Of the game. It is a republican market. Gold futures show a sigh of relief. Weaker yen, bigger. The argentinian peso is the back story. It is 799. They try to protect their currency. They spent 174 Million Dollars and you could see the ugliness over the past six hours. That is an updated check for the day. We are focused on washington. Market. Ublican type of the republicans will be watching the state of the union. President obama will address the nation in the evening in a speech in which he will highlight an executive order to raise the minimum wage for federal contractors. People talk about other issues like immigration. We have both sides of the aisle here on street smart. Join us for the hour is the democrat Austan Goolsbee who served under president obama as the chairman of the economic advisers. The youngest to serve in that position. Representing the other side, ed conard. He is a former executive at bain capital who worked alongside mitt romney, wrote the book unintended consequences. The americanr at enterprise institute. Great to have both of you with us. The president is going to be addressing the nation at a time when his ratings are the lowest ever in his presidency. Americans dont feel better than they were five years ago. How will he change that . Whats i dont in key will change it with one speech. Washington is got into the dynamic it has gotten into and that is what is given people a bit of a sour mood. We live through shutdowns, we live through threat of default and stuff like that. If the past is the guide, we will see the president aspiring to change the dialogue about where does growth come from and what are some scenes that we can. Ll unite around then he will probably outline quite a few things that he could do. The potential increase on the minimum wage for federal contractors. Section. E he gives information of the state of the union and recommend to their consideration such shall judgehe necessary and expedient or as part of the president. Is he doing this by executive order the kiss he has given up dealing with the Republican Party . Because he has given up on dealing with the Republican Party . What hes doing this for federal contractors. Thehe is frustrated with Republican Party. I think they are better off than doing this. This does not change the composition of those that have minimum wage. Republicans are right in the position they are taking. Were doing anything to address inequality but do they and they arehis ultimately that you mental . The talents of mankind are owned by mankind and not the lucky individuals and we should be doing everything we can to mind that tolerant. The less the risk consume and the more they contribute to society. We disagree on how to do that. Rich consumethe ris and the more they contribute to society. We know from increases in minimum wage in the past that hundreds of thousands of low income americans have lost their. Obs the very ones that it proposes to help will get hurt by this. This means a loss in jobs and youre looking at it like is theasis of evidence massive literature within economic studies which shows pretty modest employment impact. The question is, if you think it hurts the poor, why are they for it . I would be a basic question. I like what the Washington Post said. The president goes into his sixth year. Is this a tired administration . You have experience there. Are they looking for reinvigoration . Is the sixyear of any presidency, everybodys tired. He cannot speak for the president. Out of paradise and out of washington. It has been a particularly trying several years in washington, as you know. I think they are trying to reinvigorate. Is your response to do what they are doing and should there off position statement in the days to follow. Is the Republican Party the republic of no . , from a marketing perspective it appeals to us to not be the party of no but when the president puts forward this agenda, we should be opposed to it. This administration, it is becoming revealed that this is off of a permanently lower base. I do disagree with that. There are structural problems rooted in getting out of this deal. When our baby was a child of the babysitter wanted to say no thank you. That seems polite until you hear a twoyearold screaming at the top of their lungs screaming no thank you. I thought ar, and whatomberg difference would be if it was a mitt romney state of the union. There really will not be many. There would not have been many differences if this was a republican president making this address. Would you agree with that . I think if he had been the president , things would have been different. I should not speak with him. He is committed to helping the entire population. He put health care into massachusetts. The republicans in california are down to 29 of the electorate. Party doing to regain strength . What is the to do list to get the republicans reinvigorated . Unfortunately, explaining republican economics is difficult on tv has you have a very brief amount of time. Given the time, there are plenty of ways to explain it. I do think they are dependent upon whether or not this administration will be able to revive growth or not. So far we have seen mediator growth mediocre growth. They have done things that have no and no affect on the growth rate. They keep waiting for the rebound and it hasnt come. If they dont get it, they will have a much more difficult time being elected in the battleground state. The opposition response. This has been a lot of fun. Thank you so much. We have a lot to talk about, a scene. Y, we have a great debate coming up on income inequality. Stay with us for copperheads of live coverage of president obamas state of the Union Address which starts at 9 00 sharp tonight with coverage from washington and new york. Be talking about another disruptor here. Carl icahn, the billionaire activist investor shaking up apple again. He bought half 1 billion more in shares. We will have much more after the break. Street smart here from new york city. Some newsto tell you in carl icahn. He wrote on twitter, just shares. 500 million more we are neck and neck with apples buyback program. A generated 130 million. It is a lot of money. I was suggested that this is getting serious after what we saw for the earnings shortfall. This is a buying opportunity. He just purchase another 500 million. This now brings his stake to more than 4 billion. This should give him more muscle when he pushes for that. He was 50 billion a year. He would like the company to do it. Do you think that apple should be concerned that he has taken such a big stake because he would just be pressing them to pay out the money or do you think that they actually have got Investment Opportunities at apple that they dont want to pass the money. They are saying they dont want share buybacks because they want to invest in these new products. I talk to him. Here is what he is saying. With their huge cash, it should have absolutely no effect on the money. They can doint that both. They are innovating and they are actually doing something that they Pay Attention to. Is a 90 business that apple might have a lead on. About thealking itunes platform. The fingerprint sensor. When he is looking at this, he has a tendency to look at it from a financial when you view. He is saying that they have this cash. A start returning some of the money to shareholders. He acknowledges this as well. There are opportunities about new products that they can help create and that will help to drive shareholder value. What is the response. The t. Rowe price, the fidelitys of the world have to Pay Attention. Hes doing some of it. Butou can be of two minds ultimately the investors have got to decide. Think that carl icahn is right for saying that apple is a responsible for setting on that money . When they look and say, you came out with a new phone but the phone, while selling a lot of phones, did not sell as many as wall street. Do you think investors will will start siding with carl icahn and say, maybe it is not as good as what you say. You dont see a lot of stock reaction to this news coming out from carl icahn. Had you seen reactions in the share price . Far in a tremendous way. Big about netflix. When he first got into netflix. I remember talking to him, the stock was actually lower and it was really initially challenged. Then he had the laugh at the end of the day. Earlierked to doug this morning. I thought he had a brilliant idea of apple migrating to general mills. The idea here of the shift from a Growth Company to a true blue chip is a painful shift. They have a ship is psychologically. They are very good. This is a company in transition. Cacheave to employ intelligently while making products. If you take a company that is a mature company, if they get an influx of cash. What are we going to spend 100. That has never been there before. Whats i think today i think today is a sea change. Even with the market up 90 one points this afternoon. Coming up, it was the interview heard around the world. Tom perkins defending his decision to let the rich get richer and that they are not destroying this country. We will have much more on that moment. We are focusing on china there is a lot going on in washington. The Senate Foreign Relations Committee held their hearing for max baucus who has been nominated to be the next u. S. Ambassador to china. They dont believe that the u. S. U. S. China policy. He is asking senator baucus to formulate a bat in his position as ambassador. Joining us is Austan Goolsbee. Imou disagree assuming you would, under the administration that there has not been a clearly defined u. S. Foreignpolicy regime. I would disagree. They should call him. They should get his input. We would will we dont have a one sentence china policy that would apply in every sphere. Through the strategic and economic dialogue with china which is basically like the g2 meetings. China is changing quite a lot over this time a lot. The china academics at a vail or the university of chicago. What is the worry within the academic community. What is the front and center challenge that we face. On the economic sphere. They are moving into the rank of rich nations and they have to start acting like a rich nation and they have to be treated with the respect of the big economies and managing that as they go from an emerging market primarily driven by exports to the u. S. To something that would be more sustained of itself to domestic demand. That is by far the most precarious economic transition. What do you mean acting like a rich nation. The World Trading system is designed to give a leg up to emerging markets them and give them access to the rich countries in a way that they dont have to reciprocate because the view is, they are looking at lower incomes, growing. And they moved into the Training Systems and now they are the second largest. Conomy on the planet they have to move to the way the more advanced nations are. We have to talk to you more on this issue. It is absolutely fascinating. The dialogue back and forth. It is 26 minutes past the hour. I want to get straight to mark crumpton. Much. Nk you so u. S. Stocks rising today snapping that threeday decline. Lets take a quick look at the boards. You can see the Broader Market up a 6 10 of a percent. The dow industrials up nearly 6 10 of one percent. The nasdaq up. Apple taking a hit after announcing iphone sales fell short of analyst estimates. They had profits driven by sales in north america and in asia. We are back on the markets in 30 minutes. Welcome back. 30 minutes away from the close of trading. Now of 93 points. Gold down 12 shows the calm coming off of the emerging market turmoil last week. Dollar yen weaker. 102. 87. They yen doing a little bit other. Argentine peso are what the pros are watching. A little bit of weakness. That will mean a lot of rhetoric to calm down. There is the data check. Preks a little bit jumbled. I want to get us caught up on the headlines here with companies. Co yahoo reporting after the belt. Investors will look at whether the ceo, has she been able to turn around the slopping something ad revenue . Whether her acquisitions and product makeovers are driving more traffic. Tech Companies Like google and apple have reached a deal with the Justice Department allowing them to disclose more details. Under the new rules they will be allowed to reveal the number of Great National security orders. To waitanies will have six months before they can release the data. Home prices showing some gains. Prices in 20 u. S. Cities climbed nearly 14 in november. The biggest yearoveryear gain since february 2006. Economists a limited inventory is helping to fuel the gains. Just that simple. Tonight state of the union speech shows wrought agreement that income inequality is a problem. Sharp differences on how to address the politics of economics of it you in. Something demonstrated very clearly. It really got interesting. Emily chang, the most interesting hombre station with thomas perkins. That happening last night. A lot of heat from the letter. Likening the progress of on the american one percent to the 1930s and persecution of jews in nazi germany. While he apologized for his indelicate choice of words, he did not regret the underlying message. He said the one percent are the job creators. The capitalist that make top scope. He has been disassociated with kleiner perkins. Here he is. Demonize therd to rich for being rich and doing what the rich do, which is get richer by creating opportunity for others. It is an herbal issue. I really felt that. Most. Here we are struggling with that struggling with history. I really felt that in davos. Ed conner with us. Interesting discussion points on inequality. Alan murray of you research talking the one percent as fiction. Much more like seven percent. How do you respond as an academic when we go simplistic for one percent in 99 . What i think is it is not wrong for anybody to say what we ultimately need to do is grow, what is the secret or what are the secrets to getting the growth rate higher in the country . I guess i disagree with the espouses, i dohe not think there is a revolutionary vanguard of the few people that if you make sure they get tons of money to cut taxes as much as they have ever been cut, that that leads to growth. Well said. This is the heart of the matter. This goes to argentina. Beliefief is, there is that tech crew have their own playbook. Do the elites of technology feel they are separate and apart from other capitalist creating jobs . Perhaps they do i would say the one percent represents a successful people and a large group of people failed trying to be the one percent. So we cannot look backwards to say we want to tax the one percent. What youre really doing is taxing the payoffs from those that make you the one percent. Not living in a manufacturingbased economy where we sit around waiting for consumers to fill up the factories with good. We need talented people to get the training and take the risks that reduce innovation and we need the equity to finance the risks those people take. If we did not get those things, that is what limits growth in the economy. You said that you disagree that there is a vanguard of evil there to create jobs. Listening in on the perkins interview, it seemed more that he was saying just leave us alone. Leave us alone, but let us education, which in my worldview, where the growth comes from that is sustainable. It comes from fraud a skills of the workforce tom and that we have had experience with cutting high income taxes, and it was not great. The 2000 was a very weak recovery. A different recovery from our childhood. Not about one percent or 10 and nine percent but the dynamic between those. And others have written about the lack of mobility and the aspiration around it. Are we losing the mobility in elasticity . I think when you look at the mobility data you see it has not changed for fit the years. Second of all him a when you dig deeper, you find the place we are not holding up relative to denmark and other countries that have very high income equality is in the bottom 20 . You say the mobility is still there . Use a single motherhood, high dropout rates, high crime rates and things like that. For everyone else, the probability of earning 100,000 has gone up. The idea is how responsible are the top one percent responsible for the bottom 20 . We will talk more about that in a moment with ed conard and Austan Goolsbee. A serious topic. Betty liu and i are not on speaking terms. It is about the super bowl. Speed otally up to speed on this and i have no clue. We will get briefed on super bowl economics. Street weref wall in charge of the super bowl . That would be a different case to say the least. 15. 91. Good afternoon. They got into a discussion about the idiocy of rolex watches and why does anyone need a rolex watch. A symbol of comparable values and etc. Etc. Well, i think that is a little silly. His is not a rolex i could buy a sixpack for the x but so what . That was a highlight from the interview with tom perkins and emily chang. Welcome back. Still with us is Austan Goolsbee, who i know enjoyed the interview as well. What is interesting about this debate is you can laugh at him and ridicule him all you want about the sixpack of rolex watches, but i think what was getting lost here is is there a moral responsibility for the top one percent to take care of the of not only, 50 this country but the world essentially . You have bill gates and Warren Buffett who believe it, and then tom perkins comes out and says where did this come from . Different people have different points of view. I believe absolutely, yes. The question is how best to do that. Do you give away the capital or du roll up your sleeves and get to work and try to produce things that will grow the economy. I will point out the support of an over 80yearold man. Exclusive. I hate to say it, but i have been clumsy. It is hard. I know it is hard for you to believe. It was challenging. The paint came off the white house when he spoke. Seriously, people in strong support of what mr. Perkins said about protection of the initiative of the nation. Why are we having this discussion . I do not think we should have the discussion in the of about charity. Contributiontable that should pay for everyone elses problems. That is in some way the interpretation people put on it. I think that is wrong. I think when you have growth that is concentrated among a very small amount of people, that growth is prone to bubbles. It is prone but if you like the swiss watches, hitlers watch, you see the prices going way up. The thing that drives growth on a sustainable basis is rodbased skill in the workforce, solid economic infrastructure and good ideas. I will point out that Silicon Valley is not in a low tax place. It is in california, a place that has high reiki laois high regulations and high taxes. What happens is the minutes of the labor union in california taxes the value of the cluster in Silicon Valley. Municipal valley. Not there . Y for circumstantial reasons. Great weather and scanning value of those. The commonwealth of massachusetts had to change the tax laws recently because the exit of entrepreneur from massachusetts out west to get things done. Because you cannot afford to be there. The common man got no value from the taxation. If you look at what is happening in california, do they have better Income Distribution or better education . Nooks. No. Stanford university, berkeley, ucla, great private universities the reason why these places are compelling places for businesses to be, even though they are high x islation, high tac something that is fundamental. Risktaking is higher in california despite the higher taxes. Flex i want to bring this down to people watching who do not have a rolex. How do you teach the dispersion of the wealth or net present value of the income . How do you teach that will be distributed to the American Public . The fact is we have witnessed in the past 20 years of further concentration of the gains among the elite. How do we distribute that to a broader part . Most of what has happened with income inequality in the u. S. You have seen happen and many other incomes in the world, the return to skill, the payoffs. They are ever higher. To is the notion that while these forces are moving one way and are having some of the greatest decades that have ever been had by anyone in the history of the world, but we would then turn the tax policy to accentuate that even greater than what has already happened i find crazy. Look at the comparison to the u. S. Versus japan. We grew 77 . They have grown half as much. We have increased the workforce by 50 . They have increased a half as much. Plusve pulled 50 immigrants into the workforce. We have been able to create e normanue. Value where the gap has grown wider and wider. We are higher than europe and japan. We are equal to them. Not because of economics but the government policy we choose to distribute to them. Not an economic issue but a government policy. What should be the republican to this frontlicy and center issue of the dispersion of income and wealth and lack of inequality . How should your party respond . This is a comfortable issue for democrats. Not comfortable for your party. How do they respond . I believe it to show the success of the United States relative to japan who have killed innovation by reducing the payoffs for the top one percent or top 10 and over time that has been accumulating effect. Some of the biggest consumers. Rolex . Wearing a actually i am. I guarantee you i am in the bottom [laughter] all right, thank you so much for joining us on this. Ed connor, author of unintended consequences. We will be back. Bloomberg television. State of the Union Address tonight. Who does the president need to sell tonight . I would say if the president will make the case that inequality is depressing economic issue. I think he needs to sell the notion it is not about charity but about broadbased growth. Thank you. Really and. Back thank you for joining us. Joining usr tomorrow. Trish regan and adam johnson continues. Hello, everyone. I am trish regan. You are watching the big show. The s p rebounding from the worst slump since june. Adam johnson and i have you covered. Top 10. Yahoo of nearly three percent ahead of the Fourth Quarter Earnings Report due out after the belt. Marissa mayer working to attract more traffic and advertising. The results just moments away. The question is whether or not she was successful in this. A lot of earnings coming out after the belt. Dropping. Chnology weaker than expected results. They will continue to invest in any fracturing ability to take advantage of the growth happening in the clouds. Storing up in the clouds rather than on your desk. Number eight, texas industries. Agreeing to buy the dealmaker valued at 2. 7 billion. The construction rebound in california and texas. Number seven, American Airlines up five percent as they posted the first Earnings Report since merging with u. S. Airways this past month. Fourthquarter sales climbed 8. 7 that would exceed estimates because of travel and fair i knew prices were going up. That was one of the big concerns, whether they were going up. Corning down about six percent come tumbling the morris the most in about a year. First quarter price declines for lcd glass will be greater than previous quarters. However, the cfo believes this will be a one quarter phenomenon. That is really key. How do you grow the other parts of the business cap go gorilla grass glass. Canadian investigators watching him complaint into the program after consumers complained it was a pyramid scheme. The latest drama to unfold in the herbalife saga. Of the biggest defenders left yesterday to work for a top shareholder. The hits just keep on coming. Its uglier and uglier. Number four him afford trading flat. Profits rose in north america and asia. Extended sales leadership and the u. S. The focus drove demand in china. , isnt it . It is like the two ends of the spectrum. Everything in the middle doing theut the real growth are two extremes. Curious and interesting and the way it is. Like the great looking truck. Look at that. Now to resources up about two percent. Being urged by Casablanca Capital to spin off dividends. Said it that has had a quarter. E number two, d. R. Horton u. S. Ing 10 the largest homebuilder posting earnings that met estimates. Lets move onto the number one stock of the day, pfizer rising nearly 3 as they cut costs and saw the tax rate fall. They said one of the topselling products saw sales actually rise 11 . We may develop. A gain of almost 100 points. Its looking like a gain of half a percent here with the offender pay looking like its ending the day up 0. 6 . A little relief for investors r the toss we are down 3 on the year. Most days weve been down. Its nice to have an update. Lexa we will take it. Here are the stories were tracking ahead of tomorrow. We have cory johnson and alix steel and with us today. Phonee earlier on the with carl icahn on the news that he bought more apple. He told twitter he was buying another 500 Million Dollars and continues to advocate for a buyback. He would like to see fit billion dollars and this makes my copulation that he is one of the 15 largest shareholders in the a stake of worth more than 4 billion dollars. Theres been a lot of criticism from the analyst community. They are saying theres Better Things to do with your money if you are apple, such as buying new companies, buying and investing in new technologies. Thats the whole point of what a tech company does on a way. Of the day, you want to have Free Cash Flow leftover but when growth is an issue, apple is confronted with issues about growth and if they will be able to put that to r d,uire growth and to use but smaller acquisitions. Buybacks for some of their peers have not yielded the kind of results that are haps carl icahn is looking for. I dont think i buy that its a good use of cash all the time. Say iss what they engineered earnings. If you reduce the share count, your earningspershare go up. You what heare with said. He heard the criticism about the company needing to invest in new technology as opposed to buying back stock and he said, to me, that criticism is ridiculous. With the amount of money now flowing in and with the huge hoard, 50d billion should have absolutely no effect on the money available for new products. He is saying you can have your cake and eat it too. Make those acquisitions and do the buybacks. We also talked a little bit about the future of the company in terms of products. Everyone acknowledges that they need to have new product in the pipeline in order to generate additional sales. You might have an apple tv in the future. You might have the apple watch. Tim cook said they would be creating new products. New one was the ipad on that was, what, four years ago . What will rival that . I really think nothing could rival it. Its hard to imagine nothing that could the selling tens of millions of units bringing in billions of dollars of revenue like the iphone and ipad. Those are onceinalifetime creations. You think the watches Wishful Thinking . Geeked out covered in these. And a watch. This could buy a sixpack of here. As opposed to a sixpack orf rolexs. I have reimagined joe sixpack. Their growth of the iphone business were very apartment yesterday and with the guidance they have given for next quarter. Opportunities and landing the china mobile business and now the guidance for next quarter suggests that china mobile wilmot the a really big sale in. Know need to let everyone that they beat the estimates and also revenues came in slightly stronger. Im going to the press release right now and we are seeing this in real time. This is all about growth. You look at the earnings growth. Whats curious to me about at t, only 5 cents of revenue comes from selling phones. Its all about services and getting them through the door. Just important are these results that came out. Spendre looking at the to 21 billion. To spend 21 capex billion. So much stuffying up and down Silicon Valley, routers, switches, things to build up their networks. Theyre going to spend that much money and its one of the most closely watched figures in all of technology. Watchingeve you are this for us. Theyre coming out stronger than expected particularly on earningspershare. Andadjusted number, . 46 . 38 is what they were looking for. We will go through the numbers as they cross but a big earnings surprise. Revenue is pretty much in line, less than 1 lower. 38. 7 . Other words, the new yahoo as envisioned by Marissa Mayer seems to be working. To be able to be by about 30 on the earnings line assuming these are apples to apples comparison. Inrevenue out with quarters a row of no revenue growth. Thats about managing wall street. If your revenue is not growing out all i will look at how earningsper share ended up so much better. Thats interesting. Intuitively, you would think yahoo would be a place that people would want to go and hang out. It is lots of interesting things to clicked on versus google inch is basically putting your search term. In terms of search, it is such an uphill battle for them. We do not say that i will yahoo you. We say we will google you. When you become the verb. They have to put so much money into the content. It cannot be cheap. She was not. More aboutmay learn that if we see the actual number there. Will that equate into collects the . Into clicks . Its one of the most important things on the web and elsewhere, not just getting the person there but keeping them there. Thats why they bought tumblr. Hopefully they clicked through. I think it is improving with china and the alibaba ipo. Haveu dont think they benefited from Marissa Mayer being in the seat and the excitement . We have the survey that would track you up about attract and ceos and the premium they get. There have been so much excitement down such a story beund here that it seems to easy for the community. I think nothing of the best for that company and its an important place in Silicon Valley but they have a big product problem. They spend billions of dollars in acquisitions to acquire a lot of traffic that maybe is not all that great. The stock has benefited from alibaba. Ipo given profitable that yahoo owns a portion. Collects the notion that the ipo will be big and help with the share price but clearly from the revenue, we are not seeing big changes in business. Something that is not up in afterhours, electronic arts. Pretty ugly in terms of revenue for this quarter. Billion was a mess and it guided lower in terms of revenue in guided lower for the full year. Billioncting only 3. 9 in revenue for the full year 2014 basically blaming weakness in current stock. Overall, sales are shrinking because there are not as many games available for the console. Also, sales were light for the Third Quarter because some people literally spent less on games. Talkrms of earnings, we about the differential and earnings were a beat for the Third Quarter, end line, and will be up for the full year. If you look underneath it, sales will be an issue. Big deal sort of. This is a corridor you might expect a talk about weakness because there was the launch of a very big change in the theness with the launch of new playstation. They were not buying games ahead of it. That takes some time. That said tom a the ceo change that took place last year, not doing as well. And the retail environment overall is clearly a challenge. We have seen weakness in terms of what the consumer was in taking and consuming in the last quarter of last year consistently from many Different Companies across the tech space. We will see if they come in with a different result. That could make a big difference. Have a lot of soccer games. We have the world cup coming. Out. Fall is coming they are looking for that to be a catalyst. I have no idea what it is but evidently its going to be cool. Wheres matt miller when you need him . I have the xbox one now. Pay for that . U like 499 . U. Im keeping with the wii the quality of the games and what they have to spend to make these games, they have gone to fewer titles because it is such a huge production. And they have to do it every year. But the revenues are bigger than any other movie. But not this corridor and not for the outlook or electronic arts. Company trying to redefine itself, abercrombie fitch. Looks like theyre going to split the role of chairman and ceo. Michael jeffries has been both and now hes just going to be the ceo. The chairman will be arthur martinez, the former chairman over at sears and they are also eliminating the shareholder rights plan and this is happening two months after engaged capital says you need a new ceo and you might want to think about selling yourself off to private act the. The shareholder rights plan in theory paves the way. Michael jeffries is the ceo, if remember this guy has had a lot of oh talks. A lot of botox. [laughter] Michael Jeffries likes all of his models and he likes the flight attendants to wear very specific outfits into spritz a f cologne. Th you cannot make this up. Teens arent buying clothes. They dont have jobs. The concern is that they have not differentiated themselves. The analysts in the community are looking at Urban Outfitters to get more interesting stuff. Intimidating to go into the store. Everybody is so pretty. A trend where we see some lower end retail having difficulty and higherend, like tiffany, doing well and we see this talk of income inequality and we see this playing out in the market and in the results we are seeing. It should have that teen nic he. Is the product. If they dont have a job in no super awesome product, what will drive them into the stores . Beautiful people with no shirts on. [laughter] isnt that what high school is for normally . You know it. Thank you, guys. Perkins comparing a tax on the rich to the holocaust and he did not stop there. Our exclusive interview and more next. Its absurd to demonize the rich for being rich and for doing what the rich do which is get richer by creating opportunity for others. Lets figure out whats happening with the data. Its not necessarily good. We will pause. This is what were talking about, the data we got this morning. Double whammy. Heres whats happening. Durable good orders down 4. 3 . Consumers arent out there buying stuff like washing machines. Theyre not buying stuff to go in houses which is bad. Capital goods orders, big investment in machines and etc. , the things that businesses buy, consumers and businesses telling us they are not buying on the same day and citigroup in the Research Department tracks all of this. They call it the citi surprise index. Today, it started to turn down. Eres what surprising you can see going back for the last year, it tends not to stay at these peaks for very long. This represents what youre seeing with bond yields. I know its not exact. They go up and down together. If you have problems with the emerging markets, all of a sudden the path of least resistance starts to look like that. The yield coming down to 2. 5 as opposed to going back up to three percent. This could be the path of least resistance. Preview of the president state of the Union Address. Our roundtable on what we should expect to hear and whether its a even going to make a difference. Anyone who works hard should have a fair shot at success. Period. And does not matter where they come from, what region, what their last name is, they should be able to succeed. By now you have probably heard of the comments made by thomas perkins. He wrote in an oped likening the aggressive war on the american 1 to the persecution of jews and not see germany. Bloomberg west anchor emily chang. Any regrets by mr. Perkins on the way he delivered the message . Yes. He said right off the bat that he regrets the words you use not the comparison he made th. The messageregret he was trying to convey he regrets the words and the comparison he made. Quick, to apologize to you and who saw this as over to relate and 1to overt or latent antisemitism. Basically thatis he sees trends towards hatred of the 1 , demonization, and he believes its very dangerous territory in any society. What are people telling you on twitter, email, etc. . Manyhave never had so twitter messages about their. About this. There was a meme already before the show was over. The rolex watches win. This is a conversation he was listening to on the radio where they were talking about rolex watches in particular. They got into a discussion about the idiocy of rolex watches and why any man would need one. Its a symbol of the terrible values, etc. Well, i think thats a little. Illy i think i could buy a sixpack of rolexes with this. So what . It is just so arrogant is watch retails for 15,000 20,000. So arrogant. Why would you make a comment like that . He acknowledges he made a mistake about the analogy but this debate over the 99 versus the 1 is an ageold debate. When he talks about his rolex watches, his underwater airplane, his yachts he collects , i asked him if he felt he was a bit divorced from reality and he doesnt think he is. Me hisdescribing to reality. Its not the reality of the 99 . It is his reality. Thing to say some of that on live tv, but its a whole other thing entirely to write it in an oped. Hes coming out and apologizing but this is something that is mindboggling because you think you would have taught this one through before putting it to paper. And other words, you can proofread it. He cannot proofread live tv. He mentions danielle steel, romance novelist, a big hedge in san francisco. She was getting flack for how high the hedge was it decided to write a letter to the wall street journal. It did light up on twitter. Thanks to our very own emily chang. We are back with a preview of tonights state of the Union Address. Now onto the big story. President obama will be giving his fifth state of the Union Address the economy, and, quality, unemployment. Maybe even marijuana. Here whitmore, we are joined by gary languor here with more is gary and al hunt, host of political capitol. A lot ofg in with concern about where he stands right now. 46 job Approval Rating, a little better than his career worst a few months ago but worse than one year ago and its not great. What do you do with that . The troops,r rally rally your 46 to storm the ramparts and get done the best he can for his side or does he try to conciliate and tried to build back to the majority support he had as recently as one year ago or tried to have the greater persuasive support . How important is tonights speech . Very. You have lots of social media, google, the like. You can manage more attention than any other speech. 46 is in the middle of the tennis for. 50 you can say to get it done with a little bit of fear. If youre down to 42 , you have to rally the base because thats all thats left. Therell be a balance between both of those approaches tonight. He was there only a couple of weeks ago so the tide has shifted. What do you attribute that to . The shift is small. I see less disapproval for health care. Maybe there is a tremendous residual effect of the rollout of health care which has gotten better. Gary, i will yield to you. I dont see any other dramatic event. Theres not a strong dynamic here. President e for the beyond his tepid Approval Rating is the economy. Almost anywhere these speaks not about the economy collects income inequality. The rich are getting richer income inequality. It,f he does not address this is what america is concerned about. And hesent disapprove has not received a majority approval since november 2009. 55 disapprove. His numbers have not improved at all. Its about jobs and wages. Both are so flat. The might be an opportunity for some republicans. Gettingident is not enough credit for it. He may try to get some of that tonight. In the meantime, the income debate, will the republicans try to seize that from him . They will certainly talk about the need for growth and mobility, social mobility. I think there a real problem on the ground. It has shown very poor Income Growth down the stress on the ground is real. About that things tonight and point out the problem, promised to take action. Theres a big gap tween the problem and what he can do unilaterally. Thats his problem right now. Important for him to own this problem of income inequality . People are frustrated beyond belief. If he does not put his arms around this, does he risk losing . Is it people in poverty . The middle class . Wage stagnation . It is all of the above. Be . Iill the emphasis think its likely to be a little bit more on economic mobility and stagnant wages for the middle class then it will be what republicans want with returning to class warfare. Heres his problem. What can he do . Hes going to raise minimum wage for government workers. He has an economy pouring reforming poorly and all he can do is make government more expensive . Thats not going to sell. Minimumwage they will continue to hit hard on. I dont know why you really should talk about expanding the earned income tax credit which was a republican idea with Ronald Reagan support. That childhood education paul ryan talked about. They are small but they can be done. Wage and income inequalities through forest wage distribution gets to be problematic. Idea ofo has a better the right size and role of the Government Republican or democrat . Point republican lead. How does that compare to what weve seen . Its gotten a little better for the republicans. They took a hit at the government shut down just as obama did during the rollout that now we are back on an even keel. Trust more to handle the economy . A seven point game for the republicans. Question tok to my you, al. What kind of effect does this have on it . How well or poorly he does, he will not hit the ball out of the park but these numbers will not change dramatically in another week for two. He will play a role in setting that agenda and creating dialogue for the year. If he does not do it effectively it will marginally hurt and he cannot afford any these days. We are looking forward to all of it. How you will be here beside me at 9 30 p. M. Tonight. Al, you will be here beside me. With joshee al and i green and Julianna Goldman with full coverage and analysis of president obamas state of the Union Address at 9 00 p. M. Only on bloomberg tv. Looking forward to that. How do you make money creating spam . We have the formula. Yachts, spaceship, Christmas Trees are the dozen. Aircraft. S biggest well be right back. Time now for the scene where we bring you the business behind me at ea and pop vulture. One to make money selling music on spotify or itunes behind media and pop culture. Justin bieber they think hes so gorgeous and so cute its kind of catchy. Written 14,000 songs and they find his songs because of keywords like Justin Bieber. You can call it spam or clever marketing but hes made 23,000 in the past year and he joins us now from boston. I think you should be making more of band that. Thats clever. Like she likes it. How did you come up with that . How is it working . I was in a more traditional indie rock band and the only songs selling had weird titles so i spent the last six years writing lots of songs with weird titles. Part of the problem as i typestand it is when you it Justin Bieber, your song m, as opposed to might come up as opposed to Justin Bieber . Maybe its a problem for me as i spotify user. You have to be pretty desperate Justin Bieber fan to find it. Is this viable . To get them to find your music and download . Working inont like your basement, its better than nothing. 14,000 songs . You are prolific. Klick sometimes i will write a song, will you go to the prom with me and sing at 500 times each for a girls name. Us lots of work. I want to ask trish to go to the prom. Then i can download it and tell her to go look at it . Is dozens of videos of kids you have done just that. You can get that jingle. Will this ever turn into something more than 23,000 per year . Going to keep writing songs so the possibilities are infinite. You come across as so funny but youre pretty serious. You think of this as a business . A goodbut im having time. What is your Favorite Song you have written . This one about Justin Bieber . I dont have any favorites. This polar bear song is a classic. The food, type in animals, names and i just make songs anticipating what they might search for. Farley, if there is a will, theres a way. Maybe i will write a song about you guys. We will play it tomorrow if you do. Thanks, matt. Its not a bird. Its hardly a plane. Its masses. The biggest aircraft coming up next. It is massive. I dozed off once or twice, not during the obama years, but i am alert and i understand this speech is going to be very long. Keepm the president hearing read keep harry reid awake . Gary made the point that at 46 Approval Rating, its hard for the president to go hard on this. Will you softpedal it . Where old there be the same fire will there be the same fire . Its important to try to mobilize the base because hes going in with lackluster reports. This is year six. He has two years left and not really because of the election. Ande will watch area read hope you are all watching us tonight. Bloomberg television has a special report on the state of the union tonight. Al hunt will have live coverage and analysis of the state of the Union Address. Goldman,n, julianna and full coverage beginning at 9 00 p. M. Dominating the dubai air show boeing is notut the only key and the sky. We are looking at the five biggest aircraft. I love that. If you want more rankings, bloomberg ar. Com rank. Will be joined by the founder of hustler magazine, larry and. On defending the first amendment, legalizing marijuana, his thoughts on president obama coming up in nine minutes. You dont get to hear from him very often. Sure you tune in tonight to watch a Bloomberg Television at 9 00 p. M. We will have live coverage and analysis of president obamas state of the Union Address. By josh greenned and Julianna Goldman. Tune in and i will see you here at 9 00 p. M. 56 pass the yeah worry and that means Bloomberg Television 56 paste markets the hour. Day declinee three in the s p 500 index. A check on the board shows the Broader Markets was up 0. 6 at 1792. The dow jones up 90 points at 15,928. The nasdaq up 0. 3 at 4097. Rising Consumer Confidence higher than estimated. Helping to fuel the market price today. For marked a strong year ipos in the United States. Companies from twitter to Hilton Worldwide joining the Public Markets but will the trend continue in 2014 . Leslie joins me now in the newsroom. Talk to me about the state of the market for new stocks. It looks pretty good so far. The pipeline looks Even Stronger than it did last year at this time. We could see another extremely strong year in the ipo market. That ewing said, any macroeconomic shock that being said, any macroeconomic shock could derail that. What are they looking at . At conditions, like we said. It has continued into this year. A lot of these companies were bought by private equity during 2007. Uyout boom of 2004 now would be the perfect time to monetize. Theyve had time to monetize and restructure those businesses to make them leaner. We could see a lot of companies coming back to the Public Markets. Leslie, weve heard a lot of talk about money on the sidelines waiting for the opportune time to come back in. Can the same be said for ipos, potential deals waiting in the pipeline . Absolutely. Deals on the ipo front definitely benefit from an improving economy. It increases the Risk Appetite encouraging investors to buy into ipos which you see as a separate asset class because they are the unproven story because they are attracting performance driven investors which usually goes handinhand with an improving economy. With the fed taper argument, that can benefit as investors strivingy out of bonds for performance through the ipo appetite. The giant in the room is the. Hinese ecommerce giant what are we hearing about that . We hear about them going to hong ing to pay courtesy calls anticipation for this. Did you see the numbers from yahoo today . Unbelievable growth that that company. That said im a timing is still not official. The difference between the ipo is that its not going to be a Capital Raising event. This to pay using back debt or hire more workers. They have not official deadline other than yahoo , 2015, when yahoo could sell the stake through an ipo process. It could be tomorrow. It could be one year from now. It is still up in the air. Leslie picker covering ipos for us. Inc. Youre so much. Thats it or on the markets. I am mark crumpton. This is taking stock. I am pimm fox. I will focus on businesses and people that are cutting edge. Larry flynt, one of the pioneers of the Adult Entertainment industry, is going to talk about hustlers future. Goldmedal ice skater evan lysacekil
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