Transcripts For BLOOMBERG Bloomberg Surveillance 20140109

The country became the first in the world in which more than 20 million vehicles sold in any given year. As you know, production in the rather, are at 16 million. China has three times as many as americans. 20 million vehicles in a single year is staggering. Lets move to economic data. We will have jobless claims they. At 9 45, the comfort index will give us an idea of what is going on in the economy. German Industrial Production is a good economic data. That is a back shop. We are entering earnings season. We have Family Dollar and supervalu. After the bell, we will have alcoa. We look at stocks, bonds, commodities. 18. 38 on the s p 500. The euro was weaker yesterday. A rebound today. Nymex crude slides down. We will talk to vince later on about inflation and deflation. On to the two year yield windows week canada become a big deal for you . Currency is already a big deal. 1. 08. Is that ken dryden was talking about how parity is making canadian teams competitive again. . 63 dollar. Er a it does reflect changes. Do you see how he slammed us there with the appreciation of the chinese currency . He did not answer. It is a long season. Lets look at hr. This is one of our guest. This will join us. It isal bank yield a twoyear yield. They are just coming up a little bit. Idea we will talk to vince. We scour the newspapers. It is a twisted front page report. Lets start with something more conventional. Minutes from the feds december meeting says that policy makers are confident in the economy. They are also growing more uneasy about the stimulus. According to the new york times, their take is that fed policymakers think the bottom buying is a good way to stimulate job growth. The wall street journal takes a different view. Less benign. They are denying the risk of bubbles. Look at the u. S. Stock market. It closed at record highs last year. That would be the first from his story. The other one is one that Erik Schatzker has talked about. Glad rock is agreeing to end a survey program. It turned controversial because executed that they trades using nonpublic information gathered from an Analyst Survey program. Blackrock to use nonpublished sentiments. An unfair advantage. What they were doing started with barclays. That was a coming up blackrock bought five years ago. They would send out surveys before earnings. And ask them whether they anticipated ups or downs. They expecteder and the date transactions m a transactions. A were able to harvest nonpublic information as a result of the surveys. That is key. It does raise questions about why why a firm like blackrock, for the most part, would be doing this kind of thing. Edge, more like does not . Something that the clients need to be concerned about is the lack of due diligence. This was part of it back with and acquisition. Furthermore, compliance. You are thewhether buy or sell side, should undergo an exhaustive compliance program. This would determine what you are doing inside the firm and how it stacks up against regulatory. I would suggest that we do not know a lot about this. It is a small matter. To the securities analysis industry, this is a huge deal. Yes. We will give access story. Finally, my favorite. It is all over the tabloids. Theyre calling it rich gate. It has to do with the threat to Chris Christie and his ambition to be a president ial candidate. His aides ordered road closures that close traffic on the new jersey end of the George Washington bridge. They indicated that this was political. Audience, i do not taken a bath there across the bridge. Take an ambassador across the bridge. This was about going from new jersey east. It is always a nightmare with that traffic grid apparently be aides orchestrated a traffic jam to close the roads. On the George Washington bridge . To punish a new jersey mayor . This is how they took it out on him. Reinforces Chris Christies reputation as a meanspirited politician that will stop at nothing. That is one take. Those are the frontpage stories. Our guest host is richard snyder. He is a Senior Consumer analyst at maxim group. Macys solved our problems. They are doing what they need to do to make strategic decisions. They are shutting stores and opening stores. Will we see more of this . We will see more closings over the next decade. I think we are already over stored. Online sales or because much easier. The question is, is it going to affect everybody equally or is it going to affect some more than others . My bet is that it will affect some more than others. Consumers on the lowend are less apt to use the internet sales. Were going to see a rationalization on the lower end. Back andhis cut macys, which did well over the holiday season, indicate that tech is making up the bulk of the new business . Anybody who has not cut up a map rent is in trouble . And macys case, that is true. They have pioneered something that has been revolutionary. It sounds very simple. They have integrated online sales and inventory with their store sales. Using theirarted stores as distribution centers. What they have found is that the increased inventory in Smaller Stores actually helped sales at the brickandmortar stores. The distinction is that they are cutting 2000 jobs. Their opening five other stores. Theyre closing five and opening eight. Human better. Even better. Isthe number of jobs 175,000. They are putting more labor online. Is it easier to do this from a position of strength than from a position of weakness . I think it is more to do with a position of macys making an investment over the last three or four years. They are now in a position of strength. One of the things about internet sales, i think i will trigger in order here. It is called cyber real estate. That is top of the mind. We find that mall traffic is going down. Conversion and stores going up. People are looking online and then theyre going to the store. Then, youre going to go to that place where you have topoftheline. I have a hold. Hold on macys. Lets get the company news. Here is scarlet fu. We have a battle. Assetill battle for the of alcon in court. Theyre accused of buying up the debt of a Satellite Services provider. Will roll out its next galaxy smartphone by april. Will debut with a new wearable device. Theyre trying to compete with apples iphone. The new galaxy will mostly be have a different design than the s4. Digging with samsung, they have toeed to retain a mediator handle their patent issue. They will discuss settlement opportunities according to a court filing. This comes as the two Companies Come prepare for the next trial in april. I cannot wait to see apples results for the fourth quarter. The sales, the dynamics, china sales. Sung they are selling they already cut down their profit forecast. A little bit of mystery. Futures are up five. Jobs report tomorrow as well. Twitter question of the day was on the front page. What does bridge gate mean for Chris Christie and 2016 . Tweet us. You do not have to be in new jersey to tweet. This is bloomberg surveillance. You are watching bloomberg tv. We are streaming live on your phone, tablet, and bloomberg. Com. Good morning. This is an interesting guy in the wireless world. I was a few years ago. Trujillo is sol with betty liu. Samsung struck races are down 10 . Stock prices are down 10 . The cash cow smartphone business is facing challenges from competitors in china and india. They offer cheaper phones. They are doubling down and trying to be the largest appliance maker by 2015. Sam grobart was in las vegas and checked out some of the products cooking in samsungs kitchen. Take a look. Ces has already always been about is like tvs and peters. You can add kitchen appliances. This is a world of opportunity for Tech Companies as things become smarter and more connected. One of the big players is samsung. They have ambitious goals. They want to be the Worlds Largest manufacturer of implants is by 2015. That will be an uphill battle. They have to increase revenue by about 6 billion per year. How do they intend to do that . They have a bunch of new products here and must i guess. Take a look. This is the chef collection refrigerator. It has a price of 6,000. It has a pretty interesting feature. This store has buttons on the top. One says fridge the other says freezer. You push what you want and that chamber becomes what you want. , stillhe water dispenser or sparkling. The oven. W you it has this panel right here. You pull it out and you have one giant cooking compartment for your turkey. Put it in and you have two different cooking zones. You could have asparagus up here at 275 and pork loin down here at 425 degrees. Samsung is already a big name in washers and dryers. They are bringing new technology to that category as well. Want a bigger washing machine . The tub must be deeper. That makes it awkward. They have made their tub wider. It can hold more close, but it is smooth to get in and out. Becomeut the ambition to the Worlds Largest manufacturer by 2015 . It is too soon to say. It was not that long ago that people asked sam sun . Smartphones . That reminds me of your for trigger. Just as empty. I have champagne and blue ribbon. And lolita. Lveetaread about ve last night. There is a shortage. Charles schumer is involved. The way they put milk on x, i had no idea. It is from new zealand. Guess with their twitter handle is . Nutrition . E liquid gold. Eat liquid gold. I may have to go out and buy the original. To put in your empty fridge. Rick snyder is a consumer analyst. I know that you do not look at the durable goods maker samsung. You are looking at how these appliance makers are competing for the same dollars. Whether it is to be spent on Home Appliances or Consumer Electronics or apparel. This is what we saw over the holiday. We saw it in a big way. People were spending on Home Appliances, autos, and apparel. Retailers were squeezed. Consumers only have a certain amount of dollars to spend. I always watch the product cycle on these appliances and smartphones to see where people are going to spend their money. Requiress going on show roaming. That has taken a eight out of sales. Which retailers are capitalizing on show rooming . Macys is doing a good job. We talked about the online shopping. They have a tremendous presentation. Nordstrom does a good job. That requires investing in their stores. Theyre reluctant. That is shortsighted. People who are investing in the entire package, integration and stores, macys is spending a lot of money to redo their flagship store. Spend and you shall reap the rewards. Rick snyder is our guest. We want to tell you about the new cover of businessweek. It is an indepth look at bitcoin. I will read every word of that. Matt miller features prominently. Hogwash. This is bloomberg surveillance. You are watching bloomberg tv. We are streaming live on your phone, tablet, and bloomberg. Com. Good morning. What a jobs report yesterday. That will go to jobs tomorrow. We will have that tomorrow. I am tom keene. With me, scarlet fu and Erik Schatzker. He has our top headlines. We will begin with this. President obama will call for u. S. Spying on foreign leaders. Establishplans to limits on National Security agencies. This is according to an administration official. The question is whether they will apply to only allies. It is all because of edward snowden. Profitre of spying at the big six banks hit a sevenyear high last year. Topped 74 billion. That is a 21 jump. Anwould have soared to alltime high if not for the 80 million that covered legal expenses. He blamesman drinking and stress for his out worst on an american man in prison in north korea. This is my excuse. He appeared to suggest that kenneth they may have done something. He did apologize for those remarks and said he had been drinking before the interview. Those are the top headlines. I had a bottle of scotch one time. Some thumbs up or thumbs down . The direction is. Up. Here is the morning mustread. From the former u. S. Treasury secretary. Controversial. The difference between growth and job creation it has led to political in action. Finances will promote recovery. Unconventional policy decisions are sometimes justified as the only available pools. Not thet criteria is absence of alternatives, but an assessment of cost and benefit. Qe can be part of a successful program. This is getting old. We are almost at chronic qe. A lot ofqe2 people say why are we doing this . Including the Federal Reserve minutes. Some people are less embracing of this. I put it on twitter. We have a spectacular report on the ramifications of qe. 2. 2 million. S that is the number of jobs probably created. Good morning. We need data. We have a lot going on. Erik schatzker is with me. Lets do a quick data check. Up we go. Yesterday. Od report good feeling of bounds. The 10 year yield is higher. The euro dollar is bouncing up. Governorengland druggies press Conference Governor draghis press conference. There are real doubts about the turnaround after a two paragraph statement shows thereales provided was momentum heading into the third quarter. Jcpenney failed to hold on to that. Give us an update. They need a lot of sales and good margin. Are they getting either . I do not think so. They need a hockey stick acceleration in sales. It is tough in this environment to get either. We estimate that the average discount for the week of december 22 through december 28th, their margin is not coming from that. Will have more on the Holiday Shopping season in the coming week. Not gloom, but challenges. We look ahead too. We get the december jobs report tomorrow. A survey estimates that employers added almost 200,000 jobs. I cap the strongest year of payroll growth since 2000 five. Two. 2 million jobs created in 2013. Deutsche bank is bullish, calling for added jobs in december. Citigroup is looking for 165,000 jobs. Goldman sachs is right next to morgan stanley. They adjusted yesterday. They wind up big. From 150,002 200,000. There is a whisper feel. Someone else will look at the job report tomorrow. That is janet yellen. She will start bringing the unemployment down. Focusing on employing americans. Vincent is with morgan stanley. He knows that our historic accommodation and improving job market will make for an eventful number in 2014. With a little better coordination, i wouldve gotten a tie that matched. Mefrancine lacqua. Trust from london. Dressed me from london. The money question is, is there anything in this report that can adjust what our central bank does . Not likely. You start with 200,000 and go up or down. Down to 190,000. We recognize that the fed is short of their goals. The unemployment will be seven percent. Hat is above the estimate inflation is tracking well below the goal. There are two reasons to keep the conversation in place. With in the mix of the moment, the president speaks of inequality. Everyone is focused on inequality. What do you look at in this report that addresses the president s concern about americas inequality . That sort of thing does not change on a dime. Payrolls are up with erratic numbers. Where theition of gains are if it is retail, temporary workers. It is probably lowpaying workers. The other thing we look at his average earnings. The hardest thing right now is to remember that the fed has an optimistic forecast. The fact that the data are Getting Better says that the numbers are coming up to their forecast. The forecast was preconditioned on keeping policy. I know you want to jump in here. Chairman bernanke took a victory lap on his optimism. Things are Getting Better. You never take a victory lap. You have to ask about those reams shoots from years ago. What is this years phrase going to be . Taper is 2013. That is old news. He says taper is old news. Lets talk about unemployment. There is a strong uptick in november. Will we see that reverse . There is a secular component to it. The workforce has settled down. It could come down a bit more. Population growth has slowed. You have slower population growth and more downturn in participation. That is a recipe for slow potential output. We will get a little upturn in participation. The secular trend is down. Was here yesterday, making a case that people under appreciate the automation on u. S. Economy. Is that right . It is hard to predict productivity. You have to be optimistic about growth. First, we are good at extracting energy in the middle part of the country. That will give a comparative advantage to manufacturing. The second part is technology. It is not just robotics and 3d printing. Everything we do in the genetic space. That is really hard to predict. Lets switch gears. You and your wife have done smart work on slower Economic Growth and inflation. Worry about need to the disinflation and deflation that we read about and china . Do we need to be worried about these issues . If we have slower inflation, we have higher Interest Rates. Higher Interest Rates are a disincentive to investment. To capitalincentive leavening. Do we need an Infrastructure Program and stimulus . That is the wrong way to start the question. That we are incredibly inefficient and delivering fiscal policy. Were are so far from best practices. There are a lot of things we can do, including the fact that the budget goes to 13 committees in congress. We always separate Capital Spending from currents pending. We have entitlements that are early. The tax system is a mess. So far in these frontiers, there is a lot you can do. Were not having that conversation. What about earnings . Alcoa will kick off earning seasons. What kind of information are you trying to look for to give you a sense of our jobs are headed . We try to jewel down into the micro space. There are two things. One is retail. Who is spending . Is it highend or lowend . More important, Capital Spending. In our forecast, we are stuck in a growth channel centered on two. We have picked up 2. 75. Lets talk with your retail expert. What kind of consumer for 2014 . On the low end, it is clue me. I want to talk about your former colleague. He is cautious on the american consumer. Coming up, our single best chart is on the domestic oil boom. What it means for economic rove. Growth. You are watching bloomberg tv. We are streaming live on your phone, tablet, and bloomberg. Com. Good morning. I am tom keene. Scarlet fu is here and Erik Schatzker is along for the ride. We have the top headlines to get going. China is the first country to top the 20 million mark in vehicle sales. They grew 14 last year. This is according to the association of automobile manufacturers. They delivered a Record Number of cars in 2013. Economic confidence in the euro area hit a 2. 5 year high. That was more than forecast in november and to the highest since july 2011. This well unemployment remains stuck at 12 when one percent. Jpmorgans hired has hired someone for a regulatory role. Singh working at the imf, was an advisor at the central bank. This is your wheelhouse. This shows with the banks will do. They will hire heavyweights to help. He is a heavyweight. Absolutely. Having been in there helps. Presumably, they come with a sense of best practices. You will see unemployment. They will deal with dodd frank. Lets do a single best chart. Scarlet fu is back. Speaking about binging, we talk about saudi america. Oil boom that is taking place right now, this shows that petroleum and other oil product exports topped 13 billion. That would be the export. That is 30 higher than the average in 2012. Imports declined to the lowest since 2010. About 28. 5 billion. This drop makes a material difference for fourthquarter gdp. It will add one percentage point. Well said. Vincent is from morgan stanley. This is an nx. It is a change in that exports. Net exports. Is this the same value . Wind turbine by exports, we are exporting the same amount of goods. You worry why do the imports declined. Theant to separate monthtomonth variation and trade balance. Our tracking estimate when up to 3. 25 . That is the wind blowing through the air. Seven weeks ago it was one half. E too. Morgan stanleys economy is not bill gross is economy. Story we have been in a growth channel about two percent. We stay in that growth channel. We think there is reason cyclically to pick up. Is capping the accelerant. Gas extraction making up almost one quarter of investment. It has a direct contribution. This is critical. Oil and gas is one quarter of our investment . In structures. Those big platforms that they put up our bigticket items. They do create demand. Is that sustainable . It has been running very firm for the last couple of years. We build infrastructure. Look at the economy that is more shaky. Our photos of the day. Made a raretro public appearance in havana last night. 78 . He attended an opening of an art gallery. Look at him. He ceded power to his brother in 2000 and eight, after falling ill. You have to wonder where they will be in five years. Why this event . I understand. Great photo. South korea. Dennis rodman is living up to his name. They wore masks to mock kim jong un. The nba basketball star, Dennis Rodman, on the right. Kim jong un turned 31 yesterday and Dennis Rodman saying happy birthday. Happy birthday. I want to hear the back story of how they became friends. It is all about sushi. The World Largest sushi mosaic was unveiled in hong kong. ,640 pieces to be exact. It is like the petals on the rose bowl parade. They could have a rose bowl float a little sushi. There is some productivity. Laborintensive. I ate steak last night. That is it. Benson, thank you so much for your perspective. We look forward to seeing if you are wrong or right. We will see you with morgan stanley. Coming up, the number is zero. That is how money players were inducted into the Baseball Hall of fame last year. A different story this year. This is bloomberg surveillance. Good morning. Lets get to company news from the files of bloomberg west. Watson gets their own division at ibm. They are investing money to develop watson technology. They made headlines when they triumphed over human competitors on jeopardy. Broadcasters are heading for a showdown in the bid to block aereo. They will say tomorrow if they will consider violations that they violated copyrights. This would settle the battle between them and major broadcasters. Foxrt murdoch 21st century is dealing with the australian stock market. It went to boost liquidity on nasdaq. They want to ok the change and the list. That could be complete by june. We want to get into cooperstown. Stay off of the jews. That is the message from Baseball Writers Association of america. They chose three players to enter the hall of fame. Nonedux, tom glavine of these players was linked to steroid use. We will discuss the new class. Is this the way it should be . Not necessarily. It was a great moment for three great players. They should rejoice. Be a great summer in cooperstown. Frank thomas test announced storage. Votinging price the process is antiquated. This is a process that has been connected to a writers union. It started back in the 1950s. I know that we all agree that technology has taken over. There has to be a different voting process. There are 600 people voting. I can tell you from that experience that not all 600 people take it seriously. Had there been a different process, would we have seen a different result . Would barry bonds be going to the hall of fame . Would Roger Clemens . Not necessarily. Mike piazza would have been. These are guys who have been playing through the times. I heard all of the rumors about mike piazza. I never went public with them because i never had evidence. I also heard rumors about frank thomas. If we are just going to go by the i think so, that is not a good case. Of people wrote yesterday, including the new york times, about mr. Clemons. Is Roger Clemens guilty until proven innocent in the eyes of these people voting . Ini remember looking at him the eye when he was busy swearing at me after his name was mentioned in the report. The one issue that you have to say with regards to clemons is this is a guy who was put on trial for perjury and acquitted. I am a amateur here. Essentially, he is guilty until proven innocent. Right. I have been a big opponent of mark mcgwire until he went on television and it added to it. Admitted to it. His numbers went down after he admitted publicly. Lets be clear. There is no such thing as a godgiven right to the hall of fame. You have to be chosen by somebody. Whether the Baseball Writer sure somebody else, you still have to be chosen. Presumably, some factors weigh into the mix that go beyond steroids. To your point, it is not like Roger Clemens ever did the Baseball Writers any favors. What is happening here is that craig vizio missed the hall of fame. Player for thear houston astros. He plays second base and center field. He did that very well. The difference is that he missed i two votes. I know for a fact that one writer in l. A. Abstained from voting because he was trying to make a statement. Theres a rumor that a guy in florida sold his vote. I have to bring this in return in support of your return. Should he be in the hall of fame . No. He has admitted. Mike piazza has never been can connected except for rumor. You are a st. Louis cardinals fan. What is your take . I think it would be difficult for me to vote for anybody who is tied with steroids. Theseony is that some of players, barry bonds is a twotime m. V. P. He both the. If you cheated the game, you cheated the game. He is a guy who was put on trial for saying he never knowingly did steroids. He was acquitted. I am not naive. He did steroids. Assume that we know everything there is to know about barry bonds, how can we make a blanket of sunshine . Is the Baseball Hall of fame different from the football hall of fame, the hockey hall of fame . Is there a different playbook in cooperstown . It is held to a higher standard. Baseball is an institution. It is held to a moral compass. Trust peter to get my vote . It should not just be him. Vince does not have a vote. That is an exclusive. That is a disaster. Are you kidding . I did not want you to think i was being selfserving. I have been covering this for years. He does not have a hall of fame vote . Forex report. Lets go do something noncompetitive. Combative. They yen is weaker. Onhave a lot more for you bloomberg surveillance. A report could create good news challenges for chairman yellen. Dive intoupreme court a bitter fight over your tv set . The chief executive officer of aereo tells us of a poor decision. Is he ready . Football for the green fields of the nfl. It is bloomberg surveillance. We are alive. It is thursday, january 9. I am tom keene. Joining me, scarlet fu. A starter with a morning brief. Showing signs of weakness in china. Inflation, consumer inflation, has also slowed. China is the first country to talk 20 million vehicles sold in any given year. They approached 22 million. Economic data, we will see jobless claims. Consumers feel . We have been talking about retail and inequality. We are in earnings season. We will see Family Dollar supervalu, after the bell, it is not so important, but alcoa. The bank of england is keeping its Asset Purchase Program unchanged at 375 billion pounds. There was some noise in some places. There note of flu he is the red hot property market. , ecb comingengland up. Mportant comments turnedkrock controversial. The move turns controversial after the program allowed the money manager to execute trades using mock nonpublic information. Over about five years ago and did not admit or deny wrongdoing. Is slashing jobs. Theyre cutting 2500 positions. Theyre closing five stores. This move will save 100 million annually. They are to cover costs of the job cuts and closings. Nextng will roll out its galaxy phone by april. It will debut along with a new wearable device. Are studying the use of ice can technology is there trying to compete with apples iphone. It will likely have a different design than the s4. Alcoa with earnings. We are thrilled to have Erik Schatzker here. A manned the helm of Bloomberg News financial combine worldwide. You have more frequent flyer miles than anybody i know. Erik is here with us this morning. As we go to earnings and banks, i agree with your notes that bank of america is worth watching this year. They are really worth watching. Two thousand 14 could be a Brian Moynihan kind of year. Face recordto pressure connected to countrywide. Bank of america him bank of america bought countrywide. They were large in the case of originatorsmortgage and Merrill Lynch packagers. Regulators have a lot to find that bank of america that is similar to what they found at jpmorgan. Is better question jpmorgan has started to look like bank of america in the last year. These issues have come back to haunt it repeatedly. The regulatory overhang persists. I want to contrast the bank of america with citigroup. Michael corbin has done a lot to write the ship to right the ship at citi. Bank of america, that seemed like a genius move five years ago. 86 of america generates its revenue domestically. Now that the u. S. Economy is picking up steam, that looks like a beautiful thing. Getting ready for our sojourn to switzerland and the language,and the body you know mr. Diamond is there, there is an up roar mr. Dimo n is there. There is an uproar. What has been the report card on mr. Corvette as he goes to the batt as he goesor to this season. Outlook is Earnings Growth of less than 10 each year. America,se of bank of we are talking about possible Earnings Growth in 2014 in the order of 40 . Forget about regulatory stuff for a moment. Forget about what doj may extract from inc. Of america. Bank of america is returning to to a normalized earnings. Wells fargo wanders out and it is like why dont we spend more time talking about wells fargo. Quite honestly . They are in san francisco. The majority of the financial not just the sell and buy side, but the Financial Media on top of that all are on the east coast. We dont talk enough about the canadian banks. They have fewer banks. Is this a valid to say omg to canadian banks . Are they that good . They are more conservative. That helps. There ise to less competition because there are only six big banks in canada. The bank inxclude canada that is quebec focused. Consumer leveraging canada is higher than in america. I did not know that. A lot of it has to do with housing prices. There is Erik Schatzker with some perspective there. Next tuesday will be the day when jpmorgan and wells fargo kick off earnings season. Is a story all over the new york tabloids. People are calling a bridge gate. A threat that this poses to Chris Christie, the new jersey governors ambitions for president in 2016. His aides ordered road closures at the new jersey and of the George Washington bridge. Emails released indicate it was political and that it was aimed at punishing a democratic mayor that did not support Chris Christies election. Chris christie said he was misled by aids. He sounded appropriately outraged. Critics, they say he was a meanspirited politician that will not stop at anything. Whether Chris Christie was involved or not, this is political dirty tricks. In iowa, will display well with republicans . Did he ever play well in iowa . No. Is he going to get support in iowa because he told the democrats you need traffic should traffic check. Democraticcontrolled legislature in new jersey is going to have a field day with this. Of redactedhe basis emails and text messages. What does redacted mean . Largely blacked out. Lines across emails you cannot read. On what we did get, it is highly damning. Orwhat does bridge gate whatever cliche you want to come up with mean for Chris Christie in 2016 . He was hoping to be a president ial candidate. Tweet us. Lets do a two screen data check for you. Commodities come up we go. All of this off of the adp report. Michael mckee did a great job yesterday. It is framing the jumpstart to a lot of economists. Up, up they go. We will do that at a 30 tomorrow morning on bloomberg television. The vix, under 13 again. That shows the equity strength. I am watching the two year yield. Up to 0. 42. 9 why you may never sign your signature again, at least with a pen. Good morning. Bloomberg surveillance. I am tom keene. I introduced our guest host. He has been looking at what i have been looking at. We are looking at at at it in two different angles. That would be tickling. That would be bitcoin. The text that is focused on what bitcoin could do. Why is it a good thing . Built up a payments infrastructure and a way to i should tran. Ay 21st century fees the idea is that money should move. Itn you use a credit card, is bits on a wire. Ite you understand that, reasons that money should move in a much more frictionless and lower fee fashion than it does today. Does the advantage of can they withstand the price dynamics of bitcoin . I think there are some ways that folks are already doing that and will continue to do that such as pegging the value and coin a bitcoin locking exchange rains rates. You have to move in and out to transact, because people are not sitting on large stores of bitcoin. You cannancial terms, headset risk out in the near term to allow for those transactions to take place, i think you can quell a lot of the questions that paul krugman had about the basis of the current see while you allow its magic to happen. For the optimists, is it a hindrance that we dont really know who was behind it . I think that is the best part of bitcoin. If we knew who it was, all of out. Undits would be it would be a question of whether that person or entity is good or bad, when the reality is, we can focus on the discussion of whether or not bitcoin is good. Very good. We give you a lot of different opinions. Through the other day, hogwash. Coming up, blackrock with interesting reports on security analysis. It is bloomberg surveillance. Good morning. Bloomberg surveillance, futures up 5. Mo is with us from spark capital. Erik schatzker has our top headlines. President obama will call top limits on spying on foreign leaners. Leaders. Theseestion is whether limits would apply to u. S. Allies and not to leaders of hostile states. The changes come because of mr. Edward snowden. The banks had a seven year high last year. We will get the numbers next week. That is a 21 jump and the highest level since 2006. They would have sore to a high if not for the 18 billion banks set aside to cover legal and regulatory expenses. Johnny football is entering being entering the nfl football draft. He passed for more than 7000 yards and 63 touchdowns and rushed for another 30 touchdowns. I am fascinated if he can make the switch to the nfl. They are so much bigger and faster. Dont you call him jonathan football . That shows you my vast knowledge of college football. Theyverending paperwork, are fodder for another episode of the office. The ceo of doc you sign docusign has built a business on electronic signatures. You were the youngest Vice President in General Motors history. You started arriba. What attracted you to docusign . It is an opportunity to change the way business is done. This is one of the biggest markets i have seen. Every potential customer, every person is a potential user. Arriba created the be to be commerce area. This is the Network Effect on steroids. For those of us that have not , how does it work . As opposed to signing by hand, printing, faxing, itnning, overnight delivery, is all done electronically, encrypted. It is a very simple process. You picked up mary meeker as well. Yes. You have one of the most interesting track records. You did arriba. What is the magic that you have . I am addicted to the adrenaline rush of building great companies, making a difference, and it is always something that what is your best practice for not screwing up . Never be afraid to challenge focus, but the number one thing is to measure success by customer success. Mo point man, you have seen a lot of companies. A chance ton have be a game changer . Could this be another commodity and security . A i think it was said, it is function of the product. Do they deliver the best product to customers . At the end of the day, this is going to happen. There is no question. The only question is who is going to win the battle. It comes down to who delivers the best product. Who is the competitor . About 75 market share. It has grown every day. There are a bunch of little startups who have the other 25 . Competitors, that is paper and pen. If you look at our business where a blurb in the real estate business, if you are doing a real estate transaction, you will doc you sign it. Financial services you will docusign it. Financial services. Ipo or sell it out . How do you make that decision . I believe we have an opportunity like a twitter or a linkedin. We have no interest in selling the company. I have to sit next to someone who went to purdue. Going to do about the purdue boilermakers . What are you doing before next september about lousy purdue football . We are getting our guys out there and practicing. Do something. That is embarrassing. It was a tough season. It is the greatest university and we are excited to have our new president. We put on a new football coach. I love the boilermakers. Of theirustees do all minutes, all official work docusigned. Paper and pen is your current enemy. Should Iron Mountain by this company . I dont know if they could afford it. They are a 5. 5 billion market player. I would take a serious look at it. Koyfman of spark capital. The Supreme Court is going to decide whether to take up the latest battle over your television screen. The case of broadcasters versus aereo. If you miss our interviews, check out bloomberg on apple tv. This is bloomberg surveillance. I am scarlet fu. Lets get some company news. Ergng off versus charlie and. The two are going to be battling for the control of falcos falcones. Sales of porsche are jumping 15 . Deliveries rose more than 162,000 field by demand for the cayman and boxster models. Macys is slashing jobs. They are cutting 2500 positions and closing five stores. They say this move will save 100 Million Dollars annually. Theyre taking charge of up to 135 million to cover the cost of the job cuts in the store closings. Another Company Story we are watching, blackrock. Fund sounds like a hedge scandal. It happened that the Worlds Largest money manager. Blackrock has up greed has agreed to stop this practice. The firm did not admit or deny the findings from a probe by new York State Attorney general. They want to avoid the appearance of impropriety. Critical. The appearance of impropriety for an asset manager. Says, the distinction is, buying or selling, we want to get an edge. How did they get into the other world . From bgi. They were principally an atf blackrock bought about five years ago. It has transformed the firm intern blackrock into the worlds leader in etfs am a which is an exploding industry. Global investors in conducted Analyst Surveys where it would ask analysts for their opinions before it was visible to other parts of blackrock and to the outside. That is this nonpublic information issue. Whether blackrock was getting stuff from these analysts that the analysts were not making available to other he investors at the sit to other investors at the same time. Are you more bullish or bearish on the companies that you cover, but the fact that blackrock they fused the answers into algorithms. I remember when reg fd came the nextes changed of day. There is a new way. I dont see that here. I dont see a radical change. What you see here is systematic of what is symptomatic of what happened before reg fd. Firms are bowing to the pressure of powerful investors. Blackrock, by virtue of its size, is the worlds most powerful asset manager. On the basis of the amount of assets that it manages in the volume of trades that a push and that it puts through, people are inclined to kwok ray. Arere we having these inclined to cooperate. Are we having these major changes in the derivatives market, our jpmorgan and the other banks having the same kind of discussions . Do they care about this 400,000 fine and the issues behind it . 400,000 means nothing. It is the question of the appearance of impropriety. What is going on the banks with the constraints imposed on derivatives trading, how do we generate additional revenue and make money . Dman has experienced experimenting with stuff like this. Every firm needs to justifyingmatter of your existence on the trading floor. It goes beyond their parts beyond the your paycheck. A centuryold law gives the attorney general this is a modern problem. The guys that reinvigorated the martin act. Let me jump on one other thing. You guys partners, talked about Goldman Sachs the banking. Debanking. Is there any discussion in the literature that you see that would make it a different Goldman Sachs . Witheyre going to stay it. There is a technical reason. Doddfrank prevents Goldman Sachs from debanking. Themne thing you hear from more than anything else, we are staying the course. They are not changing it strategy. Their strategy. The u. S. Stockr market to open higher this morning before crucial data on jobless claims. That is coming out at 8 30. Surveillance on bloomberg television, Bloomberg Radio. Interviews, bloombergtv plus, Bloomberg Radio plus on the iphone and android. It is a are so clear service. For all of you joining us worldwide for from your automobile. I am tom keene. Is with us. We consider the flavors of how to watch tv. The Supreme Court could announce tomorrow whether it will hear broadcast television case against aereo. They are the Internet Tv Service that takes off the airways. It and they hate have sued to stop it. The case is now going before the Supreme Court. They will decide whether or not to take it up. John erlichman spoke with the ceo. Eo victoryf an aer could erode the transmission fees that we pay broadcasters. A bifurcation has existed, about 54 million or 57 million individuals using the antenna. Rhetorica lot of around this whole concept. In reality is, that model is existence today and this is bringing it into a more modern format. Kanojia. Mo koyfman is our guest today. The internet, the digitization of everything has make Consumer Prices sensitive to everyone. This is just another example of that. What we have seen as consumers are willing to pay when they receive value. Theyre not willing to pay more than the value they received. The reality in Television Business for years has been to regulate monopoly, certainly the cable business and consumers have been paying more than they believe the value of the Services Work because of how things are bundled. Is this copyright theft . That is what this comes down to. On, you is capitalizing could call it a loophole, but , theeality is retransmitting these are just the broadcasters trying to get with the cable guys have been getting for years. Historically, those channels, those networks are supposed to be made available for free. Is that copyright theft . I dont think it is because the law allows the. It is as simple as that. There is a reason this is happening. It is because people dont think they are getting value for the money they are paying. , apple tv,is aereo chrome cast, it doesnt matter. Once we go over the top, what you dont have to shell out all of money to your cable subscription, Companies Like aereo should go away. And doesnt matter. What matters is consumers are not getting what they want from the Television Providers today. Ed is going to force change. We have seen it every other market. Consumer demand forces change. With that. Disagree consumers are getting too much from the providers. Have ay stations do i home . The irony is, they dont want to. They are paying for it how many channels do you watch . Four. You are paying for 400. Why is that . Companies, i do not think they are in trouble in as far as they own the hype to the home. They will figure it out. They want to preserve this Business Model for as long as possible. Who controls the cost and payment for programming that is a different question. , our guest host. We want to highlight the new business week. Pick it up at your newsstands tomorrow. It is bloomberg surveillance. I am miserable. I am tom keene. I cant stand Erik Schatzker. He gets to hang out with betty liu and talk to mark messier. Mark messier has the celebrity who knew there were so many hockey fans . Scarlet almost attacked me. Let me make some news here. Messier, nhl hockey he is joining on in the loop. Later. Ll be joining us he will be joining us for the interview. It will be a lot of fun. You have to ask you about the games that will be played at yankee stadium. We will do that. I think scarlet should do the interview. In theill be sabotaged hallway. I think i will be kicked out. Betty, thank you. The equity markets, we need to speak with ms. Fu. Macies shares are rising after making announcements. They are cutting jobs and closing five stores. Even though macys did fairly well over the Holiday Shopping season, some cost cuts will save 100 million annually. Theyre looking to streamline people. Scarlet, black friday was not kind to bed bath and beyond. They reported fiscal thirdquarter earnings that fell short of analyst estimates. It was 1. 12 a share. They were looking for 1. 16. The forecast, bed bath and warnings are going to be between between 1. 60. Theyre looking for a dollar 79. A trucker avoided bankruptcy back in 2011 and is looking for just over 1 billion in loans to refinance debt. This is according to a person with knowledge of this transaction. Credit suisse is leading the deal. You can see that as a result. They tumbling in the premarket right now. Were going to talk about jcpenney because it was raised a 12 monthffray by price target. 11 a share. Jc penny, nowhere near 11 a share. Coming up next, we will take a look at the impact on bridge g ate. Us to our twitter question of the day. What does the controversy mean for Chris Christie and his prospects, his president ial ambitions in two years time . This is bloomberg surveillance. I am scarlet fu tom keene and Erik Schatzker. The deposit facility rate is unchanged at zero percent. No move by the ecb. This follows the bank of england making no change to its Asset Purchase Program. No changes from the two biggest Central Banks of europe. Ike mckee is here with us this is not unexpected, all their there was some talk about mario draghi needing to make some noise about leaving options on the table. Not just the disappointing data on the economy, but europeans have a problem with disinflation that is just as bad as what we have here. Yesterday, they came out with their price numbers, 8 10 of a percent is all prices are rising. They may need to do something to try to boost that. There will be a lot of focus on the eighth or the a 30 mario draghi news conference. Mario draghi news conference. It is a big deal. More for what stages sets for coming policy meetings. People are expecting him to do something. The samesh have problem. Mark carney said they would not Start Talking about raising rates until unemployment hits seven percent. They expected that at the end of 2014. They may have it this month. Everybody is going to be focused on ramifications on Economic Growth but no inflation . You dont want to fall into disinflation. The japanese have had no inflation for years and people stop spending money if that happens. We have that problem here in the united states. Byone wants to exacerbated falling into deflation from the disinflation we are seeing. It is still a threat in the eurozone. Not Much Movement in the back of those headlines. Mike mckee, our economics editor, thanks for that take on the rate decision. Lets get to company news. Vision ats its own ibm. They are investing more than 1 billion in that unit to help develop application space on watson technology. They triumphed over human commodities competitors on jeopardy a few years ago. Executives of apple and samsung met to discuss settlement opportunities. Comes as the companies prepare for their next trial. Rupert mart out pop Rupert Murdochs 21st century fox is trying to boost liquidity on the nasdaq. They will ask shareholders to ok the change. The listing could be complete by june. That is todays company news. Mor guest host is koyfman. I wrote this up for linkedin, the idea of the new year. You are kneedeep in this. What is the customer telling people like you right now . Media, thed social what are people saying . That is a broad question. I guess the customer is telling us that they will reward the things that they love. Have beenn a trend i following for the past year, yearandahalf. People have said, no one will pay for software, no one will do this or that. The reality is, if they love it, they will do it. That is the most important thing to remember in the internet world. Does that explain the success of uber . I think so. People are complaining about Something Else we will get to that in a second. Watch what they do, not what they say. Right. Uber is the most magical that i have ever had. You pull out your phone, you push a button and a car shows up in front of you to take you where you need to go. That is the promise of the internet. That is the promise of mobile. Want the low prices, but they cannot abide by the 400 ride at 1 00 in the morning on new years day. Let me backan up i dont mind their pricing. What i think they havent done great is communicate around their search pricing. It comes back to the point about what does the consumer want . They want honesty. Throught to be talked transparency. Think facebook is more silent than anything. I cannot convey the reduction in interest i have seen on facebook. Is that it on uber dont think they have always been straightforward in explaining why the search pricing search pricing is happening. Pricing is happening. I am a believing and dine a believer in a dynamic pricing. The travel business has been the pioneer of dynamic pricing. Is sort of taking on that model. I think local services, anything being delivered to you, anything that is convenience based, anything a luxury good, massive opportunity for dynamic pricing. We want to get to our agenda where we look at the story shaping our day. Tom, start us off. Jobs is bigger than people think. Rybody is fat, he happy fat, happy, and complacent. There is no angst. You will get it tomorrow at 8 30. This could be a bang up number and that could mean real challenges for the said. For the fed. It has been a sleepy crystal ball season and that will change abruptly tomorrow morning. Almostconsensus is for 200,000 and the whisper is much higher than that. Tom, youre going to head off to the radio studio. Erik and i will continue on with mo. Are people too fat happy and complacent . I think that is a very new york centric attitude. I think there are a lot of people in this country that are fat. I dont know how happy they are. Complacent is a different question. Were going to talk about blackrock. They paid 400,000 to and a regulatory investigation. It has to do with access to nonpublic information. His is not a hedge fund scandal, but it is a bit of a black mark on the Worlds Largest asset manager. This is a firm that has done very little word little wrong. A 4. 1 trillionto dollar colossus. People ask whether jpmorgan is too big to manage. Is blackrock too big to manage . Something like this should not the gaze of larry fink. It is turning a spotlight onto larry fink and blackrock. My agenda is bridge gay. What does this mean for Chris Christie . Emails are suggesting that his aides orchestrated a traffic jam to seek revenge on a mayor of fort lee who did not support him. Jerseyan. Tive new what do you think . It doesnt surprise me. I like Chris Christie, but it does not surprise me that he bully someone from a lyrical point of view, given his point personality and how he operates. I think someone else is going to take the fall for this. The only question to ask is how the voters react to it. He will find a way to pull through this, to be honest. Mo thinks he will pull through this. How about the twittersphere. Has lost my support here we cannot afford an immature leader. It probably means a little to Chris Christie. In the Chris Christie camp. He will not make it in the white house. It depends on how far this goes. The investigation is not over. The state legislator in trenton, newn jersey, this is the story that is not over. More dirt to come. Has been here with us for the hour. Memo bloomberg surveillance continues on the radio. In the loop is next. Worlde from bloomberg headquarters, this is in the loop. I am adam johnson with Michael Mckee and stephanie ruhle. Betty liu will be joining us in the next hour. We have the maven in Telecom Media and all things digital. He started his career at at t. He now sits on several boards, including target, western union. What a pleasure having you here. It is fun to be here. Absolutely. You have all these things happening not just in the u. S. , but everywhere in the world. Toyou are the perfect guy have on hand. We want to go through our agenda item. Just a half hour, mario draghi will be talking to reporters. The ecb president taking the podium. ,nd the European Central bank no interest rate. Also, the weekly jobs claims report. This