of theaters across america. sony entertainment's ceo michael ouron said, we are excited movie will be in a number of theaters on christmas day. efforts toinuing our secure more platforms and more theaters. so what happened? what changed sony's view on this situation? smaller cinemas apparently. caroline hyde is here with more. ask coalition of independent ,inemas signed a position expressed their interest, got in touch. sony thought, how can we get this film out? 300 the others will be showing this film on december 25. these films have been ready and waiting to go. alamo, they are based in austin, texas. also, plaza in atlanta. atlanta police say they are aware and they are going to be monitoring the situation. the whole reason "the interview" was pulled because of cyber threats that maybe you would be in danger if you were viewing this particular film. many started to feel that we have backed down to terrorists, so suddenly we've got to change. hundreds more cinemas might be lined up for the next week as well. seth rogen, the guy who wrote the film, has spoken out on twitter, saying the people have spoken, read him has prevailed. he is saying that "the interview" will be shown at theaters willing to play it. >> talking of influences on this event. the president of the united states, before he decided to head off to hawaii, at a significant impact on this story. is saying, weton never gave up, but it sounds like they had. that build up some concern. he spoke out and said, we can't so that some dictator in some place can start imposing censorship in the united states. he voiced concern that he hadn't been chatted to buy sony. >> sony is a private company. it was worried about liability. i wish they had spoken to me first. i would have told them, do not get into a pattern in which you are intimidated by these kinds of criminal attacks. this whole cyber attack has escalated into a geopolitical incident. obama weighing in, the united saying --oo criticizing north korea. this has become a full-blown saga and sony is having to stand up. >> it is sending up. are we going to be able to watch this in europe? >> good question. it is meant to be shown in 60 different countries. in january, it is going to australia. asia was never going to show it. are we going to show it as well? will we start seeing it streamed? sony hasn't answered those questions. it is worth remembering that the four biggest chains in the united states haven't made a turn. from region hearing entertainment and amc that they are standing by their ban on the film so far. intriguing new turn, i think. >> caroline, thank you very much indeed. if you are watching and you decide that you want to do something on christmas day, maybe there is an option. standard & poor's delivered a fresh blow to the russian currency that is very much in crisis. the ruble is appreciating but s&p has warned that the country's credit rating could be cut to junk. let's bring in ryan chilcote. what does it mean? >> s&p has very little holiday cheer. i decided to wear the christmas sweater. they say there is a more than 50% chance they are going to downgrade russian bonds to junk in the next 90 days. the ruble doesn't really seem to care. the ruble, up today by about 0.2%. that is obviously no big deal. if you look at the last eight days, since high noon on tuesday of last week when it really bottomed out at 80 rubles to the dollar, it has improved almost 32% since then. it fell 50% in the week leading up to that. the ruble is strengthening and we see the central bank saying they are going to loosen up some of the collateral requirements they have for commercial banks that want to borrow from the bank of russia. they are going to allow fx loans as collateral. another place no one seems to care is on the bond market. yields have long been showing that investors are treating bonds in russia like junk. the yield is just over 6%. it to do was hire a week ago. the threat of an s&p downgrade is seeing treated more like confirmation of what investors were anticipating. >> so we know there is going to be a recession next year. that has been made clear pretty much by everybody. in terms of the impact of that recession on politics of russia, what are people saying? >> knowing that we are going to have a recession next year -- we just had a bloomberg survey. they are expecting a recession in russia next year. currency crisis, economic crisis, financial crisis, that is a concern. one of the things we need to watch is to what extent this turns into a political crisis for vladimir putin. there is no quick answer to that. 15,date to watch is january when we are expecting the verdict in the trial against a member of the political opposition in russia. he says the charges against him are politically motivated. he may also be sentenced on january 15. the opposition has planned a demonstration that it did not get permission for from the city authorities. interesting to see how many people show up. ya,l this lead to a bolatna that was the name of those demonstrations we saw when tens of thousands of people turned out to protest against the russian president. and what kind of response we get from the russian president -- will it be a heavy handed one? this has very much been an abstract economic crisis so far. just the last couple weeks when it turned into a currency crisis, it became more relevant. 2015 could be different. >> ryan, thank you very much indeed. ryan chilcote on the latest out of russia. what else is on our radar? japanese parliament has reappointed shinzo abe as the prime minister. a landslide victory in early elections last week and is now in line to become japan's longest-serving premier in four decades. abe will seek to push forward policies which restore growth to an economy that has slipped. tech, isdent of stepping down in the wake of an airbag crisis. the chairman will take a 50% pay cut for four months. he remains as a board member and is taking a 30% pay cut. takata airbags have been linked to five deaths and recalls of millions of cars. porsche is recalling its most expensive model for a second time. this time it is defective parts that are the problem. porsche says it is a precautionary measure. the company sold its entire atduction run of the car $845,000 a pop. a reminder that the markets in london, spain, and france are closing early today. italy, switzerland, and greece are closed for the whole session. but we are still here. coming up, it is a cold christmas in moscow. looking ahead to a year that could see russia entering a deep recession. we will be talking with that about -- talking about that with our next guest. ♪ >> good morning. ."u are watching "the pulse we are live on bloomberg tv. now, it has been quite a fourth quarter for the markets. russia has been struggling to stabilize the ruble and now we are potentially looking at a deep recession. oil has hit a five-year low. uncertainty in greece is something europe has to think about. 2014 will be remembered by investors for volatility. as we come out of 2015 and head into 2015, one story is gathering momentum, the u.s. economy. let's look ahead to next year and start with the u.s. philip sure is with us. good morning. >> morning. >> the number yesterday was stronger than most people anticipated. the u.s. economy is beginning to gather momentum. mi overstating that? ask i don't think that is overstating the case. we are beginning to see positive momentum in the states. we expect somewhere around 3.5 percent economic growth. that is barring any other polar vortex that hits the economy. >> forgot about that. let's think about what could derail that. of the world rest looking fairly anemic in terms of growth. we got a dollar that is continuing to strengthen. the u.s. economy is a relatively closed one. >> it is, absolutely. the dollar, we think, is going to continue to appreciate against most other currencies. if you were in the eurozone, you'd be very concerned about your currency rising to that extent. the u.s. is pretty well closed. 15% of gdp, goods and services, exports, compared with 55% in the zone. the rise in the dollar doesn't have a huge effect on the economy. i'm not too concerned about anemic global growth. you could well see 4% global growth next year, certainly 3.5%. that is more than last year. the external economy isn't that bad. >> let's talk about the monetary story. most people now expecting the fed to do some tightening midyear. if the data are starting to get better, is the risk that we see that sooner? >> there is a risk, but i don't know how much closer the fed can bring monetary tightening forward, given that they want to make sure that when they are ready, they can signal that the markets. in that respect, you could see something a couple months earlier, potentially. no quicker than that. i think we are on track for june. >> this data came through without the help of incredibly low oil prices, or with very little help. in -- what factor does that do to the model? if you plugged in $60 a barrel, what does it do versus where we were nine months ago? >> it is a mini stimulus package. the u.s. is much more sensitive to gyrations in the global oil price. the american consumer tends to use more gasoline than other consumers. secondly because of the low rate on u.s. petrol prices. the u.s. gas price tends to be more sensitive to the global oil price. you see that very clearly in the consumer confidence numbers. >> let's turn to what is happening in europe. how big a concern is what happens in greece? greece looks reasonably isolated at the moment. is that sustainable? forget that greece was the fastest-growing economy in the eurozone in the third order. -- the third quarter. it is starting to catch up, i think that is the main point. fortunately, it is relatively isolated market-wise as well. events to ourhe three years ago, the markets would be very concerned about the prospects of greek exit from the euro. now, it is very inconvenient. it does have profound implications for certain parts of greece. i don't think anyone is seriously expecting a greek exit or any sort of contagion. into the plansy of the ecb, and its ability to an act qe. is there any issue there? >> we are fairly confident that the ecb will do qe, if not in january, then in march. form.about the precise there are several nuances which are possibilities. one factor which the ecb has been talking about is, perhaps making national central banks pay for risk in terms of the holdings of bonds which the ecb buys. in which case, it could buy greek bonds. certainly, when you hear the main opposition leader in greece talk about the ecb perhaps needing to undergo restructuring, that complicates the situation. >> that would make it a lot easier in terms of limiting the credit risk associated with some of the peripheral debt. this stuff should be risk-free, but it is not. if the national central banks hold the debt and you were to see some renegotiation, that would make that mechanism a lot easier, wouldn't it? >> in theory, it would. greekr example, the new government were to say, we are imposing a haircut on holders of our paper. then the ecb would be facing substantial losses. it wouldn't just be the qe. substantialds a stack of greek bonds from his market securities program, where it bought greek bonds a couple years ago. >> going to be quite a christmas. renegotiation yet again with greece. philip, thank you very much indeed. philip shaw, chief economist at investech. coming up, we will take you inside new robotic technology that you could wear. it is comfortable, and apparently it is clever. we will show you when we come back. ♪ >> welcome back. you are watching "the pulse." we are live on bloomberg tv. reports weeries of are looking at what 2015 holds in terms of new technology. for our first reports, sam grobart traveled to a small lab in indiana where the future of robotics is taking shape. >> when we hear the word robot, a typical image comes to mind. robots today all share something. they are rigid, often made of metal or plastic, which makes it difficult to perform delicate tasks. that may be changing, thanks to a new field called soft robotics. robot would be exactly what it sounds like, robots made of all soft materials. in many applications, that makes perfect sense. >> this is rebecca cramer. she runs the fabrication lab at purdue university where they are looking to create a different kind of robot. one you can wear. >> our bodies are really soft. we want to wear robots, where technologies. it makes more sense to integrate the technologies into what we already where, which is our clothing, fabric. >> the wearable robot is not a new concept. researchers have been working with so-called exoskeletons, but typically they are made of clunky frames and large battery packs arian -- battery packs. rebecca imagines something you wouldn't even notice was there. >> long-term, if we think about what might exist, i think of completely integrated soft exoskeletons that will assist with our emotions seamlessly. >> in the simplest definition of the word, a robot consists of two parts. sensors, which monitor things like motion, ken schrader -- temperature, and light, and actuators. our sensors are much further along than our actuators. >> turns out making those mechanical muscles out of soft parts is incredibly difficult. solving this problem comes down to one thing, material. >> in soft robotics, materials can't be ignored. it is a central comp onent. depending on the material, the robot will behave differently. lacks a number of options are being explored. things like pressurized gases or a combination of chemical compounds. one of the more successful demonstrations is made from a metal that can be programmed to remember its shape. >> we are working a lot with shape memory alloy. you can get them as wires. we literally use a sewing machine to incorporate these into fabrics. >> what you are seeing here is that shape memory alloy sewn into a cloth. when you apply a current to the liars, it causes them to curl up. robotic fabric is getting some big attention. rebecca's research has received funding from nasa for its potential in space exploration. future applications may include smart athletic wear like yoga pants that could correct your form, or rehabilitation clothing that could help patients regain movement. >> a soldier that has to track a very long distance, even if you could take away a small percentage of the energy that goes into every step, you can enhance endurance. it is exciting to think that we might be able to change the world someday. >> what rebecca's team is doing isn't about a new product. it is about expanding what is possible. the dawn of soft robotics has the potential to completely change the way we interact with machines on a daily basis. if what they are doing is successful, it may not be long before the word "robot" has a different meaning. >> sam grobart reporting. in the next report we are going to bring you, it is all about controlling devices by gesture. like a jedi, . that is coming up later on "the pulse the account -- "the pulse ." ♪ >> welcome back. you are watching "the pulse." i'm guy johnson. happy christmas eve. these are the bloomberg top headlines. there's been another plot twist in the saga surrounding "the interview or co-sony has decided it will release the controversial film in around 300 theaters and it will do so tomorrow. the film's director and star, seth rogen, celebrated sony's decision in a tweet which said, the people have spoken. freedom has prevailed. minister hasrime said his country is facing the risk of a deep recession. medvedev was quoted by the novosti news agency. his comments come as rating agency standard & poor's has said that it may cut russia's pro rating to junk. in the united states, there have been angry scenes following another police-involved shooting in a st. louis suburb. that is not far from ferguson. blackooting of an unarmed teenager sparked outrage and nationwide protests last month. the police department is conducting an investigation into that shooting. you are looking at pictures of ferguson where there has been another shooting. let's talk about the car sector. we have seen a shakeup at tech,. the president is stepping down after defective airbags resulted in millions of vehicles being recalled. he will be replaced by the current chairman. the company said its executives would be giving up some of their pay. let's bring in ryan chilcote. this has been a long-running saga. what is happening now? what has pushed the company to make these changes? they want toid reorganize and focus on centralizing their response to the recall of these airbags. it doesn't get much faster than this. stocker stepping down today. hit tog to take a 40% his salary. he is going to remain on the board. the chairman will take a 50% hit to his pay. byy are trying to indicate sacrificing their own salaries that they are taking responsibility for what's going on. overallit is just the amalgamation of the damage that has been done by this recall over the course of 2014 given the fact that we are at the end of the year. it has prompted this response today. >> he's going to give up 30% for four months. what has been the issue here? this has been a worldwide story that has affected multiple manufacturers. >> the issue has been the inflator is for these airbags. if it is hot enough for humid enough, it is the inflator that has been exploding, sending shrapnel throughout the car. obviously, not what you want to happen when you deploy your airbag. this has had massive damage industry-wide. 16 million cars recalled worldwide. produced inars were 2013. we are talking about one in five cars out of global production. 11 carmakers unaffected. i think there are two structural issues. it doesn't matter whether you are driving a porsche or a low-end car. in many cases, takata provided these bags. they claimed early on -- they blamed themselves to a certain extent. we just expanded to quickly and didn't have enough quality control. they had outsourced through 100 different suppliers. >> ryan, thank you very much indeed. let's turn our attention to what is happening in m&a. and brewing in the new year with u.s. medical device maker stryker looking at bidding for smith and nephew. caroline hyde is also back with the details. >> we know that it could be bidding in the next few weeks. it could be a new year resolution for stryker to be coming back to the table, to be offering a 30% premium for the u.k.-based company, smith and nephew, which makes medical devices. ker itself makes surgical implants. the 30% pickup is driving smith and nephew higher. people are liking the sound of this deal. it is at a record high in terms of share price today. it seems as though it could be finalized. timing could change but it looks as though it could be in the >> why doeseks. it make sense? >> it makes sense from a synergy point of view. this is a deal coming back on the table. in may, striker had to walk away for six months. they had to go off-line. the media had got wind of the fact that stryker was interested in smith and nephew. it couldn't turn it around quite quickly enough. it is coming back to the table. this time, what was de rigueur back in may was for u.s. companies to be buying u.k. companies and making the most of the lower tax rate. ring any bells? pfizer, astrazeneca. this so-called tax inversion was the catalyst for many of these deals. u.s. companies have plenty of profits they don't want to bring home. this time around, because the u.s. government has been trying to clamp down on these sorts of deals, they feel the risk is too high. according to people familiar, is not analyzing smith and nephew for tax benefits. it is analyzing smith and nephew for synergy benefits. they supply u.s. hospitals, the government, and insurance companies all want to see the cost of goods coming down. there is pressure on them from the government. if you make synergies, you protect your margin that much more. bigging together these two companies could make sense in terms of efficiency. we've sent it before. we've seen medtronic doing a deal. this could be the next one on the line for 2015. >> caroline, thank you very much indeed. caroline hyde on the medical tech story. let's take you to another type of technology. imagine being able to control your computers and apps with a flick of your wrist. if you think this sounds like jedi mind control, actually you are not that far off. sam grobart now reports. >> when you think about how we interact with the rest of the world, opening a door, picking up coffee, you evolved to use hands to react with everything around. that intuition to move and expect a result to happen is the natural evolution of that. what is the interface? what is the mouse as you move away from the desktop? >> stephen leicht is the cofounder of a small tech company outside of toronto preparing for a future where our interaction with technology will move beyond pointing and clicking. their solution is the armband, which gets its nickname from the greek word for muscle. >> it is a new type of human computer. it lets you control computers, mobile phones, any electronic device, through hand gestures and motions. gesture control is not a new concept. most systems require a camera or proprietary sensor, making them only useful in specific circumstances. novel technology that detects what is happening under your skin. >> so these are the sensors. >> each one of these pods is one sensor. that picks up the muscles in that part of your arm. myo measures the unique electric signals your muscles generate every time you move. picking up the muscle activity, it is tiny signals. in a medical study, what they machines that sit on a shelf and measure one muscle at once. we need to put eight of those sensors in an armband that costs $150 that anyone can slide on without shaving your hair and applying gel. what is goingents on inside part of your forearm. go,ou make a fist, there we all around your arm, the muscles are being activated. >> all this information is sent from the armband to a bluetooth enabled device. the device can then decode the information into commands. >> it interfaces with existing applications. >> exactly. you can open up powerpoint, itunes, right away. >> flick your arm to the left, your video rewinds. snap your fingers, your music plays. myo works well with simple gestures. like this videogame specifically designed for myo. but if you think about replacing all the things you do with hand gestures, things can get complicated. may nevereason, myo replace your mouse, but they don't want it to. not this should be a better mouse. it is those scenarios where you are away from your computer where myo really shines. >> they see a future where devices like google glass and other wearables will require us to interact with machines. >> there are going to be devices all around us or even wearable computers. versus replacing that today. >> our history of interacting technology has always required us to use and hold some object. myo is the first step toward an objectless interface, something you wear on your body and use in new different ways area -- in new and different ways. the perfect interface may just be you. >> very, very tony stark. stay with us. our next report is on a super drone, a high-altitude solar powered aircraft that apparently can stay in the air indefinitely and could replace satellites. that is coming up later on "the pulse." also coming up, the good, the bad, and some might say the ugly side of cheap oil. we will assess the state of the oil and gas sector in 2014 and look ahead to 2015. looking forward to that right here on "the pulse." ♪ minutes past the hour, welcome back. you are watching "the pulse." the fall in oil prices has been a story for much of the fourth quarter. the energy sector look like in 2015 and what does it look like in aggregate? there are other energies that we use. primarily gas. we need to discuss that. and analyst for the gas sector joins us now. good morning. we spent a lot of time talking about oil over the last few weeks. probably not enough time spent talking about gas. gas generally is indexed to oil. as we see the oil price coming to, it does have the read across in the gas space. >> absolutely. a lot of gas is still indexed to that oil price. you will see gas prices naturally falling back. there is a growing market. it is gas on gas competition. it is pricing gas as a commodity. supply and demand is much more important. as we've seen with oil, it is a supply story. >> who is the biggest beneficiary of the drop in gas prices? >> i think those companies that have had to live with really expensive lng are going to have a big benefit over the next couple of years. that is the northeast asians, japan, korea, china, and the europeans, which have had comparatively high gas prices compared to america. >> how does russia fit into all this? how does the contract structure work with russia? how does ukraine fit into this? is that another factor that is going to have a downward effect on gas prices? or is it the opposite? >> russia is really interesting. it does have contracts with european buyers that still have some form of annexation to oil. what you've seen recently is a big change in that, with a big push from the european gas buyers to get hub gas prices. with a lot of lng coming onto the market next year, you are going to see a lot of lng coming back into europe. the russians have a choice. do we try and withdraw supply to keep prices up, or compete for market share against lng? >> which way do you think that question will be answered? >> i think what has happened is they've taken a lot of flexibility out. you used to have an annual level and you could take less or more. depending on what the weather was doing. now, when they've had to move away from an oil indexation, what they've done is take that flexibility away. this is just a fixed amount and you have to take it. meansas good, but what it now is there is much less flexibility for the russians to kind of move against their contract structure. the market doesn't naturally do that anymore. we expect that russia will probably put in about the same amount of gas as they did last year. that means european prices have to be lower. >> how much longer do they stay low for? is this a 2015 story or a structural story that is going to be with us? >> i think this is a structural story. this is five years at least. five years is a long time to look at. you have massive amounts of volumes of lng coming from australia. by very, veryed big volumes of u.s. exports of gas. it starts right at the tail end of 2015, then picks up in the second half of the last part of this decade. lots of trains coming on, lots of gas, all of a sudden, the world is looking at a big supply story for gas. that is all set in stone already. these are all projects under construction. there is no going back on them. >> have a great christmas, trevor. thanks for stopping by. now, coming up, the super drone. a high-altitude solar powered aircraft that could stay in the air indefinitely. we will show you what airbus has been up to when we come back. ♪ >> welcome back. happy christmas eve. you are watching "the pulse." we are on your tablet, on your phone, on bloomberg.com. it is time for our new energy segment. the next in our series of new technologies. airbus is developing a high-altitude solar powered drone that can stay aloft indefinitely. whereld deliver services towers are hard to build or too expensive to maintain. sam grobart now reports. zephyrreek mythology, was the god of the light westerly wind. today, a modern zephyr glides through the skies. >> zephyr is a solar powered aircraft and it is very light and it flies at high altitudes above the weather. >> zephyr is more than just an aircraft. it is a high-altitude pseudo-satellite created by airbus. a $2 billionwhat satellite can do from 250 miles away, but so much closer to the users. >> traditional satellites orbit hundreds of miles away from the earth's surface and are in constant rotation. the zephyr operates at 60,000 feet and is geostationary. it can remain above a specific location for extended periods of time. >> it is effectively getting a cell phone tower in the sky. >> zephyr has the potential to frompt many industries, communications, to whether, to surveillance. zephyr needs to stay in flight for as long as possible. the key, the sun. the lightweight carbon body is covered in flexible solar panels that power small electric engines. keeping those engines running day and night is the challenge. conditions, with very large wings, the batteries are charged up during the day and when the sun sets, the aircraft is then flying only on the battery. >> the lighter the aircraft, the longer those batteries last. engineers are constantly trying to make the zephyr lighter. >> we are always going to be disappointed with ink that are too heavy. so this is a flight structure from the zephyr 7 aircraft. not only is this phenomenally light, it is incredibly strong. we can make it even later. we are going to half the mass. them in half the mass yet again. direct the crew can flight path, but for most part, the zephyr is autonomous. airbus would use zephyr to fill the gaps where conventional communication satellites and radar aircraft struggle. zephyr operates without field. it can provide continuous local coverage for a fraction of the price. >> the target is below 1000 euros, right around $1000. >> zephyr can help extend the internet to parts of the world where high costs have proven to be a barrier to connectivity. capabilitygo from no to a good communications capability with one platform. >> google and facebook looking for more users have announced plans to use aircraft like balloons and drones to spread the enter at to remote places. airbus isn't worried about the competition. >> we are quite happy about the interest of google and facebook. we would guess that they are pretty much where we were a couple years ago when we discovered this. it is a bit more difficult to do this kind of flying then it seems. >> connecting the world is a very global aim. for decades, we considered outerspace the next location for our highest technology endeavors. launchingface it, satellites and rockets is really expensive and really hard. zephyr shows us that our future may not be up in the stars, but just above the clouds. >> sam will be back in the next hour with some great tech packages, as well "the pulse." you can follow me on twitter. back, we will be discussing what happens with "the interview." it is going live on christmas day. ♪ >> a christmas twist in the sony hacking saga. "the interview" will be released. russian risk, s&p warns it might cut the country's credit rating to junk. and take over target, the striker company of america is lining up an offer with the united kingdom. >> welcome. you are watching "the pulse." i'm guy johnson. we have a little bit of a plot twist when it comes to sony. sony entertainment has announced it will now release its film "the interview" tomorrow in a number of theaters across america. in a statement, the sony c.e.o. said we're excited it will be released on christmas day. we are continuing our efforts o secure more platforms. let's find out what has prompted this plot twist and why they're stepping up. caroline hyde is here. >> they are, about 300 no less are stepping up. and after a coalition of independent cinema got together, they signed a petition to sony saying, look, we'd like to show "the interview" despite threats coming from cyberattackers. we still want to show it. sony did some wheeling and dealing, and they sent out the film, and it's going to be aired at about 300 as has previously been planned. suddenly sony is winding up the marketing as well. it's reinstated its twitter page for the movie, first for "the interview," and seth rogen took to twitter himself and said the people have spoken, freedom has prevailed. sony did not give up. it will be shown theaters willing to pay it on christmas day. plaza theater has even contacted the police. they're going to be showing it, but the police might be there. they're going to be monitoring he location. >> this has got to be the most spoken about film of 2014. you said they've reinstated the twitter page and are ramping up the p.r. machine. the p.r. machine kind of got wrapped up throughout this whole process. beverage been talking about it n a daily basis. that's kind of the whole irony. but i mean, what's so interesting is the p.r. machine has been going, but the political p.r. machine -- >> well, yeah. even the president of the united states has been talking about it. >> phenomenal, isn't it? you don't get much more of a coup, but this time, i think that was the green light that went for sony, because reviously they said, look, they cancelled it. ow the release is back on. he also said, i wish sony had talked to me about it. have a listen. >> sony is a private company, was worried about liabilities and this and that and the other. i wished they had spoke ton me first. i would have told them do not a pattern in which you're intimidated by these kind of criminal attacks. >> the white house also putting out a statement saying it's the right move for artistic expression in the united states. it's worth remembering, many thought north korea was behind this hack to begin with, but clearly it has sparked this whole geopolitical issue all of itself. >> and we'll see it in europe when? >> that we don't know. we've contacted sony, and sony has not said what the plans are for international release. it was meant to go to 60 different countries. sandaurlnas is where it was meant to kick off. asia was never going to show this, interestingly enough. as yet, we don't know how it's going to roll out. there's much talk it will be released by video on demand. >> we might have to wait a little bit longer in europe. >> ok. we will wait. we will watch this, and we will see what happens. caroline, thank you very much indeed. caroline hyde. there's a fresh blow to russia t. has warned that it could be cutting the country's credit rating and doing so to junk. let's bring in ryan chilcote, what does it mean, the recent rebound in the rouble? >> the rebound is just, i guess, evidence of exactly how hard the russian government and russia's central bank have worked over the past week to claw back some of the rouble's losses. but this s&p reminder, or this s&p warning that they could downgrade russia to junk, the russian bonds to junk, is a reminder of the problems that existed before this currency crisis began and the russians got some measure of control over it. i mean, the currency is still down 40% this year. the central bank is talking about a contraction that could e as big as -- as deep as 4.7% next year. though you have to point out that investors have not exactly reacted to this announcement neglect actively, they were already treating russian bonds as junk. the yields are above 6%. those have clawed back some of their losses. yields were about 7.5%. like i said, the rouble has been pretty shrunk, continuing to strengthen today by just a hair, but nonetheless, if you really compare it back to eight days ago when we had high noon all-time record lows, well, it recovered about 33% of those losses. >> we know there's going to be a recession, and we've been surveying how people feel that relationship will work with the politics and whether or not we'll see a change. if you think this began with politics, now we have a current a crisis, an economic crisis. will we have a political crisis in 2015? i think that's something worth paying attention to. any leader would enjoy those kind of ratings. having said that, maybe some of these economic issues will take the forefront in the coming year. again, inflation could be as high as 50%, according to the country's former finance minister, that's going to be a big issue. january 15 is when we expect the verdict in the trial, and his supporters have already called for a demonstration in his support on the 15th. if there's a big outing, maybe that's more dissatisfaction, and exactly how will the russian government respond i think is also meaningful. if they take a heavy-handed approach, perhaps that's an indication that they are going to be less tolerant of dissent in 2015. guy? what else is on our radar? the japanese parliament has reappointed shinzo abe. he won elections last week and now is in line to become the longest serving premier in four decades. he has policies to encourage inflation and restore growth to an economy that slipped back into recession. cement has agreed to sell its unit to lone star funds. it includes north american assets outside of western canada, as well as operations in the u.k. total price includes a payment of as much as $100 million. it depends on the performance of business in 2015. porsche is recalling a model that has a problem with a fighter. it's a precaution measure and it was discovered during inhouse quality testing. the company sold the hybrid car at $845,000. now, a reminder that markets near london and in spain and in france are closing early today. italy, germany and switzerland, plus greece are closed for the whole day. still ahead -- the dow pushed a nice little number as we closed out the year, 18,000 clear yesterday. what's in store for global markets in 2015? we'll forecast a critical eye over the new year. ♪ >> it's 11 mental past the hour, and we're looking forward to 2015. nice to see you. so, 2014, the last act of 2014 has been to see the u.s. economy deliver some really stellar data. put that in context for us. what does yesterday's g.d.p. number tell us about 2015? >> the first thing it tells us is that the chances of rates finally going up, we've spent years waiting on rates going up, and it's not happens it next year. last time we got a growth number as strong as this was 2003. i would argue all day long they were too sluggish to raise rates then. the fourth quarter is going to be weaker.+++ but liftoff or not, the economy is not growing at a speed cannot with zero rate. >> no. and this was pre the injection of low oil prices as well. how much does that add into the mix, do you think? >> well, it certainly changes the makeup of the numbers in quite a big way. the consumer is going to have a happy christmas pretty much everywhere, and that was done mostly. the weak innocence the u.s. durable goods orders number, that will probably sustain with some of the capital spending numbers as people slow down exploration drilling, getting shale on line, there's two sides to it. but overall, the consumer is the biggest driver of the u.s. economy, and he's feeling richer. >> has the tightening of policy been properly priced in, do you think? >> i don't think you can ever price it in completely, in the sense of where you can go. by the time they raised rates from 1 to 1.25 a deck ad ago, we were trading one-year money at 2.5%. the 10 jumps up a lot. we've done nothing of that magnitude. i think that's further to go in the weeks before the first rate rise. but emotionally we priced it in. >> and when we look at how that's going to change the asset makes into next year, the delor has been strengthening. that's been a story we've already seen. how much is there still to go? >> i would say there's 5% to . % more we've probably got more easing in japan and more easing from the european central bank. the divergence of policies still in the outstanding feature. global policy, and the other pieces, and after the period close to 2009 when we've seen so much money flow out of the united states, chased done by quantitative easing and do anything with yield. the snapback, the change in the pattern of global capital flows, it doesn't feel leak a short-term thing. i think this is something that will live the next couple of years. >> what does it mean for asset classes? >> well, that's where it gets more class. if you think for every $100 billion americans bought $50 billion worth of something overseas, and from that $50 billion some central bank somewhere else is trying to prevent its currency going up, back of u.s. treasuries, that that's an enormous amount of money that's been pumped into asset markets globally. when that slow stops and it's only partially compensated by the bank of japan and the european central bank, when that flow stops, there's less money down at the farther end of the food chain. there's a little boy at the back, you worry about the bond market. you worry about some of the emerging markets, some of the currencies that are still correcting. in that sense, this is how it's played out of the fed tightening. >> what about equities? the better growth that we're seeing, does that compensate bank lack of central money? for a while. the higher equities -- the higher the s&p is by the time how big d rates, but the hiccup will be, at least. it seems that the equity bull is bound to come back and say, look, rates are going up, but 2%, and i mean, that's still going to be the asset class. i buy that up to a point. we've still got a growing profit, a shrinking rate share, things we talked about all through this year that help the equity story. but even so, the end of such a monumental zero rate policy for the global equity market surely there's a hangover before they pick themselves up and say that's going to be ok. >> the question is what do you own if you're not going to own equities though? because can you own fixed income in this environment? it strikes me we're going to end up in a story, everything is priced with u.s. treasuries. there is going to be a move up in yield. >> yeah, yield a bit, but not necessarily that much. that's one of the scariest things. but you've got to take half a step back and say there is virtue in cash in this environment, simply because what was q.e. intended to be other than to give us asset prices to borrow future asset gains and half of them now in the hope they would kick start economic activity fifment borrow them from the future, at some point they have to go sideways. at best. how much, have balance sheets been rebuilt enough to see q.e. being -- how long does it take for the effects of q.e. to nwind is the kind of question. >> the way you're phrasing it tells me there's uncertainty. when we get the first rate rising when she we are we are assured rates won't go up very far, but in our heart of hearts you say, what do you mean, i think that stalls us for sure. >> i think it's a lack of confidence surrounding that transition that i think people are trying to get their heads around. >> yeah, they're saying it's well and good and saying it will be fine t. may be fine when i look back in three years' time. it may have been ok. but on the day, i would like to have more of my money in cash, because i still think a hunk of the equity gains that i've seen this year and last year are borrowing. >> stay with us. plenty more to talk about. when we come back, we'll take a short break, plenty more still to come in this final hour of "the pulse." ♪ >> good morning, everybody. welcome back. you're watching "the pulse." we're live on bloomberg tv, streaming on your ipad, and we're on bloomberg.com. the night before christmas, and sitting next to me is soc gen's kit dukes. we're talking about 2015. we're trying to figure out what happens next. as we sit here in the silence waiting for 2015 to crash in to the economic markets, the story we were discussing before the break was one of the u.s. economy starting to gain a little bit attraction. we talked about it during the break, nobody else heard, was the fact that peak rates are probably not that high. i'm just wondering, again, as we look at valuations around the world right now, if you get rates up to 2.5%, 3% in the united states, is that going to slow down the economic recovery, or is that going to keep us in neutral and keep the story on the road? >> i think in a sense, the issue is that the economy will slow before we get to neutral rates, wherever we decide those are. peak is the neutral. if peak doesn't slow the economy, it's because something else is. >> yeah, what else is slowing us down? >> if we come into an emerging market, commodity currency, commodity bubbles bursting lots f places, chinese debt off the back of zero rates looking very stretched, the economic cycle is beginning to feel a little lopsided in lots of places. and so you look forward and you say, if you haven't started pushing rates up until this late in the economic cycle, what's your chance of getting to what you used to think of as a neutral rate before old age hits the economic cycle that there are too many bids and you've been derailed? then the peak, the peak is low, but there's good peak in a sense. there's the peak that's too low because the economy is already slowing. >> the u.s. economy, 15% of u.s. exports, the u.s. economy is dependent on exports. all of what you just listed, china, emerging markets, what happens in europe, does it really have any meaningful impact on the recovery we're going to see in the states, you think? >> well, that's the united states than about all those things about the u.k. or other economies. i think it's relevant, a big down turn will have an impact on everything. think the other side of it it's tied in to global capital flows are no long sorry abundant, but it was an easier world when the dollar was weak, emerging central banks were accumulating reserves, and funds were awash with money, and that was getting recycled back. that was an easier world than pushing against that time. it's still only 15% on trade and the u.s. won't be the place with the most constraint for capital in the next two years. this all says, no, i'm not going to get a series coming through in kind of 1990 u.s. boom. we're not going to replay it by any stretch of the imagination. >> you talked about the u.k. there. the u.k. is open and exposed, and it's exposed to eurozone that looks like it's going to have a very tough 2015, but nevertheless, we saw the data yesterday, and the data, the weeks that are going to be good are not good, and the current account is a concern. 2015, do people have the u.k. economy? >> i think people have nagging concerns. again, as with the united states, the fall in oil prices is going to feed through to a much brighter consumer. we may start 2015 feeling quite cheerful, but the problems we have, i mean, firstly, you really wouldn't want to go into an economic down turn of any significance with a 5% of g.d.p. budget deficit and a 5% of g.d.p., that's got disaster written all over it. the need that we have and others don't have to sort out the deficits, so to continue with some form of fiscal austerity, whether you raise taxes or cut spending is just blatant, and the threat to the economy from this current account deficit, it's a very geeky deficit now on the current account, we're not earning as much on our investments overseas, as we chain foreigners here. that's not going to sort itself out in the next two or three years. >> the next parliament is an interesting one. i'm sure we'll talk a lot about it. kit, thank you very much indeed. you can follow me on twitter, i'm @guyjohnson. we're talking about the most pensive model and its second mechanical recall and once again, you'll be handing it back to get yours fixed. ♪ >> good morning. welcome. you're watching "the pulse" live from bloomberg's european headquarters here in london. i'm guy johnson. happy christmas to you. these are the bloomberg top headlines. there's been another plot twist in the saga surrounding the film "the interview." sony has said it will release this controversial film in around 300 u.s. theaters tomorrow, reversing an earlier decision to pull the film of its threat of violence from hackers. they celebrate sony's decision in a tweet which said, "the people have spoken, freedom has prevailed. the russian prime minister dmitry medvedev has said his country faces the risk of a deep recession. yields have said russia needs a hand on management style in the same way that it did back in 2008. his comments come as rating agency standard & poor's said they may cut their credit rating to junk. in the united states, angry tweets following another police-involved shooting in the suburb -- in a suburb of st. louis. this is not far from ferguson, let me point that one out, where the shooting to death of an unarmed black teenager sparked outrage and nationwide protests last month. remember, the police department is conducting an investigation. these are pictures from that scene. right, let's get back to our series of reports on new technology, and another development that echos this. remember the holodeck in "star trek?" the next generation featured that very strongly, a big part of the plot. now one company is aiming to make that kind of story into a reality for your home. >> you are getting inside your mental image. i think this project is important because this can change the paradigm of how we deal with it and interact with your body. i am the director. on the top floor of the university of montreal's school of design lab is where the virtual world is slowly merging with the real world. this is the hive 3-d, which stands for hybrid virtually environment 3-d. hive crealts a virtual environment by projecting it into an entire room. right now, the technology is primarily being used by design firms, architects, and automakers. hollywood animators are also getting on board, using the technology to storyboard fully developed animated worlds. drawing in 3-d is actually a much more radical concept than you might think. let's use the example of trying to draw a cube in a two-dimensional space. en you're use a cube, you're forcing a perspective and tricking your brain into thinking it seems a 3-d object when, in reality, it's flat. >> even today when you go there, we teach how to do perspective as we use to learn from the renaissance. we are in 2014, so we are looking for another way to represent the 3-d world. >> creating that same cube in hive feels less like drawing a shape and more like building an object. another thing you'll notice, there's no need for special ead sets or glasses. > the display are inclusive. they come from the reality. >> that's the hybrid part of hive. it's the real you in a virtual space. you don't have to be virtually represented. and not just you, but anyone around the globe can connect with this virtual world. >> hello, professor. >> on this particular morning, we were connected with thomas' colleague in france. >> collaboration is another part of this system, because it's existing on a server, you can have people working on a project separated by oceans. so here, you can be teleported. without lecturing traveling. you see the project, inside the project, ok, i'm moving that wall. >> high costs around $50,000, lot less than competing systems, which can run you up to a million dollars. that's because a lot of the hardware that hive uses is off the shelf. >> we focus more on the user experience rather than the technology. if we design a better user experience, that is more relevant than using one or another kind of technology. >> hive isn't about a bunch of new hardware, it's about a new way of interacting with the worlds around you, both virtual and real. >> where does the technology go in five years? >> it can be interactive with a system. >> hive 3-d is the latest expression of virtual technology and telepresence. let's are honest, those are buzz words we've been hearing. maybe that's because they've never really fulfilled their promise. but the kind of creativity that can be on lock when people are actually working together, when they're actually collaborating, that's going to require a whole new set of thinking, a whole new set of rules. the technology is already there. the only thing that may be lagging is us. >> cool stuff. stay with us. got a few more of these still to come. the next one looking at why virtually reality can be the next big thing in hollywood. that's coming up a little later on "the pulse." in the meantime, let's talk about a different technology, what we are doing, listen to his. that is the sound of a hybrid. that is the porsche 918. i hear you saying, hybrids are meant to be quiet. no, not this one. this one uses hybrid technology in a completely different way, i.e., the electricity they use to make the car go even faster. however, there have been a few wrinkles if you're a 918 owner, and those are called recalls, and there's another one as hans nichols will now tell us. hans? >> guy, the number is 205 recalls. this is a problem with the chassis. it's in the front axle area. it will day about two days to fix. porsche couldn't guarantee the durability of this product, so they issued the recall. early in september, they had 46 recalls as well. they actually individually reached out to those individuals, and it's easy, because there are only 918 of them, or at least there are only 918 of the porsche 918 sold, as you mentioned, it is hybrid technology. it goes fast. it goes fast quickly, zero to 60 in 2.5 seconds. and here's my favorite stat, guy. it gets 67 miles per hour. you compare that to the prius, 51 miles per hour. the question is, if you're driving a porsche, are you really worried about filling it up? these retail, start at $845,000. limited edition, this is all about the porsche brand. they've had this little issue with the recall. they'll bring it back in. i saw one down there, it's a pretty nice car, guy. you can sigh behind the wheel, whether it's on the right side or the left side. guy? >> yeah. i'm not sure that the fuel economy is part of this story. i think the hybrid is there to make it go as fast as humanly possible. it's kind of like the formula one car at the moment. take a step back, though. let's -- ok, before we talk about kind of what's going on here, we need to probably take a look at what's happening with porsche this year. it's had quite a year. >> we look at the top line numbers, they've sold 169,000 porsches. last year, they were in the 162, 163,000 range. they want to get to 200,000 by 2015. some of their new models, flying off shore rooms, and their sales in russia up 19% on the year. they haven't even been affected by russia. this is a part of the volkswagen group. porsche is a profit center. the thing about hybrid engines, you really get a torque quickly. that's why you get the zero to 60 in 2.5. clearly we need to do a reporting trip, you and me, we're heading to stuttgart. we need to make sure these porsches are safe for everyone involved. guy? >> i think that is a great idea. you and me, the new year, round the circuit in a 918. that's probably a great way to kick off the year. hans nichols, our international correspondent, telling it as it is from berlin. breaking news, glenn has been ppointed to the board. the bank story in 2015 is going to be very interesting as these banks try to compete with the big boys, big four, and clearly a change at the top for one of them is going to be an interesting indication about the kind of seriousness with which virgin is going take that. virgin money appointing glenn marino. he is the chairman, and he's on the board. it's going to be something that we're going to watch quite carefully. coming up on "the pulse," why a camera with 14 lenses can be hollywood's next toy, the future of virtual reality after the break. ♪ >> welcome back. you're watching "the pulse" live from london on bloomberg v. virtual reality is an easy association with video games, but a company called joint via is creating the equivalent of movie. it's a 360 degree video that you can watch via head set. we report on the year ahead for 015 and how it's going to change. >> we've had the p.c. we've had the web. we've had mobile as a platform. and we believe virtual reality is going to be the next big platform for an entertainment experience. everyone is going to be having the experience as a very natural thing in their daily life. >> in this small, dark room, visitors are invited to try on a head set and experience the company's big innovation, cinematic virtual reality. >> cinematic v.r. is essentially a branch of virtual reality that's not focused on video games, but really focused on video per se. when you watch it, you really feel like you've been transported somewhere else. you can look in any direction, to the right, to the left, behind you. you also hear the spatially correct location. for example, if you hear a phone ringing to your right and you look over to your right, you'll see a phone ringing and now the sound will come traight ahead. >> to create immersive video experiences, they had to come up with a new kind of video camera. >> the camera rig consists basically of the sphere of lenses. each lens pointing in a different direction and capturing a different part of the space. it's different from traditional cameras in that you don't really have a cameraman anymore. if you had a cameraman, he or she would in the shot itself. >> this is not a totally new concept. the 360 degree camera is basically the motion picture version of the gool he will map street view camera. that one creates film images. what makes it unique is what they want to do with the technology. they want to put you inside a hollywood-style movie. in order to make that happen, john has established a partnership with new deal studios, a major hollywood special effects house. new deals' creative director is making a sort of virtually reality godzilla, complete with a miniature city and a man in a monster suit. >> shooting in v.r. is completely different than shooting a normal film where you have just one camera looking one direction. in this case, the camera sees everything. we built a complete set 360 degrees around. we have to leave the set during these takes. i usually wear a ski mask with tiny little eye balls, and that way i can hide in the shadows and still be able to direct. this is a whole new way of experiencing narrative that hasn't been explored yet. there's every kind of genre out there we can apply this kind of technology to. >> this is aaron, a bloomberg colleague. >> i'm going to freak out, i just want you to know that. >> she's watching another cinematic movie. >> i think it's leading. >> this one in the horror genre. >> well, that was terrifying. >> she's betting we're going to get hooked on that kind of experience, an experience that's about to become accessible to pretty much everyone. >> there are a lot of exciting things that are going to be happening soon in the v.r. space. one of the most interesting is mobile v.r. that is being able to experience v.r. on your smartphone. it really makes it accessible to a large number of people, and as this reaches a broader nd broader audience, there are obviously great opportunities to build out a business delivering content to consumers. >> this technology is less than two years old, and it still has a ways to go. it's going to require more than technological advancing. it's also going to noticed a story-teller, a spielberg or cameron of immersive cinema who can turn into this -- who can turn this into the next blockbuster. >> sam, think about "the pulse" in 360. that's what i look forward to in 2015. before that, we've got to talk about the turkey. not tempted by all the trimmings? what about the caveman diet? we're going to sample the menu at that paleo-friendly restaurant. ♪ >> welcome back. you're watching "the pulse" live on bloomberg tv. we're streaming on your tablets, your ipads, and on bloomberg.com. christmas is upon us. overen dugs are usually on the menu. but one restaurant is offering the ultimate traditional feast, one that a caveman might have understood. pure taste is london's first entirely paleo-friendly restaurant. dinosaur not there today, but take a look. >> this is not about historical reenactment, it's about taking it and saying, well, this makes sense. i starred doing a restaurant, and now we opened london's first paleo restaurant. the whole purpose of the paleo diet is to go back to real food, vegetables, meat, eating he parts of an animal. >> they were always the stuff to do with how the body works or how food works. so i started to study part-time to finish my degree. >> we run the kick start campaign to get an extra 30 grand, because we really wanted to be in zone one, and that was the premium difference to getting to zone one. we had some aged investors and some investment from friends and family. there were plenty of restaurants that were much cheaper, but because we're quite unique, we want to be really accessible, we were very lucky. kick start actual al tracked ore investment than we needed. we've still got a list of people willing to invest when we want to expand. christmas is probably one of the easiest meals to make paleo, because you've got a big chunk of meat, which is about as paleo as it comes. you've got stuffing. you've got sweet potatoes cooked in duck fat, which is quite amazing. you take the flour with ground almonds, or you can even make paleo ice cream by chilling the custard and sweetening it with maple syrup. >> ok, so the food is there. we know what we're eating. the question, is have you done your christmas shopping? the shopping is not going to stop is probably the story of this festive season. when you think it's all over, it's not. today is not the last day of shopping for the christmas period, as caroline hyde is about to tell us. >> pretty phenomenal statistics coming out. according to the u.k. government, this is going to be record year for retail sales. 342 billion pounds. i know ryan is going to be one of them, but one in 10 people are going to hit the stores today for a mad rush. >> why doesn't that surprise me? >> yesterday was the busiest day of the year. we were spending about a million pounds per minute yesterday, as everyone frantically went in. things flying off the shelves. it's all about small electricals, it would seem. hair straightensers were up. >> a lot of straight there christmas. >> a lot of caffeine. nespresso is up. it's men and sports tech. sports technology is where it was hot, 90% increase in bands and the like being sold over the christmas period. what amazed me is we're all meant to be feasting, spending special time with our loved ones tomorrow, there's going to be online spending where your kids could need a new tablet, spending 36% more on christmas day compared to last year, in fact, almost 2/3 of a billion is going to be spent tomorrow as people are trying to get the boxing day sales a day early. we've become discount addicts, i think. >> i'm fascinated people are spending money on fuel bands, sports technology. is this some sort of january exercise regime that's going take off? >> i think most definitely. certainly as it kicks in -- >> you've got the technology to make sure you're there. >> exactly. giving it to ople their loved ones. >> oh, that's a very tough call. sounds like it's going to be very interesting. it's not festive, it will at least generate some good news for the retailers. caroline? >> yeah, as long as they haven't discuent too hard, too early. >> wait and see. so that's it from caroline and i. but as ever on a christmas, it is the people behind the scenes that make it work. and this year i've had to put up with a lot. i face a lot from this lot about the absence of my christmas jumper. there are their christmas jumpers. this is the scene. have a memphis. we'll see new the new year. ♪ >> as santa brings america a new boom economy with g.d.p. at 5%, the bulls get shares of macy's in their stockings. the bears get lumps of bearish coal. russia, while they run out of egrees of freedom, we consider vladimir putin's politics. where is my amazon prime package? good morning. this is sursur. we're live from new york this christmas eve. i'm tom keene. joining me, he'll be shopping 10 minutes before me, brendan greeley. leslie picker with us in for scarlet fu, who's on a panic right now. let's get to our top headline. >> you got me to put on a tie. >> you look so christmasy. >> i will never go bow, tom. the dow, 18,000 and counting. the dow continued its remarkable surge yesterday, spurred by a blockbuster report on g.d.p. data shows the u.s. economy grew the most in the third quarter since 2003. the index climbed more than 5.5% over the past five days with the biggest rally since 2011.

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