understand why we are spending billions and billions of dollars in police and court costs. The question is, do you have enough support from lawmakers to say that we are going to go out on a limb here . Is this for Recreational Purposes or is this for medicinal person this is for medicinal purposes . Whats it is tax and regulate. People can use it for recreation or medical but it would not go through the process of defining it as a medicine. I think the easiest answer and the right answer is to just go with tax and regulate. Under my bill, we would treat tobacco, alcohol, and marijuana and pretty much the same way. There would be rules about who could get it, how much, who could sell it, not let children by it, put limits on how much you are allowed to have. Nly allow it for private use there are so many successful models in alcohol and tobacco which are actually more dangerous than marijuana. Not to oversimplify it but ultimately what does this mean in potential taxes for new york state . Whats the projections are if we were to follow my law and tax and regulate, we would get the entire criminal issue out of marijuana meaning we would not have the problem with the drug cartels trying to sneak marijuana in and create havoc. We would create a Legal Industry estimated to have a value of 3 billion in new york state. That means new jobs, new opportunities. And an eight and a quarter state tax, that gives you 250 Million Dollars in revenue. We are proposing 50 per ounce. It would be double that for taxes. We are out of time. Hank you thank you. Meet the man who put Jerry Seinfeld in the driver seat for his new campaign. Is not likenfeld most car commercials. For the most part, car advertising is a total turnoff to the consumer in my opinion and i think it needs a complete reboot. Stop showing us the cars driving through the desert, we are not doing that. Acura put him in the drivers seat. He produced an ad for the brand. Result of as a bond that he formed with the marketing chief who joins us now here in the studio. Thank you for joining us. Seinfelds about jerry s involvement. Nsx, istting the first jay leno getting it . It is a great source of debate. A started our relationship couple of years ago. We really hit it off. I like how he was involved in the development of that commercial, his insides were terrific and spot on. Since that time, we have maintained the relationship. When we heard about the comedians in cars getting popular, we thought this was fantastic. Even though sometimes there are other cars. I appreciate those older cars that he drives around in. Thunderbird is not a threat to me selling a honda accord tomorrow or an acura. , we thoughtandpoint that this is a great opportunity to reach other car enthusiasts that are interested in learning about cars and a great way for us to sell our story. Itwhen i was growing up, shocked the public. No one could believe the performance and the price coming in the same package. Lost the reins to infinity and others over the years. Do you plan to get that back with the nsx a casino oneen improving our lineup. You do very well at the midsized suv. We have set a sales record every month since we introduced it. We have the formula down, we are making great progress. Now, we will turn our attention to the sedan line. Honda in general, i have always had this problem with people saying that chrysler is an american automaker, honda is a japanese automaker. I grew up in ohio where the honda plant was right up the highway. We had so many employees in ohio and you still do. We have 26,000 employees in north america. We have 14 manufacturing facilities. We are a strong contributor to the communities as far as job goes and investment. We consider ourselves every bit an american company. We are of time. I did not get to talk to you about the fit but i appreciate you stopping by. , anhat do a folk singer alcoholic, and a greedy stockbroker have in common . We will tell you. This is the greatest company in the world. Am becoming a legend. Arent you married . Yes, but cant marry people have friends . Time for the scene where we bring you the business behind film, music, and culture. Plush redhas recliners. You have to check this out. For almost as long as movie theaters have been around, they have been threatened. First it was the tv, then the vcr, then the internet. But guess what, they fight back with things like imacs and 3d audio. Is renovating its theaters and they are ripping out the older smaller seeds, reducing capacity by 54 . In the theaters they have rented renovated, attendance is up. It has to do with these bad boys write here. You have yourself a power recline. My drink, your armrest here. Cozy. Nice. So, why are they doing all of this . Well, to make more money and it is working. If you go back to 1995, the movie industry had total revenue of 5. 3 billion. Better seatsby and fancy snack bars, those numbers have doubled. There is an irony to what they are doing. In order to compete with your home set up, maybe now you have a 60 inch led tv and 8. 1 surround sound. The door to get you out of your house, they have made theaters more like your home. He always has fun. They are not the only way that they are appealing to fans. Well, there are people who are members of its loyalty club which is called stubbs. There are actually two and a half million of these folks. They are saying, you can participate in our ipo. They are offering a chance for the people to buy 10020 500 worth of the shares which will be priced at 1820 dollars a piece. Awill be doing it through website. Be allotted will towards these folks. They pay 12 a year to get certain perks when they go to the theaters. They tend to spend more than other people who come into the theaters on things like popcorn and other snacks and drinks. The theaters really make their money on not so much the ticket sales but on the other stuff that they sell. What are the nuts and bolts . 1820 dollars a share which is over 350 milliondollar ipl. Ipo. It is one of the biggest chains in the country. You have cinemark, you have a regal. The average ticket rice is higher than that of competitors and the average revenue per screen is higher than that of competitors. What it is doing seems to be paying off. Will they do with the money they raise . , ithey will use the money will use it for things like a bigger seats for those coca cola freestyle machines were you push a button that you want them to use. It is what flavor you want on the screen. You can get a drink at an amc theater . Now you have my attention. Drink if youre. Ing to see anchorman out of to get people their homes and into the theaters. If you are in the seats or investing in amc, you will probably want to see something good. The nominations for the Golden Globes are out honoring the best in television and film. The annual event has become a way for hollywood to get early buzz ahead of new releases and for more year joined by our senior west coast correspondent jon erlichman. Fuldas closure, i do go occasionally to one of those licensed amcs. , i dol disclosure occasionally go to one of those. I know the you have some opinions on gravity. This business of awards and nominations, it is a big deal in hollywood. What is interesting about these nominations today is that a lot of them are tied to movies that are not even in the theaters yet. It becomes this Real Marketing machine. We have like the wolf of wall mr. T, american hustle, banks. They did ok in these nominations. Youre able to look into newspapers, the fact they are getting golden globe nominations and getting a next or marketing push before their first week in the theater. Some smaller films has been in theaters dont have the same marketing muscle. Of course, there are Golden Globes for both family and television. Have spoken so much about netflix doing original shows and they have had some success at the emmys. Now today, they get six nominations for Golden Globes. The show that everybody likes to talk about is house of cards. Isaking of marketing, here this opportunity for netflix, which will unveil the Second Season february 14. , the actualre that Golden Globes ceremony. If they have a good day, they can continue to ride that into a house of cards Second Season. Thank you so much. We will be watching for all of those. Jon erlichman. One day to meet you might be buy your movie tickets with bitcoin. Maybe matt miller will be able to tell us. The 12 days of bitcoin coming up next. A renewed commitment to design has helped the big three compete. Five cars whose design overhauls are contributing to detroits bottom line. Today is day four. Bought a bitcoin and figured out how to spend it. Venturecapital guys are getting involved heavily in bitcoin. Aday, Mark Andreessen made 25 Million Investment in coin base which is not officially on the exchange. They are on a new fundraising round as well. The real exchanges are what you think of. This is the biggest now. People said, i thought that china shut bitcoin account. No. Still, they arent doing it. Into more local exchanges. What they do in regions, especially here because theres not a a Major Exchange in the u. S. , they do these meet up groups all over the place. Is aounder of bitcoin pseudonym. It might be an actual person. Oneay, tonight im going to at webster hall and i will meet a bunch of people who are literally exchanging bitcoins on their phones for actual cash or other goods and services. That is where it gets interesting. What is the Community Like . The community i have been hanging out with his fantastic. Very helpful, not rude, incredibly intelligent. Many people now are asking me, how do i get bitcoin or what should i do . The first thing you should do is research it. Obviously, one bitcoin is almost a thousand dollars. You can buy smaller chunks. A few cents. Buy it is the kind of thing you should know what youre getting into. Then you have read about it, read it is a good place to go. You have somebodys places to educate yourself and after that, or you can get into it like i did. No education. Feel like there is enough liquidity that you wanted to get out of the bitcoin market altogether, right now im a you could, or would it be as difficult to sell as it was for you to buy . Well, especially now. I have read so much about it, i have had so much help for people involved in the community. I could getket, out faster if i lowered the price for the asset im willing to lose. There is a much bigger spread in bitcoin than you are used to seeing. How much . When i was looking at the website, some bitcoins were on some were on sale for 1100. It is the kind we you decide how much youre willing to pay for and how much youre willing willing to sell. You are your own marketmaker. A very interesting story that was written today which said that 927 people controlled half of the bitcoins. There are about 12 million bitcoins out there and at least 920rding to an insider, seven people control half of them. If you can count to that detail, the anonymity argument is gone. There is no anonymity argument. You are able to follow every transaction to the very first transaction. Well, that is disappointing. It would be like cash on the internet. It is all really interesting and we are looking forward to the next installment. I will be talking about security tomorrow. Excellent. Other than the smart watch, your finger is the latest target of wall street tech. Wall time for weird street where bizarre is business as usual. Wearable tech. You can stay connected in style. I feel like i am one of those latenight marshals. It is made of stainless steel. It interacts with your apple, your android phone. You get instant alerts. Early adopters will get their order in april of next year. That looks like that will be foury hip trend for about point six milliseconds. It reminds me of the mood rings on the 70s. Kind of weird thing you put on your finger and youre not sure why. High meetsfor you, high fashion. The angels working their magic. They are flashing a little skin. Here is the exciting part. Is gathering a lot of buzz because look at that thing. It featured a 3d printed snow let snowflake set of wings. In its ownible right but the fact that it was made on a 3d printer is what people are buzzing about. The possibilities are endless. What do you think . , you haveellbound very little to say. I know, theres a lot to talk about. It was founded in columbus, ohio. Your home. I actually used it to go to the victorias secret show every year but i stopped. . Have you grown up . I felt like they were getting painfully skinny. I thought that you were covering it. Yes, i did. I could not stomach it anymore but it looks like they put on some welldeserved weight. That is something else. If you ever wanted to learn the art of being santa, well, head to the north of michigan. Every year, more an 100 ms. Crinkles and santa clauses come to learn the tricks of the trade. They come to get lessons on makeup, wardrobe, and even reindeer care. So, there really is a school to teach you how to be a santa . I think we should send you there. My belly jiggles when i laugh, like a bowl full of jelly. I was feeling a little out of shape. Have a good night, see you tomorrow. Is approaching 56 past the hour. That means that bloomberg market Bloomberg Television is on the markets. We closed at the lows of the session. Ook to washington weighing whether the Federal Reserve and when they will be pulling back on quantitative easing. Many traders are bracing themselves for an increase in volatility that could come when the fed starts to taper. The central bank is meeting next week, investors are anxious for the timing. Than 5stor bought more billion worth of call options. This is if the vix jumps 50 . A big increase in volatility. Join us for our weekly report is dan deming. We are joined from the cboe out in chicago. Trade that we saw, how unusual is that to see a trade of that size on one particular bed . It is not an everyday occurrence. We have seen it in the past, even last night we saw it. Basically, youre looking at , hedgetfolio manager funds, whatever it might be. A were looking at some protection in going into the First Quarter. Need aely they will small percentage of the portfolio to some kind of retentive call buying in the vix with the possibility of heading up some risks. My feeling is that they dont want that that to pay off. We need some protection in case the market unwinds. Have we seen a lot of bets in that direction, that the volatility will go up as this hedging milk and is him as this hedging mechanism . We have seen the pickup in the movements. This is better than one percent last friday and one percent as well. You have seen the pickup along with those moves. The options going towards expiration next week. The activity we have seen in the last couple of weeks and months, andave seen some buying the selling of the high calls. January,een in february. We saw the call buyers in february and april today. To take us and decipher what you are saying, do you think a lot of this is protection or are there some out right bets that volatility will go up significantly . A combination of both. ,hen you see a trade like that that is a binary type of trade where it is like earthquake protection. As far as the activity that we at theing, were seeing money calls. That tells me there might be some offensive positioning moving into next year. We have a lot items between now and the end of the year. We have seen the fix moving up with the announcement coming out next wednesday. Thank you so much. We will see if some of these bets will be paying off. For that. Big pivot thank you so much. This is taking stock for december 12, 2013, i am pimm fox. Vote on the set to latest budget deal in washington. How will this move the country and its local culture forward. G speaks aboutnin leading the first family of football. Talksunder of apptopia about how he takes apps from the graveyard and brings them back to life