Today. Nineup eight percent percent now. Bill, ime i get my gas have a mini heart attack. It may be major this month. We will get another couple of months of whether corrupted data from companies or the government. We could not sell as many was so cold it outside. In terms of the markets, turnaround tuesday seems to be in effect because the dow has recovered from the 326 point drop. The causes for weakness and emergingmarket concerns and the fed tapering, still in effect. Drop inlacher said the the past couple of days will not get into get in the way of the fed continuing the dialing down of the stimulus. Maybe what the market is crying out for. E want more qe the central banker was very vocal about how they are just going ahead and doing whatever is best for them and being selfish and not taking developing nations into account. We do. Microsoft looking out for number one, naming a new top spot. Stepeo bill gates will aside from his role as chairman of the board to devote more time as advisor to them. John thompson will take over for bill gates. His search went on for so long people are wondering. It hit me so closely because i spend a lot of time with our. I did not know if he would go or stay. He eventually started decided not to. They now hired an insider now. Wanted tol candidate go. Bill gates is there. You still have Steve Ballmer very close and paul allen is hanging around seattle. That is a lot of baggage. Our guest host for the day, thatr in chief of a weblog covers everything auto related. It makes sense it is matt millers favorite. It branches out to one million other sites i love. It does. We want to highlight market, and Equity Analyst who covers microsoft, is with us as well. With you. T is this good news . This is who i suspected for a while would be the new ceo. The president of the tools division, the largest part of the company, and the architect where the platform for microsoft came from. This is the future of microsoft. He has been part of that and is given more responsibility over time, more reorganization. Ive been figuring the most general i frankly think it is good for the company. We have discussed a lot when the news came across the wire, microsoft seems to have failed at almost every turn when it comes to the Consumer Perception of its products. They do really well on the enterprise side. They own it. The cfo comes from the enterprise side. Is this business going back . No. Most of it and the big focus will be. The company spent eight years redeveloping their enterprise is business. It will now drive the move to the cloud and we will potentially see substantial or explosive Growth Driving revenue , differentiating. They have been doing well on the earnings front. Very well. If the process is successful, in a year and a half and two years, the largest so far. Made to layalready the land of what he wants to do. Here is what he said is his priority. The first thing i want to do is ruthlessly up remove any that allows every individual organization to innovate and then focus on innovation, on Things Microsoft can uniquely do. He used the keyword, innovation. I did not hear disruption. I did not, but microsoft has a great press photo of him chilling out in his zuckerberg style. Trying to art. He is a young guy, 45. He hangs out with all the guys in silicon valley. It is a nicelooking hoodie and that is what i would wear if i were a billionaire wearing a hoodie. Speaking of people who have a lot of money, here is bill gates asking him to step up. I am thrilled he asked me to step up, substantially increasing the time i spend at the company. I will have over one third of my Time Available to meet with product groups and it will be fun to define the next round of products, working together. Matt, i thought of you right away because of the connection. It is something you have been covering for a long time. Itll covering ford said the ceo session problem has taken too much focus away from the products. The same is true at microsoft. Absolutely. The day he said no, he is staying, do not worry, iker caps offs price went down and ford prices went up. That is the way everyone viewed it. Complaints. Ernal people know eventually mark will take over at ford, but it was bothersome to them he was walking around. She said the same thing. Maybe he will, but it is not a done deal. Who knows. Back to getting microsoft and that to do list, he has a lot of constituents. Employees and vendors and customers and shareholders and the board. How is his message different from audience to audience . We cannot tell until he starts to deliver it, but i think he will deliver a similar message of innovation, a drive to change in business, all the things you would expect. That will be important. He is also capable of bringing in interesting items and discussions. Capable of surprising us and i would not be surprised if we see it. The xbox business is one of my favorite businesses. I wonder if they will rake up that business. A lot of people have been talking about that is the one that is mogul i sleep most likely to be spun off. They are saying they want to be part of the cloud and you have to have devices for that. The only device microsoft produced recently that anyone cares about is the xbox. It is great. Premature to say all of a sudden they will, because the outgoing regime was a big fan of that one microsoft strategy. Microsoft and the reorganization took the xbox operating system and Development Team and combined it with the windows team and are moving more of similar operate operating system components, not the move of a company thinking about breaking it up. That is the move of a company trying to combine and make leverage that works in other parts of the business. That is steve omers will his microsoft look different . His microsoft will overtime at with different because the cloud will become bigger and the cloud will drive a lot of the story. The opportunity in gaming in the future will be gaming in the cloud. Xbox live is a big big business. The point is, it is a big opportunity for microsoft if it were not just part of microsoft. Within microsoft, it looks tiny, but the reality is they will leverage the cloud investment they will do and that will differentiate them in devices in general. Thank you for your perspective on microsoft and the new ceo there. Mandela is holding a Live Conference or webcast i cannot think of the word. He is addressing customers for the first time in his role as ceo if you wanted to watch the entire presentation. You can go to bloomberg. Com. They have someone interviewing him. Other Companies Recently General Motors has a new ceo. And she just got swarmed. They said, we will not do that with other journalists but we will interview our own guy. That is one way to do it. We will be back. Welcome back. I am matt miller. Just about 40 minutes until the closing bell. 47 minutes. Take a look at where the markets are. Allback tuesday, but not the way back. Turnaround tuesday is better alliteration. Nasdaq, it down lost 326 yesterday. The yen is weaker as well this afternoon. The yen was one big reason why stocks continued to lose ground. An important topic here today. And awill get to it minute. Matt is our guest host for the hour. We are talking media because Companies Start reporting earnings, including time warner. It began laying off employees. Also with us to talk media is paul sweeney, head of north American Research for bloomberg industries. This it seems like cost cuts are a way of life, like it was for the banks. It is. Side. Ic on the publishing Newspaper Companies and magazine companies, they are challenged with revenue. There is no growth. The only way to maintain profitability is to cut costs. You see it with time inc. As they get ready to spin out and be a Standalone Company as they have to show Profit Margins to investors. It is all of our faults and we told them years ago not to change and not grace the internet. It was part of a large strategy to destroy time. Business insider, huff po, a upstart Media Outlets on the internet taking a lot a web views. They are breaking some news. Exactly. It has been a change. If you look, what is interesting is, you had nate silver at the new york times, and he was part of a big Media Organization with some of the best traffic posts and most read stories they had done. They are founding their own companies because even the new york times, they are still moving too slowly and they are looking for venture capital. Media is still a big as is and people still care about it erie it some older organizations did not adapt fast enough. People trading upwards as well. You have got to think that is either the sign of a turn or insane. Just plain insane. Some of the traditional medias were talking about, they have to cut costs. And soent and so on forth, we are starting to see that talent on the print side really migrate from traditional ink on paper to the digital side. That is where the dollars are in terms of advertising and subscription fees. Class everyone getting into as more 1000 eyeballs, people get into it, it drives the price down. To differentiate yourself, you have to do better. That is why we are seeing a return to longform internet. You have to give value to advertisers and readers. Buzz feed does real reporting. Everything is nothing but that on the web, the price of 1000 views eventually is worth nothing. Our advertisers. By the buzz feed Business Insider where you have to click soon click through every slide. They care about audience and will pay for audience. Wherever audience goes, that is where advertisers follow. It always will be that way. The new york times, you are seeing circulation decline year after year. That is a problem when you go to advertisers. Was watching the super bowl, i had my ipad in front of me and was checking my twitter feed at the same time. For now, it is still twitter tv first. Phonead my macbook and and everything going at once. Everyone talks about Second Screen of your laptop and household. In my household, the Second Screen is the tv. With carrie underwood, we were watching twitter and i caught 90 of what was on twitter and 10 on the television. It was a better viewing experience. Quest that is how a lot of people watch tv. Tom keene viawith twitter. Were watching the same football game. Hang out with tom. It is the only way he will. On the internet, it is 15 . Some of the online video, faster than that in social media is faster than that. The dollars speak for themselves. Matt, your Parent Company is known for having a snarky tone. How important is that differentiating your content versus another weblog that focuses on cars . The idea is to do what other people cannot do. Interlink, source which runs motor trends, we reported first last week, we are hiring people right now and it is because, if you want to read the same review everyone else does, that is fine and there is alot of market for that area story was broken because everyone had that story and they passed on it, not believing. You get in trouble sometimes. You have broken embargoes in the past. We do not break embargoes. We do not buy embargoes. They are lazy journalism. The information a week ahead, our jobs as journalists are to find that information. We called people might them know we are breaking the story, but we did not agree to the embargo. It is the other thing we do on the web here in magazine journalism, ive done it before. It gets lazy. They have a month to do things. It is not on the same schedule. You guys here get up early in the morning. By 3 00 everyone. Class you are not sucking at the of the organization theteet. The teet. That is the family acceptable word. Ask matt, even though you just said that, we will let you stick around here and we will be right back. Time for global outlook. Investors remain concerned about emerging markets to shift away from that for a second, bill gross sounds skeptical about chinese gdp. Six percent or seven percent , emergingmarket companies, no one knows what is there and it is a little bit of baloney. We will have to wonder going as tod through this year the potential problems of china and other emerging markets. Any time you can make a reference to lunch meat in china is a good opportunity. It is not a shift too far away from the auto market you covered. , it is now the biggest auto market in the world. Fastestgrowing, and General Motors is really chinese motors at this point. They sell more cars in china than the United States. Is audi the big seller their . The government officials tool around in them. It is interesting. They have a whole range of cars they do not sell here to meet the chinese market. Wherever you are and the company you are working for, you cannot have a nicer car than your boss. They sell an extended version they do not sell in the United States. Consumersand chinese tastes are similar. That. Shy cars and all of carson also talked a little bit about china. He has been known to short a couple of big china stocks and he asked if we can trust data coming out. You cannot really trust the data coming out of china. That is reasonably well established. You have collection problems but also a government that is really knowingly not putting out real data. Someone argue you cannot really trust the data out of Federal Reserves either. Conspiracy theorists are all out. It does not count fuel costs. You cannot eat and ipad, that is what i always go back to. If you do not think there is inflation, go to the grocery store. The problem now in markets is that there is not enough inflation and that has been one of the broader concerns driving stocks and emerging markets, u. S. Markets lower, it is 26 minutes past the hour. Lets take a look at where stocks are trading right now. For the dayur high but we are looking at gains right now. The dow is up by 4 10 of one percent and that is about 78 points. Yesterday, 326 points it fell. That was the worst to drop of the year so far. The second worst drop of the year was 318 points and that was the week before. Start. Y rough pretty volatile after that. This puts it into perspective. Not much of a turnaround. Bad in general for stocks. And jcp. Down 9. 9 right now. The Bloomberg News story on the terminal right now says jcpenney shifting from terrible too bad. I think the best idea for jp jcpenney, i think jc should i jcpenney and rename it. They would make a lot more money. We will be right back. Welcome back. 30 minutes away from the close of trading in the u. S. I will focus in on my favorite subject. That is cars. Here with me, editorinchief, before we go further exactly what this is for viewers who do not know. We are probably the Worlds Largest online news site. We just cover the Auto Industry the way normal people would cover it. It is not all press releases and boring. People rent cars and race them. To carsthing related and not necessarily car reviews. Yes. You will love it. You have a lot of other family sites and we already mentioned this. You have opposite lock, and on truck yeah, my domain, because i prefer a truck over a card. I need it. There is a great story about the fact toyota might come out with an amazing offroad competitor to the ultimate truck in america. I thought there is no way it would happen. They would they will definitely show something. We show something and motor trend did a front page cover story on the plastic model of a car they showed that they will never make. They will never make. They do not have the components to bring it out, but they have a nasty truck in the tundra. It is a possibility. I think they could do it. The ceo, it is his name on the car and he can do whatever he wants. He loves to race. He said, we want to make more interesting cars. What is the point of building boring Toyota Camrys all the appeal i do not get the of the pickup truck. Thisw could they make bonkers truck . It has racing suspension and wheels that are 35 inches, it is a monster, but they sell them out. They cannot keep them on the lot. 10 other guys that find it amazingly attractive. One out of every 10 piece or just people goes offroad. They look awesome. I went offroad and with one right when they came out when i was out in a random place in texas driving a truck and people thought it was a concept car. The reaction i got was the same i got driving around the streets in a lamborghini. It is bonkers. That is a decent rice tag. I spoke with someone who defines the suit the future ahead of the chinese new year. He said last year was the year of the automobile and this would be the year of the u. S. Real estate market. Getting back to the year of the automobile, pickup trucks, that was a big precursor to the boom we saw. Will they continue to be big drivers hear . Absolutely. That is where a huge chunk of fort rough its come from. The growth were seeing of chrysler, that was only one of the big three that reported positive sales growth last month. People love trucks. For trucks. Azy i sold both of my cars. While everyone else here is i will do the snow, snow we dont. You mentioned one of the great accepted travesties of automotive journalism is that these companies do not tell us their margins on products. It drives me bonkers. Analysts try to suss it out. , i passed more than half of profits for ford. We do not know for sure. They make tons of money. They are on a completely different product cycle. Cars get refreshed every four or five years. They make a Huge Investment in a hope pays off. Huge upgradebeen a cycle this past year and that contributed to car sales going back to the highest since before the recession. Absolutely. The question is, are people driving more . There is a chart of vehicle models. The data from the department of transportation, one interpretation is that it peaked in 2008. Three point one million miles traveled by americans was the peak. Yes. Back in 2008. One interpretation might be these are people replacing old cars and not necessarily new drivers coming on. Transportation, are people walking more . There is some of that. There is a trend toward urbanization. I live in brooklyn. I use the metro card more than the car. I am on a car site, i get the cars. Public transit is great. Leave the road open for my subaru. There is also a similar step. The average age of a car is older than it has ever been. So yes, there is some Market Movement for people to replace their vehicles. They released pressure off of new cars. Wanted they were afraid to, which is why hyundai came back out. We are past that stage and i think at this point, it is People Holding onto their cars and people waiting they have had their job. They need to go out and finally by that maza roddy. People who do not buy cars and just used zip car, i do not know if that is good or bad. Haveds my age, we will kids ourselves. I am a millennial. It will be a different car from what our parents bought, but it is really money. Crushedmy friends are by college debt. Metro cardet the every time. A lot of them will end up buying the Toyota Camrys. The car may be boring, but the prophet is insane. Toyota made more money last year than General Motors and. Class that. Warrantee, maybe that is the hyundai warrantee. I cannot remember. We will take a quick break and will be back right after this. It is time now for Word Association with our guest host, the editorinchief. We picked one out for you especially to segue. A really embarrassing way to die. The ceo of the Segway Company a cliff. Ing off these things never took off. Just gettingare let off. Been to dean kamens house and he is the original iron man before elon musk. An amazing dude. Elon musk, Word Association. Weird. I talked to him. We were quoting him in an article because he said something that was like, his sales guy went to detroit and said, we will not build a truck and where did you get a crazy idea what that . The crazy idea was elon musk. Said, thishim and came from you. He said, i just say crazy stuff sometimes. Elon musk is known for just saying random things and everyone it is company said, what . That is also what makes him awesome. Do not let him know and do not tell everyone, but he is cool. I like random and insane things every once in a while. Bob says crazy things all the time. He called Global Warming a crock of something in french of in front of a bunch of reporters. In the middle of snow me get in, we might tend to believe him a little bit. We now have jim farley who occasionally says crazy things. He sometimes gets in trouble for that. He says you can track everything in your car and he says, we do not. A wordto association that has to do with breaking news we cover this morning. It is fun to ask especially millennials. Bing. Seen commercials for that. I think it is a Search Engine but i do not know. I use google like formal people. Bing google toou get to google. How about footie e trying too hard. The new microsoft ceo shown in his hoodie with his glasses, it will not work. Be yourself. Everyone does not need their own thing. I have a word for matt miller. Snowmobiles. Valentines day is my reply. I am very excited. Qwest connect the dots. On valentines day, i will go with one of my producers and steven craig, one of our favorite cameramen, and rent snowmobiles upstate new york and drive around, five hundred horsepower snowmobiles. He is a handsome man. It will be a very nice day. Sounds like a great valentines day. Usit will be the three of here at same love. [laughter] perry . Goodbye. Fellow texan, but, i worked on a Google Campaign against rick perry and he beat us and he is smarter than you think. He is a tough debater. He is gone. It will either be greg abbott or whitney davis. The highest spending we would say wendy davis next. Let me throw out one that is more important if you are from texas. Matthew mcconaughey. The second most handsome match to ever go to the university of texas. He is great. I heard the new show he is doing. N hbo is fantastic he was in a movie, mud which is amazing. I highly recommend you check it out. He is under consideration for best actor and he won at golden globes. Can we do so she . Sochi. I will do so cheap. Do not flush put paper. There is a picture in the media room. The toilets are apparently not working and it is a disaster. I love disasters. That is why you are a journalist. Matt, editorto inchief. In the meantime, Mark Crumpton has breaking news. We have been following this for the past couple of minutes. Puerto rico, Credit Rating, cut to junk. That is according to a spokesman for smp. If you have been following this story and watching us on bloomberg television, you know puerto rico was set to issue debt this month and that would have been the first borrowing from the u. S. Territory since june. We had been learning learning back in december, december 11, Moodys Investors Service had threatened to cut puerto rico to speculative grade. That was what that was within 90 days, if it was unable to capitalize markets. The commonwealth and its agencies had 70 billion worth of debt according to morningstar, about 70 of u. S. Municipal mutual funds owned those securities, which are tasked tax exempt nationwide in puerto rico. Isare learning today smp cutting puerto ricos Credit Rating to junk according to a spokesman. We will continue to follow this story and see what the ramifications might be not only for puerto rico but for the wider global structure. We will continue to follow it and bring you more details as soon as we get them. Back to you guys. Thank you. Breaking news. On puerto rico being downgraded. We want to bring in chris, the director of discipline portfolio strategies at wells fargo securities, for his take on the markets as we head into the close. 40 minutes, 30 minutes from now. We called it turnaround tuesday because we like alliteration. And we are optimists. There is reason to be. Japanese futures are up by about two percent. This is it. I would not say it is over. A lot of the heady heavy lifting has already been done. Based on fundamentals, some of the things we are seeing in risk, the midsingle digit is about appropriate and that is where we are at this point. I do not think it will come down and bounce off. Is there any reason for optimism . As the fed comes out, scarlett pointed out earlier, and says, look, we are not ofking off our backing off qe. And, we get better and better unemployment numbers but we all know it is because people are dropping out of labor fours were taking jobs that are horrible on wages they cannot live on. Higher Interest Rates mean people cannot afford to go out and buy the tracks they cannot afford or the homes they cannot afford. A positive outlook . Interest rates, the tenure is to 60. Rates are not going higher at this point. Credit spreads are tight. A lot of liquidity in the marketplace. The overall market with gdp, the low single digits, it is still relatively robust. When you look at what the fed is doing, the fed will and tapering proper probably toward the end of the year. When they are done tapering, they are still at zero. When we look at the economy and are not jumping up and down saying this will be a great year, but it is still a good year and you look back at s ptightening cycle, the was up about 50 . You can still see with the combination coming off the table, equities moving higher. How much of what we have seen in a last couple days is the and strength and the repricing and liquidity being inspected . A lot of it was repricing of risk. The markets forgot about some of the for sovereign risk and they priced things to perfection. Now all the market is doing at this point in time is discounting some of the macro risks at this point. I wonder what you think about the breaking news Mark Crumpton came in with. Of discussion about this on surveillance this morning. I am not sure. Can they default . Is it possible for puerto rico to default . If they do not, do we have to solve them . I am not an expert. I cannot really give you a good answer. It is a concern. It is like our own grace. It is a concern. Tail will lag the the dog. Negative headlines coming in to an already jittery market. When you look ahead, we have got the jobs report friday. Next week, the new chair of the Federal Reserve testifies before congress. Will either event provides support for the market . I think so. The market is finding a price where risk is appropriate and people can make money. Athink the market will digest lot of this information and move sideways a bit and move higher. When you look, there is still a lot on the table. The economy is still in a good place. Valuations are much higher than they were. Still reasonable. The relative value basis, i think they look pretty attractive. Jeffrey saying they will hold tight on tapering. I think a lot of Market Participants feel if they can spank the dow hard enough, janet yellen that is quite an image. Thank you. [laughter] yellen, already dovish, make him and give a little bit of what the market wants. Yes. I think the market, they are just repricing risk and janet yellen, the reputation is very dovish. She comes in and the market realizes, it is going to be until the end of the year until tapering ends and there is a lot of domination. Go back to the 2006 time. We have multiples of what we had on back then. The markets did relatively well still. I think she will come on and chew the market. Ultimately, will find a footing here. You covered the Auto Industry. Do they worry about the volatility . It is background noise. Share prices, detroit was last time i talked to auto executives. It was detroit. Andooks darn good for ford General Motors. The car Sales Numbers that looked like a blip a month ago, and this month, they said it was the weather, but it is starting to be too many ticks it down and it is worry some. You need to sell a lot of f1 50s in the economy. Again, people are data point driven. If you look at the broader economy. It was still about 50. One data point. Not a trend. I think what we are seeing, a lower growth, but a robust environment. It will take a lot to push the economy down. All in all, it is steady. You can make money in this kind of environment. What is a drop . Where . Emerging markets are a good explanation for something. The trade we always build up in class. A little bit more leverage has come into the system and people are taking on more risk. The opportunity is our smaller this year. In order to exploit the opportunities, you have to become a little more aggressive. With volatility, that is very low weeks ago. You have seen it spiked up a little bit. We can see more of that. Positioned for a higher environment. Thank you. Chris harvey, the director of discipline portfolio strategies at wells fargo securities. We have that eight missed to go before the closing bell. Eight minutes to go before the closing bell. Still fairly low is when you put it all into perspective. Compared what we saw in 2008. Coming up next, a retailer launching a new womens line. Up 82 points. Street smart is heading into the close. A better day for the dow after yesterday possibly hundred 26 drop. Time for your top 10. Take two. Dropping nine percent as it is forecast. They also posted a thirdquarter be held by sales of grandpa thought of five. That is matt millers favorite game. Percent. Nearly three the firm is raising the stocks. That will happen later this year. Bank returns for held helped by higher earnings. Lower legal costs. The owner of kfc and taco bell posting fourthquarter profits. Growth in emerging markets as well as russia and france help bounce out sales in china. Lets talk about zynga, more than two percent, and analyst raises his price target. Raises his price target to six dollars. Is positive on zyngas natural motion. Amazing. You raise your target to six dollars. Five, jumping nearly 18 to a record. It is using its fullyear sales and profit forecast after customers in north america bought more of its product. In todays surge, michael kors, the person and not the company, a billionaire. He owns about two percent of the company. It is amazing. The session guys make so much money. They can if they get it right. Quest you think about how many guys do not get it right. Michael cores Michael Cores they are right next to each other in the mall. You look and find the bag you want. Quest think about what you want. The bag you want. All right. Moving on to number four, linkedin down one percent. Shares to 60to 80, and it is facing headwinds, including decelerating traffic and jobs data. Sirius xm radio shares are down two percent of the satellite radio provider. To one jumped 12 billion thanks to subscriber growth. I have xm in my car. It is good stuff. It is the best. Number two, jpmorgan, up one percent. 543 million settlement. In new york. Judge investors accused jbm of turning a blind eye to a ponzi scheme. Quest number one, stock of the day, j. C. Penney. 14 . The store chain says samestore sales rose just two percent in the fourth quarter, missing the average. The game projected by analysts. There we are on the own is closing bell. What a difference a day makes. Some of the losses crawling back , 1756 there, a gain of 13 points. 15,445 on the dow. We lost 320 six yesterday. A bit of a ways to go. This has been an incredibly rough ride. What you think about it, we are only down by about i percent. 5 . Exit has only been a month. It is february 4. If you annualized it, you are down 60 . I hope you are right. Im willing to bet. Quest you think they will still taper . They will hold tight. They will hold tight on the taper. Janet yellen is obviously a job. Dove. The market looks like it will tell her into giving more punch. But it looks like they are not going to. What happens when you make the baby just a in the crib and cry . Timeout . Time for the roundup. Always havet, we julie and christine over here. I want to talk about. At microsoft. A new ceo. The guy has been running be cloud for graham. Program. He is replacing Steve Ballmer. Bill gates. Aside as chairman of the board. This is a video that was circulated. Right background to lead this company in this era. There is an opportunity in the cloud. The groups that he has working with, he has really met the needs of our customers. Help out. Better the stock has been in the same place since 1998. It was bare 2007. 36. Whether he is wearing the suit odie. E huddy hodie that stands for innovation. Bill gates has done a fantastic job with the move. He is putting himself in a steve jobs position. He says he will work there when they wait. A third of his time will be devoted to microsoft. Nadella is free to do whatever he wants. He can take some parts of the company and get rid of them. Not everything. It is like to parent on the board over your shoulder. His job is on the line if he does something to upset former or gave Steve Ballmer or bill gates. He will be the driving force. Will move people aside so this guy can go ahead and make changes. He will make some room between bill gates. Is the german word for buffers. I had actually forgotten the english word. He will provide a buffer. Greatrosoft earnings were last quarter. You can say what you will about the stock, but if you step back and look at it, it is doing very well. Because of the enterprise in the cloud business, and that is where nadella comes from. I is that deal of expansion in market share . It has become like ge. A big oldfashioned kind of stock the company. Perhaps this is going to bring that juice that it needs to get some of the innovation and growth. Can he function as an outsider . Can he bring a freshness that an outsider would bring as an insider. That is like gm. Can mary bring that . Often eat here in detroit because we do not ask it is easier in detroit. Money andke a ton of that is what microsoft has been doing. That is not a puerto rico has been doing. They make a lot less money than they spend. Their Credit Rating was cut to junk by the rating agencies. General obligations has been cut . A db class bb they are negative watch. What do you do . Could puerto rico default . I am not sure it is even legal as a territory of the United States of america. When we come to the rescue . If they or a territory . It has never happened. Exit is a gray zone. I was just texting back and forth with hans. He said that this is where it gets ugly. Part of the issue is that a lot of mutual funds have to get out. Now that it is junk, they are not allowed by their charters to hold it. Saw that creates additional pressure. The United States will still be there, right . The are picking up . 25 on dollar. You cannot default. What does that say . If they stay or a territory default, it does not say anything good. Says you haverter to lose it, you cannot hang on in the hopes that the u. S. Will come into a bailout. Life is good news for haunts. It is not good news in your 401 k . There are winners and losers in every market. Over you shopped at target the holiday season, you might be a loser. Target is apologizing for those data breaches. Said thathn mulligan he is deeply sorry for data breaches last year. We will learn from this incident and as a result, we hope to make target and our industry more secure for consumers in the future. The Senate Banking committee is calling for retailers to participate in a system about data breaches. This. My issue of all target couldve easily been avoided, i dont know how easily. Target and neiman marcus, they did not come out until customers until started to be reported in the press. Why didnt they come out and tell everybody right away . Target heavy data breaches several years ago and it took several years to come until customers. There is no law or regulation forcing them to do this. It is the bank that would have to tell you, not the retailers. The banks should tell you the retailer. You would think the Consumer Protection bureau you would think. I think Elizabeth Warren would be slapping somebody. This is a problem that would never happen in little old backwards, foreign languagespeaking europe. For years they have had a system called chip and pin. All of their credit cards have a little microchip. You have to slide it into a target that would cost 200 per machine to upgrade. It would nullify all of these security issues. U. S. Regulators dont care. Regulators are talking about these Early Warning notifications. They are also talking about steady up a standard for security measures. Whenyou set up a standard the iraqis constantly evolving . There is a process if the threa ist this constantly involving . There is a process. Bitcoin. We run a risk that our bitcoin accounts may be hacked. We won the risk that someone is out there mining more bitcoins. Or putting them out there to be mine. How do you secure that . All the bitcoin to mind and then there is deflation of the client. In bitcoin. From bitcoin to a more traditional industry. Time is preparing for job cuts as they spin off from time warner. Brother, tims is preparing to leave. This will be tougher to pull off. If you think about it, it follows with news corp. Did. They spun off there publishing arm. Now time warner is doing the same thing. The problem is that they are spinning off Time Magazine when news corp. Spun off its publishing arm it was debtfree. That will create a complication. That is what you will see job cuts. Know what is fascinating about time warner . Aol time warner came together in the late 1990s. They got rid of aol. And then they got into cable. Now you have time warner, which is cable. Now they are spinning out the old legacy. This is one of the worst deals. This is how bankers make money. The bill demong and tear them down. Build them up and tear them down. I know you are excited for this. Oh yeah. House of cards is coming out soon. They are raising money to make more original shows. It is a Value Proposition going forward. There are noat stable movies or shows to watch a netflix. Searching for movies on netflix, but i like house of cards. Blackorange is the new is good. Season three of house of cards is coming. Is this them introspectively ainking about we are channel with none of our own content. The content makers and the audience, how much value is there to be the middleman . Point, p to this they have a ton of content. Everything they do is a home run. With the exception of lille hammer, which was good, but not a hit. Why do they do so well in the content . Life is edgy. You look at these storylines, and that is some creative stuff. They tell the story in a way that leave it all out. The way it works when you talk about broadcast networks, success breeds success. Haveu are at amc and you madmen, you are able to attract other creative types. Ammer, the a lilleh creative types know that there is a commitment. Kevin spacey talked about this a lot. They do not have to follow the traditional model of the pilot that explains the whole story in one episode. And then you have cliffhangers. You can sit down and watch all 13 episodes. There are new ways to do television. Who doesnt love that . I love it. Good to see you guys. To buy . P, is it safe adam will tell you. Plus, facebook turns 10 today. We are talking to one of the social Networks First employees. We have more street smart coming up. We connected on his level of facebook having this mission of being more than building a company. It has a market cap or a value we are trying to do this thing in the world. We finally got a little bounce today. Is it time to buy . I would like to thank the folks who are crunching the numbers for us. And 2009, there have been a total of 18 declined. The team were declines of 5 or more. Two of them were declines of more than 10 . The current decline, the s p 500 is down 6 are sent. 6 . His current decline is not as bad as what we have seen before. It is more like the average. It is more inline with the average. It is not that bad. Can we possibly buy right now . Lets look at the indicators. I want to show you the percentage of stock above the average is really low. A load have sold off. About 80 are below their moving average. You can see this has happened before. You have a kind of selling. What has happened . Let me overlay the s p 500. You will see, curious isnt it, how they match up. These little green dots, they are buying opportunities. You get these dips down. There is a lot of selling and people come in to find value. That is one indicator. It is momentum. Done is overlay the mix with the s p 500. It is the same story. The fix is fighting as we have seen now. Look at this. You have had the opportunity to come in and buy. The point is, you start lining up enough of these indicators, and you find people who are willing to come in and buy. Good stuff them. Oming up, ve retailer eretailer bonobos get into womenswear. Facebook turns 10 today. We will be right back here. Ive just been reflecting a lot on the first 10 years of facebook and one of the things that i remember from early on, when my friends used to do most of my computer science. Now he works at facebook and runs most of our engineering. I remember right after releasing the first version of facebook at harper harvard, we had this conversation that is awesome that there is now this utility and community at our school. But someday, someone is going to build this for the world. It did not occur to me that it could be us. A in 2007, bonobos broke into crowded market with a simple strategy. Now the redhot Menswear Company is taking a similar approach as they fanned into womenswear. Theres a new idea behind a new line for women. Our ceo joins us here on set with some close from the. New line. G from the there will be a fashion show later. How does this line look . Ayr, all yearunch round. Pieces you can wear with versatility. An amazing pair of jeans with 30 stretch. We are hearing Amazing Things from the women who are wearing it. Kashmir sweaters, all caps letters. Essential pieces that you want to last for years. The one challenging thing about jeans is that you need to try them on. You might try on 50 pairs before you find that one that really works. How does a woman who is shopping for jeans a few manage that . Is boughtle company on the idea that based on the idea that you cant build trust canfit on online you build trust and fit online. We have Free Shipping. You have great energetic and empathetic service. Moreover, we have policies built around Free Shipping and great returns. You can take a chance on this. The world has changed and ecommerce is moving from something on the margins to the core of how we think about brands. Trish buying the new brand, or me by bonobos, and i am not sure my thighs, you will send me three or four that i can try on . You got it. Year six. Is now in we have these revolutionary shops that are personalized fitting rooms where you can try stuff on. We could see Something Like that coming. All we want to the brand. When it comesmen, to close, they want to go to the store. They want to walk out with the purchase. If you have gone through all the trouble of going shopping, you want that instant gratification. You want to wear it out. I find the you would say it. You would say that. Is there a difference between how men and women shop . There is a difference. Menwomen browse. Cannot build a great manhunt men hunt and women browse. We know about penetration of ecommerce. We know how busy women are. My sister was just in town which is a threeyearold girl. She is starting her own kids brand. Women are busier than i have ever been. You do not want to spend your whole saturday shopping for eight hours. For a woman who is traveling and working a lot, juggling a family and personal life, we think that ayr can be an awesome answer. Fingers crossed. I will have to check it out. Coming up everyone, we are talking to these of employee number 12. What was it like to build the company from the ground up, and why he left. That is coming up next. Rats on facebooks 10th anniversary, we are taking a look back. Steve king was facebooks director of media sales. They scored some of their first big advertisers. He joins us now. Thank you for having me. When you started it facebook back in 2005, did you ever imagine that the company had the potential to become what it has become . Ihi
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