tv Bloomberg Surveillance Bloomberg December 19, 2013 6:00am-8:01am EST
digital, and now facebook wants to give you a video ads. his aira is wearing jordan retro 11 gammas. limit one per chimney. good morning, everyone. this is "bloomberg surveillance." it is thursday, december 19. i am tom keene joining me, scarlet fu, a. steele, alix steel is here. good morning. >> good morning, tom. we will start with china. .hort-term liquidity operations staying in the region, new zealand's economic growth accelerated to the fastest pace in almost four years. deftly good news there. economic data here in a u.s. -- it is thursday, so we get initial jobless claims 8:30 a.m., 9:45 a.m. bloomberg consumer confidence, and in
about a.m., existing home sales. earnings after the bell we get nike and carnival and 50 days until sochi, olympics. >> do they have snow? >> they're going to have snow. it is a little dicey snow? maybe they will get snowblowers in there. >> and seriously, mr. putin speaking in russia. we have that on london television this morning. look for that at bloomberg.com. we scour the newspapers, but before that, let's go to the data check because this is a big story. real movement off of what we saw yesterday afternoon at 2:00 p.m., futures negative 2 after a huge surge yesterday. here is the story -- yield did not move. everything else moves, but it was really priced out of the bond market nicely, euro-dollar weaker, yen dollar stronger. screen. to our next vix moving to a complacent
13.80. there is the dow well above 16,000, gold craters and the yen weaker come out that important $104 level. theen and others looking at 104 level for a weaker yen. alix steel, there is gold plunging. you willg below 1200, have a lot of shortcoming in the market, betting against any price swelling. >> does this price effect a gold mining, gold investment, getting gold out of the ground? >> it will as long as it stays below its actual support level. 6, 12 month is when you will see minors taking stock. it is not like the taper came out of the blue -- giftsaccept guess -- of gold for christmas? >> i do. hearings would be green eyes. >> she takes gold for the
holiday season. we started the front page -- here is scarlet fu. >> it is all about the fed. the fed begins tapering and the world is not -- a miracle, ben bernanke leading to a slowly scale back with the $85 billion monthly bond buying program to $75 billion less. the economic forecast were more dovish. well cut the time and employment falls below 6.5%, that is if inflation stays below that 2% goal that the fed has outlined. >> the press conferences get better, and i thought one of the best question yesterday was from torres, andws chris he said are you out of a toolkit, are you out of tools, is that what this really is about? chairman bernanke he a very thoughtful answer. -- well, he isd a lame-duck chairman. >> you have to wonder how this
set up janet yellen for 2014. how much did he help her by starting the process while he was on his way out? moberlymorning, mario -- mario barbara lee and peter -- mario garbelli and peter orszag joining us later. >> fighter jets contract to sweden from boeing. brazil's president had complained that the nsa had some -- bite on her government. >> we lost in the french lots, has been be fair, saab desperate for international business they have been working hard on that. they also offer higher levels of technology transfer meaning that they might have had a better business. >> if you are the world's number one and number two, i mean, the contract is yours to lose and
boeing is going to get it. >> a convention in the sac larry somberng -- -- larry steinberg guilty of insider trading. italy took them a day to come up with a verdict. a lot of drama around here. some people call it acting. >> really? this is really incredible, new york federal prosecutors bringing 87 insider trading cases over six years, and now 77 convictions. that is incredible. >> can he appeal? >> would not know yet. we have not got the night yet. the role news is this puts pressure on matthew martone, whose trial begins in january, since it's steinberg trial did not go over well. >> and stephen cohen has not been charged with anything, but
his firm has paid up. >> those are front-page stories. >> this thursday morning as we raced to the end of the week. i will be on vacation, our guest andhis our, chairman managing partner of sonnenschein partners. ofhael wolff is founder active, former yahoo! board member. yahoo! mayer is a ceo at as well. we had a fed taper yesterday, and gentlemen, let's go to this. i would say a less uncertainty. marshall, is this a boost for 2014? >> i think that is right, tom. i think maybe there's somebody -- something for everybody. we expected a little bit of taper, we got a little bit of taper. we expected a little bit of clarity because bernanke is a clear speaker, he does not speak in fed speak. than i would have expected on this zero policy for
a while longer, but he was clear and he had a something for everybody. >> michael, this has to be good news away from economics. this has to be great news so bad but you can move on. >> was interesting most of our is the -- most of all is the consumer -- there is easing in the markets did not collapse. provides a great deal of confidence to consumers, especially also reported as we go to the final days of the christmas season. policy, what fed is the humility on the west coast going into next year? world has had a challenging year to say the boost.a major economic >> the biggest hit in the gut heaven would've happened with techsa, but from a perspective, they are looking at the something good, there should be continued interest in the sector. the 10 yeart see
yield move at all, but as the fed continues to taper and we see that slowly move, what does that wind up doing for the m&a business climate? does that end up spurring more deals to take advantage? >> sort of. i do not negatively moving of the yields that facilitates m&a. it is the gaining of confidence. below money environment we have lived with now for a half decade since the financial crisis has propped up equities. that is not prop up m&a. m&a is a longer-term marketplace. if yields are moving up, because people believe that money has value again and that we are going into a mode of growth again, that is facilitating of m&a. wolff,eby you, michael things are going to start to return to normal. we are not there yet, but we have taken up first important step. >> in the valley, what is happening is these streets are paved with gold matter what.
they continue to see more and more consumer interest, but i think the fact that the financial system looks like things as he said -- the world did not end, give them a lot more context. ofmarshall, you have a lot experience. what year does this remind you of? 1994? is there a moment, as we end to 2013 that this feels like? >> 1994 was not bad, we were coming out of the 1992 recession in the gulf oil crisis. there was a sense of relief eared we are five years past the real crisis. in some ways, bernanke has been right all the long in a stating the simple truth that this is not like anything. this is all new, and let's face it -- the will did not and a bang, but we still had jerryrigged economy with way too much debt, and while we see no sign of inflation, paul krugman has been right on that, i think
that there is always going to be some vulnerability that when there is a release of animal spirits, there will be a lot of cash. --there is a protection reduction for 2014 during we will continue this conversation with marshall sonnenschein -- marshall sonenshine and michael wolf. >> and that is our twitter question of the day --what's your biggest worry for 2014? i am worried about goal, but i am also worried about the employment picture. >> i am worried about what is going to happen on "kindle." -- "scandal." >> me too. >> astrazeneca targeting diabetes. astrazeneca will pay as much as $4.3 billion to take so control. myers will focus on building cancer treatment instead. onus is that citigroup will be little changed this year. bonuses at citigroup will be
little changed this year. this move comes at citigroup ceo tries to reduce costs to curb shareholder pressure. and a sacred service investigating possible theft to credit card and debit eta at target. it is believed the reseller was had by hackers over the black friday weekend. the breach may have affected as many as 40,000 card devices according to the secret service. that is today's company news. that is a lot. >> i stopped at target for the first time in my life on black friday, spent $20 and i was on my phone this morning trying to find out if i got hacked. it is a scary. >> when is the last time you buy something at target? >> i am watching "scandal" this weekend? >> do not read that wikipedia page because it will give you spoilers. leastt leas -- >> at -- no more, spoiler alert. here is what is coming up on $14.5 billion,--
>> one of the most interesting guys in academics -- dean henry thisbe on "market makers" morning, peter henry from jamaica, first-rate education, he is the force behind the nyu stern school. on "market makers" this morning live at the clock a.m., that will be with the stephanie ruhle -- at 10:00 a.m.
that will be with stephanie ruhle and me, tom keene. i am here now with alix steel and scarlet fu. >> nike launching six new limited edition holiday-themed sneakers in the last 10 days of december. that is a lot of sneakers. that is in addition to the three signature sneakers by nba stars lebron james, kevin durant, and kobe bryant. kylemberg businessweek" joins us. it sounds like too much. is it? headseakerhea -- sneaker will buy them. the secondary market on this is huge. it is a lot. they might be hitting some diminishing returns. >> are they responding to demand or creating demand when they create these limited editions? >> it is a little bit of both pure that of a brilliant and risky part of the strategy. >> there is not a lot of competition -- there is a lot of competition of ideas, reebok -- adidas, reebok.
is a growing? >> it is growing, but it is predicated on the fact that they're commencing consumers of supply is short, but that is not that short if they're rolling out one or two every week. >> for years and years, the death and nike, a continues to be a moon shot they made 18% in the last 10 years heard what is different now as they go into 2014? what do they cost? >> about $140. --so they are acceptable they are accessible for a large body. that is the nike formula. >> that is the formula, but it is not that scarce when they have got 11, just on basketball, 11 shoes in the next 30 days. >> i have 11 pairs, i could go pair.he next 12th
>> we are about technology and shoes. >> as much as nike does these custom shoes, i think they will sell out. the kobe bryant model, for example, it has a snakeskin, alligator skin look. i think everybody is going to want one of these. if you collect sneakers, you are going to want one of these shoes. >> is in part of the technology you have the new, whatever, air things in the bottom of your feet? isn't that part of it? >> i do not think it is as much technology -- i think it is people collect them. there is a cool factor of people seeing them on your feet. >> when i was growing up, everybody wanted a pair of air jordan's or the reebok pump. there was one "it" sneaker. there is not any one "it" sneaker. we are talking about all these different pairs and it does not matter if one sells 100,000 pairs, right? >> it is almost like the opposite of that. keep consumers to lust after what is of skier in the very
rare, odd looking shoe, which is different from the 1980's in 1990's. >> obviously 50% of revenue comes from sneakers, what is next? >> basketball shoes, running his big, they are doing great in europe. whereis the big place they are missing right now. >> what did you learn about this, financial? they're making tons of money, they are constantly being the gloom expectations that i've known for, what, 20 years or more. what does the management say the interesting sneakers will do to continue to drive that equity performance? >> it is furnishing the brand, and the thing about it is they are doing it because they can, and the value in the company is in the supply chain. they can run off 10,000 pairs of shoes. >> why don't the other sneaker people do that? i do not know where reebok is are now. i have four or five adidas. >> yeah, because you run all the time. >> she can give it right back. [laughter]
where are the other sneaker companies? >> they are doing the same thing, just not as well and not as much. exactly wherenow to distribute, they know when to get them, they know when to push them into the market, they know how to hype i. t. >> can you see me running through central park? >> so fast, so fast. >> you have to get some lebrons on your next run. tothat is what it comes down -- nike has the stars. that is what has driven their business, and that is one of the things, besides manufacturing in every thing else, that has made them continue to win. >> this is something we will continue to watch for. kyle stock of "bloomberg businessweek," thank you for joining us. coming up on "bloomberg surveillance," why microsoft is focused on the wrong thing when it comes to microsoft's next ceo. ♪
>> good morning, everyone. breaking news here at "bloomberg surveillance," this has to do with facebook and mr. zuckerberg -- it is at tech time, and they are to offer 27 million shares. the headlines just coming out. this is what overhangs successful growth company offerings, those of further shares. scarlet fu has the details are greg facebook will offer 27 million shares, and mark zuckerberg, the founder and ceo, will be offering 43 million shares by certain selling holders. the majority of the net proceeds of zuckerberg will get on the taxes will satisfy incurred in connection with this sale. that is only one part of it. --ebook sales down in the shares down in the premarket.
>> this is distinct it appeared at about the guys in this ever before. facebook, zuckerberg, to "gift" 18 million class b shares in december. the class b gift to be converted to class a. our gift of the morning -- you get lucky sometimes with us, with a lot of work in silicon valley and yahoo!, michael wolf joins us. you have seen this before, you the share there is overhang and they have to go out a movie shares. >> it worries investors but there is a motto in silicon valley which as you raise money when you can, not when you need it. they are taking advantage of this moment were people think the stock is doing well, the company is doing great, and it has gone back up. so it is striking that balance between what is going to be that overhang versus good moment to raise money. >> how do you discern a company doing this right whether it is fancy talk of gifts, class a,
class b, and a company that is being devious about it or less transparent about it? >> the big indicator is -- how long does the ipo -- are people giving out their shares or selling their shares? had -- ament, facebook initial wave of people who left, but for the most part we have not seen a lot of that. >> the initial shareholders, asshall sonenshine, help us well, knew this was going to occur when a bot of those shares. they knew this would happen. >> yes, there are lock up options and post-lock up option should expect insiders to sale. the gifting will not hurt anybody initially, but later on if the sets of a foundation, he gets a full tax credit. >> slowdown, this is a sonenshine alert. give me all the literature you brought today. showed up with his iphone, marshall has enough -- >> he actually knows what he is
talking about. >> you are presuming mr. zuckerberg is setting up a gift transferred to set up a zuckerberg foundation. >> scarlet said he was selling some shares and there was a news item that he was going to give some shares. i assume, i do not know, but i assume he will set up a take hisn, texas -- taxes -- and -- >> the letter a to b -- is the a to b. >> i think he is going to buy the san francisco giants. >> yeah, right. telethon leading innovator and will it do it again this year? ♪
s&p futures back above a few hundred, dow closing 16,167. stronger bernanke and yellen this morning, they take a victory lap. terrific news on facebook. this is a real validation of their shared price performance. >> facebook is selling cash. mark zuckerberg is offering 43 million shares as part of this. 1.6 andreessen is selling million shares as well. part zuckerberg is making a gift of 18 million class b shares and converting 18 million of them to class a shares, which are the general shares. is. morgan securities handling this. >> michael wolf is with us with his great experiment on m&a, corporate structure in silicon valley. michael, this class a, class b, explain that to mere mortals. >> from the beginning, mark
zuckerberg has controlled his company. it is one of the reasons he did not sell out to people. and right now, he had special shares, just as the founders of google and other people, so he certainly if he is going to give those shares away, he certainly wants to convert them from b to a so he maintains that control. offacebook says the majority shares to zuckerberg are to satisfy taxes of sales. >> what part of this is motivated by shares having rallied big from the ipo, and what part of this is normal tax rotation? >> every analyst has a buy on it at a much higher price. >> they do but their average rice target is up to $60. right now it is that $55. is this an indication of people within facebook do not see the stock of going that much higher ? >> it may be just a moment. i think they have a lot of confidence in the business and facebook continues to be a
growing phenomenon. >> we will discuss this later in the hour. newsfeed front and center across the zeitgeist. the zeitgeist for 2013, while it was disruptive, disruptive as well, it is so 2013. next year's word of financials like this -- financial zeitgeist maybe constructivism. a for morenenshine, and m&a -- what is a constructivist? >> first welcome i made up the word, and they said they had a strategy to buy lots of shares from families in institutions that one out but only if the management or board would say that they would go along with some of their ideas, i.e., be open to their suggestions? i said you better not call yourself an activist fine, but if you want to change the
company on those terms, you should call yourself a constructivist. >> is carl icahn a constructivist? the terribleeing of the marketplace, i would say he is not cured bill eichmann is not, although i think you would like to be thought of as constructive. -- he is not. bill akerman is not, although he would like to be thought of as constructive. --the m&a that we might see out with the old, and with the new, dubs going private, the near stock exchange being bought by company that -- >> barely existed, right. we had a bounce in the m&a market in q4, some of which is normal and some is a leading indicator that we are starting to get a little bit better confidence. this has not been a good year -- it has been applied to last year roughly. >> where do you need to get to to be happy? >> i'm fine where we are. >> but the industry do a double,
a triple? >> i do not think so, tom. if you would go back to the height of the m&a bubble, about $4 trillion, but it $1 trillion of that was leveraged buyout. dell had a lesson for the entire marketplace, and they think a lot of directors took notice of this. you know what? some activists actually have something constructive to say, it is just that they say it in show tunes that are annoying, and some directors actually do not want the headache that dell brought to them. the dell. done by only 65-35, it is like the office voted 6-4, we're giving you a get well card, thank you very much. at some point, i think dell stands for the proposition that directors acting in the interest of public shareholders may have some alignment of interest with activists who are annoying, and i think there is a movement now afoot to try to get corporate strategy and corporate share
prices rights, including three m&a, but when it is right. >> what about next year? when i look at the big leading indices for m&a this year, telecommunications far and away the most active industry. does that continue into next year, is it being driven by activism? >> telecom is its own special case, and it is not a lack today to combine, it is very mature, powerful companies that are combining. t-mobile and sprint together, it they've got over 50 million subs, which starts to compete with verizon and at&t, the majors on top your the real game in telecom is in europe or muchhave not had as consolidation. you've had fragmentation on the political and regulatory site as well as on the markets i, and that is starting to age because the eu has gotten the memo. vodafone, looking to for instance. >> yo boy, has that thing done
well. vodafone is almost the same size and market value. i think the big regulatory shift is in the eu. they are getting a little bit of pushback from the european commission parliament, but this woman from the netherlands who is overseeing this sector has really gotten the memo and a starting to say we need to be pro-consolidation. >> your talk about regulation big deal, and michael, i am going to suggest minimal regulation other than the nsa headache, and mark zuckerberg should be celebrating. >> they wait too big for forgiveness than ask for permission -- >> but there are so many startups, to be fair, versus telecoms, where there are what, like, five in the u.s.? >> if you look at what is happening me sectors, yes, there will be a lot more mergers between a big. right now, we have charter circling around time warner
cable, and sprint, let's not forget that sprint is pretty much owned by softbank, which ago upstarthortly itself. >> i'm going to be cordial and ask what the future of yahoo! will be. mayeriticism is ms. has been acquisitions, she put out yahoo! leverage, she changed the logo, what is her to do list for next year? >> in a lot of ways, the appreciation in alibaba has given her cover to do a lot of things she needs to do for the company. this was really a broken company. when i went on the board, it had not been run by somebody who knew the internet for 10 years. it was ridiculous. so we brought in some he like marisa who knows technology, very few turnarounds in silicon valley -- >> what is her to do list for this year? >> she has to continue to grow traffic. she has got to grasp and sell advertising, and i think the advertisers -- advertisers via
momentum. as soon as they see that the prices of -- that the traffic is growing, they will go after it. >> she ought to buy a pair of the nike shoes week talked about earlier. it is a brand transformation with ms. couric and others -- is going toumblr turn out to be a great acquisition. >> the stock is up 100%, but the revenues have not moved a bunch. it is all alibaba. i think the pressure is on her to start showing real growth. >> to that point, is 2014 going to be the year of allie baba? -- alibaba? >> it better be because how else can you explain a 100% rise in the stock? >> does marshall know that if on bloomberg you get a major minor? >> all of your viewers know what eva talk -- ibaita is.
>> my husband does not. >> i know what it is. >> excuse me. >> my husband is not know what it is. ibit -- a.ope knows wolf and marshall sonenshine are our guest host. we want to alert you to the guest -- to the cover of "bloomberg surveillance -- of "bloomberg businessweek." also coming of an annex our bloomberg television and radio, gamco chairman mario gabelli. think of it as a stocking stuffer. ♪
>> good morning, everyone. "bloomberg surveillance." scarlet fu and alix steel with me. >> finance minister dealing with failing banks. they will create a resolution fund. the finance minister has also agreed on a plan on how to share the cost of the program. the agreement among the finance ministers is seen as a big step towards completing european
banking unit. senator max baucus is president obama's pick as the next ambassador to china. that is according to people with knowledge of the matter. the montana democrat is chairman of the senate finance committee. he has already said he will not run for reelection next year. and u.s. home values soared $1.9 trillion this year, the biggest gain since 2005, and with the increase, u.s. home values have never covered 44% of the losses suffered during the housing crisis. all of this according to zillow. those are your top headlines. thank god. i bought an apartment last year -- thank you. appreciation is what i need. >> the city is spoiled. is existing home sales today? >> it is. >> at 10:00 a.m. now it's time for the single best chart. >> the thing will best chart is on the app economy from statistics.com. it really shows how the total numbers of available apps across
all apps stores has climbed. it is that about 2 million, and the platforms leading the way, pardon away -- far and away is the apple either with the system, which is the blue line, and the end racism. everything else, windows phone, which is microsoft, of course, and blackberry is kind of stuck at the bottom there. it shows that divided nature, the bifurcation in the app platform and operating platform. >> there it is. >> we also wanted to check out the top 10 free apps. i know you're a big fan of number one, tom, candy crash. youtube is number two, tebow vine,in -- temple run, and google maps. >> i'm glad you brought this up. michael wolf with us. it is like separate worlds. it is like twitter -- i have my app world, and 70 doing candy world, --their apple
and somebody doing candy crash has their app world. >> apple has 13% of the smartphone market but they have 76% of the app sales, 76% of the $25 billion a year app sales. google on the other hand has practically 80% of the smartphone market with around 20% of the sales. i think we will see that. summers do other favorite apps, but there are some big hits. -- consumers do have their favorite apps. millionash, 500 downloads. >> vivid they have the same thing on farm led -- it didn't they have the same thing with farmland on facebook, and when they come out the next day? price youtube, pandora, those are here to stay. apps,have the top paid which are here to say. marshall sonenshine of sonenshine partners, d.c. this app -- who do you see this
applet growing more m&a? >> apps are good for consumerism. they do aggregate buyers of goods and services and they are very effective tools, which is exactly why facebook is doing so well because it is a way to reach people. drivetechnology to commerce. >> how about reaching businesses? >> the same thing. it started as a consumer phenomenon. >> here is my candy crash, here is the app for you folks, a paid advertisement here on "bloomberg surveillance" -- pocket slide rule, there it is. it has the cursor that moves, and you can even turn it over and learn how to do logarithms on your slide rule. p? that is a man ap >> show this to marissa mayer the next time you see her. >> yahoo! finance has 90 million users, and i hope that bloomberg of technology will go a little bit farther than a slide rule.
>> i don't know, i like that. >> the majority of people do not to use a slide rule. >> this is true. we want tonenshine, thank you for joining us today, sonenshine and partners talking about m&a for 2013. >> zuckerberg on a slide would go 27 million times 53 -- >> it is a lot. >> whoa, and the government gets all that! >> taxes. speaking of mark zuckerberg, as we said, planning to sell shares. how this will affect the company and what the company is doing with regards to the pesky video ads showing up on everybody's newsfeeds. we will talk about that on "bloomberg surveillance," on bloomberg television, streaming on your tablet, your phone, and bloomberg.com. ♪
>> this is "bloomberg surveillance." i am scarlet fu with tom keene and alix steel. let's get to company news from the files of "bloomberg west." third-quarter forecast in line thanks to the shift in the cloud. analysts were forecasting a 4% increase. oracle spent $50 billion acquiring 100 companies in an effort to keep up with this move to cloud computing. apple kicking off its made in
the usa push. the company now taking orders for its new mac pro, the machine being built in a texas with components made domestically. it starts at just under $3000. and hulu says revenue will hit eight $1 billion, 44% increase. they also say paid subscribers reached 5 million earlier this year. that is to raise company news from the files of "bloomberg west." >> breaking news this morning on facebook. asreholder selling as much 70 million shares. mark zuckerberg himself selling 41 million. they're using the money for working capital and other corporate events. >> facebook shares down almost 58% in the market. rocks are made to pay some taxes, too. -- mark zuckerberg needs to pay some taxes. we're talking but the dreading facebook, right now youtube has the biggest slice of video ad spending.
they spoke wants to get in on that territory is now a somebody who says video will be on the forefront of multiscreen advertising. the head of interactive advertising bureau's advertising center. thank you for joining us today. facebook so long because youtube has been running 15 second video ads for the last five years, yahoo! has been doing it for 10 years, acted like facebook is just catching up now. >> i think facebook is just embracing mobile. in the past year, facebook has come to a place where mobile has become a core part of its strategy, and giving be growth of video, -- and given the growth of video. gained enough traction that it will not be a turnoff anymore. >> that is yet to be seen i think. i think that one thing is proven
-- interrupted advertising works. if it is relevant and if it is targeted, it works even better. eventually i think that people will get used to it and they will like it. facebook is up for a little bit of a struggle in the beginning. >> facebook has said it has reached the capacity of the number of ads they can serve the audience. is it more about pricing, getting the most for one ad or the amount of ads that is important? >> i think it is more about getting the most for one ad. >> and i watch my kids watch ads seem fithulu into the product. others seem to be in the way. what makes for a good video ad where i am looking at it, but i'm not angry that it is their? >> -- there? >> i think it is just that, in stream, native -- >> how long? what is the research on how long i can stand a video ad? >> that is one thing that iab is working on. >> seven seconds?
>> 15 seconds. second some are 30- ones. quite feel a thing i pay attention to is the little banner that says you can get out of here in three seconds. >> just as scarlet mentioned, how many of us look at that little banner go 3, 2, 1, bam? that actually do not have research, but it is something we will look at next year. i think most of us do. it is different between each group. i think you and i may look at it but i am not sure that kids do. they are used to it at -- it is part of the content. >> i think there is a big issue about user experience. the fact is they're not putting ads in the middle of a video program, they're talking about putting a video added to the middle of your screen, and when a consumer is looking at that on their iphone, it is really intrusive. also, they are saying they're
just going to launch to tech. what is fascinating is facebook has already given up on social ads. they are now coming back at display and video like everybody else. it will be interesting to see how users react. i can understand why advertisers would be excited about it. >> how do you measure success? the follow-through is one part -- >> yeah, how do you do that? >> how do we measure success, how do we measure effectiveness? >> no one knows yet. >> nobody really knows it. >> thank you. that is one of our basic themes on the show as we are going into what he 14 blind. >> that will be the -- into 2014 blind. >> facebook and other big companies really investing in this, we will -- it is not just about engagement, it is about audience. where is the audience going? it is also about the effectiveness of the ads and how
long they should be. >> what should people avoid doing on their mobile devices? what is a preferred doing on their desktops? >> i do not think of anything. wordprocessing is one. anything work related, things that relate to heavier, yeah, word processing, excel, things like that. business insider with an article that there is too much information out there, we are drowning our news feed, we are drowning in all of this information. are we drowning? >> i don't think so. kids are finding what they want to see. we are not drowning -- if anything, we are consuming more and more. >> we are taking in more and more. >> the expression of this year is fear of missing out. so you want to keep consuming information because people do not want to miss out. >> all right, to isolate, michael wolf of activate and also anna bager. >> this is a post taper forex
markets, they taper. equities surge, the dollar, too. has they adjusted to a smaller principle? we have peter orszag and murder the belly. its acton getting together. your back hurts, you have nightmares about bowties. there is a website for your inner hypochondriac. this is "bloomberg surveillance ." we are live from world headquarters in new york. thursday, december 19th. i'm tom keene. joining me, scarlet fu and alix steel. guest host, peter orszag, former director of omb and vice- chairman at citigroup. mario the belly is with us from gamco investors -- mario gabelli is with us. our morning brief. >> i think you have nightmares about your bowties. >> i do. >> and no, i do. let's get caught up on what
happen overnight. china, the central bank injecting funds into the financial system using short- term liquidity operations. growthland's economic accelerating to the fastest pace in almost four years in the third-quarter. gdp in greasing 1.4%. in the u.s., it is thursday, so initial jobless claims coming out and then bloomberg consumer comfort and then at 10:00 a.m., existing home sales. a couple of earnings after the bell -- nike and carnival. start the countdown, 50 days until the sochi olympics. very exciting. >> go team usa. >> we need jim grant going down the course. >> that is a bowtie for sure. >> we start with news that just broken the last hour. facebook is raising cash. the company and shareholders selling 70 million shares in the company itself selling 27
million, and mark zuckerberg, 43 million shares -- also converting class b to class a shares. facebook will use the money for working capital and zuckerberg will use money to pay taxes linked to his exercising of stock options. facebook shares, trading at record highs, is down on the premarket. a conviction in the sac trading trial. michael steinberg found guilty of securities and trading fraud. this verdict could increase pressure on his former colleague to cooperate. has not beenen charged. secret service investigating possible theft of credit and debit card data and target. target was hacked in the. black friday.od security breaches been resolved. i hope you did not go shopping on target. >> i did, on black friday.
i am really scared. >> use cash next time. >> i am absolutely going to use cash -- or bitcoin, maybe. hearam delighted to zuckerberg will pay a billion dollars in cash taxes. on a million shares at 50. thebloomberg surveillance," strength of our show is our guests. we bring you peter orszag and marriott -- marriott the belly. mr. orszag, known for his work on the fiscal deficit and the social security program with the brookings institute, service to the president on moving the deficit to a smaller point. , come -- acclaimed value investor, the own facebook? >> maybe. >> for your kids. >> my clients -- we own $45 billion, we have to own a few
shares. >> this has been one of your great arguments over the years -- media companies, they have and a play by different rules and voting rights. how do you bring it over to the land of zuckerberg? >> you go back to 100 years ago. if you owned a press, "the new york times," you want to control and the theory of an independent voice. a and b was ok. we went public, but we made a discount after going public. after-the-fact, we are against. an a/b stock when it was created but they allowed the voting stock to be converted to and stewart sells at five point discount and you can give voting stock. >> do you think zuckerberg is
doing the right thing in the way they structure facebook in the secondary transaction? >> i don't have a specific point of view. i have 1000 shares. but on the secondary transaction today, it is cosmetic. you've got 2 billion shares of 55 million, ifng he is selling 27 million and the company is selling 27 million, offering the company stock in order to not have attention on his own shares. >> exclusive. --io gabelli's tie is less ben bernanke's. >> it is 4:00 in the morning -- do you want me to wear a bowtie? peter orszag, former director of the omb and the bloomberg contributor. i want to bring it back to the federal reserve and what ben bernanke said. he mentioned people don't appreciate how tight fiscal policy has been and the fed was able to move forward with
tapering even with the fiscal restraints in place. how does washington respond to this? do they continue moving ahead with their games or are they in a better position to actually cooperate? the good news -- i agree with mr. bernanke that in 2013 there was a lot of fiscal consolidation. the federal government probably fromacted 75 basis points growth. the number will be much smaller, more like 30 basis points or so. just that factor alone you should expect some increase in topline growth in the u.s. big question is, for that to happen, washington has to stay out of the way. this budget deal we got, good news from that perspective, even though it is a little deal. at least it is not shooting ourselves in the foot. one risk is the backlash seems like it is leading some republican leader saying we need to make an issue of the debt limit again, and that is not good for the economy. we spoke to the chairman of
the president's council on economic advisers, and i said to jason, why can't the president get the gumption to take a victory lap on what you accomplished? the fact is the deficit vectors are moving in the right direction. why is your administration so reticent to say, not job accomplished -- mission accomplished am a but we are moving in the right direction? think there is still a lot more to be done both on the economy and the fiscal front. but you know me, one of the reasons of the deficit is coming down, which still has not received enough attention, is the remarkable slowdown in medicare. they care costs in the first two months of this fiscal year were lower in nominal terms, nominal terms, dam last year. that is following a five years a really slow growth. >> but, peter, you moved away from the current deficit, which is 400 billion or 500 billion, but 17.5 trillion debt. your own projections in nine
years is 25 trillion. >> this route assertion -- >> what everyone is thinking about. you can't hide it. you can't shovel away 17.5 trillion. by the way, is the number -- >> no, but that includes intragovernmental -- [laughter] here is the question. no one will worry about the level of debt if we were on a stable fiscal trajectory. the reason we worry about high levels of debt because it typically is associated with an explosion thereof, rising rapidly and get out of control. i come back to, what is driving the long-term fiscal debt? the answer is health care costs, by far and away. the slowdown is so substantial -- not saying this will happen -- but the slowdown is so substantial that the congressional budget office, which i ran and i assure you
does not like to update their forecasts frequently, has not been the 10 year deficit numbers because of then deceleration and if it were to continue the entire long-term fiscal gap would basically disappear. -- thert answer -- given level of debt is higher than we would like but what i worry about it if we had a stable fiscal -- fiscal trajectory? no. is the worry less of the vectors of now but the condition out for years or five years, 10 years -- you are saying it is not going to happen. saying it won't happen but if we continue to have the slow growth of medicare costs that we have been experiencing -- the cost grow the same rate in the future as the past five years on average, there is no increase in medicare this year in gdp. >> within the framework of the own -- their own numbers at omb,
you basically looked at $25 trillion deficit -- assuming three percent interest rate -- 2025, thank you. it is the debt ceiling -- not the deficit, but the debt. but interest rates at three percent -- >> we will come back with you. a special "surveillance." a lecture with marielle cavalli and peter orszag -- mario gabelli and peter orszag. that was fascinating. >> all right, we have much more coming up. are also higher and yields are coming down the little bit. let's take a look at mario gabelli's top stock picks. you don't want to miss that. ♪
>> good morning, everyone. i'm tom keene. with me, mario gabelli, peter orszag and scarlet fu and alix steel with us as well. you have important news. restaurants,darden that owns red lobster and olive garden, is spinning off red lobster and curbing olive garden's growth. breaking news just in the last hour -- or 10 minutes, in fact. spinning off red lobster. shares are moving down in the premarket.
>> it really speaks to the difficult environment restaurants have enticing new customers. the economy might be there for some people buffer restaurants it is still difficult to grow the business. a lookant to go and take at washington because congress heads into the new year with a new budget, a small one. this spirit of compromise could evaporate as quickly as it came. the debt ceiling fight is still ahead of us and policymakers are positioning themselves for the 2014 midterm elections and the 2016 presidential election. peter orszag, former director of the omb is with us, as well as mario gabelli. ther, when you hear of compromise -- i can't believe we are calling it a grand bargain -- but when you hear of the compromise, do you worry about it is all posturing and will not carry over? we have theter that deal than we don't, we didn't, but i don't think we should celebrate too much. there are still other risks ahead. the debt limit being a
significant one. it would be a great thing if we had 12-14 months of node dysfunction, no drama coming out of washington. --we all have hope >> so we can see whether the economy can pick up enough momentum. i think it is a crucial question. >> gdp. >> yes, which i think we would be on track for if we did not have more drama. it raises the important question about stagnation in the economy or not. we keep having these impediments coming out of the d.c., so we can't get to the question of whether the underlying growth rate is a little -- >> this pushes right into your bullish scenario. you have been able. you've got to have gabelli-like patients, the answer, this good news for peter, is good news for gabelli? rally, could blow up the clearly a confrontation over the
debt ceiling, which is fundamental to the long-term outlook for stocks. that is one issue, but there are so many others back and go on. more gloomy at 7:00 a.m. than 10:00 a.m. >> i need coffee to get me excited. they gave me water. >> we have a lot more to come on "bloomberg surveillance," including michael steinberg charged with insider trading. ♪
>> good morning, everyone. a lot of fun here today. mario gabelli, peter orszag is with us. scarlet fu and alix steel with us as well. futures, negative two, dow futures, -10. 1068.taper, the dow and 16, where were you 12 months ago with the doom and gloom? gabelli was buying stocks. alix steel has top headlines.
>> vladimir putin says a russian made a $15 billion loan to the you can to -- ukraine to help its neighbor. he says the two countries have special ties, like close relatives. he said the deal to supply the discount in% natural gas is temporary but could be extended. retail sales in the u.k. bouncing back. sales up 0.3% following a drop of 0.9% a month earlier. closing sales posted a big gain, up 0.4%. colder weather boosting demand for winter clothes. soared 1.9alues trillion dollars last year, almost eight percent drum and the biggest gain since 2005 -- eight percent jump. this is according to zillow. >> one of the major stories of 2013. shout out to michelle meyer and
others, she at bank of america merrill lynch nailing the call on housing. santa claus is out. mario gabelli is decidedly in. giving you something more to look forward to, a christmas morning stocking stuffer. how about a few of mario's best picks of 2014? weatherford? and oil services company. if you look at the chart, it is nearing long-term support. a great point. i like to look at figures. but my no more numbers oriented. charts -- i do care about everything. weatherford is a benefit of horizontal drilling and fracking, which is a technology that is helping the u.s. with their current account deficit, political independence, and really helping the american consumer and creating jobs. >> and oil services company. >> they make artificial lists,
so when you go horizontal and two lateral view need something to take the gases out. jeff immelt from ge bought a company in artificial lift, went public. the company has about $18 billion in revenues, $13 billion of good quality, 12 billion shares out. they were going to slow. all sorts of challenges with taxes, foreign corrupt practices act. and shareholders will be getting tired of this management moving slowly. >> seeking a management change, perhaps. >> a lot can change. the glacial speed of reducing debt. within the framework of can, with ayou number twice the current price of the stock between 12-18 months if they do something in a quick and orderly fashion. >> what happens if oil goes to $90? >> if natural gas was free for everybody, like they are doing in the ukraine with russia buying votes --i don't think it
is a possibility because you look up a strict three years from now and you can sell the futures and lock in some of your spreads. oil at $90 -- clearly, i am all in favor of it going to 70 -- >> quickly, peter, i want to bring you in. this is a multiplier effect a policy where we focus on big oil or whatever, but weatherford is a knock on effect of this expansion. >> the big change over the last 12 to 184 months in the various shale plays is a shift toward oil production. the marginal cost of oil production coming out of north america was $60 or so a couple of years ago. it is on track to go to $30. a remarkable revolution. if you then layer on the constitutional change in mexico, our energy analyst, who is very very sharpfinitely a guy, and he believes we will see
a non-trivial reduction in price. >> you have another gabelli selection. >> viacom. 2" franchiserman -- you are very ron burgundy-esq ue this money. the problem is all of this is reflected in the stock price. it is trading near record highs. how much higher can ago? >> i think the stock will double the next few years. i am delighted everyone does not like it so i can buy it cheaper. the company, like a lot of companies we like -- 722 million shares when they split up cbs, at 300.440 and will be we think a $160 stock. >> isn't media in a bubble right now? >> stay focused on viacom, ok? -- via, you off
don't have to buy it, i am recommending it. but within that framework i think what happens is they use cash flow to buy back stock, which is a very good way to return. >> investment 101, how does gabelli ride a winner? >> that is a challenge because we managed to thousand separately managed accounts. we have a great team. you met some of my individuals. larry haverty, which covers the global media. essentially, when somebody owns six percent of the stock because it has gone from three percent of portfolio, we will curl a little back. we are running $45 billion, which is small, but primarily all equities. quickly, to scarlet's point, you can ride the media stock -- >> american express, dropped from 50 to nine dollars and it
million a year and said it will halt acquisitions. earnings-per-share for the year could be down as much as 20%. it had forecast a decline of three percent-five percent. boeing seems to be paying the price for nsa spying. losing out on a $4.5 billion jet fighter project from brazil. brazil's president publicly complained about allegations the nsa spied on her government. one this is at citigroup will be little changed this year. bonuses for traders and investment bankers will be flat or even down by about two percent in some cases, according to a person briefed on the plan. it comes as citigroup ceo tries to reduce costs amidst shareholder pressure. a dramatic afternoon in downtown manhattan. former sac trader michael steinberg found guilty of insider trading. it could mean dark days for and his firm because they recently paid a penalty for insider trading.
fines for the banking industry, particularly jpmorgan, and we see separately this idea at sac capital. mario gabelli with us, with gamco. you have seen so many of the ups and downs of this for decades. insider trading, it is one of the squishy as things out there, is it not? >> i am delighted the free market process has what adam smith said, the traffic cop at work. you have to keep a level playing field. more importantly, tom, you want to bring back the confidence of the individual investor and the integrity of the markets. >> tell me if i am out of line -- did you make up every morning at your shop at gamco and say sac was playing by different rulebook? did you feel like you did not have an upper hand on information flow because they did things differently? >> we were very simple. we follow in industry-specific.
we go to conferences and track companies for a specific. of time -- period of time -- >> in and out? >> i don't know what they do. i assume you have a successful record, he did it a certain way. i don't reverse analyze it. our turnover last year was four percent, which means we buy, love, and hold. >> in one hour, four percent -- >> they generate a lot of commissions and therefore a lot of information low. >> do you see in your that mainpic efforts street is becoming to be re- acquainted with your wall street? >> regrettably, we can sense that the animal spirit is returning, particularly with the bond market. not looking well. you want to get out of fixed income. and intermediaries also feel they want to have a greater return by looking at the exposure of common equities -- to come in at woody's. but not like 1999 when i would go to las vegas with lou
payingr -- 20,000 people $39 to listen to pundits talk. we are not there yet but we are moving in that direction. >> as it is getting increasingly more difficult to make money, is what we are seeing with these convictions, 76 in the last six years in insider trading, does it serve as a deterrent? >> when you go to insider trading -- back in the 1980s, the 1960s and the 1980s, people would send brown envelopes out saying if you are not interested in buying this company because, send the envelope back. nobody bothered checking. whether it was option slipping, ideal flipping, a lot of various ways. there is always something that goes wrong at the margin but by and large, look at the integrity of the markets over the last 100 years. they are the best of all alternatives of allocating capital. nothing has changed. >> bonds -- you look at equities, but they are linked to bonds.
bond prices go down and yield go higher next year? >> i am three and 6 -- >> translate that. >> three percent on the 90 day, -- or 180 day, and six on the 10-year. context ofn the analyzing companies, what the economic environment will be an interest rate will look at with inflation at two percent or three percent, what is the 10- year without the fed stepping on the break in terms of rates, and within that framework, how the stats react and why would i want to own a cash producing inflation index earnings power at a reasonable price over an extended period of time like webmd? >> mario gabelli on bond inequities and soon on webmd. >> the fed's historic announcement that it will be tapering back this denver -- the mill is package. -- stimulus package. futures off a little bit, backing off after yesterday's
rally. the yield on the 10-year has moved higher, 2.91%. everyone is eyeing the three percent level. and we have economic data this morning, including jobless claims at 8:30 a.m. in existing home sales after the market opened. >> good morning, everyone. "bloomberg surveillance" on bloomberg television and radio. we have m you can -- vladimir putin with a number of pardons and this one was missing. the idea of the billionaire khod orkovsky getting a presidential pardon. that is a big deal. alix steel and scarlet fu with me. our guest host, mario gabelli from gamco investors and peter orszag is from citigroup, as well as former omb director. "bloomberg view" column this as well. >> i have a sore throat, i go to web m.d., and you wonder why your child has a fever, you go to webmd.
if obama wants to sell obamacare, it goes to webmd. it is making $4.8 million from the government. some senators calling for more disclosures. thank you formd, being here, david. appreciate it. what did you have to do to make money from the government? >> our contract with the government is to provide our health care professionals and accredited education program just to inform them of the details of the affordable care act and how it is going to affect them and their patients. also, a lot of positive and encouraging articles about the affordable health care act. is it part of the deal? >> the affordable care act is a real opportunity for us. empower health care decision-making, we launched a dedicated area in our site where consumers have a company and a set of tools and content to understand impact of the legislation on themselves and their families.
if you are one of the millions of people who for the first time now will have to shop for insurance directly, we provide a set of tools were you can compare plans and understand options. >> i checked out the website and it does not appear to be clearly marked as sponsored content. shouldn't it be part of it? >> all health-care reform center is not sponsored content. >> but you are being paid by the government to write about this. >> the consumer content is not sponsored by the government. our contract really have nothing to do with that. >> you had said that you did not have an obligation to disclose the $4.8 million contract. is that still the case? >> if you look at the educational program on our medscape site, it is clearly marked as it is sponsored -- i i did not see that when actually went to your site. i think what it also tends to highlight, though, the industry is how much competition and how hard it is to grow revenues. are you looking to do more business with the government and looking to have more disclosures? >> we have a robust set of
advertisers. pharmaceutical, consumer packaged goods, health plans, and in certain circumstances, the government, and we have done business with the government for many years. >> carl icahn had a 12% stake, pushing for buyback to offset revenues. -- the fossilsls -- mario gabelli, do you have a sore shoulder? >> no, i made it up. >> i went to webmd -- i have a teary and my nose. it is a fabulous site. where do you want to take webmd after many years of being truly iconic but at the same time a set of jokes? where'd he wanted to be in five years? >> as i said before, over our history we have been empowering our consumers to make better health care decisions and health care professionals. as a result of that, we build the most trusted brand in america. the largest and most engaged audiences.
as health care is evolving we see additional opportunities to grow our business. you, thectors like doctors like webmd? we haveve a site where 625,000 active physicians on the site. >> users trust the site. a great source. an encyclopedia of the digital age. bad -- notdo have a a shoulder, but something else. >> hypochondriacs, people who think -- [laughter] reach a very broad audience. we made the interaction between patients and physicians much more effective by empowering patients with information. ,> very quickly, peter orszag is he lowering health care costs? >> to this point, as doctors and consumers, it is becoming
scarlet fu with us, alix steel, mario gabelli -- and joining us, the author, betty liu. she will change her name just to betty. what is your new book? mario, give me this lovely book. >> mario is in it, by the way. >> good morning. >> mario gabelli does not know it, but he is in the book. >> you are not going to blush, right? thenot in theobit -- not in obit section. program, we have tom carper, head of the homeland security committee and he will talk about all the issues we have been discussing some of the nsa and the findings from the white house advisory panel. pretty stunning. also about the budget he'll -- a and oslo fromaper the fed. a lot of topics. >> that he knew, thank you so much. "in the loop" with betty liu at
8:00 a.m. this morning. >> the week of buybacks -- boeing, $10bs, billion, gm, up to $22 billion. it speaks to them amount of cash these corporate balance sheets have an companies are still reluctant to invest in their businesses. it is perfect would have mario gabelli on to join us to talk about the use of cash by companies. using cash companies to buy back stock or do you prefer they reinvest in the business? >> both. warren buffett has constantly reinvested in businesses. only a couple of small buybacks and has not paid any dividends because he has had the ability to compound the net worth of his company, the intrinsic value higher him about the network based on book yard on the point of view of allocating capital we look at management and say, how do you generate cash flow? what do you do in an inflationary environment, deflationary environment? it is cheap, buy it back, if you
want to maintain earnings-per- share growth, by it back. stockn't we fueling the market bubble because there are less supplies of shares? >> companies will go public and you will see -- you mentioned a 25.5 ilyaing you dollar offering. -- $25.5 billion offering. mysteries of great your world of economics. we need investments to create jobs. where is the investment? as you study this and the people around you study it, is the investment in america is simply going abroad or going into share buybacks and dividend increases? >> there have been a lot of share buybacks and dividend increases. whether it makes sense -- a company can overdo it. evidence does suggest you can overdo cash for share repurchase is. again, it is company by company. >> that is a very good point.
across thegate, advanced economies there is an issue involving the degree of investment in the economies and physical investment, and it will be better -- this again goes back to the secular stagnation question. is our potential output growth as high as we think it is, and if not, why not? >> and lower corporate taxes will make the u.s. friendly -- >> we will be back with more from mario gabelli and peter orszag. ♪
9-they are in third place, 16. i can you be in third place? chairman of the nets basketball team. bruce ratner, forrest city ratner is the company. we will talk to him about commercial real estate and development into 2014. >> this is "bloomberg surveillance." i'm scarlet fu with alix steel and tom keene. our guest host our mario gabelli, from gamco, and peter orszag thomas from citigroup. let's get some company news. facebook shares down more than four percent in the premarket. the company will sell 70 million
shares in a follow-on public offering. about 27 million shares offered by the company, mark zuckerberg will sell more than 41 million and the rest from other shareholders. the stock is valued at $3.9 billion market cap based on yesterday's close. apple kicks off the made in the usa push. the company is taking orders for its new mac pro, being built in taxes with components made domestically. it starts at just under $3000. hulu says revenue this year will hit a billion dollars, a 44% increase. the online service is paying subscribers reached 5 million earlier this year. that is today's company news from the files of "bloomberg west." show -- itite hulu is good for things like a abc.com" but i go to and i do it for free. themes going into next year, there are a lot of choices. >> and some are free and some
you have to pay. >> because of all the washington drama, let's talk about washington for a moment. -- best place to work, this not in washington, despite the explosion of shows. federal employee satisfaction and commitment are at record lows. peter orszag is former director of omb and he says government jobs should not be sold killing. have they gotten worse since the recession? >> that is what the evidence suggests when you ask people. a lot of people join the federal government -- obviously, it depends -- but a lot join with the hope that they will do something and in a polarized environment where nothing is happening that is a lot harder. tomy mom kept pushing me work for the government because it would protect me from the different cycles, the siblings. but this ability -- but the stability has not been there with the sequestration. >> job protection is higher, -- you will have the job but you may not be able to show up every
day. >> this is a "bloomberg view" op-ed piece from dr. orszag. job satisfaction has fallen. >> the cbo was suggest they are also well fed and well paid. >> there is a long standing it andabout compensation evidence suggests that on average, wages are about the same after you control for education and experience in the federal government, but benefits are a lot more generous. the whole package is more generous for a federal worker then and otherwise similar private sector worker. so, that should be good. on the other hand, you have these terrible more row surveys, much lower than the private sector. >> what about the short-term budget? federal workers have to contribute more to the pension.
how does it feel when you are working in washington? in slowly ond military pension, for example. we do have an issue, because a lot of the pension programs have actuarial gaps and a lot have to pay for that. >> i need to bring this to "scandal" again, because alix steel mention it, all these tv shows based in washington -- "house of" "scandal," cards." what most resembles what washington is like? >> i have watched "veep" occasionally -- >> having an affair with the potus and -- >> white house dinner with olivia pope, that is what i remember. "the"veep" is pretty funny. ep" is very funny. what part of it might be true? >> those things happen once
every three or four months but not every single minute. dike anything, it takes an element of reality and accentuate -- like anything, it takes an element of reality and accentuate it. >> they are always going over the same topic and can move forward because of the institutions in place. >> we talked about this before, it restricts -- reflects polarization. good thing. >> it raises a lot of questions anding into the 20 14th 2016, presidential election. peter orszag and mario gabelli, i guess host. it is time to take a look at the short -- stories shaping the day. >> the wall of worry, what we have to worry about next year and what do we do about that? mario gabelli is legendary about that. how do you push them aside? completesically look specific and say, what will a company do over the next five years? commercial aviation, health and wellness organic and natural
foods? for example, the whole energy area. we look bottoms up, where are the values and the bargains. and then management. we are blessed with america with managers who come every day by and large to make money to shareholders -- for shareholders delivering good services and products. if we get the right tax structure and fiscal policies, we are really going to reemerge as the economic leader of the world. orszag, one example, last year we have a wall of worry of europe. draghi stepped up and said we are doing things different in the europe, and the wall of worry disappeared. we can have economic walls of worry and policy can fix it. >> that's right. i think 2014 is shaping up to be moderately constructive and especially in the u.s., as long as policy does not mess things up. worriedry about --
about shooting ourselves in the foot and chinese discoloration, the growth rate falling more rapidly than people -- >> one example, your colleague at citigroup saying, these are the worries about europe but the fact is, europe is doing better. >> doing at her. >> this is our twitter question of the day and it goes to your point, peter, you're concerned about 2014. what is the biggest worry for you? here are some of the answers. peter, to your point, the next answer is, emerging-market economy. chinese real estate market and banking it. the indian rupee and russia with falling revenues. the third one is the all someone zombie to wear to the apocalypse. >> that will make you target number one if you wear a bowtie. >> you mentioned lou rukeyser earlier, mr. gabelli.
optimism wins out. we have seen it this year. we may go down 18% or 20% this year. this has been the most unloved bull market since time began. >> everyone is contrarian. over toyou are heading the radio studio. i know you have dated to break at 8:00 a.m., jobless claims. tom keene will continue on bloomberg radio. meantime, alix steel and i will talk about our agenda. my agenda is facebook. facebook and the founder zuckerberg will sell $70 million -- 70 million shares in a public offering. these companies that are newly listed have to deal with the headache of people selling shares going forward. even though they had the debut and made a comeback, share sales continue to be a hangover. >> facebook had a little birthing pains. the stock was $19 at the end of last year. he is selling some stock.
even martians knew he would sell stock at some point in time. >> really no surprise. >> we don't have any problem with that. i think there are 2 billion shares and he is selling one percent of the company, but he is taking some off the table and paying taxes. he should not get stock options. that is absurd. he should do like the mayor, working for a dollar a day. >> i am looking at nike, also our cover story. holiday themed sneakers of the last 10 days of december. earnings coming out after the bell. analysts looking for earnings percent, sales growth eight percent. it gets 67% of its revenue from these crazy cool sneakers. i have not bought a new pair of sneakers and four years. i use a different brand for my running. but that's ok. what's competing for the same feet, is the pile growing or is it a competitive environment out? >> we want to thank our guest hosts for the the hour -- mario
>> i and cory johnson. >> it is a historic day. record highs after bank started tapering the bond buying program by $10 billion, extended the timeline for zero interest rates. the company founded to sell track shoes, earnings reported from nike. a follow-on public offering for facebook or the social networking company and ceo mark zuckerberg will be selling 70 million shares. most of them belong to zuckerberg himself. pay money will be used to taxes on stock options. what do we read into this? clancy is selling $2 billion worth of stock.