Man. After 10 years in prison, Mikhail Khodorkovsky walks free. It may seems like writtens eike putin para restroika. Dont be so sure. Show for ericast and i for the year. We are going to talk about the blackberry. If you thought things cannot get worse, think again. Shares fell by more than 50 in the last quarter and losses were far worse than analysts anticipated. Are actually rising this morning thanks to a separate announcement about a new partnership with foxconn. We have julie hyman and cory johnson to break this down. Walk us through the foxconn partnership. Is a fiveyear partnership, foxconn will take over some manufacturing and help market the phones in indonesia and asia. Unclear about the financials in the conference call, how are they going to pay foxconn. There is some talk that maybe this would open more of a massmarket audience to blackberry products. It is not entirely clear. Still have a strategy. That has been their big struggle. They change their Business Model a few years back to go into Consumer Products and try to grow that. Now they are pulling back from that. Focused on enterprise they talk a lot about enterprise on a call and in the statement. You would think that is their only hope. John chen, the new ceo, gave himself an out. He said i have only been here 45 days, cut me some slack as i dive in to this giant hole. He did not use those words the numbers, he would not use the phrase a zombie. It is like is on the movie. I know it is coming, woah. Year, theis time next four of us are sitting here, what will we say about blackberry . Sign of as no turnaround. The products do not seem to be taking off. They have legacy costs that keep tripping up on them. They continue to lose contracts. Cio is going to say we need to get our new blackberries who is going to say that . Get oured to smartphones from the company that is targeting indonesia. That might not sound like a crazy idea, indonesia has 250 million people. If you are going after indonesia, you are going down market. I got a new blackberries this week. Downmarket. Did you buy that or is it provided to you . I am not going to tell you that. There is one thing to be said, it is still a blackberry 7 on the old software. Most of the sales were blackberry 7s. The point about what are the corporations going to be ordering, there was a writedown of 4. 6 billion. Was licensing agreements, and part it was carriers who bought blackberries and say we do not want these. Asinventory writedowns, well. Stuff they have been making and are not going to be able to sell. The single largest part of it was patents, licensing, and acquire technology. They said it was not so much patents, it was more licensing than patents. That was not clear in the release. On the call that never came to the desks, book value takes a whack. Book value is less than half of what it was before. It is amazing. Why i Technology Companies getting revaluations . You see how fast things can change. Nokia can be the dominant cell phone maker in 2005 you know the answer. Is the word Innovation Associated with what you are doing, the market loves it. Technology, innervation, the future of business. Is the whole reason that apple says we want to hold onto our cash this is their fight with icahn and others who want to buy back shares . They want flexibility. You look at blackberry, nobody wants to be blackberry. I thinkur point, people, including the markets, get excited about the notion of the future and it gets a higher pe multiple than software as a service it gets a higher pe multiple. Software as a service is better than software. Branding image aspiration. Financial services their branding is terrible. Innovation technology, people are excited. At the very least, this lesson with blackberry teaches us something. I am downmarket. In the world of technology, the notion of a sum of the parts analysis is bunk. So much of it relies on the value of intellectual property. At the very least, the analysts and presumably the investors do not have a clue what this is worth. You have got to know the business and have a unit sale understanding in order to understand. You have to know who buys this and when. Great to get your thoughts. Julie hyman and cory johnson. In russia, Vladimir Putin oil tycoone former who was once the richest man in the country. Mikhail khodorkovsky walked free after 10 years in prison. Ryan chilcote has covered khodorkovsky for more than a decade and was in russia for his arrest in 2003. The world is easy to see move. Kovskys next there is a mystery, we know he hised in berlin to see ailing mother. Were getting word she may not be in germany. What is going on . He arrived in berlin, he is having been pardoned by the russian president on humanitarian grounds to see his mother who is battling cancer. He gets there only to find out she is in the russian capital. She did not know he was going directly to germany. He said he was unaware she was going to be a russian capital. He has had pretty patchy contacts over those years with his mother. Ago, he was in prison. He walked out of prison after president can pardon him. Yesterday, president clinton said Mikhail Khodorkovsky president putin said Mikhail Khodorkovsky asked for the pardon. He was due to get out in august. He refused to ask for a pardon. In russia, that presupposes acceptance of guilt. He has maintained he is not guilty. In fact, this was a vendetta against him that president putin has wanted to get rid of him and basically pushed him out of the way to cement his grip on power in 2003. Why did putin release him . That hewn rationale shared with journalists yesterday was that 10 years is a long time, his mother is sick. Done his time. The fact of the matter is we are a couple of months from the Winter Olympics in russia. Relationships between russia and the u. S. And the west have been poor, particularly recently over the antigay laws. For a long time, the west has been calling for the release of Mikhail Khodorkovsky. They believe he is a political prisoner. He is a rival of Vladimir Putin. He spent most of his time in prison criticizing putin. This is thought of as a concession to the west to lower the temperature and relations before the olympic games. Is it to divert attention from russias agreement with the ukraine which also is a source of tension . Possibly. That is what i was told by an analyst earlier today. It is extraordinary how the news cycle changes. I spent the beginning of yesterday talking about what to what9 putin had to say about ukraine. Not looking to pick a fight with the eu. By the middle of the day, one of the biggest stories in history recently in russia. The president pardoning his archrival, Mikhail Khodorkovsky. Once russias richest man, he is worth 13 billion. In two thousand three, despite an unwritten agreement between president putin and the that they could not enter politics, he did and funded the communist opposition. That is why president putin went after him. Putin maintains he was a criminal. That is something that mr. Khodorkovsky, until now, has denied. Does this mean anything to investors in russia . It meant a lot 10 years ago. He was the principal owner of the Largest Company in the oiltry, the fourth Largest Company in the world, producing 2 of the world oil. They had to close the stock market for an hour to try to bring stability to trading. Yesterday, upon news, stocks went up by him or one percent in russia. They are still the cheapest stocks and emerging markets. Theikhail khodorkovsky was poster child for everything wrong with the Investment Case for russia, he has been replaced. It is not a huge difference. Any idea how much money khodorkovsky has now . The thinking is he still has several hundred million. He had a Company Worth 36 billion taken away from him as a result of fraud charges. Hide at least several hundred million before he ended up in siberia. Ryan chilcote reporting on Mikhail Khodorkovsky. He knows the story of the man going back to his arrest in 2003 and before. Time for the news feed. The economy grew faster in Third Quarter than estimated. Gdp expanded at a rate of 4. 1 , higher than past estimates. The economy is at its strongest level in two years. Consumers stepped up spending on health care. The Obama Administration backing off on another provision of the Affordable Health care act, exempting more people from the individual mandate next year. If your Insurance Company refused to renew your insurance because of all i care, you will not be penalized if you do not buy a new policy. You will still be eligible for catastrophic insurance. This will cause even more confusion in the market. Lamborghini has unveiled a new sports car capable of speeds up to 200 miles per hour. It is named after the spanish word for hurricane and made of carbon fiber and aluminum. Typical liberties to not go for less than 200,000. Theetail scorecard, who are winners and losers this Holiday Season if my car is any judge . The back is filled with toys r us. We will be talking about private equitys incursion into rental housing. Blackstonecalling their landlord. 40,000 homes and climbing. Stay tuned, this is Market Makers chirico streaming on your smart phone this is Market Makers. Welcome back to Market Makers. The Holiday Shopping countdown is officially taking. Four more days until the season ends. This longe waited like many of us, the easiest way to beat the rush would be to buy a few shares of retail stock. The question is, which firms are a head . Lori is the president of cross legend investment. Here we are on the Holiday Season. Who is the big winner . This season,k at it has been very promotional. Friday was, black pushed up. That do not have to promote the store across the board or did not have to promote much. There are very few, but there were a few brands who pull that off. , apanies like anthropologie division of urban outfitters. They have been running ian unpromotional season. Their same store sales look flat but they do not include e commerce. Their u. S. Same store sales are very strong. Continues to be on fire. It seems like i am getting hooked up as a consumer. Are the retailers killing themselves over promoting . If youriot till pay retail, you feel like a chump because of all the deals. I kind of had to look at who are the few that did not have to promote. Most of the others, it is a sea of 50 off. That is a tough environment. It is one thing when they can be scientific and say sweaters are not moving, we will take 40 off of that and keep other categories and tags. They have not been able to do that. Lori, which retailers did presume this conventional did pursue this conventional wisdom that you have to discount and open early. And are not reaping special benefits. Teen retailers have had a rough go this year. If you look at some of the big guys, Abercrombie Fitch and aeropostale, samestore sales were down. They had too much inventory. They tried to price things up. Aking 30 off when they are starting the season at 50 off, you can be sure it is eating their profitability. And already had to warn take estimates down. Not an easy season. Where are teens spending money . Technology, or are there so many discounts . Technology is a piece of it. Also, there has been a big shift over the past few years. It has happened over time to the fast fashion retailer. Forever 21. You walk in and for 20 you are getting something that is trendy, not the highest quality but it looks good. There has been a big picture shift away from the classic, preppy americana that other teen retailers build business on. Holiday shopping season a last cause for abercrombie and aeropostale . Can something magical happened over the next four days . Well, broadly speaking, this week and next week are the two biggest volume weeks of the season. To beis a lot of business done. The names you just mentioned they really have to pull a rabbit out of a hat. They are looking towards let me mark this down so i can start the new year with a fresh level of inventory. Not a lot of hope they pull it off the season. Lori, about forever 21 and howes like it, h m, competitive can abercrombie and aeropostale be against that . If what you described is a trend, it sounds like theyre going to have to be much more to supplant much more disciplined with inventory next year. They have no idea how much people want to buy. This trend has been going on for sometime. Last year, we were in a really cycle,oreddenim teen retailers participated. They thought they were back on track, but that trend fell off quickly. Aeropostale has done a shift lovo driven. They are trying to get fashion show them. Fashion driven. Abercrombie has always been areically driven, they going to try to drive more of the fast fashion. My sense is they think it is here to stay. What does it look like for luxury retailers. Does not even care that price. They do not seem to be subje ct. We have seen a bifurcated consumer for some time. Has not been affected by the 2 increase in the payroll tax hike. Spending continues strong. Some of the companies i mentioned like lululemon continued to be purchased. Tiffanys had a good quarter as well. There you go. Thank you so much. Erik, i hope you are paying attention. Lori cwachs. I have already done my shopping, it was not easy. Imagine trying to shop for the girl who has everything Stephanie Ruhle. I did give some consideration to colored denim. You will be happy that i chose something else. You will find out. A little what a great idea. A 30,000 jacket. We will be back. What if your next landlords name is blackstone . As in the private equity firm. Is that good or bad . We are asking and giving you some answers. We are going to talk about a different kind of bowl, College Bowl Season starts tomorrow. What the hottest tickets are, stay with us. Americas singlefamily homes represent the largest physical asset class in the world. Equity firms are capitalizing to build a prices rental housing market. We took a look at how it is working. Outside the clinic county the gwinnet county workhouse. High. Rices may seem 228,000. This is a bargain for private equity firms. A block of homes have been seized by the bank. The hottest new asset class, Single Family homes. The biggest players in this new throughlude blackstone invitation homes. Colony in American Homes, a unit of colony capital, and californiabased American Homes for rent. Many of the houses they are buying were homes that want to families. They had been struggling with your Monthly Payments when they requested a third mortgage modification from their letter, citigroup. Everything was on hold and we did not worry. After just a days notice, citi mortgage sold their home to the highest bidder, blackstone. It feels like our house was stolen. We were caught on guard off guard. Notice, no anything. This woman bought the house. It was one of more than a dozen bidding victories. She was more than a dozen bidders for blackstone. Across georgia, the firm purchased more than 170 homes in one day. Thanks to the rapid foreclosure invitationkstones homes have dominated options. Buying up 2000 properties in gwinett county alone and in cities across the country. These investors are placing bet on a vast number of singlefamily homes. Have put in players about 20 billion to acquire north of 150,000 homes. What is the attraction of a city like atlanta . You can buy thousands of homes in nearby locations that makes the economics of serving those feasible and aggregating large portfolios. When borrowers do not pay their mortgage on time, the lender forecloses and sells it at auction. Hires an equity firm auction Bidding Company to buy it and a contractor to renovate it. Finally, a leasing agent to rent it. The gather the income from thousands of homes. And blackstones case, bundled as income streams together, price them, and sell them to investors. The number of rental homes has million to almost 40 million today, boosting demand for singlefamily homes. Blackstone offered to let the family stay as renters. More than the monthly mortgage they could not afford. It is our job to worry. The latest family to be priced out of their own home and the American Dream. It is not worth it. I would rather rent. I never thought i would Say Something like that. Reality fors new the many on main street that has created a profitable new business for the few on wall street. That was willem marx. He is here with us along with Cristina Alesci. Are struggling with whether this is a good thing or a bad thing. In your experience, did you get a sense for whether it is better to have blackstone as your guy who than some lives a few blocks away . This week, erik said di rtbag on television. The families we talked to said some of them had difficulties contacting the Property Management companies for firms like blackstone. Callhave to go through centers as opposed of calling their landlord down the street. Country around the cant complain about landlords. The question is, when they are scaling up, are they able to deal with problems that will and they provide us is very service . When blackstone bought this property, the family was facing foreclosure. They were several months behind. Their point was that they never received a notification until the day before foreclosure. That has nothing to do with laxton. The bank foreclosed upon them. Itit was not blackstone, would have been another investor. Who knows how they would have run things. Food is what kind of communication they would have had. From blackstone