Abenomics. Switzerland, voters approving immigration curves that threaten to upset ties to the eu and could hurt the economy. More on that later with hans nichols. Economic data in the u. S. , mortgage dealing would these an mba mortgage foreclosures. About iseene cares janet yellen testifying before congress. First woman to run the fed. We will talk about that with ensarling of the republicans. Earnings parade. Hasbro, we should get lori l after the bell. President Obama Meeting with french president hollande in charlottesville, virginia. I have heard the french president is traveling alone. Traveling solo. At the state dinner, stag. No date. And embarrassment of riches for the french president. He does not know who to go with. I am staying out of this. This is what happens when adam johnson is on the show. Data check. Stocks, bonds, currencies, commodities. 5 off of a churning weekend off of the complex jobs report. 2. 66 is where we settle. Euro is stronger. Through 100 on american crew. Brent crude at 810 wait brent crude at a 108. More fxbased. Vix, 15. 2 nine, go to cash. Youre right. Gold, 1272. Churning yen. Going to russia this friday to see the olympics. I cannot convince you not to go . No. Are you going to knock a hole in your door . The locks do not work. You have got to get out. I just heard you professing your love for figure skating. I am all figure skating. We scoured the papers on the web for stories. Figure skating free. Again,rgan in the news the New York Times talking about the email that was sent from a chinese regulator to jamie dimon saying to me a favor. Look at the daughter of a friend of mine, she is a good interpreter. Jamie dimon met her at a june 12 meeting, he had nothing to do with her being hired, she is now employed this woman was qualified, mr. Dimon was away from the sequence of hiring. Looks, how many people do you know have gotten jobs because they knew somebody. Job because aen a College Roommate said let me introduce you to someone. What do you think . It happens every day, i think the bigger deal is they found the spreadsheet connecting specific deals with a number of different people, there was some sort of pattern of behavior. Doesnt surprise me that they say can you help my friend get an internship, no. I try to get the middle child a job. Second frontpage story, russia and bitcoin. China said no more bitcoin, russia is going the same direction. They talk about illegal acts. This is a sequence. T. Gox, 50 of the claimed transactions occur. They are back up and running. , which is mt. Gox based in tokyo, shut down. The price of olivias bitcoin went down. 113 on her cell phone, it went down 50 . Cannotthe exchanges happen. Bringing into question whether this is a valid means of exchange. Finland said it is a commodity. Fromina has banned firms using it, i check it on my iphone. Apple stopped allowing you to download blockchain, bitcoin wallet. State attorney general saying the use of bitcoins in transaction is a technological floors to a technological floorourish to crime. Even ben bernanke said he even beninancial bernanke think the potential of bitcoin 22 , the soros, s p all in, 32 . Make a lot of money. He was still trailing the s p 500, really hard to be the s p. He has displaced right at bridgewater as the top performer. David tepper is somewhere in the mid40s. Great news for blackrock an etfs. The old vanguard, just index yourself. James mackintosh this morning, here is the key quote this hour. We will focus on this across bloomberg surveillance. Four other funds made four jillion dollars correctly calling strong run in equities. Our guest post is Michael Holland. We look at chairman yellens testimony tomorrow. They arethese hitters, making 2 and 20 on their fees, all they did was holland 101. To be everything back to vanguard. Japanesere in the market unchanged for commodities, 66 . Is better 22 than zero. You have been bullish every time, you have got to be long. Shameless plug. It is not. We are building viewership. Why have you been so bullish . What we have talked about, what david tepper has talked about, and the people at wellington, they have found things to buy. Articles will say the same thing. Look at what things cost, back you look atwhen values. When you had 10 times earnings for the u. S. Indices, that does not make sense. End of ourthe frontpage story. Michael holland, here is the thing. It is as dumb as buy shares. George soros is no different, he is really handed over control. It is no different than you picking up the phone and go and haresd you to buy me 1240 s of holland international. Simple investments, alternative this, high fee this. The stock market is a place you can make longterm wealth happen. It is about identifying things that make sense in terms of value. When you look at the u. S. Stock market, 15 times earnings, not so attractive, it is still quite attractive relative to what is you have not adapted your theme given the worries of the noncontraction we have had . That we havey is had so few interruptions to the bull market over the last several years, particularly over the last 12 months to 18 months, the complacency. A lot of people do not even care. People said i am not ever buying again. Jpmorgan story this morning, the chinese the hiring. Shareholder of jpmorgan like yourself, how do you handle the news, whether it is in the New York Times or bloomberg . Nothing. O do about that is ridiculous on the front page of the New York Times. What is in the article . Jamie dimon did not in fact have anything to do with the all he was quoted as saying was we will see what we can do. That is not a direct link. Folders could her, shareholder of jpmorgan, i started my career there. I was probably the only one whose parents did not know someone in the bank who got the job. That was the way of wall street and all of bloomberg and all of new york city. Why are you looking at me . Lets get to company news. Heres adam johnson. Worry at data theft at barclays. 27,000 customer files might have been stolen, according to a report in the british daily mail. The theft might have been limited to information from clients of barclays Financial Planning business. The bank is working with regulators and british authorities trying to figure out what happened. Still investigating. Nissan, japans least profitable carmaker. Income was just 3. 3 of revenue, a slim margin. Lowest margin among the japanese automakers during the quarter. A sharp turn for nissan, the company led automakers in profits two years ago. The company is recovering from production delays and slowing growth in emerging markets. After more than a century, car manufacturing in australia is ending. It is. Toyota will stop making cars in the country by the end of 2017, ford and gm have announced plans to stop production, the exodus comes after a runup in the Australian Dollar. Companies have cited high costs of getting to australia. That is your company news. Mayer makingercer headlines after yahoo reporting it is teaming up with yelp. All the details, coming up next on bloomberg surveillance. Streaming on your tablet, your phone, and bloomberg. Com. Good morning. Bloomberg surveillance, 2 00 p. M. This afternoon, a conversation with marilyn hewson, ceo of lockheed martin. Peter cook with that, a defense contractor for the nation. All things washington, look for that at 2 00 p. M. This is bloomberg surveillance, i am tom keene. Adam johnson is in, Olivia Sterns is here before she jets off to sochi. Scarlet fu is figure skating. Better her than me. Another big move from yahoo , marissa mayer, according to the wall street journal, partnering up with yelp. This is right up your street, olivia. Trying to improve the local search. When you put in bergdorf goodman, normally what would, is bergdorf goodman. Com, they are going to have the young local were a few they are going to have the yelp local review. Yelp reviews local businesses, trying to compete with the bigger players, Microsofts Bing and google. They have been doing this for 20 years. When mercer mayer was at google, she tried to buy yelp. Help us with a perspective. Would never bele bigger, they have relentlessly gotten well over 60 . 67 for december. Who is behind them . Bing has 18 , yahoo has 11 . Yahoo is the largest web portal in the world. What is a web portal . In search, tiny. 11 . Why do we care . Search ad revenue makes up 1 3 of yahoo s total sales. Michael holland is with us. Google goes and goes and goes. Buy and hold google or buyandhold apple. How do you know when to finally get out of a dog that used to be buyandhold . You cannot always do it. Two reasons, the Company Simply turns into something that you did not originally buy. Codec, motorola, the names go on and on. The other is that it gets to a level google, when i bought it, years ago, they were a lot lower. Not only in price but in valuation. The company has grown dramatically, i Love Companies whose name is also a verb. Ha, ha. At the end of the day, for example, twitter and tesla did you buy off management . The microsoft ceo changes or mercer mayer or Marissa Meyer at yahoo , do you buy off people. Thebsolutely, if you have right person in charge. Microsoft i dont think ballmer did a bad job if you look at cash flow. This looks like a good change. Google is a curious rennanreed, sergey bri running it. What if it becomes a Consumer Product company, no longer about search . Any of these companies i them to rejuvenate themselves, refresh themselves. Microsoft has tried to do that. For example, ibm. Companies like digital equipment and control data you are still long google . Still long google and ibm. Digital. Long michael highland, resurrecting names from the past. Adam and olivia are going what . Was that a song . Is that like radioshack . Keep it up. Down 8 year to date, yelp is up 38 year to date. Coming up, harvard professor Martin Feldstein discussing the impact of Janet Yellens capitol hill visit. That is at 10 00 a. M. Tomorrow morning, bloomberg will be all over that. Good morning, bloomberg surveillance. Futures 46. Dow scarlet fu is taking figure skating lessons. Headlines this morning. V thousands rally in kie calling for elections to limit powers of leaders. The country is on the verge of default. The crisis is in its third month and has crippled the nations ability to raise funds. Voters in switzerland improve approve limits on immigration, a setback for the government and business leaders. They warn that restricting the number of foreigners allowed to live in the country will damage the economy. The proposal grew out of concerns about scares housing and falling wages. Michael sam could become the player draftedy by the National Football league are. He revealed he was gay in an interview on espn. He was voted defensive player of the year by the associated press. Projected to be chosen in the early rounds of the draft in may. He has not been drafted yet. He would announce this before he has been drafted. I watched several tapings of various networks of him last night. A very well spoken individual. Just saying judge me as a football player, that is the only thing that matters. Interesting how this moves the story forward, he is not five years in the league. Like we saw happen in the nba. Morning must read. Adam johnson has a smart essay. Caught myrook attention, he was responding to an article in the national journal. Speaking about the end of american exceptionalism. He takes exception to that. The abiding source of exceptionalism is the american character. This is a difficult thing to quantify. Not everything that matters can be measured. Crook is on the other side of the pond. He has the accent . Michael holland is our guest host. Is ourill world, this kurds to clear markets. Since june 2007, we have not been perfect about it, a la churchill, we have cleared markets where others have not. How clear are markets . Pretty clear. We are so self flagellating in terms of things that could go wrong since the crisis of 2008, last week with a couple bad numbers, people expected us to go right into the tank. In fact, the markets were up a little but having had we have up the bottom in 2008. Icons in the face of people saying negative things about the u. S. Stock market. Continuing this discussion, Michael Holland. Talking about use of cash. Our twitter question of the day, is bitcoin biting the dust . Tweet us at bsurveillance. Streaming on your tablet, your phone, and bloomberg. Com. We will be right back, talking about the airlines and the weather. Good morning. Bloomberg surveillance, monday morning. Janet yellen tomorrow across all of Bloomberg Television and radio. 10 00 a. M. , that will be something. Gellen and chairman hensarlin of the House Financial Services committee. Adam johnson and Olivia Sterns, lets look at a data check. Stocks, bonds, currencies, commodities up 5. 10 year yield 266. American west texas intermediate, we were over 100, 9 9. 42 now. Jetblue might have figured out the secret sauce. They have one of the worst ontime records, only 73 of flights are on time. It only has 1 10 of complaints of bigger airlines. Why are consumers cutting them a break . Justin is from Bloomberg Businessweek and focuses on airlines. What are they doing . One of the things we have smallerm a paper, airlines tend to catch a break. The big guys charge more, people tend to expect more. That is the difference between people going on vacation with a Smaller Airline as opposed to the bigger guys, you are doing business . You do see the split between the leisure traveler and the corporate traveler. Bumping,sue of infuriating if you have ever booked a seat on the plane and they say sorry we oversold. You say jetblue has never done it, that might be a mistake. They do not oversell their flights. They are the only ones who do not right now. On the table. Oney financially, airlines do it because they have no shows. I want to frame this as a different business, lets take your work with Bloomberg Businessweek. Is this a new business or is this business as usual . New tactic. D of a jetblue has tried something different. All theluggage, headaches with lousy airports, is it a new business or is it just they recovered and are going to make the same mistakes . Is fundamentally transforming this time it is different. Ver to Michael Holland you do not think airlines are bluechip stocks. They are not jpmorgan or apple. All i know is what i have experienced, complete losses over the years over all the cycles. I have cycled long you get killed if you own airline. If it is short, you go out. Warren buffett, one of the few things he has done badly is owning an airline. If you look at the three year Earnings Growth for all of them, the small ones, the big ones, 40 , why is it that so many few people give them the benefit of the doubt . My experience it is on my experience is that it is uninvestable. Since the beginning of time when they started trading, the experience is in terms of losses versus games, they have only lost money. They are masters of losing money. The thing is, these guys are tired of losing money. I will buy it this time. No, it will just lose money. They have to put up with a track record. Jetblue and southwest are not losing money. Of United Continental we have comment, traditionally not focused on how to make money. We have to run it like a business. Justin, what do you see them doing . Capacity is down, not as many flights, and you pay more. The argument has been we are not a public utility, this is a Free Enterprise company that will make money. The airports have problems of their own. Americas worst airports according to travel and leisure, laguardia is right up. We can get to laguardia, flights delayed of the windy city. How can you be surprised . Onlyhicago area is second to atlanta and terms of volume. What are they doing wrong . Well, everybody always wants more runway. Large, it isand the mercy of the weather. Mercy of the weather. A moment of silence for Olivia Sterns. Are you flying aeroflot . I am. [laughter] every airport in certain parts of russia is like laguardia. Moscow airport is not very nice, the st. Petersburg airport is slightly nicer. I assume the sochi airport is bland new. Who is going to hold your hand . Have you flown aeroflot . I have. A stewardess. It is a flight attendant. Correction, flight attendant. Look at aeroflot, explain what the experience is like. The plane has not been renovated that recently. The airplanes are on average 20 years old. It is not much better on u. S. Carriers. Erasurveillances soviet expert. We look at your airline business. Swiss voters approving a new measure. On white people and companies are not happy. This is bloomberg surveillance white people and companies are not happy. This is bloomberg surveillance. Good morning. Bloomberg surveillance, adam johnson and Olivia Sterns. Scarlet fu is getting over the lego movie. Iran will offer Real Companies better terms on exploration contracts and then iraq. A government minister, the contracts will more flexible terms. U. S. Workers quitting jobs at a overr rate, it hit 1. 8 the last year. Workers voluntarily quitting is seen as a sign of a stronger labor market, reflecting optimism. Vie, 69r the lego moi million in its opening weekend. The number one spot. The monuments men, the story of a World War Ii Mission to rescue art did well. I love the theme song. Lego, lego. A new song. That is frozen. Lego whatever. Switzerland, expect the unexpected. The people of switzerland voted for new immigration curbs. Go home. Zurich and geneva are expensive and successful, they have had enough with the movement of troops into the nation. Swiss voters made this significant. Will xenophobia reign . Hans nichols joins us from zurich. This is a huge deal, take us forward to late may when we had the european vote. What does this signal . This as atreating switzerland story, but you are right. It is a European Union story. How they negotiate with switzerland over this 1999 treaty, they cannot go on the cart with switzerland, than other countries like france and the u. K. Will take that as a signal that they can take eu treaties and turn them into swiss cheese. Excuse the pun. You can have separate negotiations and the eu as we know it will cease to exist. When you look i remember when youopera of look, i remember the greek uproar. Nazis,ght, neo whatever you want to call them. How pervasive is the far right, almost fascist feeling across europe . There is a bigger problem in southern europe. Particularly in greece, they are about 25 . Less so in germany. We will see how strong the far right party is in france. The daughter of the initial rightwing politician there and france has already tweeted out bravo. You saw the same thing in the u. K. You are seeing rightwing politicians trying to seize upon the vote, that passed by 19,000 votes. A sliver of a margin. The chief White House Correspondent here for bloomberg for so many years. How is the immigration debate different in switzerland versus how it was here in washington . Toi thought you were going ask me about my trips to monticello and mount vernon, that is where all the focus has been. There is more direct democracy here, the immigration story in thestates is inside republican conference. It is an internal dynamic. Here, it is nationwide. In switzerland, at least. You have all the individuals going to vote. Close to 3 million of switzerlands 8 million population voted. Look at the breakdown, it is the countrys in the areas of switzerland where they do not have immigrants, and the countryside that voted in favor of this. The cities, zurich and geneva, they have lots of immigrants working in pharmaceuticals and Financial Services, they voted no. You see a split. A citycountry divided switzerland. What is interesting, comparing this to the u. K. Or other places where there is a kneejerk reaction against immigration. In switzerland, immigrants phenomenally are highly skilled in switzerland, immigrants are predominately highly skilled and work at places like roche and novartis. Is it really competition for jobs or is it about property prices . What is driving this . Propertygures are prices, infrastructure, transportation. This is a protest vote about free migration. Is good forit business. Less popular with people. Even in a country like switzerland, their Unemployment Rate is 3. 5 . The sentiment, the nativist and populist sentiment, unemployment in other countries is 10 , you have a problem. These votes in may are going to throw some curveballs. Thank you so much. I recommend the number to value meal at mcdonalds office in zurich, 12. I am unfamiliar. That is american for expensive. Hans nichols joining us. There is a move on the currency. The u. K. S Immigration minister resigned over the weekend, he was himself employing an illegal immigrant. Story s a went like that. Why are you looking at me . I would ever do that . I was not saying certainly not. Your bowtie. All their family comes over and spends money, it is the great thing for america. Cash positive on that. Ischinas economic chinas economic slowdown going to drive down Global Growth in 2014 . This is bloomberg surveillance, streaming on your tablet, your phone, and bloomberg. Com. Good morning. Surveillance, with me adam johnson and Olivia Sterns. Thank you for your emails, scarlet fu is at figure skating lessons. We will get her in here tomorrow. Mr. Johnson has company news. Htc saying it will lose money , more than forecast. It will miss estimates as it tries to turn around revenues and a slowdown in market share. Htc plans to boost marketing, trying to slow the slide in sales. When novo expanding and smartphone business in africa. They will start selling two models in nigeria next month. Might start sales in ghana and ivory coast later this year. Tschetelekomm deu will pay for the 39 stake it does not already own in its checzech unit. Look for bloomberg west. Later today. My must read for 2014, Elizabeth Economy singlehandedly changed the debate over china pollution with the 2004 the river runs black. Finally, she is out was by all means necessary. China needs resources. Think cold ball in africa think cobalt in africa. Americas greatest fears over an ever stronger china. We are thrilled to have both dr. Economy and Michael Leedy with us this morning. By all means necessary, commodities. What should be the u. S. s response to chinas insatiable desire for commodities . If we understand it within the context of broader u. S. Policy, engage but hedge. We look at chinas rising demand pushing ever forward on the security front. Through the south china sea, the indian ocean. Push forward with engagement, do more bilateral and multilateral accommodations with them. At the same time, we need to maintain a presence in the region. Willeryone in washington read this book. Your focus is more energy security. With new military strength, how does that dovetail in to the ability to buy cobalt in africa . So far, the two have not come together. China is providing support and a host of different ways for companies that secure resources. Their military is looking at securing ceilings close to home so they can get those resources back. The biggest impact chinas isource quest has had on us through its demand driving up prices. Our response, number one, has to be about cutting our own demand so that we are less exposed. Having been to china and having gone to the coast cities, i saw the development that has driven the commodities boom. That has slowed down, what is the update on ghost cities . Empty cities. We have been talking about this for five years or 10 years. It still has not seemed to slow down. Still building . Still building. We have seen the National DevelopmentReform Commission tells Steel Companies to take more stakes in iron ore as they are faced with overcapacity. Let me bring in Michael Holland, you go to china every six weeks . Over the last you are pressing a call on pollution, people leaving china as a result of the horrible stuff that you said was going to happen. It is worse than ever. On the resource front, lets talk about what you see for the future Research Back for the future with respect to natural gas. Are they going to lead us out of pollution problems . I dont know, i think that is going to take a while. Chinas manned for coal last year was equal to the entire worlds demand. They are trying to move away oncernedthey are current about coalition, developing mongolia. Pushing the problem further inland. I will rip this up. Why cant they fix this now . With a totalitarian regime, why dont they stop using coal . Abundant. S so they have been reliant, 75 of their energy comes from coal. You are not really dealing with a totalitarian regime. A regime that has a lot of difficulty implementing guidelines and rules and regulations down through the system. It is one of the fallacies we have bought into that whatever beijing says does. It is not the case. Also reliant on oil. What point will china become more assertive on a global stage with Foreign Policy . Sudan, the southern only roads in southern sudan have been built by chinese Oil Companies. They always refrain from getting into the fray and of sudanese politics. China is learning as a goes out. It came with a we do not touch anything attitude, it has learned that even if it wants to stay out, it will get drawn in. It is learning through south sudan. Its capacity is limited, just like it is limited at home to control things. They are the only ones buying sudanese oil. It matters what they do, it is not so much that they buy sudanese oil, it is that they produce oil. It is essential that we keep that demand. In the heart of this, michael levi, we are not on a level playing with china. Our General Electric or intel, are they negotiating worldwide. Exxon mobil, are they negotiating on a level Playing Field with china government corporations . Absolutely not. Cheape companies have finance, a government that can step in if they need help. They have all these components. Sometimes those do not end up being benefits in the long run, they get into trouble. In the short run, they cause problems for u. S. Companies trying to compete. Thank you so much, michael levi and Elizabeth Economy. By all means necessary. Must read of the winter, late winter, early spring. Fromages, the usual Elizabeth Economy. Blunt and direct on china. That will go to the top of every ir list. Emerging markets, eem etf down four percent over the past year. 12 over thewn past year. Market,iscount to the 11 towns earnings. Emerging markets are the cheapest in a long time. Nothe extent that china is Elizabeth Economy is as good as anyone to tell you, they are not going out of business. Even with the pollution problem. The Lunar New Year numbers just came out, pretty good. If they continue to grow, 6 , the emerging markets will do well. Too bad we cannot ask more questions, the question about emerging markets and commodities a piece. Tion is it is a story that tom can get to later. Michael holland, thank you. On the equity markets, Elizabeth Economy and michael levi. A forex report to get us going. 102. 14, weaker yen. Olivia, there is the ruble basket, you go to sochi. Argentinian peso has done better. Coming up, harvard professor Martin Feldstein discussing janet yellen on capitol hill. This is bloomberg surveillance. No room for trial and error as republicans face a debt ceiling position. The clock is ticking for the gop. And democrats the honeymoon was short. Janet yellen must reserve preserve independence. She makes her way to capitol hill. I will be a stormy session. Fashion week in new york. Alexander mcqueen. She needs it now. Good morning, everyone. This is bloomberg surveillance. We are live from bloomberg World Headquarters in new york city. I am tom keene. Joining is adam johnson and Olivia Sterns. Scarlet fu is off for figure skating lessons. Howard oort, gamco chief executive officer has been in the markets and optimistic. Ard ward. Currentaccount deficit right and widening to a new record on new imports. This is adding to the prime ministers challenges as trying to as he tries to drive the recovery. Importing more energy. Another big story were watching coming from europe, swiss voters approving immigration curve that threatened to hurt the economy. We heard about that from hans nichols and well talk about that later in the hour. Mortgage delinquencies and mba mortgage foreclosures. The big news, 10 00 tomorrow firstg, Janet Yellens testimony before Congress Since confirmation. After the bell we will hear from loreal. President Obama Meeting with the french french president. There forig symbolism the french president to travel to monticello. A big fan of the french. It is about four blocks down from [inaudible] it is like 1012 feet up, it is like this is where Thomas Jefferson lived. Trying to get a loan. It is in all of branch, right here go we will give you a steak dinner and take you through monticello. They all say cello. Southerners will send us an email. Here is adam johnson with a southern accent. To hear that. Want in another development. Chinas insurance regulator asked jamie dimon for a favor in the hiring of a Family Friends daughter. The woman was given an internship and later hired. She has a fulltime job at jpmorgan. Jpmorgan, we should point out, jamie dimon had nothing to do with the hiring of this woman. Somebody says to me a favor and somebody gets a job out of it . I suppose. Russia preparing to join china in the crackdown on bitcoin. The country is warning those that use the Virtual Currency that they are breaking the law. Russia is the Fastest Growing secondFastest GrowingData Download after the u. S. More than 20,000 customer files may have been stolen according to her per oort according to her report in the daily mail. These just will not go away. They wont. It is very surprising it is berkeleys. They have the penmanship technology. More secure. Itwe have not switch because adds 200 to the cost of every cash register. That is why we have not switched. Cry wolfhington they this morning, they being the debt ceiling worriers. The sized treasury secretary send a letter friday to remind congress of the seriousness of the moment, your government may run out of money. Congress is distracted watching figure skating. There is the small idea, getting reelected come november. Knows a triple lutz. Knows republicans are in disarray. What did we learn about republicans over the weekend cap go . That they probably watched a lot more figure getting been working on the debt ceiling. Still no offer from House Republicans on the table, despite the letter warning that february 27 is the day the government the Borrowing Authority most likely gets tapped out and the government will have 50 billion on cash at that point. That is not enough, the treasury says, in order to safely get the country during the next few days after that. Andproblem is the calendar the fact that republicans are Still Deciding what they want to ask for in exchange, if they ask for anything. Letty darrow Double Barrel this with the testimony of tomorrow. Of the housengs do not want a debt ceiling either. How dominant is the section of the house of representatives . The problem for John Boehner Ahmed there are 30 House Republicans, give or take a few, that will not vote for any debt ceiling increase no matter what they have attached to it. That is his problem. He knows at the end of the day hed has to have something on the floor that will pass with most of the republican members, but he will have to get democrats to back it at well back it as well. What is really important is that if he gives it away and has a clean debt ceiling increase, democrats and the white house says will say the next time this comes around, we expect the same thing. John boehner, the current job hardest job in washington at the moment. The debt ceiling has been raised a time since 2009. How could we possibly think this will be any different catacombs . Everygo through this single time. It always gets done. There is damage done to the country. Even by bringing it to the edge. There it is the crisis to pay. On wednesday for the House Democratic retreat. They are out all next week. Theave to get at offer on table and the next few days or so other ways we are running into the deadline. Watch for something this week. Beforeng has to move wednesday, because again, the calendar turns into the enemy at that point. Peter cook in washington. Thank you for keeping us up to date. Tune in today for peter cooks exclusive interview with lockheed martins ceo at the 2 00 hour. Ownership of equities, your Retirement Plan into all that we see in economics, particularly with Janet Yellens testimony tomorrow. We bring in howard ward, chief executive officer at gamco. You have been patient and have been in the market. Great Hedge Fund Performance by people that were in the land of howard ward. George soros, they took howard ward 101. State for us your optimism to be in the market right now given the walls of worry out there. Economy continues to move forward now. This year looking for gdp roads north of three percent, could be close to four percent. Gdp growth north of three close to fourd be percent. From the standpoint of the economy, we are doing pretty well. We had a little bit of a hiccup in the past few weeks. Part of the data we saw with payrolls. That was impacted by weather. We got three different surveys last week. The Establishment Survey that gets the most attention. The Household Survey and the adp survey cannot be dismissed. The Household Survey and 638,000. I want to go to the heart of the psychology. You and i would hang on every word rum sir johnson tumbled 10 sir johnson templeton. He would say shares are on sale. That is exactly what they are but we are scared stiff. This is a unique time in history where we have very low inflation, one percent inflation, low interest rates, growing gdp and profits and valuations on stocks that are simply average at 15 times this years earnings. Times earnings with growth at six percent. The price you pay for the growth youre getting. What is the upper bound . The consensus, i believe, about eight percent growth on earnings for this year. Combine that with the dividend yield of more than two percent, and if the multiple just stays where it is in the market moves with earnings in the dividend return, that is a 10 plus total returned, pretty darn good. That works. That has been down forfive percent since the start of the year. The Laszlo Birinyi seeing it at 1900 by the end of next year. Very quickly here, what is the number one thing the gloom crew gets wrong . I think they focus on the trees and missed the forest. What are the trees in this market . People worry about the emerging markets, and there is an argument we have decoupled from emerging markets. I do not think we will know that for certain until we get warmer weather. For thed ward with us entire hour. Martin feldstein will join us later. Now you can purchase the close right off the catwalk. The Company Disrupting the runway coming up next. Good morning, everyone. Bloomberg surveillance. This matters now, howard ward shoveled driveways. He has left his heating bill unopened in the library. He joins us here on the weather of this winter and slowing the economy. You have taken a look at this. You and i are in the northeast. The weather has had an effect. A big impact. Aboututh has atlanta to get some snow. Gas. Ig reason is natural the primary fuel for generating electricity, natural gas. 50 of electricity generated by natural gas. What has happened for prices in the past few months. 60 increase. That has an impact on the wallets of consumers. It has slowed the economy a little bit. Very important ingredient. An ingredient, and that is economics. The world will come to an end. Corporations in this weather continue to make money. Morning theard this Fourth Quarter 2013 expectation is that eight percent growth of profits in line with what the expectation is for 2000 14. Companies are making money and generating a lot of cash. They are buying back stock and increasing dividends. I think this continues to be a Good Environment for investors in stocks. I am going to go to the heart of the matter right now, the timeline of when people own things. Most people own things with a longer time line than the emotion. How do we get the emotion from the latest set of snowstorms to her responsible amount, three years out, five years out toward their i say 20 years out . It is very difficult, especially when it comes to investing about the stock markets or the gold market or any of the markets. They have to think longerterm. They have to take advantage of runningat instead of from them. People ran from price dips this week. That will come back when the temperature warms up in the economy starts to blossom more. The economy will be ok. The only person not affected by the weather, carl icahn. Buy in shares of apple. How were board on this howard ward on the stormy winter. Coming up, we will look at something in new york city that is just lovely, fashion week. The demand for fashion and fancy dresses and shoes. This is a huge business in the fashion capital of the world, new york. We are next to bloomingdales. 59th and lexington. Good morning. This is bloomberg surveillance. Good morning, everyone. It is bloomberg surveillance. Our twitter question of the day, florida is in trouble, russia is in trouble. Is bitcoins biting the dust . Somehow we will get a huge response. They will be outraged we will ould ask. It is bloomberg surveillance. I am tom keene. Adam johnson is here. Olivia sterns has the top headlines. Starting in the ukraine. Thousands are rallying calling for elections. They told the crowd the country is on the verge of default. The u. S. And European Union are ready to stand in with financial the the political crisis in third month and have crippled the nations ability to raise funds. Madonna immigration. New limitations on immigration. Antiimmigration proposal grew out of concerns of falling bluecollar wages. Michael sam could become the first openly gay player could drafted by the National Football league. The defensive lineman public labor borough revealed he was. Ay in a public interview he was voted top defensive player of the year. He is projected to be chosen in the early round of the nfl draft in may. What people were so surprised about is he came out ahead of the draft to announce it. Thisg surprise in football weekend. This is not ancient history, it is what Olivia Sterns is focused on. Iane von furstenberg you can focus all month on that stuff. Full swing,eek in and amidst all the glitz and glam and celebrity bloggers, there is one start up at his disrupting the way the entire process works. It is called mo. Byis shaking up the industry selling close straight from the catwalk. We are joined by the cofounder. It is shaking up the industry by selling clothes straight from the catwalk. Explain how this actually works. Actually what we do when the othes go down the week during fashion week, previously people were unable to access it. Now the fashion industry is seeing the destruction with social media with the looks i go down the catwalk are seen by women all over the world. Thanks to you. A little bit. Thanks to the internet to really help do that. What they were not able to do is actually purchase them. What we did is bridge the gap between what goes down the runway and allowing women to preorder. I know olivia has left the this carefully, but how much dorft us goodman f goodman hate you . This is really helpful to the designer. We are also grateful to the industry because we are helping to rejuvenate it. Let me tryrds to wrap my head around this. I have never been to a fashion show, but if i were to go, i would see something i like or maybe i go to your website and say i like what happened on the runway four minutes ago and i want to buy it. You put me directly in touch with the designer and i can buy it. That is true. We are like the dell model of fashion. It is also interesting, because it lets you buy books at comes on the catwalk that would not even end up in the stores. A lot of times theyre not even produced. The Department Stores cannot take the inventory risk on purchasing them in the hopes that a woman buys them and linger on the store floor. Tell us about what people are buying. We heard the average spend it 1300 . Is 1300 . Noveltyare buying items. Oneofakind things that they cannot get elsewhere. We are into the third year and we find that women are fighting some of the more basic staples as a more elegant, refined way of shopping. I mayward ward, you and not know the runway very well but we certainly know charts. We are calling this, hello, amazon, goodbye best buy. At least thats far as retail appointment concerned, retail jobs have resounded since the recession but most of the growth is being led online. Take a look at that. The yellow line is retail jobs going up where the other lines are saying down there. All going online. Investors have been playing that with amazon for quite some time. Ebay would be another beneficiary of online shopping. Within this revolution, i want to go back to fashion i do not know how Louis Vuitton makes the given product in a given week. Collin klein at any given store, a good place to get run over. Yet you cannot get the fancy collin klein calvin klein chanel, they cannot get it from you. Retailers have scaled back on inventory. What we do is take a noinventory approach. We deliver it to the woman during the season in which it was made. It is a low inventory risk model. To your threads about being a threat, you are partners. Bowties . Ou give me he thank you for joining us. Coming up next, janet yellen makes the fed debut tomorrow. We will discuss the timeline with Martin Feldstein of harvard university. This is bloomberg surveillance. Do not go anywhere. We will be right back. Good morning, everyone. Bloomberg surveillance. I am tom keene. Adam johnson and Olivia Sterns with us as well. Mr. Johnson has this Morning Company news. Of loreal in shares trading on word that nestle is looking for ways to cut the 32 billion stake in the cosmetic maker. Both companies have discussed a possible change with the banks according to people familiar with the matter. Nestle holds a 29 stake. Nissan, the least profitable carmaker, net income rose sharply last quarter but just a 3. 3 of revenue. It is also a sharp turn for nissan of the company lets all put led all the companies in of thebility led all japanese automakers in profitability just a few years ago. Inota will stop making cars australia and a few years. Car companies have cited the runup in the Australian Dollar and high cost of production in the reason for leaving australia. Very good. I want to talk about a topic of the morning that is continuing. The work of Bloomberg News and New York Times and a bank in the United States that would be jpmorgan. The probe is once again in this pot like. An email showing that a top nese regulator asked Jane Jamie Dimon for a favor to hire a job applicant. She now works at jpmorgan. The bank says chime in time and had nothing to do with the hiring and not suspected of any wrongdoing. This challenge will not go away. Everybody does this every day. Business as usual. What company would not try to do favors with the regulators . This is directly tying it to the advancement of revenue. This is separate from the news we had a couple of months ago but there was a spreadsheet allegedly found tying transaction and deals with the hirings of chinese regulators children. The only reason i got a job at Merrill Lynch coming out of princeton is a buddy of mine was working at Merrill Lynch and said put give me your resume. But nobody was able to say we because weo do x hired adam johnson. Howard ward with us. He sees the fire that happen. They are completely removed from your investment world, arent they . For the most part. I have to say that with all jpmorgan has been through, there really is the appearance of a witchhunt against the company. They have been fined every which way. Theyve billions of dollars in fines, a lot of that traced to businesses they acquired at the governments request. So tired of the lets go back and attack jpmorgan again. Fines . That isn like the bp oil spill. Or are you on the financials . On thee are you financials . We forget there is a sector called financials. They did really well. Could you stay on board or even be overweight financials . I am not overweight currently. They were selling below tangible book value a couple of years ago. We acquired in the 30 range. We have trimmed thats a bit. From my perspective when i look at the banks, they are no longer super cheap. Relative Earnings Growth is no longer all that great. So i do not think there is as much upside in the banks today as there was. As you talked about earlier with emerging markets, is that the new supercheap . I do not think it is supercheap yet. I would be patient. I think there are bigger issues. Where is value right now . I think it is largecap u. S. Stocks as opposed to small cap where you have quality the quiddity and dividends. The ability to buy back. Small distinction between and large because rates eventually go up so small caps get hurt . Small caps have been the best place to be for the past 10 years. They had a big runs. They did not go down during the lost decade of equity returns, they went up. That is an area i would harvester in favor of largecap. You have been a huge bowl on apple. Do you reaffirm . , bear in mind that the past couple of years, no company in the world will make as much profit as apple. Criticisms,f the they are the number one generator of profits in the world tom and that 1213 times earnings. Very quick data check. Most of the markets are down. Good morning, everyone. I amberg surveillance. Tom keene. Bloomberg television and bloomberg radio. Streaming worldwide at on the website and tablet. Our guest host is howard ward of gamco. No one has nailed the struggle of the American Economic recovery like Martin Feldstein. Years ago he cautioned of tepid growth and weak job formation. Reach janetns yellen as the chairman goes to capitol hill to listen and speak to elected officials. The first testimony. The Federal Reserve independence is at stake now. Joining us now, Martin Feldstein. Good morning. What would be your advice to chairman yellen . What should she do as she aces a tumultuous house . I think she has to reassure them of two things. First, that she is concerned about unemployment, but also, and this is the thing that has been missing, that they will not let inflation get out of hand. That as the economy starts coming back stronger and stronger, a are putting upward pressure on inflation, and the fed knows its job is to prevent that from getting away. Two percent the target for inflation is something she should reaffirm to them. What she needs to reaffirm many would say is independence. You have been one of the many people that have taught us. Weve go back to the real independence of the fed in 19 51. How independent is the yellen said from the members of the house . We go back to the real independence of the fed in 1951. Alternately congress has authority over the fed. It fed, in practice, does what it wants to do with interest rates, with the taper, and i think it is very important to maintain the independence. Atone of my up professors princeton, alan blind there, used to talk in class about the wage price spiral, not commodities, as driving inflation. When do you see that actually having an effect in moving the numbers higher . I think this time around we could see prices move in before wages. It is hard to say, but at this point inflation is not a problem. I think it is important for the fed to reassure the public that once prices start to rise, once inflation starts to move to two percent and edge about that, the fed will be there to limit it. Is howard wardy of gamco. How important is this testimony and how do you link it to confidence about equity markets . I would not attach too much weight to the first testimony in washington. I do not think there will be any significant change anytime soon. I think the taper is in place and we know the timeline. From texasrling all take i think to be polite fractious tone with janet yellen. How should the likes of Martin Feldstein or janet yellen or how do you defend your cells against the people that he represents . Defend yourselves against the people that he represents . I think she has to make it clear to everyone listening but the fed will continue to focus on what happens to inflation and what happens to the overall face of the economy. There is not much the fed can do about stimulating the economy, and that is why i think future inflation has to be part of the focus of her testimony. Youartin feldstein, thank so much. He is with harvard university. The force behind the National Bureau of economic research. I think this is a huge deal tomorrow. Hearalso would like to more about the threshold of the chicago fed president put forward of unemployment. What will happen . Will janet yellen move the target . I respectfully disagree with mr. Ward of gamco and really look for him to be tough on chana chairman yellen. When we come back, we will talk about the call to pay out more money to apple. We will be right back. Good monday morning, everyone. It is bloomberg surveillance. Keene. M adam johnson and Olivia Sterns joining us. Scarlet fu in advanced figure skating. She plays hockey as well. Joining us as well, Stephanie Ruhle. I am afraid. I am just going to talk about my extraordinary guest. The one and only dick parsons. This man has been a leader across all industries. We need to talk about income inequality and capital. The u. S. Banking system has fueled the american system. The number two hated industry out there. Dick parsons with Stephanie Ruhle. The chairman of the american jazz foundation. He has his own vineyard. Translation, he is totally cool. Look for that in about 20 minutes. Time for first look. Starting in the ukraine where protests are comes are continuing. Playing the cano during up demonstration in the capital. Perhaps an appeal to calm. Walking in at sochi. That was a big deal. Coming into the stadium with a big deal. Over to britain. An amazing picture of a car nearly submerged. Look at that. This is like slugs like they have never seen before. Britain has been hit by extreme weather this year. The whole world, whether you can call it Global Warming or crime and change, amazing as you look around the world. Think of all the snow in new york. Blowing my mind you just admitted to all of that. As a point out, it did snow in cairo this year. Approximately 700 citizens and south korea are to support their up withympic team rainbow colors. That is interesting him up because we have heard the views on homosexuality. Interesting to see those rainbow so this is a political deal by south korea . Everyone is excited about the olympics. I watched figure skating watch figure skating 12 days of the year. I was like i cannot believe they did that. Do you think the judges are being even . No. It is like the market. Talk about something not even today, talking about yelp which is up huge today on the deal with yahoo . They will now use the search results to help bring in more advertising. Obviously that is good for oath. Good for both. Is thenumber 159 billion apple cash pile. We will talk about what they should do with their cash coming up next. This is bloomberg tv,veillance. On bloomberg radio, and your tablet. Tomorrow on surveillance, the responsibility of wall street. Rbc Wealth Management ceo. The equity outlook. Adam johnson with me and Olivia Sterns. Howard ward our guest host. Adam johnson has company news. Starting with htc saying they will lose more money this quarter than originally forecasted. They will miss analysts estimates as it struggles to turn around revenue and slow the decline in market revenue. They plan to boost marketing to boost sales. Expanding the smartphone business in africa. They will start selling two models in nigeria next month. They may start sales in ghana and the ivory coast later this year. Deutsche telekom is by in full control of the czech unit. They will pay just over one billion for the 39 stake it does not already own. This is a bets on recovery in the Eastern European telecommunications earle. At its company news from the files of bloomberg west. Front and center and the story advanced over the weekend, use of cash with any corporation. Ish apple it is simple, iss the group that represents institutions and advises institutions on what to do with annualroxy votes and boats with companies. Apple shareholders very clearly should vote against activist carl icon Share Buyback proposal. That is the, and idea of micromanaging. Howard ward with us from gamco. Our activist good or bad . A benefit to institutional shareholders like you . I have no problem with whatever he wants to do. If he wants to nudge management to be more proactive and returning cash to shareholders in this case. Specifically with respect to apple, very much involved, i do not think there is a big difference between what the company is doing and what he is asking for. I also believe next month they will review the buyback and reauthorize it and reup. Agree apple has a juggernaut of cash generation. How do you provide as this provide a distinction with what we should do with passion apple or other Bluechip Companies . We have seen others wisher buybacks. In and introduce a new topic, and that is that apple has recently indicated perhaps one of the reason they do not want to be more aggressive in buying back stock, is that maybe they are thinking of a major acquisition. This would be something completely new for them. Tim cook has thrown that out there, but this is something that may be in the works. These are the guys that create something out of nothing. Why would apple go spend money on the whether it is buying people, patents, why cant they create something . Because the iphone has been so successful that any new product they introduce, whether it is a new watch or tv, nothing is really going to be more than incremental. Gamco. Have your team at can we make news . What kind of company when apple purchase . Obviously we do not know anything that has not been put out in the public sphere. All we can do is guess. I would guess something in the media area or Financial Services area. Maybe they could buy jpmorgan . Something further involved in mobile payments. 400 have a i think 400 Million People credit card information. According to some surveys, they are the number one trusted site with user information. Think about the latest iphone, it actually has a fingerprint scanner. That is a way to really leverage the success in the iphone, and it will move the needle. What kind of company would do that . I do not want to speculate. Maybe they are going for jpmorgan. No, no. We are going to go to the agenda and a bit, but i think it is critical with your optimism and the optimism we heard from michael hall and earlier, use of cash is a driving force for stability and not correction in markets, isnt it . Thet is pretty nice to have constant buyback of shares going on, not just with apple but throughout the stock market. It absolutely helps to study things. Ss has pointed out that tim cook has returned most of the cash to shareholders in the u. S. As aey can do a dead deal proxy to bring that back. They have also back tim cook. On hydrocarbons and mining dogs, any interest in the Oil Companies . Yes, but the same three companies i recommended last year. Diane near Natural Resources bog and continental resources. Rapidly growing domestic companies. They have all corrected with the pullback in that group. I would buy all of them today. They are more volatile than the overall market. They are all three outstanding companies. Them outy pay for of existing cash flow as opposed to borrowing . They are pretty close to breakeven. Preks tomorrow morning tomorrow morning, Small Business optimism. The reason i mention this, two thirds of the job creation in this country they come out and say are we optimistic, and if so, will we higher jobs . This is a dovetail between the bluechip world and the Small Business spirit. This comes down to nominal gdp. We are starting to see an improvement. Yes, where was one of the surprises . A positive surprise. Construction. Pentup demand for housing. Neuhaus whole formations coming back. Housing starts are coming back. Little decline in rates will help mortgage will help Mortgage Rates going into the spring. Look or housing place going into the next few months. Howdy reconciled the dichotomy between the gdp picking up a hiring getting softer . I do not think hiring is getting softer. Shows 100 75,000 new jobs. Even the Establishment Survey was 140 2000 when you average out government losses. I think we will get back on track and payroll will look at her and the economy will look better, and the concerns that people had about the hiccup will go away. You see the stark contrast between howard wards and bill gross friday after the jobs report. Janet yellen, her testimony you will see and hear that on Bloomberg Television worldwide tomorrow morning at 10 00 eastern time. Oldgrowth does not share your optimism come a plain and simple. What he stated that was so stark on the comments friday was the idea of distortion and financial repression out a decade. Do you agree with mr. Gross that Janet Yellens number one task is the financial repression, distortion not five years but even 10 years . It is all a matter of degree. I do not agree with the thrust of the argument. If you go back to 1947 through the end of last year, do you know what the trendline gdp growth was in this country . 3. 2 . Do you know where we are right now for expectations into this year . Very close to that. The economy is accelerating. I think in other words, this is the best of time, rates are low and growth is accelerating and stocks are cheap . A sweet spot and temporary concerns about the economy will dissipate. Global gdp forecast, imf publishes 3. 7 . I want to get to olivias agenda item. The olympics are going on. What did you think of the opening ceremonies . I thought it was a great success. Do we have things ever go wrong on the show . Norway leading the medal count. The wall street journal thinks they are slated to take home number one. We are in third race, i believe. Holding girl, american snowboarder winning the slope style. Lugeve womens singles today. On a 7. 5 hour delay. Thank you so much for setting up the week for us. Much more coming up on bloomberg surveillance. Televisionbloomberg Stephanie Ruhle with dick par sons. A busy week. Janet yellen tomorrow. It is bloomberg surveillance. Good morning. Live from bloomberg headquarters, this is in the loop. I have olympic fever. I am Stephanie Ruhle. I am matt miller. Did you watch snowboarding last night . I watched figure skating for a while. It was like the twilight zone. So weird. On womensyourself snowboarding you will have olympic fever. I switched over to call of duty. Hollande arrives in washington today for the first state visit in over 18 years by a french leader. President obama will seek to deepen their military alliance. The two leaders have an op ed illustrating how their relationship has transformed in recent years. Mcdonalds opened their first restaurant in vietnam today. Don thompson was there for the opening in ho chi minh city. He talked about the opportunities that he sees in africa. We do not have a lot of presence across the continent. Were looking at the opportunities that africa may