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tv   In the Loop With Betty Liu  Bloomberg  December 30, 2013 8:00am-10:01am EST

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1.3 million americans are losing unemployment benefits. weekly checks for those people have been delivered since the recession started in 2008. the security breach at target has put credit card security front and center. the list of companies who may profit from the changes we pay for goods. -- like stone taking a stake in crocs. also announce their ceo will be retiring at the end of april. we begin the monday morning on wall street. stockmarket bears have been proven wrong this year. some of last year's worst performers stood apart from their peers. looking at stocks in isolation does not tell the full story, but julie hyman will. you have been looking at how stocks fared, compared to other
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assets. what do we know as we look back? >> we know there was some of the rotation that people were talking about, out of the bond market, into the stock market. if you look at the relative returns of stocks versus bonds, stocks outperforming bonds by the widest margin ever on record. >> so pay attention. year, whatto the new sticks out? still a lot of optimism going into 2014. not a lot of estimates that returns will be or match the pace we saw this year. obviously, huge gains in stocks this year. but there is some optimism, especially the signal that the market game with the fed saying it would begin tapering and stocks taking it in stride. the fed, what it was doing,
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what it was not doing. that was a big theme that affected the dollar and gold. that has been a tricky trade. >> a huge underperformer this year. there'sioned the stock does not have -- bears did not have much to hang their hat on, and those lonely gold bugs out there did not have much success either as we did not see the dollar recover. performers?up look at the rotation from best and worst performers. this phenomenon that we tend to see every year. the worst performers of the prior year come back. inreally saw it strongly 2013. the worst performers of 2012,
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best buy, hewlett-packard, pitney bowes. back,uy has come roaring up 239%. hewlett-packard just about doubled. pitney bowes just about doubling as well. you look at the worst stocks this year, newmont mining, peabody energy. a lot of commodity related underperformers. past performance does not predict huger results, but if you want to take the patterns we have seen, you may want to take some of these commodity names. u.s. is on strong enough footing, if there is an economic recovery, this could be good for commodities. >> thank you, julie hyman. certainly outperformed. bloomberg got the rare chance to sit down with eric schmidt to
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see how the internet giant is letting on taking advantage of the new year. the biggest change for consumers is that everyone will have a smartphone. the fact that so many people are connected to what is essentially a supercomputer means new applications, education, social, though sorts of things. now more tablets and phones being sold than personal computers. people are moving to this architecture very fast. the biggest thing that we are sure about is big data and machine intelligence. being able to find people, talk specifically with them, decide what to do with your products, that changes every business will believe. the visit -- biggest disruption that we do not know what will happen is the genetics area. the ability to have gene sequencing in places will yield
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discoveries in cancer treatments, diagnostics, that are unfathomably important. the biggest mistake that i made and google was not anticipating the rise of the social networking phenomenon. in our defense, we were working on other things, but we should have been in that area, and i take responsibility for that. google is hiring, investing globally around the world. the arrival of the internet everywhere, it is all agreement, in that sense. google benefits of the transition of traditional industries, and even when things are tough in the country, because we have a return on investment advertising, it is smarter to move to google, so we win no matter if the industry is in good shape or not. is our innovation.
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how clever are weak, how fast me get systems deployed? we want to do that as fast as we can. blackstone ceo steve schwarzman just announced a $200 million investment in the struggling footwear maker crocs. the minority stake coming in the form of convertible preferred stocks. the crocs ceo will be stepping down around april 30. they are trying to revive their fortunes. some say that it was looking to shop off the entire company, but you have this minority stake from blackstone. cristina alesci is with me now. it has been an interesting story. throughi spoke about it the year, this idea that crocs was looking for an entire buyer.
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that did not happen, so minority stake is the next best thing. >> this gives other investors the confidence perhaps to back this company with such a well- known investor like blackstone. clearly, a lot of work to be done here. the popularity of those rubber shoes significantly declining here in the u.s. blackstone is betting on an increase outside of the u.s., not just in their shoes, but there are other things that they make. growsre hoping that that in the popularity of the brand. i spoke to john mcardle, the ceo, and he is betting big on this expansion in asia. ,hey are trying to get all ages from walkers all the way to 100 years old, buying crocs. is the question for
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investors now about the ceo, who will it be? blackstone will be a part of the decision-making. unusual not to see a ceo come in as we see one going out. to want to give reassurance investors there will not be a vacuum there. see an likely announcement sooner or later to make sure that the stock price is supported. this speaks to the fact that the traditional lbo's are tough to come by. this is just another example of private equity looking beyond to put money to work. >> we talked about the structure, the type of investment, convertible, not necessarily the lbo's of the past. >> they are protecting their downside, getting a cash dividend in the meantime.
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theng an investment before year is out, but at the same time, protecting its downside. with thena alesci latest investment from blackstone in crocs. long-term unemployment benefits expire in over the weekend for over one million americans. democrat's have a new year's resolution to get them back. and the target security breach has put our credit card security front and center. we will give you a short list of the companies poised to take advantage in the new year. records smashed in the new year and in hollywood. behind the stats of the silver screen, when we come back. ♪
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>> you are watching "in the loop " live on bloomberg television. i am deirdre bolton. we will get you down to washington, d.c. he comes over the weekend unemployment benefits ended for one million americans. phil mattingly is with me now. senate democrats want to extend the benefits. does their plan have a chance? it does andlike there is bipartisan support. a rarity these days in
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washington. senate democrats pledged to push the extension to january 6. there is a proposal on the table sponsored by a democrat and republican. getquestion is if they can four other republicans to join them. they need that magic number of 60. republicans are wary about extending this, but it the senate can move this through, there is a chance they can put pressure on this and get an extension to the program. some bipartisan support, remarkable for this year, but what republican voices are standing out? >> from the support side, dean cosigned onto a bill with jack reed. president obama called him from
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hawaii this past week to pledge his support in pushing this when the senate comes back. on the other side, ideologically, this is a tough issue for republicans. they are always wary of the safety net. says the 26 states that offer unemployment insurance, we are ok with that. it is the emergency measure that we have to let go. the key issue here is a little , whichan 3 million jobs were available in the last report, 11 million people looking for them. this is what sent -- senate democrats give for the reason for not pulling off of the accelerator yet. they think this is a fight they can win. overnly doesn't look that
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the holiday season, not extending these benefits, but many of the districts that benefit most are red districts, districts that conservatives hold. 2014 is coming up. senate democrats feel if they can move forward with this, they will put a ton of pressure on john boehner and his conference, even if they are not violet -- ideologically for this idea, they will start hearing from their constituents, and will have to move forward. >> thank you. we are going to bring in another first in for this conversation. the jpmorgan chief economist. am sure you heard what phil was saying. what effect could this have on consumer spending? >> it would be a hit to consumer spending. a lot of households rely on
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unemployment benefits for their spending patterns. in july 2010, extended benefits lasted for a few weeks. retail spending sort of fellow there. if this could last, it could subtract half a percentage point from first-quarter gdp. >> not to be glib about it, but we are talking about 1.3 million americans. you think this will show up in consumer spending? >> it does not take much of a hit in consumer spending to have an impact on growth rates. huge numberis not a when it comes to a $16 trillion economy, but when you take that out of one corker, it could have an effect on growth rates. have you been doing studies, research about which kinds of
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companies, industries could see the biggest effect? are we talking about big-ticket items, clothes? >> it is hard enough to get the less, magnitude which -- which kinds. i think nondurable goods will be hurt more here. >> quick question. the white house council of economic advisors say that these benefits lasting would be the equivalent of losing 240,000 jobs. i know you mentioned gdp. is there any other way that you could quantify what this will mean for the economy, especially in the next couple of months? >> there will be some hit on employment. you could see other
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effects on labor market outcomes. labor market participation rates could fall even further. there is some evidence that people, when they lose jobless benefits, tend to fall out of the workplace altogether and go into other means of paying the bills or whatnot. you could see that decline in the participation rate if we were to see these benefits expire. >> looking at the larger picture of employment, what do you think this means to the pace of tapering? >> one thing this could do, if we were to see these benefits expire, you can see the on implement rate continue to fall at a relatively rapid pace. i think what you see recently from the fed is stepping away
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from using the unemployment rate as the sole source of forward guidance. benefit see jobless issues for the distort the message we get from the unemployment rate, that could be another factor leading the fed to downplay the significance of the unemployment rate, when thinking about the interest-rate hike. some republicans on the spoken to point to recent economic data has rationale for not extending the program. are highlly, numbers in line with benefits, but they are looking at the jobless rate coming down. how do you look at that, is that a fair take on things? , one is a difficult call for congress to decide. we have seen good momentum for growth this half of the year.
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we could get possibly up to three percent. i think congress will have to consider this, which i do not envy. >> what about all the jobs that cannot be filled by americans? there are about 3 million of them every month, because we are not strong enough in math or science. how much does that affect what you see in employment growth? main determinant of employment growth is gdp growth. we need faster demand growth. no interest rates help that. the concern of those on the other side of the debate would be that our unemployment benefits having an effect on labor supply, rather than labor demand.
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>> thank you so much for the time. u.s. chiefase economist. phil mattingly also because from washington, d.c. from cars to clothes, we live in a sharing economy. pictures ofhared ourselves with selfies. some say that if you have not done them yet, you need to embrace the self-portraits. ♪
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>> you are watching "in the loop " live on bloomberg television. you can also watch us streaming on your tablet, phone, and on it is 26 minutes past the hour, which means it is time for on the markets. a pretty quiet day. futures unchanged for the s&p 500. 2013, a big year for stocks. the s&p is up close to 30% for the year. more on the markets in 30 minutes time. in the meantime, here are your top headlines. killed in twoople
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suicide bombings in russia. highlighting terrorist threats across the country, six weeks before it hosts the winter olympic games. is selling a controlling interest in its falling snackwells cookie and cracker business. hobbit" taking the top spot at the box offices this week. it took in over $190 million, beating out five other new releases, including "the wall of wall street." if you need cookies delivered or someone to deliver your new
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year's eve dress, there is an app for that. we follow one of their bike messengers around. take a look. >> helmet on, feet set. just another day at the office for justin. >> in an average day, i might do 15 deliveries. >> he is a professional errand runner, doing chores or people that find him using task rabbit. it works as a marketplace for on jobs. everything from housekeeping to sushi delivery. task rabbit takes a cut of each transaction. >> when i started the company in this sort ofn, collaboration did not exist yet. then, similar services
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have come up. connecting people to share their free time, their special skills, to rethink what work means to them. it is a completely different take on the labor market. now operating is in 16 cities and is hoping to go abroad. they can hire on a temporary, ongoing basis. task rabbit can bring some into their office every week, every month. >> for now, only 10% of people toenough work on the site earn a living. everyone else are part-time. today is picking up some jews, delivering cookies, and even buying a diaper bag for
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an expecting mother. i want, as long as i stay professional on the task. just one example of the sharing economy. kearns is with me now for more on this sharing economy. the labort, sharing force. pretty flexible for the labor guy. where else do we see this besides airbnb and zipcar? >> we see it all over. every day you hear about new ways of putting people together to share something. the company out in california that tracks this has an estimate that there are a total of 200 firms doing this with about $2 million in backing. we all know some of the big names but there is so much percolating right now, it it
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seems by the end of next year, those numbers could be multiplied. >> how many startups are involved in this sharing economy? is hard to say. one of the things that is interesting, when you go out of the economy world and you start about the people toects of this, and you talk economists on wall street, it is something that is not well tracked yet. it is still new and novel to those that follow this. gdp expand with a sharing economy, or does it take a hit? , maybe ise of zipcar do not buy a car. it is not necessary for me to buy a car. numberis a huge
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calculated by the commerce department. it is a $16 trillion number that tries to take in everything, but that does not really reflect the way that things are happening. when it measures capital goods, like a car, it measures the value of a product they cannot have a factory. it gets more complicated when you talk about measuring a car that is rented out as part of a fleet or sit in someone's driveway, that someone else can use. it is an evolving part of the economic trade. there is an economist at nyu that has done a lot of work on this. years this in five could get to one percent of the economy. the numbers are still in the billions, still a small share, but the pace of growth is fast. >> changing the whole dynamic.
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task rabbit with chores, zipcar with cars. some people say big brands, such as hilton, will be affected. >> that is something that we see. thisis something where tends to make sense. the second most valuable thing a company has, but it is usually idle 20 hours a day. connecting cars with people that do not want to babysit it all the time makes sense. some of the biggest car companies in the world are doing this. imler hasr -- da ,omething called car to go where there are little cars parked around the city that you
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can go and find. uber has had huge growth, now valued at $3.5 billion. backing from google. general motors is investing in what is called reallay ride. bmw is also working on a car sharing program. >> the bigger firms will need to figure out what is going on around them. thank you for joining me on the sharing economy. when we come back, security breaches to missed deliveries. you how they will try to make it up to you. why experts say tim cook is being rewarded when shareholders are not. and a lot of movies broke records. we are back with a new strategy
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to get you to go to the movies. ♪
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>> 2013 was a record year for movie ticket sales. 3" areies like "iron man a big reason. i feel like there is a big sequel theme this year. scarlet fu is with us. about recordlk years, only by a small amount. domestic gross will surpass last year's record of $10.8 billion by just one percent. just barely but a new record high. is studios spaced other big releases. they figured out, we can all win in this. as well, there are more movies
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that made at least $220 million in receipts. ticket salesrget, are more expensive in general. surprised, for some stupid reason, every time i go, they are more expensive. get better seats, sounds, not sure about the food, but they have upgraded their experience. in terms of the best movies of the year, the sequel theme is strong. more of the same. >> it seems to work here and overseas. despite these blockbuster budgets, not every movie has been a hit. what was the worst? comes toone ranger" mind. it lost millions of dollars in the theater. three for it and it was
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hours of drawing out this nostalgia. another big dud was "after earth." that was a sony picture. down," another sony release, did not do well. did quite well with the help of the special effects. one thing that people are looking forward to next year is "jack ryan." there have been a number of actors that have taken on this franchise role. pine taking over now, catering to a newer generation of young girls.
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men" is another one that people are anticipating. this is a george clooney film featuring matt damon. i am sure the studio executives are happy. thank you very much, scarlet fu. from movies to pictures. 2013 will also be known as the year of the selfie. social mediafrom expert randy zuckerberg. and the target security breach causing a lot of concern that consumers. short list of companies that are poised to benefit in the new year. ♪
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talking about it even before the president made it a household name, and the word is not going away. selfie is webster cost is webster's
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dictionary word of the year. >> i do not have a problem with the selfie. it is a way to capture your self before history does it for you. this is the way that history used to survive. norman rockwell painted a selfie of him making a selfie. if we are going to indict ourselves, we have to remember the role of the selfie in industry. twitter makes you post a selfie when you sign up. if you do not have one on facebook, it will remind you. instagram is the house that selfies built. the selfie that is my twitter icon was taken at a photo booth at a wedding. my profile picture is me walking away from the camera with a
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child on my camera. these are just ways to imply that i am too cool for selfies. but you cannot be a part of these websites without making a about how you want to see the world of you as. when i am done with his video, i am definitely going to put it on facebook to see what my friend from high school said. our narcissism is the currency that keeps sheryl sandberg happy, but the rise of the selfie has nothing to do with the decline in humility. it is just a business strategy, and it is working. looseew weeks ago, betty book with social media expert randy zuckerberg, who gave some lessons on etiquette. word of thee is the
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year, a global phenomenon, taking off in every aspect of our lives. our incessant desire to photograph every moment of our lives. it was a matter of time before our global leader started to get in on the trend as well. >> there was this great presentation i saw a couple of years ago that said if you are over 30, you think the camera is on the back of the phone, but if you are under 30, the camera is on the front. it is funny, because the selfie has always been around. h painted self-portraits, andy warhol popularized itself photographs. but it was not really until the iphone 4 that it became a global phenomenon. this has me thinking, there
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are these new paradigms of how you are supposed to behave on social media. something want to do that will get you a lot of flack, like we saw with the president. what are the do's and don'ts with social media? i am a big fan of documenting an important moment with your eyes and heart, not with your phone. if you must document it, take stock of what is going on around you. is there something going on more important than myself? a few occasions where you definitely should not take a selfie is in light of a tragedy. if you are posing in front of a sonsreck, a la romney's over thanksgiving, if it will
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grow somebody out, overly romantic public displays, and my number one, never ever while driving. you see a lot of people taking selfies while driving. a huge no-no. >> when we come back, congress returned from vacation next week. one issue lawmakers will be tackling, how to tax a digital goods. you may pay less at the app store as a result. we will tell you why when we come back. ♪
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holidaythough it is a week, there are deals being announced. earlier we announced blackstone will be investing in crocs. we recently discovered pain capital will be investing in bob's discount furniture. her steed unless she is with me now.
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this is an example of pe firms having a lot of dry powder. they seem to want to get the deal done before the year is over. alesci is with me now. >> we have seen a lack of deals in private equity all year long. you mentioned bob's discount furniture. this is one private equity firm selling to another. these are not deals that investors in private equity are necessarily in love with. if you are an investor in one fund, and it is being sold into another fund, you are probably getting the same asset at a much higher price. standpoint, they are getting out of a deal that they have been in since 2005. bain capital is betting on
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housing recovering and people buying new furniture along with it. is wee downside with that have seen an uneven recovery when it comes to the housing market. certain markets are recovering more than others. >> we have seen a lot of pe firms traditionally in retail. we have seen other examples where one pe firm is a seller and another is a buyer in retail. >> retail has been a mixed bag for private equity. you have had some homeruns but you also have some private equity firms misjudging the retail cycle. that is the danger with retail. you do not want to leverage a retailer at the moment where consumers are losing confidence. looking at some of the consumer confidence figures coming out, unemployment numbers looking better. all of that is giving them comfort that they can add some
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leverage on this deal. considering it more of a play on housing. christina, thank you. our deals reporter joining us on bain capital buying bob's discount furniture. it is 56 past the hour which means it is time for on the markets. higher, if you want to be optimistic on this monday morning. the nasdaq and the down very close to that unchanged line. keep in mind, as we head towards the last trading week of the year, s&p 500 up 29%. when we come back, christmas made the over. the deals are not. retailers want you back. how they are making their best effort to get you in stores. and for the first time in four years, apple stock not
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performing dosh -- not outperforming the s&p 500. ♪
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♪ >> welcome back. you are "in the loop." weekly jobless benefits for 1.3 million americans expired over the weekend. 400 and $50provided checks to the unemployed after state benefits ran out. tim cook, getting a raise, a two percent increase over last year with an increase in salary and the rest in nonequity incentive plans for compensation. minoritye taking a
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stake in crocs, investing $200 million in the struggling footwear maker, announcing that their ceo, john the carmel, will retire at the end of april. rolling out post holiday sales, deals, and promotions, trying to get you back. we have an expert right now who will tell us whether or not it will work. mark is joining me now, the author of "bargain-hunting," how to shop and a discounted world. are these big efforts going to pay off? are they going to make is go in the stores and buy things? >> i think the retailers are all the bid desperate. we are seeing 75% off as a price of buy-in and for the first time. is it going to pay off for us? yes, we will get cheaper prices than never. i think that retailers will start having real trouble because they are teaching us to expect huge discounts.
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>> of course, there is the margin squeeze. how cheaply can you sell goods? the trade-off here is 75% off is going to get me in the store and then i will buy seven extra things that i did not intend to buy. that is essentially what walmart is, right? >> it is a vicious circle. we have shows like orders, storage wars, the shows are just about stuff. we should not be trying to buy more, we should be buying right. too much stuff for us to buy. >> that is the lower end when i think about discounts. jcpenney, walmart, target. what about the others? i know you are a luxury expert as well. they do not discount at all. seems like a higher the velvet rope, the better. >> this is fascinating, a lot of luxury brands need to cross their fingers. all -- other than louis vuitton,
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there are always deals to be had. because there are not necessarily deals on everything, but do they have a sample sale? absolutely. >> they do discount, they just are extremely quiet about it. we were talking about that, over the weekend a friend of mine was saying that chanel is trying to make their bags harder to get because they feel like they have been scooped. as you said as well, there is actually no waiting list. people think there is, but there is not. >> there is an amazing book called bringing home the birkin about a man who was a birkin dealer. if you spend enough on scarves and knickknacks, they will magically open the door to the basement. the idea of a waiting list is a misnomer. chanel is hiking prices. those quilted handbags are identical but are twice the price from five years ago.
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like there is that appeal to snobbery. it is not expensive enough, people do not feel that it is enough of a treat or a reward and suddenly the mentality changes. >> absolutely. the more that it is a status symbol, guilt by association, you feel better by spending more, retail shangri-la for them. >> we have been talking a lot about this idea of the sharing economy. how does this change the way that retailers operate? if you want a chanel bag, you want it and you do not care, but there are websites that let you borrow or buy secondhand. is that going to change how business runs? >> the big issue with some of the consignment buying is there is such an issue around fraud, the issue around super fakes, the fakes made in the factory in china and have slipped out the back or, they are the real thing, just not legally. once you start having problems
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with authenticity, that is the real issue. >> you see that as a much bigger challenge or game changer for the retail industry, for the luxury retail industry than the so-called sharing? >> absolutely, faking is a looming problem. as the industry expands there are bigger and bigger it -- bigger and bigger incentives to create fakes. fines are so minimal, you get a slap on the wrist and you pay the money. >> marcus, thank you for joining me. mark ellwood, joining me there. moving and shaking this hour, the netflix ceo, reed hastings, the streaming subscription service will be purging thousands of titles from its database beginning this saturday, the goal is to make room for new content.
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it was announced by reddit sleuths on saturday. what is going away? likeeasons of television, "mr. bean," and "kids in the all." no word about "breaking bad," but there are people in this newsroom at least to hope it stays on for a while. rick break to take, when we come back to massive target eight a breach. a big problem, what happens when privacy information gets into the hands of hackers? out with the old, in with the new. the biggest names in wall street and washington, sounding off the year ahead. ♪
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"in theme back to loop." i am deirdre bolton. from the tsa to the nsa, the government has been ramping up security measures. there is a large debate over how much oversight is really
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necessary to ensure public safety. >> we missed a foreign call coming into the united states after 9/11. they said -- how do we fix that? this is how they said to fix it. if it goes to the private companies, you will have a government mandated scheme? no such oversight. >> the recent data breach of the target credit card system is a reminder that the hacker economy is alive and well. according to multiple reports, some of the credit card information actually made its way to the black market. joining us with more, our expert panel from washington, d.c.. a former nsa employee is with us, as well as our senior west coast correspondent. jon erlichman, i want to start with you. hackers have just as many tools, sometimes at this point someone say they are ahead of the good guys. >> you could definitely make that argument here. the target case specifically, this is not just someone
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stealing your credit card and going on a shopping spree. the cards attached to them make their way immediately to the a veryarket, sophisticated market. often you hear about these data breaches affecting millions of people. dell has some amazing statistics on this. they find it if you take a visa or mastercard to the black market, that is worth three dollars or four dollars, but if you can do so with sensitive data, which was targeted as part of this targeted data breach, you could get a very valuable piece of information, like eight of birth, which allows the card users to skirt the security issues that are generally attached these card. absolutely, this is a very sophisticated world of hacking we are living in. >> when someone buys cards and card numbers on the black market, what happens? do they go on spending sprees? are they more crap -- more quiet so that they can get more with
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more frequency? >> unlike us using a debit card or credit card, they are often using wire transfers. there have been examples of people using bitcoins to buy these different cards, but to answer your question it is generally about moving the money quickly. you obtain the credit card, you might go out and buy a gift card, with the gift card you might die actual goods that you can sell somewhere else. the name of the game is about trying to keep the authorities for figuring out where you are and moving the money around quickly. >> to your point, gift cards are helpful in that. which companies may benefit from the increased focused awareness of data breaches? of people have probably heard about smart card technology in the last week, the idea of using credit cards and debit cards that are better at keeping hackers away. they are used in a big way in europe. less so in the united states. there are companies who have led
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in this technology with these types of cards, but they have not tried to break into the united states. it is hard to say that just because of a data breach like target suddenly there will be a new opportunity. stay with me, john. mark young is going to join me now. he is a security expert from washington, d.c., president of general counsel who helped to craft cyber policies when he worked at the defense department. mark, based on what you just heard from john, are we going to see more of the technology? in other parts of the world coming to the u.s.? >> i think that is very likely. i agree with everything that john said about the active hackers trying to come after the card numbers. one thing i would point out is that even if we go to a more european model with smart cards
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and rfid, that will not necessarily protect the information stored elsewhere in the databases for big companies. for example, hackers are going to go after the information wherever it is i. the target reach and the t.j. maxx breach from a couple of years ago, these incidents go after transactional mechanisms. we have argued for a number of years that this is less about the technology in place and more about the humans behind it. >> what about this idea of if the government were ultimately -- if companies were forced to -- obviously some technology companies have been reluctant to do so -- it makes them potentially more vulnerable down the line? you have one conversation about holding onto that data and on the other side you have these data breaches that companies are concerned about. how do you balance those things? >> that is tantamount to saying
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that banks are vulnerable because they store money. the same issues exists here with these corporations that store your personal identifiable information or health care information. of course, they are vulnerable and what they should be doing is increasing their methodologies and enhancing those methodologies. this is not a technology problem , this is the human policy problem that can be addressed by better thinking. bestrk, what is your advice, then? how can the average consumer protect themselves? >> we should be aware of some of the information we provide to companies like amazon and google . we do this out of convenience, for good reason, but we should be asking the western of how they go about protecting their data and take our business elsewhere if those standards do not meet our own standards of how they should be protecting our personal information. >> do you see companies embracing what you would consider best practices?
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>> i come from the department of defense, so in my opinion we really set the standard for the protection of our own data, information, and operations. so, i see a slow progression of better standards. we have a security framework atablished through presidential executive order that is marching us down the road to better protection, but without a change in attitude about this being a person problem, a people problem and not a technology problem? we will still see the kinds of breaches that we saw in the target reach. >> do you see a lot of different companies, consumer different -- consumer driven or defense companies -- is there a sharing amongst executives about how best to protect the data they do have? not at present. there are a lot more corporate priorities that get discussed in the c suite.
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the issues of cybersecurity are beginning to migrate more into those discussions, which is good. there will be more sharing and we doing for is that kind of discussion and the implementation of best practices along with the more human approach to a better understanding of who is actually interested in the data, what data you have, what technical assets you haven't waste to protect the information, and how you can operate it. those are all important. i do not mean to suggest that technology is not important, but how you use it is much more important. >> we obviously all get used to using certain passwords, certain pin codes. we probably stick with them for too long. how often should people be changing their password to protect themselves individually? >> it is driven by the importance of the data and how secure you want it to be.
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i would recommend at least once a month for the changing of passwords for like your bank account and online purchase sites. that might be a little bit cumbersome for some folks, but the adversary, hacked of us, other nationstates coming after that proprietary information, they operate on a 20 47 basis, so you have to do your own calculus as to how often to change that information. the more frequently, the better. >> thank you for your time, mark young, joining us from brendan analytics. and our own senior west course co-is -- correspondent, jon erlichman. when we come back, apple is beefing up plans to develop systems to search for quotas using voice tags. also, beer maker carlsberg with brewing opportunities in asia. how is this company ending for breweries in china? ♪
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>> here are your top tech stories from bloomberg west. based is adding on voice- photo sharing, filing a patent application in march allowing the searching for tagged photos on smart phones using voice tags and the new future -- feature may be integrated into syria. google has won a new battle claiming that street view violated federal wiretap laws. in may of 2010 the giant said they mistakenly gathered giant from -- gathered information from open wi-fi networks as they captured images of roadways and houses. audi, the company will be working to develop in car entertainment interim -- in car
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information entertainment systems based on their android software, it will be announced next week at the consumer electronic show. we are back in just two minutes. of course, you can get all of your latest news from "bloomberg west." we are back in two minutes. ♪
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>> welcome back. you are "in the loop." 26 minutes past the hour, meaning it is bloomberg television on the markets. there is a snapshot of your futures right before the opening bell. as you can see there, right along the unchanged line. here in the last trading week of 2013, the s&p 500 is up 29%. in the meantime we want to bring you the top 10 trades that you need to know about today. julie hyman is with me, as is our senior market correspondent, scarlet fu. i will kick things off with number 10. facebook tom of a social network, dead and buried for people in the u.k. according to a social media study.
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research from london shows that children and teenagers are leaving facebook for newer sites, like twitter, instagram, and step chat. ,> among belize international kraft foods is selling its bid in snack well, the cookie cracker bit -- cookie cracker brand fueling the low-fat craze -- phase two decades ago. >> number eight, cooper tire and rubber company dropping their $2.2 billion merger with apollo tires, saying that financing for the heel is no longer available following evaluation dispute with the company. is numberechnology seven, shares rallying to a new high, extending last ekes gains, extending ownership agreements, a subsidiary for the chinese expecter, they say they to deliver 2800 electric vehicles in the fourth quarter.
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>> number six, a french drugmaker failing to win u.s. regulatory approval for its multiple sclerosis drug, failing to capture a larger share of the market, centipede said they disagree with the fda decision. a 100sung, debuting tenants television that is four times the resolution of standard i definitely -- 100 and 10 inch television that is four times the definition -- resolution of current high definition television. a breast-cancer agency that administers medicare benefits said they will lower the rates for their services. piper jaffray companies price tap -- price target on the stock. nation's largest producer and distributor of eggs, behind brands like a gland best,
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reporting an 83% jump in second- quarter earnings, results attributed to lower production costs and increased sales of specialty eggs. number two is twitter, posting their biggest decline on friday since their trading debut in early november. the stock valuation ignited the drop, continuing to fly in the premarket. -- >> number one, cross fit shares surging after announcing that john mccarver will be retiring this spring. blackstone, investing $200 million in the maker of colorful last the cogs. said that they would increase stock repurchases to $350 million. the opening bell is just moments away, but joining us from chicago in the meantime, todd horwitz, the founder of average joe glad to have you with us. what do you think for today?
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i think a lot of traders are trying to close out the year without much trouble, right? >> that is right. the next few days -- >>[opening bell] to 30% of at 25% opening volume, the market will likely drift higher. , not much probably for the next couple of days. >> look out further 4s if you will. when things start to settle out at the end of the year, people come back to work, what do you think will be the big focus? tapering is behind us, what is the next big thing? >> tapering is kind of behind us, the next big mark will be the jobs number one week from friday, along with the fed meeting. we are still very data-driven by the federal reserve. supposedly it is all linked together.
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i would not be surprised. although to be fair, i have been on the sidelines and i think they could jump higher and at some point we are building a bit of a bubble and they will be focused on the unemployment number and the fed and i think it will start to move from there. >> to catalysts to note. thank you very much, the founder thereof from there we bring in jim, the chief international strategist -- strategist at scout investments. his call is that european stocks will come to life in the new year. glad to have you with us this morning. why do you think that? it is of all the support from the ecb? what is going to draw these european stocks higher? >> two things are going to help. basis, theiscal drag governments collectively are in better shape than they were. they are not getting worse, and
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a sense. the french and spanish economies are basically flat at this point , a vast improvement over where they have been. the fiscal drag should be less. the monetary drag should also be less. we think there is going to be a bit more monetary stimulation. putting moreank money into the system. the ltr oh, they have been taking money out of the system for year-and-a-half. just a quick that, have a better fiscal balance, i think that europe is in better shape. thinklowing up, if you there will be less support from central bank and from government , what if the fed tapers? how was i going to affect monetary policy decisions in europe? >> europeans are going to be a little bit concerned that if we taper and our interest rates go up, that will make the dollar more attractive.
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in turn pushed down their currency. i do not think they will be upset about it. they are generating their own liquidity. they are not like an emerging market living on the excess liquidity of the western world that sloshes in and out of their economy. i think that europe can take care of itself in the context. >> julie, you have been looking at one particular company? >> yes, this is a provider of mobile payment security. if you look at how cards are structured in the european union and europe generally, rather than finding for them, you enter a pin, you have the sim card inside, the security is within the card itself. here is how they have done, year at 20%, amsterdam outpacing a little bit that stoxx 600. you would think that this would be a big growth area and i did not know a lot about the company, but i started to look
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at revenue growth over the last couple of years, estimated it is not huge considering what one would think is the potential for this sort of thing, especially given some of the problems we have had with payment security as evidenced by the recent situation at target. >> z you see any -- as julie just mentioned, an amsterdam- based company that we heard , some of the european practices may be imported here to the u.s.. how much here is technology a part of your thesis for european stocks going higher in the new year? >> not particularly the thesis itself, but we think they are particularly attractive and the flip side of this discussion about targets and the magnetic cards, the information getting swiped, it is harder to swipe information off a card with a chip embedded in it. and then you also have to put in a pin.
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has anybody ever checked the signature on your credit card? system and there are 80 countries around the world using the chip and pin technology. it has just now been introduced into china, it is just now coming into this country. we are kind of behind the pace, so these could be good years for the chip does this and cards. they also make the chips in the cell phones that you can use for electronic transactions. we think that the estimates are ,oo low going forward particularly from this country, where all of a sudden we are waking up that we have got to do something to catch up. roll thispposed to technology out between now and 2000? we think that that is going to be accelerated. to japan,rope scarlet, i know you are looking
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at the caterpillar of japan? >> the world's number two maker theirstruction equipment, stocks have actually outperformed most global competitors, primarily because they get a boost from the weak yen, but the reason to be bearish is global. toand is depressed with cuts spending plans. the weekend can only help so much. talked much about asia. we have focused primarily on europe. the japanese caterpillar, as we call it, would obviously be up play on raising growth in asia. >> we just think of that is a bounceback, in a sense. caterpillar is one of the great well-run companies of the world. --,lso like to mock soup two -- kamatsu. if you do a chart overlaying them, their trends have been the
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same. we think that the worldwide economy, as it expands mining is going to do better than people think it will. it will not be the boom days from several years ago, commodities will not be going through the ceiling, but we think that it has a three with a seven percent p/e ratio, so we think it is a good comeback candidate. >> jim, thank you for your time, your thoughts and ideas there. jim joins us there from scout investments. when we come back, the for your hot streak at apple compared to the s&p 500 has ended. we will tell you what that means for tim cook and his compensation. way ofing digital he is life for most of us. but a challenge for lawmakers? how to tax them. what is one of the bigger discussions congress will have
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when they return from holiday? ♪
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>> lawmakers will push to ease the tax burden on digital products. there is a bipartisan effort underway in the house. phil mattingly is with me now. what is the goal here, exactly? >> the basic idea is to try to cut down on duplicate of taxes. companies and government officials have kind of an faced with a patchwork of state and federal regulations, something that has proven problematic for both. representative lamar smith, a senior republican, is pushing a bill to try to streamline things a bit, defining exactly what digital goods are and limiting the taxation to the state were the customers actually registered. for example, say that tom keene is sitting in virginia and dying to purchase the new beyoncé album? that comes from a digital
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retailer based in california with a computer server located in texas. there is a chance at all three states could try to claim jurisdiction, something that has caused major headaches for online retailers. lawmakers are trying to create a structure to better define how these products are treated and take some of the headache away. this idea gained traction last year. what is different this time? >> the big thing right now is the big row -- the big roadblock of the states. the national governors association came out against this will do good reason. they estimated that this would cost them about $3 billion in revenue because of how would go into place. lawmakers have tightened the definition of digital goods to address the issues that the national governors association was pointing to. they hoped that that would start to clear the way again. bipartisanship has a long way to go on this bill, but they have a powerful lawmaker in ron wyden.
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there is a possible future here. >> phil mattingly, thank you very much, joining us from washington, d.c. on this potential digital legislation. of course, congress has more -- as one more week off. 2013 was not great for apple investors. the stock is ending its four- year streak of outperforming the s&p 500. what does that mean for the ceo? whoegin with jon erlichman, has more now from los angeles. seems like tim cook is still getting paid, investors did not have the best year. ? >>e does this matchup people have spun this in a few different directions. the broader takeaway is despite the fact that it was up a little bit, it was not the broad pay package of some ceos. tim cook is the first person to say that he was frustrated with stock performance. he was addressing it at the annual meeting and here we are now talking about the struggles for apple stock. when compared to the broader
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markets, a lot of technology companies, you could argue they are having a tougher time than apple. why is that? especially when you look at the documents and what the board thinks about what he is doing and the revenue and profitability of this company, you know, you could go in a whole bunch of different directions. whether it is that people are waiting for the next big thing beyond iphone, even though they just unveiled a whole bunch of new ones, or if they are more excited about the stories from other minis. >> apple has been the target, let's say, of some activist investor attention this year. carl icahn was one, saying that apple should be buying back millions in additional stocks, so far they are not doing it. >> late on friday we got some of , for the first time, some commentary from apple on saying -- thanks, but we will follow our own path on this, putting out a big document ahead of their annual meeting saying that
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they will have this issue on the agenda. do investors want to see this massive buyback by the company? the board is urging investors to vote against this. apple is already in the process of returning a lot of investor money through buybacks and dividends. that was an interesting development to see. >> stay with me, nick thompson is here as well. nick thompson is of course a bloomberg contributing editor and the editor of "the new yorker." said, there are all kinds of ways to spin this, what is your take? >> the first is that tim cook will be fine. he was given one million stock options over the next eight years. he changed the terms in june to something that would be tied to stock performance. not do it, they are investing a little bit less this year, but they still will be making hundreds of millions of dollars down the road,
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assuming they keep their job. is why their salary and total compensation came to $4 million. john'sll right. >> to point, apple is a hugely successful company and tim cook is not making as much as some ceos. >> well, he is, actually, if you look at it in the investing term , somewhere around $70 million this year. is tim cooktion is, doing a good job? a lot of people are questioning that. people think that he is not doing nearly as well as steve jobs. on the other hand, they had a pretty good last six months. they did not put out any massively innovative products, but they did iterate pretty well with a very solid market niche, even though they are giving a lot of ground to android at the lower end of the smartphone market, with interesting questions coming up next year,
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including the cash on new products. thisere is always comparison, right? that tim cook has to face that heers do not, in that followed steve jobs. >> i think it is really important. i was just talking to attack ceo last week, that was the commentary where they used to sit around the boardroom table and asked the question -- what would steve jobs do? theyhe question is -- are asking the question about apple or other companies? they have had a big stock move this year. we talked about amazon drones moving into this area or that area. jeff bezos, what is he thinking right now? a valid broads question to ask, despite the fact that apple continues to put out some very aggressive financial numbers. >> bringing it back to something else that john mentioned, what about this activist contention?
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these are some pretty big names. >> they are saying that apple has an ungodly amount of cash, they need to do something like you to meet. i think that that is not a huge philosophical question for them. they will either give back or keep it on hand. carl icahn has these strange ideas that they should borrow $150 million, even though they have vast amounts on hand. the real question for tim cook, john is absolutely right, has apple transformed from a company that can continue to produce and do well to make products that are good but no longer be the massively innovative company that everyone is scared of? do we think that will no longer happen with apple? maybe. is that ok? maybe. it does make his job more collocated. >> thank you very much, bloomberg contributing editor and senior west coast correspondent, jon erlichman. you can check -- check out the
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whole team every weekday at 1 p.m. eastern time, right here on bloomberg west. we are back in two minutes with more "in the loop here ♪ -- with more "in the low -- in the loop." ♪
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>> time for global outlook. in russia, 14 people died, 28 were injured as a man detonated duringon a trolley bus rush hour. it followed a similar attack that occurred yesterday. the international house of pancakes announced today that they have opened up their first restaurant in saudi arabia. it is at this restaurant that they will brand their northeast region. carlsberg, boosting expansion in asia, the world's fourth biggest brewer sangha they accepted $1 million to buy each brewery. the idea here is a play on the expanding population in china.
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we are back in just a few minutes with more "in the loop." ♪
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>> all right, well, we do want to give you a quick market check here. the dow, s&p 500, nasdaq, pretty close to unchanged. you can see that on your screen. one thing we are focused on as 2013, just ae year quick reminder, the s&p 500 is up 29%. most traders are probably trying
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to get out of the year fairly quietly. in the meantime, brad bender is here. brad, you have been monitoring all kinds of things for us, but moving away from what i have been talking about with stocks, you have been watching oil. what is going on there? >> we got a pop of $100 for the first time since october in our inventory with withdrawal in numbers. that took traders by surprise, at the end of last month the talk was all about supply and now we are talking about lack of supply. we are starting to see a little bit of a buildup of geopolitical tension again. libya is back in the news. we had the violence in lebanon and more coming from syria. >> there has been this tremendous change since november? what happens next? >> next everyone is looking at what is going to happen out of
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africa. we have libya and sudan, the situations there. from a technical perspective the charts are telling us we are back over the 200 day moving average. moving in a bullish direction. it is of course going to be a quiet week because of the holiday. that is for traders are focused on. >> dings are pretty tight until friday? >> if you look at 2013 in perspective, if you take out the pop we had because of syria, it has been in the $10 range, which was reflected in the options market that we are seeing now. the oil they closed at its lowest level ever since they tracked the gauge in 2010. tights are looking at the range in crude and not necessarily seeing anything unexpected happening in the
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future. >> what is the range? sounds like 98, 99, up to 104? >> right now. looking back through the year, probably more like 90 to 100. there is definitely chatter out there on trading desks of seeing this move up to $100 and reversing above this level. on the downside, getting below the moving average, traders are looking at a possible 96. >> the number one surprise to you from this year? to $98,crude is closer $99 tomorrow, we will have the highest yearly close of crude oil in history. counterintuitive. all we have been talking about this year is supplied, supplied. you withgreat to have us. thank you for joining us, greg
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bender joining us to look at options, of course, in the oil market. well, that is on the markets. more in a few minutes. in the meantime, "market makers," is next. ♪ . . . . >> live from bloomberg
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headquarters, this is "market makers" with erik schatzker and stephanie ruhle. >> a deadly terror attack in russiae with the -- in with the winter olympics is weeks away. >> we sent out exclusively with gary gensler just days before he retires. >> washington is buzzing as congress works its way toward a tax on internet sales. we will dive into the details. >> good morning. it is monday here in new york city. you are watching "market maker " ." i am erik. >> i am scarlet fu. stephanie is out. on to the top news stories from around the world. the ceo of


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