i welcome to "lunch money." am adam johnson. let's take a look at the menu. fort goes global with the new mustang. what is the roadmap for alan mulally? york's losers face off. it is a hard sell. alanrld, china -- greenspan says bitcoin has a bubble written all over it. and two kings of rock -- their stuff is on the block.

unveiling its 50th anniversary of the mustang. that is happening today, all over the world. this is the first time that they will sell outside of north america since 1964. over one million people on a mustang in the first two years. ,ew features -- lower roof wider wheelbase, and a more efficient engine. that is a first since 1986. what people really want to know ly becomellen mulal the next ceo of microsoft? we get a chance to hear from the horses mouth. you told the board of ford that you will stay at the company. are they asking you again to renew your commitment? >> i have no changes planned. >> let's try again. fall, cant it next you tell me that you will still be in the coc?

>> i love serving. >> you always say you will stay until the end of 2014. >> i love ford and there is no change in the plan. >> that is the company line. good for ford, bad for microsoft. people really like alan mul ally. >> he has done an amazing job. one i brought him in, there was tremendous skepticism. i remember one reporter said to me, you just signed the death warrant of the ford motor company. i bring in a non-card guy. he has done a wonderful job. part of what we have done is build a really strong team. as good as he is, we knew he would not last forever. >> i know him and he is a trophic leader. he excites people. the question that you asked -- does technology fit? doesn't

stretch beyond his capability? >> he says that he expects to stay through 2014. he is dedicated to ford. we will continue to move forward. and the fordulally crew want to talk about is the new mustang. >> it represents the heart and soul of the new company. day. a really big 50th anniversary and we could not be more happy to present this. the mustang has universal appeal. to put it into perspective, it has over 5.5 million followers or fans on the spot. over half of them are outside of the u.s. in the four corners of the globe. it has universal appeal. it ignites a sense of freedom and optimism. it is very consistent. it transcends genders, demographics, and nations.

>> allen mullally says it is part of the one afford plan that was put into motion -- one ford plan that was sent into motion years ago. >> also, to make something affordable. >> which was the idea of the pony car in the first place . world's fair,the they introduced the first mustang. it changed the auto industry. bowman was a great fourth car, -- it was a great driving car. >> you could not get in europe. i always wondered why. now, we are designing our vehicles to serve all of the markets. >> the thing about the mustang behind us, left-hand drive, right-hand drive.

everybody can now enjoy the mustang. >> i instantly thought of this as the culmination of your one ford plan. you got there and now i can be sold around the world. another one of your legacies has been to boost fuel efficiency without losing power. talk to me about the four- cylinder engine that provides more power than the v6. >> we talked about the ego boost. one of the options -- three different powertrains. one option is a cylinder ego boost. you get all of that wonderful torque. it has a 20% improvement in fuel efficiency. >> how many mustangs do you want to sell? >> we will not share -- >> you sold one million in the first two years. >> the market will decide how many are sold. we are so excited about the response. this is with the world is wanted for many years. now we can deliver this mustang

around the world. at the end of the day, the mustang has now but out of the corral. >> as an engineer, you're an engineer, right? were falling all over themselves about the live axle. the one poll that connects the two wheels. people could not believe what a great job he did. nowadays independent rear suspension. it is like water cooling a porsche. it is unheard of. >> not only do we get to do independent rear suspension, now you can select the ride and performance that you want to have. you can change that to me your desire for that day. >> have you driven one? >> i have. it is absolutely exhilarating. you get the car you want and you can afford it.

it is a great drive. >> is it a margin driver for you guys? i said is the most important car since the model t and he said what about the f-150. >> you look at this lineup noun, -- now. now, from ford, covers all of the market segments, from small to large. the mustang is right in the middle that family. it is the number -- another member of the family. >> what do you think about your market cap? >> i think ford has come a long way. the most important thing that we do is to stay focused and make the best cars in the world. we are growing our operational efficiency. >> when can i get the keys to one of the used to drive it? >> i know you have been looking

at it carefully. we will get you into one next fall. >> next fall? >> the color of your choice, automatic. >> i would definitely go with six speed. >> what color are you going to choose? >> i like this great. -- grey. >> so who owned the first mustang? >> she was 22 and got her first job as a teacher. she wanted a convertible. i said i have a new one in the back. he took her to the back and took the cloth off. it was in 1955 mustang. he sold it to her and she drove it away today's before it went on sale. she was driving along and people were stopping her.

everyone wanted to see it and she felt like a movie star. that captures the essence. global, gmis going is going back. it is trying to focus on its european brands. draghi, be a risk east -- risky strategy. here is a bloomberg exclusive. >> i think the u.s. government has been selling gm for a long time. they're almost out. there were prohibitions put on the management by the u.s. treasury. it made it government motors. it needs to be general motors again. it is a fascinating time and a catalytic time. i think it will release management to put into place demands and do something that is shareholder friendly. that up toot inc.

lofty a lot legal? -- goal? >> i think it is probable. 25% is that the first something that will happen in the near term. the rest will probably happen over the next year or two. >> are you going to take an active stake? >> as of right now just passive. >> gm is up well ahead of market. we will hear more from mr. bass and the investment he is betting against. the former fed chief, alan greenspan, says he knows a bubble when he sees it. last night was the annual lighting of the rockefeller christmas tree. the tradition goes back to 1933. if you missed it, enjoy. ♪

a on streets, kyle bass made half billion dollars.

i was before the housing collapse. he is betting against a different sector. >> the european banks are good thing to bet against. they have not been cap. there are 3.5 times better than the american banks. you have industrial production rolling over for the last year. pair up after a big turnaround. there was a qed induced turnaround. and deuced turnaround. induced turnaround. i think it is a very tenuous situation. we like vodafone. >> do you want to assure them? herbalife is one name that he would talk about. this exclusive interview with stephanie role.

investors have taken the opposite sides of the company. he calls it a ponzi scheme. carl icahn has defended it. count him among their believers. >> when a particular short hader releases a report, it a kind of abnormally large negative effect. i think that this business is one that is fascinating. it generates significant cash flows with no debts. it is growing. when you have this large cohort of unemployed, they may be unemployable for ever. there is this new normal. it is a natural unemployment rate. when you look at these countries with 50 or 60% youth unemployment, there is an interesting percentage of young people who are in these businesses. that may be where this growth is coming from. perspective, this

all played into something that fit into a macro ideology as well. it is interesting. i think that we are catalyst driven investors. in this case, the catalyst is coming in the next 60 days. i think they will have their three-year audit redone. one of the auditors was insider trading on their equity. there were allegations of improper audits. you have a re-audit being done. they will be able to access the capital markets. i think they can borrow 2.5 times the free clash flow. -- free cash flow. maybe even 250. they will be able to borrow 2 billion sorrows at -- $2 billion of -- $2 billion. >> will this change her tune in any way? >> they have said numerous times

that it will be done by year- end. >> so, do january 2. what if they do not? >> that depends on the situation going into january 2. you can head yourself pretty easily these days. you can cap your downside. that is where we sit today. >> so there are some big-name investors. is it necessarily right to call these guys into battle? myself ant consider investor. i try to win more than i lose. there are guys out there who are much better than we are. there are firms that do much better than we do. we have a great process. i think that we will prevail over time. i do not know anyone who doesn't do a lot of work. they end up getting caught. the market will catch them if they do not do a lot of work. your emotions will take over. when your emotions take over, you lose everything. >> is it hard to do everything?

-- you have an extraordinary investment process. you have an extraordinary reputation. investors want a return and the one it tomorrow. how does that affect the way you sleep at night? >> what is fascinating is that the bigger investors -- whether it is pensions or bigger institutional investors, if you plenty of time. it is the smaller, more fickle groups of investors that look for returns month-to-month or quarter to quarter. i am kind of ok with them leaving. if they leave because we have about six month stretch. -- that is one thing. but, if they understand what we are doing and why we're doing it and they leave, then they should leave. --hink that we have a great that is the attitude that you have to take. if you do not, you will had

yourself into no return. >> kyle bass has plenty to say about fannie, freddie, and a number of investments. you can watch the entire interview on our website. you can also go to our app. kyle bass rocks at his job. so does the boss. we're going to show you the pieces that are selling at auction. but first, kobe's new kicks. the lakers star has a new line of shoes. will he be wearing them on the court anytime soon? we have the answers coming up next. ♪

the last time we saw the los

angeles lakers superstar, kobe bryant, on court, he was limping. that was during the playoffs. he had a ruptured achilles tendon that kept him on the bench. he has unveiled his ninth signature shoe. as for what we will see him and his shoes on court together, some expected tomorrow. now but it looks like sunday at the earliest. >> i will probably be wearing them, it probably will not be on the basketball court. many years on court, we had to ask him what history and team would look like? >> magic, myself, darrell jabbar,, kareem abdul- and larry bird. >> no michael jordan? ouch. we will have our full interview tomorrow. kobe's return will likely be a sellout, another story for tonight's next-next game. tickets are selling for less

than half of what they were at the beginning of the season. a combined record of 8-26. these teams are terrible. get it together. two tech giants are on the verge of joining forces. apple is dealing with the largest mobile carrier. and what is the fed going to do? we have thoughts coming up on "lunch money." ♪ it is 26 minutes past the hour, which means we are on the markets. i am julie hyman. it's get you caught up on where stocks are trading.

we have declines across the board. i have gotten smaller since the morning. a lot of economic data for investors. a gdp and jobless claims numbers coming in better than estimated. they were revised higher than predicted. as adam just mentioned, people are trying to figure out what the fed will do next. terms of individual movers, we are watching a duo. men's wearhouse and joseph a bank. aseph a bank is evaluating bid for men's wearhouse. several options are on the table. noted a high probability that the deal goes through. that could provide benefits to hold companies. joseph a bank is also out with its earnings, coming in at the high end of its predictions. the shares are little changed.

men's wearhouse is down. we will have more on the markets in 30 minutes. you will get more "lunch money" next. ♪

we are is "lunch money." streaming live on your tablet and your smartphone. i am adam johnson. today's moving pictures where the picture is the story. yemenbomb destroyed a defense ministry complex. it was followed by a raid on the facility. the attack left 25 people dead and 70 wounded. in florida, more than 40 pilot whales are stranded in shallow water. they are beaching themselves in the everglades national park. rescuers are using small boats

to try to push them to deeper water, where they stand eight greater chance of survival. protesters in ukraine raised a flag as a show of defiance against the government. protests and rallies have been staged in the last week when the president abruptly decided not to sign a trade deal with the european union. critics believe that they will strengthen ties with russia and dead. china is asserting itself on all fronts. they are redefining their defensive airspace. their warning citizens against excessive pollution than expanding the use of bitcoin. the digital currency has been soaring in value, getting more than 8000%. more brief time, it was valuable than gold. are we in a double? alan greenspan think so. >> you have to stretch your imagination to infer what the intrinsic value is. i have not been able to do it.

maybe somebody else can. bubble?sk me, is this a yes, it is a bubble. >> unlike bitcoin, apple is catching a break in china. they are on the verge of a deal with the largest mobile carrier. china mobile will start service on a wireless mobile carrier. its will offer iphones to 759 million subscribers. we justis china mobile? got the number of subscribers, but we have a few more notes for you. ♪

>> the sheer size of china's middle class has business is true when, including the movie industry. jeff katzenberg says that before the end of the decade, the u.s. will no longer be the world's biggest movie market. >> five years from now, china will be the number one movie market in the world.

yearwill be 3.5 ilion this and in five years they will surpass us. they will surpass us in many of these ways just sheerly on the numbers. >> there has been a lot of taper talk. will the fed actually walk the walk? alan greenspan will wax poetic on central bank business. and the electric guitar that bob dylan is holding? highestout to go to the bidder. the story is coming up in pop. jeff bezos made headlines with plans for drone delivery services. this week, he is doing it again with rockets. three, two,r, one --ignition. >> the secret of private space companies founded by bezos.

successfully tested a new engine for rockets. they will show humans into space. -- shuttle humans into space. ♪

money." we arech

also streaming live on bloomberg.com, your tablet, and your smartphone. i am adam johnson. it is jobs friday. economists are running their numbers to try to figure out how many people were hired. they're also trying to estimate the impact of the fed's massive bond buying program. not to mention the near zero interest rate policy. bill gross tells market makers that it will be time for the fed to walk the walk starting very soon. us to second they allow talk about taper and begin tapering -- whether december is the month is still up for grabs. the fed wants out. there is no doubt about it. many analysts -- even some of the doves, the president of the new york fed said that there is no risk in quantitative easing.

there is risk on the standpoint of the balance sheet. interest rates will rise and we may be at risk of capital losses. the fed basically wants us out of there. aey need to replace it with forward guidance policy. it will allow investors to be confident that things will not change so much. >> why are you certain that the fed wants out of quantitative easing? eventually, they want out. -- tohe president think you perceive that they are concerned about asset valuations that quantitative easing has driven? are they concerned about the fact that it is not working so well anymore? >> i think both. jeremy suggested earlier this year that the asset markets were building.

that may be due to quantitative easing. there is no doubt that stock prices are high and high-yield bonds are low. i'll asset prices -- whether bonds or stocks or alternative assets, all are basically mispriced. they are elevated. that and wants to diminish the effect to the extent that it can. what they're going to do in terms of transition, we think, is reduce the quantitative easing at the end of 2014. they will eliminate if they can. if the economy response, they will continue the policy rate for a long time. another man who knows a thing or two about the economy, a man who actually ran the fed -- we're talking about alan greenspan. he coined the term rational exubera and. -- rational exuberance. he has just written a book about bubbles.

that is not his concern. >> i am more concerned about the fundamentals. >> of the overall economy? >> exactly. then i am about the state of euphoria. what iso you say that? the red light on your radar that you are concerned about? >> first of all, profits have been rising. is, a share of national income has been rising to levels which cannot persist. slowdown inven a the rate of increase in the share of profits, that in and of itself slows the growth in earning and eventually slows the expectations for future earnings. that is one. the main issue is interest rates. i have written in the book that i published two weeks ago -- it is very difficult for me to see

that we are not on the edge of a significant rise in long-term rates. i do not know when that is. i do know that we are very significantly undervalued. the rates are significantly lower than in -- they would ordinarily be. of q1 two and three not onentially focused monetary policy, but on buying long-term assets. that is not something that the fed has done in the past. it will be interesting to see in retrospect how successful this whole process has been. >> all of them buying will not end anytime soon. here's the catch. it actually comes at a price. >> i think we will be at zero for a long time. they will continue to print. i think that equities are the natural place for pensions and hedge funds to congregate

around. i think that equities in the u.s. are an interesting place to be. of theple at the top quantitative easing spec it have seen the most deflation of their assets. it has made the rich so much richer. that will hurt the middle class. >> the boss knows about the plight of the working class. so does bob dylan. you could own a piece of history at an auction this weekend. rock on the block is next. ♪

>> you are watching "lunch money." we are also streaming live on bloomberg.com, your smart phone, and tablet.

first, bob dylan. the american folk rock singer has been influential as a musician for more than five decades. on friday, his guitar from the 1965 newport folk festival is going up for auction. if you do not know the story, no problem. a christie's specialist will fill you in. , in 1965, july 25 -- he went on stage with an electric hand in front of an audience for the first time. it totally changed the way we viewed music history. he had been a traditional, more conservative, troubadour. >> the regular acoustic guitar? >> very much carrying on a tradition. he created something new. it changed the way the whole course of music tree would move forward. little bit of the history of this actual guitar. what kind of qatar is it and now

does that now end up -- what kind of guitar is it and how does it now end up on the auction block? >> it is one of the classic guitars. still a guitar that everyone would aspire to own. bob dylan and members of his touring group would use charter flights around the country. would fly themic around. guitar was5, the left on the plane. he reached out to members of bob dylan's entourage. it was not claimed at that time. away in the 1970s. his daughter inherited it in the early 2000. she did the research to confirm that it was the guitar that he actually played. you can tell by looking at the photographs.

she compared it to the wood grain in the guitar. the wood is like a fingerprint. you can see the grain here and the green here. it is a match. >> the auction is tomorrow and the guitar could go for as much as half $1 million. and another auction comes up tonight at sotheby's. if weis one song that, are in new york, everyone seems to be a springsteen fan. even if you're a casual springsteen fan, you will know those lyrics. what we call this is a working draft. when you take a look at it and start worrying, it does not read run." you hit the chorus and it is there. he is sitting on his bed and having the phrase warned to run. did someone else think of that?

starting to write it down. what you have is insight into the creative process. >> what about insight into the world of collecting? this is a world that many people may not be familiar with. collecting poetry and manuscripts and now songs. there hasy think that been a long history of collecting poetry and manuscripts. people collect additions of shakespeare, for example. hemingway is a great example. something like bruce springsteen or dylan or the stones -- the great names and classic rock, are seen as the poetry of the late 20th century. now is the chance to start collecting that. when it was written, no one thought it had legs or longevity. now, we see that does. people who have an interest in this material, they will be seen as the people who will be buying

hemingway's first editions in the 1930s. >> the manuscript will go between 70000 and 100 houston dollars. plus, a john lennon letter. they could be yours. another auction piece that could be yours, this one might go for as much as $300,000. a brick wall? this happens to be the work of a british street artist. it is today's mystery meat. ♪

it is up to 56 past the hour, which means that we are on the market. i am julie hyman. let's take a look at what is going on in the treasury market today. we do have yields at their highest in 11 weeks time. we had better than expected data points today.

jobless claims showed a bigger drop than had been estimated. time, a higher gdp provision. stocks are not holding up very well. the nasdaq has turned off. people are trying to figure out what the fed is going to do. taperinging to see sooner than expected? i want to bring in jim hershman. he is the president of western asset management. we do have this better than estimated data today. yesterday, we had mixed data. the iso number was worst than estimated. what do you make of all of this in terms of where rates are going? grades willis that remain between 2.5 and three. data has been very mixed. the fed will begin to taper in march. if data became -- remains

strong, it could be sooner. thehen we started to have taper talk in may, we started to have a more violent reaction in the treasury market. do you think now that everybody is so over it that we will not see that kind of reaction? >> that would be our view. it is like a roller coaster ride. the first time, you're a bit nervous. the next time, you're not as nervous. people will handle it better this time. >> what about in terms of the communication that you expect? not just in the days of ben bernanke, the from janet yellen as well. do you think that there will be more clarity on what the fed is doing? >> we certainly think that the communication will be enhanced. janet yellen will be better at that. we think the market will as well. >> what do you think positioning wise? will we see a range bound market? what do you do?

>> you do not want to be in treasuries. that is the short answer. you want to selectively look at opportunities around the globe. where you can pick up yield and where markets are fairly valued. there are other opportunities where the markets are up and you can get some good value. >> if you are looking in the u.s. come up but outside of the government market, where would you be looking? >> we think the structured product area offers good value. short duration, high yield is attractive. are concerned about rates rising, that is a great product to be in. >> what is your strategy? >> structured products. high-yield, short duration. selectively investment grade credit. >> what are you seeing in terms of flow? in terms of where your

clients are going? are they going into those areas also? >> very much so. they're going into the products that you sectors more aggressively. -- high- credit space yield bank loans and short duration, even emerging markets. >> thank you so much for coming in. good to see you as always. we will have more on the markets in 30 minutes time. "bloomberg west" is next. ♪

>> live from peers three in san francisco, welcome to the early edition of "bloomberg west" and i'm emily chang. let's get straight to the rundown. it is a deal six years in the making and one the one -- and the one that steve jobs couldn't get done, but is apple now working with the largest carrier in the world, china mobile? and