3. 75 . I say that with an air of surprise. Just because the discounts are so extreme. 75 at bloomingdales, the same at saks. You have to wonder whether their earnings will be there in january. Finally, on the 10 year, we are bumping up on three percent. This whole paper thing taper thing, it is real. If it drives Interest Rates up, we will see what happens. Julie hyman is keeping an eye on stocks. I want to look at ebay. Comscore coming up with the latest numbers. ,hey say ebay sales are up 9. 6 but that is actually deceleration. The 15th. Up through maybe you saw a bit of a slowdown. Amazon saw the same thing but not exactly the same. Twitter is up a sixth straight day, at a record since its ipo. What is driving it . Not necessarily fundamentals. We will talk about that later in the show. Certainly, no fundamental news driving them higher today. Tesla motors has been on a hot streak lately. Dailytoday after china reported that they would be expanding into firsttier chinese cities. There is already a dealership there that has been doing well. Luxury auto sales have generally been strong in china, so i hope running on those new dealerships. Now onto our big story. An avalanche of online orders overwhelmed ubs the season and the company failed to deliver some packages in time for christmas. Ups says all the packages should be delivered today. Ok. Not on christmas, though. Is attempting to make amends to customers, offering a 20 gift card and refunds on shipping charges. 2013 may be seen as the year that americans fully embraced e commerce. Its fleet ofh 100,000 vehicles come a was not ready for it. How can Delivery Companies keep up in this amazon economy . Several guests here for our roundtable. Julie hyman, lets begin with you. Lets walk through exactly what happened. I had ordered some toys on amazon, a little lastminute, i , but anyway, we ordered some toys online. They were not there on christmas eve, like they had been promised. My initial frustration was with amazon. I wonder also how damaging it is to other brands relying on ups. Amazon is pushing this off saying that they fulfilled their orders, and the fault is with ups. What is interesting is how much ups anticipated the holiday. They hired 55,000 extra people to help them over the Holiday Season. Up theirly beefed staffing, facilities, logistics. To analysts,lk this preparation is a collaboration process between ups and fedex. They plan together, ahead of time. Blame ispartially to higher than estimated demand. Amazon did say that one million signed up for prime in the first week of december. There were also some issues with the weather, although you should argue that they could have anticipated that as well. You cover logistics, you know the ins and outs. Where do you think ups really went wrong at the end of the day . The crux is they were not able to protect the weather. There was a shortened shopping season this year by about five days because of where thanksgiving fell. Demand just over exceeded their capacity. Shortterm, not a great aim for ups in terms of the pr story, but longterm, it is a great aim. Ecommerce is picking up faster than people think. Ups and fedex are huge beneficiaries of this. Is that really the message here . We are not buying at brickand mortar stores, we assume that we can do everything online. I think what we saw this Holiday Season was traffic down at Retail Stores 20 into the holidays. And then what we saw here was this ecommerce story. It is bigger than people think. The department of commerce has always said ecommerce is six percent of retail sales. That has always been a low number. It is much higher than that. Retail sales on ecommerce in the week leading up to christmas was 14 of sales. The problem is, consumers are left with less trust in the system the closer you get to the holiday. So i come away with a more on that if i better make sure i buy it in person or order early. That it isargue making us procrastinators and perhaps these hiccups will make us order earlier. That is my take away. You have to order early or you have to shop in the store. I wonder what it will mean for sales next year. If you look at amazon, every quarter, and jeff bezos is spending millions on additional gesture grecian centers, put geomet centers, bringing them closer to the big markets around the world, knowing that the volume is surging. If you speak to amazon, they fulfilled their obligations. Ecommerce, these companies are making huge investments because they know this will become a bigger part of the economy. Will you think ecommerce morph into brickandmortar commerce . You have to have the pope geomet centers closer to people. It sounds that way. You look at the amount of money these companies are investing into their full film and centers, if you think about it, sameday delivery is coming to a lot of product categories. What do you have to do for same day delivery . You need inventory on the ground in local markets. I was really hoping for a drone. Amazon is pushing off the blame to ups, but to your point, which is what a former guest said, amazon could have done better to manage those expectations. Would it have been so bad to say, you cannot get it by Christmas Day. I wonder if next year you will see a shift in customer patterns. That said, you know that amazon and ups will move heaven and earth to prevent this from happening again. Amazon, ups and fedex are pretty much the only game in town. So again i come back to that collaborative relationship. They have to work something out themselves. We are looking at fedex stock come up one percent. Do they come out the winner here . Think if we did not have the Severe Weather that we had earlier in the month, we would not be talking about fedex or ups. We would probably be talking about wrapping up the year. I think the weather played an important role. It did create some bottlenecks, which when they were opened up, flooded their system. Are we supposed to be prepared for that . We will be running a piece later today. Arent you supposed to be able to manage this . You are hedging it out. As you know, when you listen to the weather for report before you go to work, it is difficult to predict the weather. You could hedge it, but there are no Better Networks than fedex and ups, coupled with the service they offer with the usps, every home is touched. You can get strawberries from Central America shipped to california, covered in chocolate, and then deliver to maryland. We have an incredible robust supply chain. We do, but it just broke down. Question to you, as the transportation and logistics analyst, as you look at the systems, what do these Companies Need to do to do better . How many packages were really impacted . We do not know what that number is. It could have been 10, it could have been 1000. After one hundred 50 million packages, 1000 is not a disaster. Of 150 million packages, 1000 is not a disaster. Amy they need to look at some thirdparty carriers, if they were the issue. We really do not know yet. I am sure they are doing their postmortem now and they will be telling customers and investors what happened and what they will do next year to make sure this does not happen again. This is not the first time this has happened with packages not coming on time. It happened a couple of years ago with ups. It was weather related. You have to have a plan b. Rest assured, the kids still got there gets. Daddy was in charge of that lastminute shopping. Thought those things ahead of time. Coming up, from zero to hero. Why last years worst stocks were this years best performers, and how you can repeat that this year. As we look ahead to 2014, we got some advice from dr. Doom himself, nouriel roubini. He is talking about where he would put 1000 right now. He is a bit more optimistic than you think. Shall be first, at least pretty close. Time for a bit of insight and action. Let me show you something. 2012hree worst stocks of made it into the top 15 in 2013. Best buy was dead last in 2012, down 49 . What happened . A new ceo, and it is up 239 . Hewlettpackard, the same thing. Pitney bowes, third worst. Number seven this year. Maybegot me thinking, they are not first but they are in the top 15. So who was last this past year . Look at what we found. There are the three worst performing stocks in the s p 500. Newmont mining, cliffs natural resources, peabody energy. What do they all have in common . They. Out of the ground. Pull stuff out of the ground. Serious that this is happening as the imf says it will be upping their global forecast. Down, maybeave been just in time to catch the upswing. Newmont,er of fact fine. Gold is miserable. Gold has lost money for the first time in 12 years. Just focusing on cliffs and peabody. Talk about a cycle stock. If you catch these cycles correctly, you set yourself up to potentially make some real money. Finally, over here, peabody. Same story. All we are talking about is getting the cycle right. I think i would rather be long on this stock, rather than short, especially as the imf says growth may increase next year. Losers the three biggest to the three biggest winners. We focus on netflix, micron, and best buy. The head of north American Research for bloomberg industries. He has been top ranked by institutional investors. Always a pleasure to have you here, paula sweeney. Netflix, best buy, two of the top three. They are up more than 240 . Terrific performance. Theyuestion is, have tapped out, can they see this continued upside into next year . Netflix books story is an incredible story. Consistentlys been in momentum stock driven by subscribers. If you think about netflix, are they continue to add subscribers oblique . Bulls think they are, the will tell you that is the driver of the stock. 30 million subscribers in the u. S. , 10 million outside. The bulls will tell you this is entering into a global story, it is about the growth of online video. That is what will be needed to drive subscribers. Carl icahn was a big supporter. I also spoke to his sons partner. It was interesting because carl decided they needed to get out. I do not know if that sentiment was echoed across the board. Brett love david and the company and spoke a lot about the potential would subside subscriber growth, and that was the key. Karl says that when anything is better than 300 , you take the money and run and you do not want to push your luck. I wonder if investors are looking at the Stock Performance so well and they say, maybe i need to look at the bottom of the barrel, such as you pointed out. One of the bullish case for the netflix story is the Global Growth of broadband connections. If you think about how you will get online video outside of the u. S. Where you do not have a robust cable or telco plan, it is wireless broadband. If you look at the longterm projections over the last next five years, wireless deployment in europe and asia, some very bullish forecast. If you think that will come to fruition, that would drive consumption of online videos. Which companies are doing the best . Theme,agree with that the buildout of broadband, who is doing it best . In europe, Liberty Global is one of the larger companies. If you think about the european cable companies, they are deploying broadband fiber points to drive wireless consumption on your devices. Wise, i was speaking to someone in hong kong, and they said they could not get it looks there. Are their contact content agreements . Tough, that could be a issue for the netflix of the world as they negotiate contracts. Is a key theme. Glad you are here, paul. How should you invest in 2014 . It turns out dr. Doom is not as negative as you might think. We will talk about where this legendary bear is putting his money now. And the little blue bird that keeps on flying higher. Twitters unbelievable surge. Theouriel roubini is economist known as dr. Doom, and he was given that name because he correctly predicted the collapse of stocks and real estate in 2008, at a time when those markets were at alltime highs. Stocks and real estate are surging once again, so what is his prediction for 2014 . The outlook may surprise you. Every day you have to wake up and make sense of this consecrated world. I preferred to be called dr. Realist. I am neither a pessimist or an optimist. In 2007, i predicted the Global Financial meltdown occurring. Because of that, i got the name. Are too optimistic took on risky assets. If they had followed my advice, to be underweight in u. S. And global equity, we could have reported that correction between novemberf 2007 and 2009. March 2009. Right now there is a Global Economic recovery, so you need to be a realist about what can go right and what can go wrong. You do not want to listen only to people that agree with you. It is more important to see why people disagree with you. I make a special effort to listen to those who think they are better because that pushes me to ink harder about whether my views are correct. First of all, you have to be diversified. You need some of your money in the u. S. , abroad, in emerging markets. Interest rates will rise, so you want to be on the upward bound. The Global Recovery will occur, so you want to be marginally overweight in equities, a bubbly global equities. The most exciting ipo of the year is getting more exciting, twitter surging and since then look at how the stock has performed. In december alone, shares have climbed to 70 , a market cap of 40 billion. Just to show you how big that is, twitter is worth more than Companies Like target, cbs, and delta airlines. Shares are surging on no news. Not reported its firstquarter earnings yet. What is behind the hidden rally . We want to go to our panel for this. On . E, what is really going i have a theory. I have a area a lot of people in there want to be social networking space. That means facebook and twitter. Facebook is old and twitter is new. Some of it. Robably you are talking about sentiment. We have been talking about twitter improving its mobile ad strategy. So there is a fundamental basis underlying it. But then you have the sentiment you are talking about with status, achieving cult this move that does not have to do with fundamentals. Stockis one interesting sage who weighed in recently on this, he tweeted about it. He said had is a company have stock value of 41 billion . The coming crash, he says, will be horrific. Even analysts who were bullish have price targets below where it is right now. You scratch your head and say our people really going to get burned . Matt drudge seems to think so. This is a classic case of quarter and window dressing. A lot of Portfolio Managers had this in their account from the ipo. They probably need to make sure wey have it so they can say were big investors and twitter, one of the best ipo. What is happening is that people are buying the stock, they are pushing their discounted cash flow models out many years to bring a discount back to today. It is certainly pricing in growth over the next five or six years. It is a steep valuation considering everything. This thing is incredible. Let me show you a few comparable valuations. What were talking about is cash flow. The total stock market capitalization plus all of the bonds and then divide that by the cash flow. Just another way of looking at value. Like price to earnings but there are no earnings. Google, 12 times. Facebook, 20 three times. And now look at twitter. 301 times. Talk about expensive. It is off the charts. Charts,e have done bar these three would have been so low because the scale would be off. I can remember in 2000 my mom would want to buy a particular stock because it was kind of like as cool as having the latest handbag. Cmgi was one of them. I was able to scoop it up. I would say, mom, do the evaluation. You wonder, is this the same thing where you have a lot of inestors saying i need to be this space. I need to own this. This is the hottest thing. They are demanding it. And also Portfolio Manager saying i have to have this because my investors are going to demand it so there is a race to get it. Is partially the case. One of the issues is some scarcity value. If you are able on social media and you recognize one of the sources in growth is on social media, there are not too many ways to play it. It is facebook, twitter, maybe linkedin. It is a limited love stocks. That might be a little bit of the scarcity issue driving the names up. Look at what facebook has been able to do on the mobile advertising front. Twitter trying to follow in those footsteps. You think about video with mobility, and it is a very real possibility that this is the future. This company does deserve this kind of valuation because there is that opportunity. Yes, it is possible. It is just a matter of showing the growth is potential the Growth Potential is going to become reality. You can talk about the targets all the want. Aree fair valuations meaningless to people why to buy the stock. Eventually it is going to meet these growth targets. Arecurrent valuations meaningless to some extent. Who thought that flicks netflix was worth what it was trading at . Into 2014 itoing would have been the best performing stock this year. Adam, i know you have a beautiful stock chart to show us. If youre not afraid of heights. Look at this thing. Early november. It was 40 for a long time. Look what happened. North of 70. In just ay doubled matter of weeks. There are a lot of believers here. A little scary. Thanks, the whole gang. Closerup we will take a look at americas aging credit system. His target really to blame for the data breach . What wente to deliver wrong at ups. We are digging up clues to the delivery rose next on street smart. A two companies are having rough Holiday Season. It is making it tough on you and me. Were talking about target and ups. Very different situations, starting with target, the data breach exposing credit cards used in stores hand has resulted in a classaction lawsuit, 11 customers are claiming target was negligent. They may have a hard time proving it. For more on the legal ramifications we are joined by a libya. So what does target we are joined by olivier . What does target say . Customers are furious because this alleged breach started on november 27 and it was not until december 19 that they started to notify customers. Customers are furious. Understandably so. I did not realize it was that long. People had money siphoned off. I have your name, card number, and the security code. All of the information to make a fraudulent card. You do not have your date of earth or your Social Security number. It is still enough to make credit card fraud. So it is very serious. Think about, if i am a customer, what does that do to my willingness to go back to target . Your plastic once again. You are burned once. You do not want to be burned again. I was speaking to a retail analyst earlier and he said it is going to have tremendous impact on customer loyalty. That is what you see target due to combat that. They started giving out a 10 discount. Im not sure that is going to do the trick. They are offering free credit reports for up to a year. Maybe that will help them they are promising customers it will not be on the line for the charges. U. S. Is where you have more credit card fraud than any other country and that what you need to do is update the technology because the Swipe Technology is the same technology in the 1980s audiocassettes. That changees everything . If you update it, you use henan chip cards, they have tos d chip use pin an cards. I just moved over from the u. K. I blocked it because of what happened to matt moore matt millers bitcoin. How is this chip different than a credit card . Anytime i go to starbucks or go to a restaurant, they asked me to put into my individual pin, so that is more secure. At a store, nobody is checking signatures. Nobody is asking you for id. Half the time. Abroad it is much more secure. The u. S. Needs to operate with 21st century payment methods. Thank you and let me borrow that card. Not going to get that far. Rget underjust tag fire, ups missed critical deliveries on Christmas Day. We went inside a shipping hub to meet the man who is in charge of logistics during the Holiday Season. This is the biggest challenge i have had in my career. Toare looking at trying build the most Efficient Network we can. Lets go. We are going to see mike smith. It will be about 40,000 additional. It is a challenge. You have so many variables. I want to make sure we stay on it. It is controlled chaos every day. Controlled chaos. The weather is a big issue. We have a debriefing every inning about the next one four hours. Our guys are better than the local weather companies. Today our mission is to set the client up to keep the packages delivered when they are supposed to be. We will react to that based on what is going on that day. Last year, the wind shifted. To one runway operation, which was really a tough operation. Based on what is going on, we will be working with the regions to come up with the right movement if we have a problem. Every peak season is a little bit different. If something happens, we will react to it. We have to. We have no choice. Everybody will come together. It may be something not that big but it could be anything. That is basically it. We are good to go. Ok. By the way, that was scott. With ups, forgive me, also known as mr. Peak. There are so many jokes that could be made. That is a tough situation. He was supposed to make it work and obviously he didnt. The weather was an issue. He was looking at the storms coming in. As we heard earlier, it is for sure. But still, no excuse. No excuse. Im sure theyre going to invest a lot to make sure it does not happen again but next year we are going to have more packages on ecommerce than we did this year. Dont wait until the last minute. Ok. I bet some of you went to see well fu wolf on wall street. Coming upall street next. I needed to mold him in my own image. Time for chart attack where we show you a chart that will make you smarter. There was a battle at the box office yesterday. Five movies premiering. Paul sweeney, you are the movie expert. Lets start with the wolf of wall street. Winner. Ke that is the 10 million yesterday on Christmas Day. Expectations are about 35 million through the weekend. It should be number one. That is solid. It is a threehour movie. Not something they can punch five or six shillings in a day. It is going to have a long life. Tovey was, lets find a camera in here and give a lay of the land. Tell you what, lets find a a camera in here and give a lay of the land. The secret life of walter mitty, grudge match, thats kind of weird. The Justin Bieber movie. He has a builtin fan base, including my daughter. Like 20 omething 44 million twitter fans. He is doing something right. I should learn from him. As you look at these others, what jumps out at you . One of the big issues, 47 ronin is a new picture. It looks like universal is talking about taking a right down on that movie. The initial expectations are below what they needed. People are pending key anna keanu are panning reeves. They do not even mention his name in the trailer. I think they are trying to focus on the spectacle of the production. They are trying to take the character out of it. Not thatications are great. We talk about the Christmas Day box office battle, but in all seriousness, is this an important time for the movie theaters in the same way the summer blockbusters are . It really is. It is the big moviegoing time of the year. For hollywood, hollywood in terms of box office in north america, flat coming into the Holiday Season. The Holiday Season is going to make or break hollywood, whether there will be any growth at all. So it is important. We have to figure out our next movie to go see. I ink it is the wolf of wall street. Top 10 stocks you need to know. The close is next and from russia with love, talking about christmaswdens greeting. George orwell warned us about this kind of information. The types of collections in the book, microphones, tvs that watch us, our nothing compared to what we have available today. After this. If you missed everything happened, we will kill you cant up. It is we will get you caught up. Number 10 is ebay. A slowdown in sales. We have researched saying ebays increase from thanksgiving to the third week of december was slower than the 21 increase from thanksgiving to the second week of december. Bolts eigen is up today. The german automaker is poised to sell volkswagen is up today. The german on the maker is going to invest automakers going to expand. Number eight is fedex. Up. Stock is it also reiterated a buy rating on the stock. Fedex also said it had some shipping delays for christmas. Nothing quite as bad as ups. Number seven, tmobile. Two percent on reports it is going to raise funding for its planned purchase for softbank. Print is going to buy a majority for about 20 million next year. The old familiar situation. Speaking of the situation, viacom is up a fraction. The wolf of wall street should top the Holiday Box Office with approximately 10 million in sales followed by the hobbit. Wolf is supposed to raise 30 million over the weekend. 10 million is not a lot. I want to see it. But three hours is a lot of time. Ill am happy to wait for it to video. Or what do you say now . On netflix. When you can watch it on demand. On dvd . 10 million, that barry covers that barely covers leos salary. That was just the first day of christmas. A good family picture. Number five, amazon. Prime hadfter amazon a record setting Holiday Season. According to the Research Firm channel advisor, people are not holding it against amazon they did not did their stuff. Not in my house. Amazon guarantees, guaranteed overnight delivery. Number four. Twitter, up almost five percent, another record high. It is extending its fiveday gain amid optimism the company in grown to expand sales digital advertising. We talked about it earlier. A lot of people are skeptical, however. Tesla gaining three percent on a report it will focus on opening more showrooms in china next year. Hundreds of highend cars have been ordered or preordered in the country since the first to show room opened in september. Number to his blackberry. The stock is down nine percent frome cofounder walks away a possible takeover plan. Ok, here we are the close of trading, the number one stock of the day, ups. Although it is managing the trade flat. Itsshipping company says Distribution Network was overwhelmed in the few days before christmas which led to delays for thousands of packages. Ups is making every effort to get packages to their destination as quickly as possible. We wish them luck. Have you talked to anybody at home . Have your packages arrived . That is a good question. I do not know. I have talked to people at home. Were any of them from santa . Yeah. So the girls are wondering why santa screwed up. Shh. Shh. Im not saying a word. Game, 7 10 of a percent for the dow. The s p also ending the day higher. We have the market up a basically two percent for the month of december so far. It is funny, alex is joining us with more, we have been feeling like the market has been on a tear this month ever since the fed announced its paper tap er. We we are not as much as have been. It is eating her out to the end of the year. How many traders are it is outd earring petering to the end of the year. It is really following japan. Japanese stocks were at their highest level since 2008. Ironically because of more monetary stimulus is japan, continued stimulus. In thefferent than here u. S. Also the last five days of trading tend to be positive. We do not tend to see a lot of selling in the end of the year. It seems to be more of a rotation into the names like twitter. Taking a look at the last chart. Yeah. The santa claus rally is alive and well. These are the stories were tracking ahead of tomorrow. Alex, we are going back to you. There is a positive feeling. Lets keep it going. A fourmonth high for the retailers. All three components of the weekly bloomberg comfort index, whether it is a good time to shop, all improved last week. I should point out it was still down only seven points but it is improving. So it is a trajectory. Another report showed the gauge of whether it is a good time to make purchases advanced to the second highest level since 2007. I found this perplexing. He hear how bad it is for retailers and how much they had to discount to get people in the stores. It is good for shoppers. You feel better about shopping if you know you can get 50 off any store you walk into an america. Not necessarily, they feel better because theyre Getting Better deals, not because they feel better. Because they are earning more money or car closer to getting a job. I am skeptical as well. Youre talking about a number that is down in the negatives 27. 4. The Unemployment Rate, this is all the people who have left the labor force and the people working parttime who want to work fulltime and the actual people who are unemployed, 13. 2 . But that is down from 17 . Just as the Unemployment Rate is down seven percent. But it is still high. Is gettingectory better. It is still not great. A lot of these jobs are part time. Or serviceoriented. Exactly. The quality of the job. What the advancement is. We are also talking to greg he was basically saying that it is really about Home Improvement retailers that have done really well. The sentiment is pretty good there, you dont need the 50 . Everything else, which i thought was interesting. What are the numbers we got . Falling mores are than forecast. The latest sign of strength and labor market. Apparently, that does not apply to Flight Attendants. More than 10,000 people applied for 750 openings on Southwest Airlines and this, by the way, was in two hours. Inc. Of the number of applicants. The first time the airline had hired Flight Attendants outside of the Company Since 2011. I was curious to know, trish, you and i were talking about this earlier, 22 and 36 cents, that is how much Flight Attendants make portray. 72 trips a month. And on average it is a 55 minute trip. I am wondering if they are paid while they are waiting to get onto the flight or are in the airline. Presumably not. About 19,300t to a year. Wagememorial is minimum is seven dollars 20 five cents, about 15,000 dollars. Were talking about barely above the minimum wage. A lot of people want that job. 25 an hour is better than 7. 25. That there is all that downtime. When you are waiting in the airport. Your boarding people. Being a Flight Attendant or aid pilots, you have an interesting schedule. You do not work regular hours. People like that. You get free tickets. Southwest is supposed to be a good company. Remember where there was an overwhelming number of job applicants for mcdonalds. It wasnt. It was a walmart. It was harder to get a job at walmart than it was to get there you go. Of course that many people will apply for this job. It is a sad commentary. This is what were talking about. It is tough for a lot of people. It goes back to the real unemployment, 13. 2 . It was interesting the applicants, with a younger people coming into the workforce or a result of so much consolidation they just had a bigger pool of Flight Attendants to choose from . Lets get international and talk about a controversy in japan. A visit to a japanese war memorial by shinzo abe has angered china and south korea, straining tensions between the countries. Abe became the first Prime Minister to visit the shrine in seven years. This memorial honors japanese soldiers that were killed while fighting but it also memorializes some world war ii criminals. Abe said it was not intended to hurt the feelings of the Chinese People but he is known as a nationalist. There has been some controversies he has been involved in where there have been historical points of record, things the japanese been accused of and he said that did not happen. So he has been accused of being somewhat of a revisionist. And then you see Something Like this. I was reading in the Financial Times a couple of days ago about how the u. S. Was supposed to have pivoted to a share. That was supposed to be their focus and have been forced to pivot back to the middle east. Raising the question of what happened to china and japan really come to bigger blows, which could be possible in 2014. Where does that leave the u. S. That has no presence within that group . We have been so distracted with the middle east. We have so many economic ties to china and some which invested. With japan, a lot of diplomatic times that have been firmly established. And the issue you are talking about his debate over the islands. China and japan are claiming the islands along to them and there may be oil under the islands. You can understand why it goes beyond such a great topic. Farmers make about 64 billion dollars on it. Washington, d. C. Might kill it. The Environmental Protection agency is going to decide how much ethanol next year. Congress enacted the renewable fuel standard back in 2005, assuming climbing destinations and introducing corn ethanol requirements. The program is under threat. The epa floated a draft will the mandate by about 12 and the question is what does that do, the Ripple Effect to the farming economy and to wes . Farm prices have been hammered. 40 is used for ethanol. Say, and i have done a lot of reporting on this, i have been to brazil, sugarcane ethanol has been a huge success there. Ethanol is a tough sell. In part because corn is not the most efficient way to make it. It requires several steps. It is far more expensive. The corn industry has lobbied. It provides income to farmers. You can understand why they would want it. Feasible,input is not like the wind. It is a wonderful concept but if you cant do it legitimately, and if they cant stand on its own feet you have other source of of energy right now. Sources of energy right now. Moving on to tech. It has been clobbered by google. The company that provides interpretations of lyrics from hiphop music was caught trying to boost its search ranking that a shady tactic involved getting third parties to link to the website. The search giant has taken action. Now if you search rap genius, the companys website is not in the top 10 results. You get weaker pda, twitter, but you do not get the website. These guys are you get twitter, but you do not get the website. They have given some vulgar tiff sysops to the new york times, mark zuckerberg. Confusingbe very about the quality of links you can use and how you use it. Issue, searchan engine optimization is a really big deal. A lot of websites try to get to the top without paying. How do you deal with that . What are the rules . Even if they did badly. Even if you can wag your finger. After a confusing Christmas Day tweet, Justin Bieber fans are not sure what to believe. The 19 yard superstar announced his retirement to 48 million beloveds saying my believers, i am retiring. That he is says actually going to take a break to spend some time with family. Sounds like a fiveyearold ceo. Whether it is true or not,he timing of the announcements you could say, if you are a cynic like all of us, maybe a bit of a marketing ploy. Ofdid come on the release his last film, Justin BeaverJustin Biebers believe. Did not dot one well. On Rotten Tomatoes it was about a 64. On imdb, 1. 6 out of 10. Of course. It is not a quality production, adam. But if it is getting those kind of reviews, why would you make a second one . Teenage girls love it. I would not know him if you fell on my face but a lot of people love him. Reichs would you recognize him if he walked on set . Yes. I would not. Christmassnowdens readings. A child growing dashboard today will grow up with no conception of privacy at all. And a smooth landing is not always a given. How to crash on purpose. In two. Smart is back Edward Snowden issued a televised christmas greeting on wednesday comparing nsa activities to the surveillance state described in the novel 1984 here come 1984. Collections in the book, microphones, video cameras, tvs that watch as, are nothing compared to what we have available today. We have sensors in our pockets the track us everywhere we go. Think about what this means for the privacy of the average person. Grow upborn today will with no conception of privacy at all. Sales of the book are up 337 at amazon senses leaks the summer and after name dropping only guess where they will go from there. How apt is the comparison between america and orwells 1984 . Aining us for that we have professor of history, james livingston. Great to have you here. Does he have a point . Yes. Most definitely. His thereke he makes is a difference between the fiction and the fact. Thatiction suggest everybody knew they were under surveillance. Until the know that new york times, the washington post, and Edward Snowden revealed the extent of the surveillance. Canthat we know, maybe we do something about it. It almost sounds as though, in a curious backhanded way, mr. Snowden has provided a service. Absolutely. I think he is a national hero. Hero. You do not see him as a traitor . He is acting in the best tradition of the civil disobedience. Were there other ways to do this . Tell you theow, to truth. I think it is a good question. For him, this was the only choice available. Youack to the comparison, have taught this book. Many times. Walk us through the nuances that make it different. You mean the fact of today . Well, i think orwell was trying to be as heavyhanded as he could be. He was trying to depict the convergence of what we called to tell the terrorism totalita riasm. In what has been called society inlitarian which surveillance is so ubiquitous, we are not even aware of it. Book, thethe difference is that everybody knew they were under surveillance and they acted accordingly. However we supposed to act . He has a point when he says kids born today will not understand ive a c in the way that we have been able to take for granted in our will not understand privacy in the way that we have been able to take for granted. So will you take the leap that the nsa somehow violated some side of natural compact we live under . Or he government you mean did . The government. I think the government did. I think that is his point. And the federal judge decided that. The fourth amendment, the government is crossing a line. So how do you walk this line . We are not fighting traditional warfare. We have terrorists we are up against. We are the nsas point, trying to find the bad guys. How do you walk this line where you are able to stop the bad stuff from happening but maintain civil liberty . It depends on what you think the threat represented by terrorism is. It seems to me there is not a way to fight a war on terror. There is not a way to do that. There are political means to deal with terrorism and that is how we have always dealt with in the past. To fight a war on terror is a losing proposition. If we can justify the nsa surveillance in terms of a war on terror, we have a ready lost. We have already lost. Good to have you here. We are going inside the cockpit of a helicopter to learn how to navigate a crash landing. Scary stuff that realistic as part of our bloombergs best of the 13 series. Of 2013 series. Alsois is street smart, streaming on your tablet and phoned in bloomberg. Com. It is the movie everybody is talking about, the wolf of wall street, came out yesterday, we have a spoiler for you. In the openness the in the opening scene, he crashes his helicopter. Probably not the recommended method for flying. Our guys decided they wanted to look at the proper way to fly a helicopter, especially if you have to crash land it. A student is required to perform emergency maneuvers. The hardest thing about any emergency procedure, whether an airplane or a helicopter, is the fear factor. It is the fear you have to do it over because it will get in between you and the control of the helicopter. We are basically rolling the throttle back to idle. So the helicopter is dissenting at a rapid rate. Compared to a normal landing, we control the speed at which we dissent, anywhere between 100 and 200 feet per minute. We cant control our descent. Between 1500here 2 thousand feet per minute. When we are approaching the ground, we need to arrest that rate of descent. The entry. Tage is the second is the glide. The third is the recovery. How we do that is with the flare. We level out and we use the energy in the road or to push to push our rotor landing. Is this assuming the helicopter is functioning in the airy . Lets say you lose power. The motor is no longer spinning the prop. As the helicopter falls, air will start to spin the blades. You are using that airflow to try to slow it down. That is intense. Do you feel safer in a helicopter or a plain . I have never been in a helicopter. I feel safer in a small plane. Because it can glide. We are talking about bosses next. What about a company that gets rid of them altogether . Up the treestart house teaches clients how to do web design. Company has made it hold made a bold decision. It has removed all of its managers. Since making this move, treehouse saw a 63 increase in its client base. Monthly revenue is up 45 and he needs tosts respond to fewer than 10 emails a day from his team. He joins us now. You say this is a movement. Your company is pretty small, 60 employees. Do you think you would be able to do this with 100 or more employees . I think so because a lot of bigger Companies Like war, who makes cortex and guitar strings, 10,000 andly have four ease and 3 million in enue, and they dont have 10,000 employees and 3 million and they dont have managers either. You say managers communicate messages from top to bottom. I think that is a valuable thing to have. They settle disputes. They help people manage their careers. It is it to get encouragement from someone. They keep their teams motivated and happy. Shield people from things that are superfluous or that they dont need to know. How are these things bad and what you do in an organization where you dont have this . Those are all good things. The problem is, most managers and getting affected by the power and they end up micromanaging and not really serving their team. Great managers are servants. I think the trouble is it never really works up that way. We found a way that people are able to communicate, able to stay focused, able to stay coordinated without a person to do that. Is there a financial incentive . To change the financial structure so that if they brought in a client they got a greater portion of the revenue . No, we found that people are tremendously motivated by being the power given the power to do what they think is right. We give them total control and say hey, you are smart. You can figure this out. We give them very broad goals. We say hey, we hired you. You are smart. We believe you can figure this out. How do you use technology to foster communication . Does technology fulfill some of the roles of a manager . Yes. You could not do this without e mail. We built an online forum. Willbody at the company post a project. If you join, all you need to do is do a daily status of eight, kind of like status update, kind of like a tweet. If anybody needs to know what is happening with that project, they check the status. We find that that is enough information. But youre using losing component. You lose the team spirit, the idea of getting people together in a room, sharing ideas, bouncing that off one another. Where is that element . Are people actually working in your office . Are they remote, how do you work that . Have a distributed team. We have about 20 in orlando and 20 him portland, and the rest work at home. We are used to using Tech Knowledge he to interact. Once a year, the whole company week to beer for a human, smile, hug, do all those important things. It sounds to me like you are a bit pointy. All of these transactions are not stored on a server. It is just a bunch of people loosely interacting. It sounds like you have these project reports that people update or not. It sounds like bitcoin. Do you think it works . At work, often people are treated like children. But at home, they make big decisions, raise their children, decide how to vote. For some reason, at work, managers decide that they do not know how to do these things. I think we heard you get an email. That was one of your 10 you need to answer. Thanks so much. Thanks a lot. Coming up, the weinstein way. How to turn box office bets into oscar gold. And how one guy turned a supercar into her cooking machine. You cant make this up. Thats weird wall street. Time now for the scene, when we bring you the business behind Media Entertainment and pop culture. Red carpets, swag bags, gold statues, this is the season. Weinstein brothers have this down to a science, and here to explain how they do it is anti. Anti. He been is spill the beans. How do they do it . Have allrse, i dont the secrets or i would be out there marketing films for the weinsteins, but these Marketing Campaigns start months and months earlier at film festivals were these movies are screened and they start to compile critical acclaim. And then, hopefully, more critical acclaim right before before theright release into theaters. And then, hopefully, critics in and l. A. Reword these films with even more praise the gets them recognition goldenden gloves globes. The weinsteins are probably the most successful at this in the history of awards. They are able to have films with appeal and they are able to find an audience. The artist was a silent movie in blackandwhite that went on to win an oscar. Behind the scenes, the stuff that most of us dont have access to, the phone calls, getting the right people to show up at the right parties . Yes, it is a Huge Campaign effort and everybody from the director to the screenwriter and the big stars in the film are all involved in the campaign process. It is a whole cast effort. Ultimately, do you think that not only are these people that really understand the Film Industry and what is going to resume, but they sort of have their finger on the pulse of news and what is current and what people are looking for . Is it that combination . It absolutely is. They released mandela, walk to freedom. They could not have time get better. They did not know, obviously, that this great man was going to pass. But peter selva gave a stunning gave aance idris elba stunning performance and is definitely in best actor contention. Forest whitaker and oprah are getting huge raves for their performance in the butler. You could definitely see them come into the oscar picture as well. Each of these movies that you highlight, and even last year, Silver Linings playbook, there is a very Human Element to these characters and these movies. Are they using those relationships to somehow reach out to other people . Is that key . It is movies that have relevance to the broadest amount of people and click with voters in the academy and the foreign journalists who make up s. E golden globe these are not bigbudget films. They are 35 million 45 million budgets. Nothing to sneeze at, but they take these movies and find an audience for them. That sounds simplistic, but it is not an easy thing to do in hollywood and they are just genius at it. You think about the publicity s,mpaigns behind these film are the weinsteins just also very talented a Public Relations . These are all great films, but there is a rollout process. One of their keys to success is they have built up such an incredible reputation and roster of successful films over the last 2025 years, first with disney, then on their own, that i think they get first look at a lot of quality films before they get to various festivals. I think they probably get a look at some better films than others , but they have a good sense of what the audience is looking for. Their track record is uncanny. Andy dick smirk, it thank you , thankning us andy you for joining us from los angeles. Paul sweeney, always on pleasure to have you here. Etflix take a look at this. My traditional platform has been for 30 years distribution. N pbs that reaches the largest number of eyeballs. Every kid in america when i was growing up had memorized the entire primetime schedule. Now we have hundreds of choices. We cannot possibly memorize and have appointment tv. With the access. Thatthrilled with the idea if i want to watch three or four episodes of house of cards, i can. Finally, we are appealing to the consumer, not the Almighty Network i, the programmer who is saying you will watch it now. Everything is in flux. A model thatreally nds us into the future with any real confidence, the way we used to. Area wherein a new the middlemen reached the lions share. There are too many middlemen getting too much stuff on the cheap. Make a dealoing to with pbs, and we do get a large share of that because we are the pbs showsed of the along with downton abbey, but it does not completely offset with the decline in the old hardcopy dvd sales represented. It suggests there is a coming. Truggle when does United Artists get together as they did early on in the old hollywood system and say this is not working for us, what will happen . That will be an interesting turn of events. This is not good for us. This is good for people who are not doing anything but pressing send. Its interesting. My question is, what is the percentage difference . How much is he losing by going to netflix . If selfpublishing on amazon is any indication, it could be 30 . So, content is important but it is much cheaper. How is this like a new york giant . You can find out in todays weird wall street. Its time for weird wall street where bizarre is just business as usual. It turns out this Holiday Season traditional ovens are out. Anar enthusiast has found unconventional way to cook a turkey. By theoasting it lamborghini exhaust. Do not try this at home. It is a titanium exhaust system. A half 1 million oven. Too much time. Too much money. Have you ever deepfried a turkey i go no. Its pretty involved. Branson says he deep fried his turkey. It is the best turkey i ever had. Ever wonder what it would be like to be an nfl player . Now you can know. To rentsing craigslist out his condo during super bowl week. He will charge you only 9,000 to live like a giant. New jersey. I wouldve thought he would be living a little larger. What is the average . Or a firstyear if you are a lineman, its the lower end. And if you are him, you are looking to pick up spare change. Mcresources. An employee site mcdonalds had that generated negative publicity. It was getting heavily criticized for offering bad advice. Some of its greatest hits, discouraging workers from eating fast foods. Remember to tip your pool keeper. Sell unopened presents on ebay. Hey, youve got it all. Unreal. We will see you back here tomorrow for more street smart. Quakes hit is 56 past the hour which means is 56 past the hour, which means we have another bloomberg on the market. The s p is closing of nearly 30 this year. The nasdaq closing out at a 13 year high of 40 167. We did get some better than expected data earlier this morning. Weekly jobless claims fell more than forecast. We are keeping our eye on the vix. The volatility measure hit a onemonth low today. By mark, we are joined sebastian in chicago. The vix is trading at pretty low levels right now. Do you think this is just like trading during the holiday week, or other things pushing it down . Quakes typically during a tradey, the vix will lower. Plus, it is a slow time. Additionally, take a look at how the tenure has moved. I think a lot of people were fearful about the 10year hitting three percent. That didnt happen. A calm 10year, a calm bond market is going to lead to a calm equity market. 11have this vix that touched and three quarters, 11. 7 today,. It measures the cost of insurance and it is at a one month low. Do you think markets have had time to absorb the fed tapir and we are now at record highs for equities . Do you think we are in to seera we are going lower levels of volatility . Quakes may be. We look more like 1999 or 2007, where we see the market rally and implied volatility in options go up. These things are all cyclical. The equity market will continue to perform well. The 10year starts to pick up some speed, i think the equity markets could be in for some problems. ,f we look at vix or the vix the vix is at a onemonth low. The vfixes of our one year low vvix is at a oneyear low. It is relatively inexpensive to ensure, and with that at an all time high, i think looking at some sort of s p 500 put or some sort of longterm vix call of sense. Es a lot do you want to buy the vix at these levels . Quakes buying the actual cash vix is difficult. When you buying the actual cash vix is difficult. Do i think it makes sense to buy options . Yes. January call options are cheap. Thetrade i really like is june 17 call spread for two dollars. If we get any kind of lift between now and may, that call ead could return it eason return a decent amount relatively quickly. Mark, thank you very much. That is Mark Sebastian with swan wealth advisors. That is it for on the market. I am olivia sterns. Quakes this is taking stock for 2013. Er 26, todays theme is Wishful Thinking. Retailers hoping to cash in on after christmas sales. The spotlight is on exchanges and gift card shopping. Our store is really doing any better than last year . We will find out. Plus, the japanese Prime Minister stirs up bitter feelings in china. It Wishful Thinking that