Planned in diversifying our economy. Putin says sanctions are responsible for 30 of the crisis. U. S. Businesses looking south to cuba. President obamas decision to normalize relations opens the door to limited trade. U. S. Companies will be allowed to export telecoms equipment, agricultural products, and materials for small businesses. The president spoke with abc news. Andf you are a cuban exile you saw your family driven from a country you love, you are going to feel strongly and emotionally. There are friends of mine who feel that way. , we wante said to them to see greater freedom. Marco rubio of florida is the action. Ock saying he could hold up the confirmation of an ambassador to cuba and block the mc. Stocks in asia and europe are rallying after Janet Yellen Andy fed pledged to be patient. Keeping borrowing costs near zero for a considerable time. The most inrose 2 , more than a year. Sonys decision to cancel the interview will not come cheap. Sony spent about 80 million to make and market the comedy about a tv crew sent to kill north koreas leader. The actual damage from the hacking will cost sony more than 100 million. 0 millionsony spent 12 to clean up its systems after a hack on playstation. Unveiling. A new phone equipped with a keyboard. Similar to the funds that made blackberry a household name. Customers complained when blackberry abandoned the keyboard. Share now is less than 1 . Lets get you a day to check. You mentioned a rally in global equities. Futures at their best levels of the session, s p futures up to 25 points. A stronger dollar fading a little bit when you look at eurodollar, 1. 2332. Some selling of treasuries leading to a higher yield on the 10 year. Crude oil stabilizing the last few days after dipping to 53. 60 on tuesday. 58. 10 a barrel. Overnight, a little bit of recovery in the ruble. What is going on inside putins head . Hes been sharing it with us at a press conference that began in hour ago. The russian state media ran a trailer. As in a trailer for a movie. Plays]ic music thats not a joke. A trailer for a president ial press conference. Hans nichols joins us from berlin. How is the movie going so far . When you take a look at what the ruble has done since putin started to speak about 1. 5 hours ago. It looks like a heartbeat monitor, up and down. Suggests theputin central bank is independent, at the next he does not approve of what they are doing. On onet mixed messages crucial point, hes been consistent that the west is to blame. 25 toa precise figure, 35 of the economic crisis is because of western sanctions. 35 , exactly . Thats russian precision. Even metaphorically, his language is remarkable. Talking about russia being a bear that likes to have honey and berries, the west wants to moreg the bear to nothing than a stuffed animal. Tohes telling the bear hibernate. He is sending a signal that this can last for two years. Russians are going to expect this for a while. He did give himself some room on that. He did say if things are not working out after two years, maybe we will have to cut some programs. Forrepared the public additional economic pain. At one moment he sparred with a ukrainian journalist. Not given anything. The only hope for optimism is that he and merkel had a late call on monday evening along with hollande and others. Not a lot of optimism. Glad you brought up merkel. Putin with near record Approval Ratings in the 85 range. Merkel is very popular in germany. Is much of her popularity hinged on her relationship with putin . Very little of her popularity has to do with what they used to call the view towards the east. It is more on the economy and what Angela Merkel has done. Somewhat internally given credit for saving the euro. We have some concern in greece. Most of merkels Approval Rating is based on economics. Less focused on russia. There seems to be a consensus on russia, sanctions need to have teeth. Sanctions need to stay in place until crimea or until the sovereignty of ukraine is respected. There is an eu summit today. Are the leaders more worried about what is going on in moscow or athens . Technically, the summit is going to be more russiafocused. Athens got a 2monfils on life. We will have to see how the president ial votes look in athens. Yesterdays did not go well. That was expected. The heartbreak moment for athens and greece is december 29. Whether or not we will have snap elections. Right now it is a wait and see approach ungreased. On greece. Hans nichols, thank you. We continue to monitor that movie, four hours. It never ends. I love the specificity. Twice 5 to 35 of rush has problems are caused by sections. The audience are holding up signs with their questions. That is worthy of a Hollywood Jim is portfolio managing director at Morgan Stanley. We talk about the markets and the fomc announcement yesterday. What did you learn . Yellen had a strong, to the extent that he had lowered the 20152016 and 2017. She kept her longterm forecast of 3. 75 in check. The message is that she wants to create growth. Even though we are getting good data now, she wants to get the growth moving higher in she wants to close the output gap and increase inflation expectations. By keeping a three point 75 rate and chat, she is saying were not going to let things go out of control. It is pushing the economy forward. If she needs to take any of that back, she can. Did she clarify or confused . Initially it was confusing the rhetoric on the street when we were thinking about it was it was all about the term does she leave a considerable period in or replace it with patient. Patient is code word for hiking rates in six months time. Link theshe tried to previous statement with the current statement. She didnt inject the word inject theshe did word patient or cheated change her Forward Guidance. Did inject the word patient. She did change her Forward Guidance. She kept the integrity of the previous statement by keeping considerable period. Its a marriage of those two. The fed is worried about another taper tantrum. It sets off a panic. Jinping that is not what she wants. Shes careful. Leslie . Is it worth it. It is almost like a linguist at class. Is it worth it for the fed to give guidance . Is worth it for the markets. The markets are always going to think about when the first rate hike is going to be. Based offng to price of that. From a clarity and risk profile perspective it is helpful to know that the next move by the fed is a hike. And when that might start to occur. And what are the criteria she is looking at to make that occur . Right now what she is saying is it is based on Economic Data but we want flexibility. You went to link it to what do. Do you agree with janet yellen that systemic leverage is not close to where it was precrisis . Absolutely. Even the Regulatory Environment has made that, doddfrank and basel iii. We can see in moves that we have had, we have had oil down 40 since summer. Weve had take shocking moves. We had not had any big financial shocks where there might have been and over levered position that needed to get forced out of the market. For right now we are not typically, those types of moves follow it. We will talk more about oil when we speak to an oil analyst in london. Coming up on bloomberg ony cancels a, s movie release. What kind of precedent does it set for the Entertainment Industry . Our twitter question of the day. Did sony do the right thing . Tweet us, bsurveillance. Brendan . N we will be backo. This is bloomberg surveillance. Scarlet fu with Brendan Greeley and leslie picker. Sony pictures got hacked and threatened over the interview. It canceled the new york premiere. Canceled appearances. Sony gave theaters to violate contracts and not run the movie. Now sony has said they have no further release plans for the film. Paul sweeney is director of research for media entertainment. Could sony has handled this any worse . I dont know. This is an extraordinary, unprecedented situation. The issue in the short term, i the righte they made decision. This is not a franchise movie. The risk reward of trying to show this movie in the holiday season, the risk is too much for a movie that is not a make or break situation for the studio. Longerterm, it raises a question of is this a precedent that feature films could be held hostage by any party . Short term it is the right decision. Sets a bad, it precedent. In that industry, do studios run a Reputational Risk or do consider years or do consumers really know or care who made what movie . They really do not care. Sony, it is an issue of isnt a Reputational Risk for the talent in hollywood. Producers, directors, and hollywood. Relationship with their theater partners. Here, sony worked with theater partners and said the theaters were not comfortable showing this movie. Work withey tried to their partners. They are run the risk of getting a reputation in hollywood that they would not stand behind their film. This is such a unique situation. I think everybody is going to give sony a pass. To an industry consultant with 40 Years Experience in hollywood. They are very cautious. It is easy for them to drop a movie. You do not have to play this. What therstand theaters wanted to do. Im having a harder time giving sony a pass. More for First Amendment reasons. Is there another way they can distribute the film so the public can see it . Online streaming, is that a viable option . A lot of folks are saying this might the Silver Lining might be sony might have an opportunity to release via Online Video Service such as netflix. This might be a test case for filmto launch a big studio directly the end netflix or some other, amazon prime or Something Like that. Else, to gauge the market. What that be a viable business market. The Silver Lining might be that sony might have an option to go direct to consumers. I am not really clear that this film can live in the home video market, what walmart want to put the movie in stores. My morning must read is from michael moore, best known for fahrenheit 9 11. Tweeted, dear sony hackers almosts retweeted 15,000 times and favored 11,000 times. The movie business is not cutting edge executives. Does this discourage risktaking in hollywood . This could be the risk. Hollywood over the last 10 years franchise towards the movies. The comic book movies. The greatest example would be marvel studios. Theyve had a tremendous track record of releasing marvel and Box Office Hit after Box Office Hit. A is more difficult to get one off movie green lit in hollywood. This might make it more difficult. A very risky film to begin with. It is a political film. North korea. This is a one off, high risk film to begin with. Sony acknowledged that. That might be a little bit of a damper for new ideas. Paul sweeney, thank you for joining us from bloomberg intelligence. Sony treating it more like a risk and a First Amendment exercise. We will wait to see if they release it. It looks like they arc in the headlights. I do not think they anticipated it would be picked up as a possible cause. Changing the trailer lives on on youtube. Did sony do the right thing . Tweet us bsurveillance. Some screenwriter is taking notes and this is going to be a movie. The most metamovie ever. This is bloomberg surveillance. Scarlet fu with Brendan Greeley. Tom keene is off. Time for our morning mustread. Andn the ft, uber selfemployment. Selfemployment startups and maker businesses comprise a larger share of the workforce. Workers are becoming more free and more at risk. Many enjoy the challenge but few are secure. Its a more efficient use of capital. Pusheds risks are being down to people who used to be employees but are now contractors. The risk is worn by the individual. It also brings down costs. Theres a costbenefit analysis. Inflationok at the numbers today, i know we like to blame oil prices. We also have technology. We have other industries that are creating more individual workforces. Structural changes. It becomes a big disruptor. Inflation comes down. How does the central bank push Interest Rates higher . Gets businesses out of the job of providing a safety net. Safety net is not there, someone has got to pick that up. The government has to step in and be a bigger role. Are still going to need to have a doctor and go to a hospital if you are self employed. Are we taxing that properly . Are we getting b revenues from that . It creates a different dynamic for the treasury. I think the market are ahead of the government officials. I wonder whether Congress Sees that as something coming down. These are things that are being discussed but i do not think a lot is being done. Typically tax policies, these things move at a glacial pace. It is hard given that in itself undefined. All the businesses are so different and unique that it is different to have generic policy that covers all. In bite had to get paid coin. Maybe. We discussed oil, coming. Oil prices on the move. The chief oil analyst at Energy Aspects joins us. Make the best entertainment part of your holidays. Catch all the hottest handpicked titles on the winter watchlist, only with xfinity from comcast. This is bloomberg surveillance. Tom keene is off for the day. Lets get you top headlines, a Historic Development in the relations between the u. S. And cuba. President obama announcing his decision to normalize relations between the island nation and open the door to limited trade. Chevron does an aboutface on the longterm billing plan and has indefinitely debate delayed plans to drill off the coast. Level ofny cites the Economic Uncertainty in the industry as one reason for the change. Chevron does not plan to drill its first well until 2025. The hottest ibooks item at starbucks might not be the coffee. They had record gift card purchases on the fed december 24. Last year starbucks sold 2 million in the u. S. And canada on christmas eve. That is roughly 1500 gift card per minute. How many are still stuck in the drawer . You make money you sell the gift cards and they dont get redeemed. Its a line item unredeemed gift cards. It is a profit center. From Morgan Stanley is with us you look at fixed income all over the world in brazil, venezuela and india and russia. Thing they all have in common is their reacting strongly to the price of oil. Do you have any idea of the floor. In terms of calling a floor it is difficult. I know our commodities analysts had said the 40 areas that could be a floor but the bear case. Perspective an oil as we think about it through the market the one thing it is done is cause correlation to go up. Everything now is trading on oil. Stock prices are trading on oil, high yields are trading on oil, this is an environment where we bought centralbank policies and they were starting to change and the fed was easing and going to remove accommodations and we would start to tighten in the bank of england would do the same, the ecb would be easy the boj would be easy as well and we figure the correlations would break down now all of a sudden you have the shock of oil coming down so quickly in the market and it focuses the entire risk on that and creates correlations and volatility to rise and that is really the key. It certainly creates opportunity for some but lets get an experts take on where the prices may end up. Energy analyst and she joins us from london. We were talking earlier about a new natural price of oil anyway to come up with one . Thats difficult. We are already seeing a strong rebound in prices. And you areersold likely to see a volatile market going ahead. When you look at the u. S. You are drawing a distinction between the independents and the majors . Having said that the oil verys have gone after expensive projects and you are just turning to see cancellations and cutbacks and you are going to see the aftermath of this sharp drop in oil prices across the board. You will see projects getting delayed or canceled. One of the most popular forms of ipos are taxfree spinoffs. Lately these things have been underperforming as oil prices flubbed what you expect in 2015 . We are likely to see a huge increase in m a in the oil sector particularly in the u. S. A lot of players are going to get taken over because their debt is so high and their finances are not Strong Enough to withstand what is going on. You are likely to see a lot of activity in the sector particularly on the shale side of things. I would to bring you in here a lot of people compare oil and the slump we are seeing to the next subprime crisis did the bond market get too enthusiastic . Certainly the highyield market is hurt on this 15 of highyield is energy but 85 is not energy. One of the things we are seeing as i was saying earlier there is a high correlation risk where ones one sector of the market has taken over for everything else. Default rate in highyield is around 2 so we are starting at a low base. With the fall rate rising it probably well. How much will they rise . We will have to see. The question is does oil stay at these levels for a long. Long period of time or does it bounce . If its here for a longer time default rates could go higher. The fall hasof been the slow realization sinking in of low oil prices and what that means for huge capex expenditures. Are we seeing the end of huge offshore projects like the salt pans off brazil or the north sea . By howill be determined long these prices stay. Our expectations are oil prices will be low for the next six months at least and that will do significant damage and you are absolutely right in terms of the big projects the capital intensive projects, they will be questioned and the fact that saudi arabia has not stepped in and made the opposite noise saying it is not interested in stepping into shore up prices that puts a huge amount of . Surround these projects. For this there was a sense of complacency dont worry saudi arabia it will stay at 100 in this will be a paradigm shift its a matter of time until how long it takes to filter through. He will probably see that the bac