back. it becomes a medium for losses. and sears plunges as eddie lands' end.ases is monday,e and it december 9. it is my birthday. what about that? i am 49 and holding. >> that is the only reason i came in today. why would i get out of bed if not for your birthday? oh my goodness. how can i even see straight? what happened over the weekend besides tom ringing in his birthday? japan is slower than expected. the prime minister's recovery and today, it is a big

mac moment. it is a key check on the help of the global consumer. figures come out later this week. and the president will leave for south africa this morning. he will be attending memorial services for nelson mandela. george bush and hillary clinton will join the president and the first lady. jimmy carter and bill clinton will fly separately. they will join dozens of other dignitaries and tens of thousands of mourners at the service being held in johannesburg. that is your morning brief. >> it was a subtle weekend. particularly in bitcoin. that will be a feature during the week. futures are up. the 10 year yield is that 84. the currency market is on the move.

crude is at 111. the 30 year bond tries to migrate higher. 103.05. it was really quite important to see strong -- keep it going. we scoured the papers. >> some of the biggest tech companies are joining forces. they are demanding reforms on the nsa surveillance program. names include cap -- apple, google -- all of the silicon valley companies. they highlight the need to reform practices. after president obama

told msnbc that he plans to propose curbs on the nsa to guard against snooping. >> facebook says to mind my business. >> what is the story here? >> there is tension between what the government is trying to get and forcing them to unveil or reveal some of what they have been doing. they are trying to hold back on releasing too much information. >> do they have my e-mails? >> i think that they do. >> madeleine albright says that they have been -- this has been going on for years. the french were listening to phone calls. this is not new. edward snowden has put this out there and everyone is panicked. >> they may think that there e- mails to eharmony --? >> sadly, they are not that interesting.

page out is taking a of bill ackman's playbook. they have accused herbalife of being a pyramid's create -- scheme. they are approaching investors. they are projecting that they pulled their money from ackman's firm. they have lost up to $500 million. it is risky and he responsible. they win and and hired a firm to fight this battle for them. if they are out there and speaking as investors, this is truly a war. give me a break. will take said he this trade to the end of the year. will his investors? there's a difference between a trade and investment. this is his passion. they could be putting pensioners

money into them. should he be telling them what to do? >> in your reporting, is there anything here that is illegal? >> no. unethical? definitely. >> they all declined to comment on this. this is the latest. our last story -- we go to the other side of the wall -- world. the biggest protest since the orange revolution. it is all over the front page. they toppled a monument to vladimir putin. the outrage stems from their position to turn down an integration package. they're bolstering ties with russia. --aine has some did financial difficulties of their own. iswhat i find interesting how divided the ukraine is. it is knowledge everybody is for

europe. there is a real division. >> there is a certain tilting away from russia. anger is pouring out ray now. >> currency markets are on the move. there was noise out there. important economic data. it is the five days of debate. congress races to the christmas break. the affordable care act simply will not go away. congress confronts the reality. new, stunning the double-doubles. washington, our chief washington correspondent. you want to talk about the deficit. this will not go away. are people actually concerned about high deductibles? >> you certainly have a lot of republicans who will talk about

it. there talking about the problems with healthcare.gov and they are also talking about the way the rubber meets the road. the prices that they are paying for premiums that are out there and the deductibles are going up as well. this is another talking point for them. they have criticized the health care law. we will have several members on capitol hill and this is one of the questions they will have to answer. rollout, theo the website is operating better. they will make this point over and over. >> lawmakers actually have a deadline of their own to sign up for the affordable care act. how is that going? >> there is actually a different website. technically, they are members of a small business. that is the congress of the united states. they are operating off of the d.c. exchange. the deadline is december 23.

december 9 is the deadline for members of congress understaffed to sign up for individual plans. they want to be forced to eat their own cooking. many are signing up. many are finding that they are having problems. they're also getting sticker shock themselves. the speaker of the house complained about his premium ebeling. >> to know what the deductibles will be for a senator from west virginia? >> i can tell you that john boehner selectable is going to be $1000. that has gone up. he is a 64-year-old smoker with a stressful job. ,f you are on a family plan also your age -- members of congress will be judged on their age. that is something that all americans have had to confront. >> senator cruise has a wife at

goldman sachs. >> on her plan. >> $20,000. our guest host this hour -- we wanted to bring you clarity on the affordable care act. he is the ceo of evergreen cooperative of maryland. david kirkpatrick is with us as well. he will talk about bitcoin. tell me where we are. whether republican or democrat, these to vegetables -- deductibles -- how does anyone live on an $8,000 deduct ball? >> these are unusual. we have a whole range of deductibles. some are gaming the system. >> what do the blues main? >> blue cross, blue shield.

people in maryland have had low premiums. they attract people looking for the sticker price. aremost reputable firms going with higher premiums and load up bowls. our silver plan has a air t and hundred dollar deductible. this is part of the problem with the plan. it is really complex. >> you are a physician. could you explain how a family with two or three kids gets through the week with a 4000 or $5,000 deductible? >> there is a limit on the deductible. that is total out-of-pocket. it is still extremely expensive.

however, the different plans are more affordable. these are the high deductible plans that have low premiums. there are a lot of plants with modest preview mims -- plans with modest premiums. the number of people coming and makes a big difference. of our initial group, 40% of enrollees are under the age of 40. younger compared to you, only. clearly, it is complicated. what does this have to do to become less complicated so we can understand? >> good question. i am all for a single-payer system. we will not be there for many years. >> realistically? >> you will probably need a navigator. there are navigators in each state in each county. it is not as easy as top

velocity, but if you go to healthcare.gov, it is working better now. you can follow it fairly well. >> a better system even as deductibles are shot for a minority of americans. david is with us on bitcoin. let's get to the busy morning of company news. >> let's start with -- we will hold off because we want to save our time for any and sears. investors are pulling their money out of sears. what is the next move then? this is "bloomberg surveillance ." ♪

>> good morning. he will become the ceo of american airlines. i think that will happen in the middle of a question from stephanie ruhle. doug parker of u.s. airways. this is "bloomberg surveillance ." i am tom keene. it is my birth day and i wanted stephanie ruhle. get her on-air. >> i'm trying to do my best to get ready for the show. made itrs know, tom very clear that there would be no mention of his birthday. he is talking about all morning. under no circumstances will we discussed my birthday. it is front and center. >> you're going to black rock? >> eric will be there.

let's talk about any lampert. he may be loosening his grip on sears. he has controlled the company for nine years. shares have sunk on the news that his hedge fund has cut its holdings. he may know how to invest, but he may not know how to run a company. >> that has been a big question. most investors are pulling out. he has had to make some big new -- moves. land'ds'y spun off end. people are talking about what his next move is. it will be hard to find someone to buy it. >> if you look at what has happened, it has been a disaster. why the excess -- exodus? >> they were locked up for five years. he could not do anything.

their fortune has fallen. now, investors say they wanted to redeem their money. they had one year to get back the money. that is what is playing out right now. >> david is with us. a bloomberg contributor. this is the structure. it is neither bricks and mortar. >> it is impressive that somebody would try to save them. it is interesting about lampert. i have a friend who is an investor. he says that now is the time to the money into his head fund. -- hedge fund. i do not know of anybody can save these retailers. look at what is happened to best buy. it is a time of extraordinary destruction and disruption for a lot of traditional industry. retail is after the music industry. >> in your world, it is a force. -- i am alwaysry

saying that retail is obvious now. the ones that are coming soon, we have not honed in on. >> what is it about the way that he has run this company that has not worked? he may not look at a company and see flaws. >> that should be on the showroom floor. >> he runs different divisions. they compete against each other. they are pitted against each other. this is a retail corporation. the show remain concept has taken off. he is under investing in the company. my favorite status from isi. their holdings are at $1.51. $1.04 on kmart. compare that to home depot. and macy's. if you go to sears, it looks that. tom, if the retail experience

is about desire, is there anything you desire in sears? >> i have not been in sears and a million years. >> that is my point. >> they have incredible appliances. >> but those appliances, would you buy them elsewhere if they were cheaper? do you say that you want to get them from sears? >> their dishwashers are their own brand. they are quite excellent. i recently brought one. >> we have a lot to talk about. we're talking about bitcoin in just a bit. stephanie was just telling us about how much she paid for the christmas tree. that takes us to our twitter question of the day. what is too much to pay for a christmas tree? tweet us. >> $12. >> i got a big tree. >> a 13 foot christmas tree? >> $12, december 23.

>> what a grant. ♪

>> this is "bloomberg surveillance." let's get you some company news. starting with the biggest airline. executives of american and us airways will sign einar -- final merger documents. the new company will be called american airlines group. it will sell under the ticker sick -- symbol aal. d money on new models. they will also roll out new models.

is considering floating its british operation. call for them to lift their minority stake in u.k. retail. that is today's company news. >> that is fraught with symbolism. a big deal in the united kingdom as the shanghai bank tries to figure out what to do. >> they have already come out of the u.s. in a big way. they're tied to china. >> let's get to a symbolic must- read. stephanie ruhle is joining us. >> this is some volatility. there was a piece in the wall street journal -- wall street mothers stay home. the number of women with stay- at-home spouses have climbed nearly 10 fold since 1980.

this is according to census data. seeing more and more powerful women with stay- at-home husbands. they are on diaper duty. >> you have lived this. the key phrase that you say there -- this was skewed to very successful. there are a lot of people struggling and making half of the salary. it is not working. >> even for a lot of these women, is it working? --, i was a stay-at-home mom a wall street mom. head of thes the household, can he be the one picking up kids? i do not know. it is kids. do you weigh your code paid for by yourself. -- do you want your coat paid for by yourself?

that is what i'm saying. do you want it paid for by yourself, from your husband? >> there is nothing in that store that fits me. >> it would fit you. >> enough of that. all right, let's move on. later on, let's say you are a bullish on bitcoin. how do you get one? we send matt miller on a mission to find out. this is "bloomberg surveillance ." ♪

>> good morning. it is monday morning. with me, scarlet fu and stephanie ruhle. we have a data check. >> emerging-market stocks are

rising. the big question comes down to what the fed will do next with regard to tapering. the yen has weekend. the jobs report is coming up sooner rather than later. we will be speaking later today and dissecting comments. >> it went back and forth over the weekend. it nudges away from what we saw on friday. the japanese data this morning was disappointing. also disappointing, matthew miller's search. wall street gave credibility to bitcoin. just one example. the currency surged and then tanked. matthew miller is focused on this. in search of bitcoin. can you actually get one? >> i have not gotten one yet.

i have arranged a meeting. >> it sounds like age of deal. >> they kind of was. they were like, i am out, but i am getting some later this week it it is not a physical claim. -- coin. it is the digital currency. i'm going to do 12 days of bitcoin. i like to live off of the grid, anonymously. >> this is a virtual currency. you had to call people up to get one? >> i started trying on thursday to get one online. there are a number of ways to do it. you have to measure your bank account and social security number. i thought, absolutely not. i started trying to use bloombergs corporate inc. account and corporate credit card instead.

did not want my information out there on the internet. that did not work either. >> we are clueless. how do you get bitcoin? >> there are a number of methods. basedsiest one is quite -- coinbased.com. that is the one that i signed up for. >> you had to give personal information? >> my boss told me to. it could -- it took four days. you could meet up with people and set up meetings. >> they are waiting for you at a coffeehouse? >> you never know what you pay until you get there. >> it varies so widely. $727 for theg at bitcoin. what is interesting is that, if

you look at the price chart, it rockets up like a hockey stick and drops. if you look at the volume chart, it does the same thing. no one wanted to sell it. >> you wrote "the facebook effect." if you were to write about bitcoin, where would you start. >> the point is, why it really matters. that i think makes the most important is that it is a nongovernment issued currency. this is the first time we have had anything like that. it is an evolution of the internet. that is the ultimate nongovernmental saying. it started in the u.s., but it really is global. everything that happens is global. it is a huge challenge for government. we have a new kind of money

merge and. -- emerging. >> david put that his report. it collapses almost half its value. that is not a currency, unless you are in zimbabwe. >> there is debate over whether it is a security or a currency. it needs a marketplace. >> hold on. maybe all of us are too inside. we are in the business and we follow it. peter, i want to bring you in. does this mean anything to you? >> it means nothing to me. we are sticking with existing currency. >> he says it does not matter. >> i empathize with that point of view. are you going to try to live on bitcoin? >> i am going to try for a couple of weeks. a number of people have done this. there was a woman on forbes to

did it for a week. a coatne is going to get on bitcoin. >> what are the denominations? >> you can buy it in fractions. there is some japanese name. you can do a lot of real stuff with it. you can buy things on the internet. it tanked last week. a service in boston where you can order food from 1000 restaurants and pay for it in bitcoin. >> i would never be one of those because you could get $10 for a hamburger, but only get two dollars for a hamburger. >> if you compare this to the internet, maybe it makes sense. >> i think that there is an easier way to get it. if you are a mathematician, you can mine it by solving a

mathematical equations. that is how it is created in the first place. >> it is harder to understand by standard deviations, the older you are past 20. for me, it is almost impossible to understand. for tom, it will never happen. >> it is absolute malarkey. i stay with that. what are you doing next week? you're going to find a bitcoin? >> they're going to sell me one. >> thank you so much. up, the new ceo of time warner cable is going to receive a large golden parachute. we're going to look at some of the largest exit packages ever. ♪

>> good morning. i am tom keene. scarlet fu is with me and stephanie ruhle. busy day. we have top headlines. >> 2:00 p.m.'s economy slowed more than estimated last quarter. gdp was 1.1%.

that was revised down from the first estimate. business spending was weaker than initially thought as companies are cautious on their economy. protesters poured into the streets of kiev. they fear that the president is going to bring the country into an economic bloc led by russia. this followed a rally where they tore down a statue of vladimir lenin. and a chance to own a piece of the sydney opera house. you can own a tile for as little as $90. you do not own it physically, but you can personalize it online, giving you virtual ownership. fundraiserart of a to pay for the renovations. >> i would do that. people buy stars for

each other, why not buy a piece of the opera house. >> there is a birthday gift for tom. >> time for single this chart. what do you have? >> he is going to become the ceo of time warner cable. there is work that the company will be acquired soon. rob marcus has a big payday coming. he could go out the door with a golden goodbye. we wanted to take a look at what other recent severance packages have been. this is from the economist. mel karmazin takes the cake. with $250away million. with $100e left million. left with $60 million. >> he did a real turnaround job.

we straddle the medical business with the business business. look at those numbers. with a mix of your work in baltimore, is there a perception that this system is rigged? on compensation? nonprofit, we do not pay huge ceo salaries. looking at it from the point of view of her regular person in maryland, the system is quite rigged. >> if you can make it through equity gain, that is an alternative. they get their fair share. >> i do not know. we need to share a bit more income than we do. >> that is an understatement. income disparity is the single biggest problem we have right now. so many people have so little. suffering is expanding and it is something that we all have to

focus on is a serious concern. a small number of people are accumulating greater wealth. what happens next? it is not clear. >> does the distress you when you see the president going out and talking about how well the affordable care act is working. though the distress you that we talk about a pr campaign and not about fixing the system? >> they are absolutely ashamed of the fact that the act represents redistribution of wealth. that is what it is. there's a whole article about how terrified they are about wordpress if we do not have redistribution, i am afraid we will have massive suffering in the future. that is really growing. >> we have suffering going on already. the biggest cause of bankruptcy is health care costs. we have to do something about them. >> that is something we will discuss further.

healthcare.gov specifically. it's a review of the brand working? we will take a look next. ♪

>> i am scarlet fu. let's get you some company news. china mobile is set to take owners for -- orders for the iphone. they will except orders this thursday, according to the wall street journal. they have not released racing plans yet however. have stopped accepting bitcoin as a form of payment. they have suspended it because of safeguarding users interest. and google and yahoo! are among the tech heavyweights calling on the u.s. to go into overhaul surveillance practices. a statement says that the balance between protecting rights has gone too far in favor of the states. that is company news. >> and a story percolating from the nsa -- spying and technology. david kirkpatrick is with us. effect.""the facebook

the movie is out memorial day 2017. >> i wish. >> this is serious stuff. we have a lot of information. fancy guys wrote about pushing back. >> they should push back. trust is their stock in trade. the u.s. government has seriously undermined it. it is ironic if you think about this as one of the most powerful industries. it is one of our great hopes. the u.s. government basically went and said be scared of these people if you live in brazil. >> did the government do that or did edward snowden? >> the government did that because they should have realized there was no way to keep it secret forever. >> what would you suggest mr. zuckerberg will do next? >> the economic necessity to

push back is so great. they will increase the pressure dramatically. why is amazon not on that list? you look at the list, and they're one of the most important tech companies. they are absent. >> it is likely. >> they are all was the outlier. >> i would love to know those discussions were like. >> their website is something of the federal government would like to emulate when it comes to health care. you cannot do anything that simple. >> maybe he wants to be on the side of the government to get those drones approved. >> did you know that it is 112 days? that is how long the white house has to reach its goal of enrollment. while that could seem feasible, healthcare.gov has been enrolling people at less than half the rate that it needs to succeed. >> there is no question about that. a lot written over the weekend. the affordable care act is

affordable -- $300 premium per month. then there are the pesky deductibles. the new york times suggests $12,000 deductibles for a couple. i cannot get there. how does that work? the chief executive officer of evergreen hangs on every word that the president said. the first few words are deductible. here we are. how will somebody making $42,000 per year have an average health- care plan? >> actually, it is quite doable. it is working vastly better than it was several weeks ago. better than some states are working. you do the shopping as stephanie was talking about. -- the protocol is easy. >> why the uproar?

about deductibles and premiums. >> i am not sure. the plans that we offer in maryland have quite loaded up troubles. $1000. maybe a bit more for families. someone making $42,000 or a couple making $42,000 gets significant subsidies to make it more affordable. i think this is overstated. >> how about a low bar? if the website is looking better today, was in the three weeks ago a disaster? >> it was not even close to halfway decent. now, it is. it is much more usable. >> does that mean it is sub are? >> it is close. not 100%, but it is much better than it was. they will get close to the 7 million that they want. >> is it better on a small

scale? honesty, it is scaled up much better than maryland. we serve one state. thathing to point out is getting the young invincible's is a big issue. they are the 26 to 40-year-olds. those under 26 can stay on their parents plans. what we have found is that young people actually do want to get health care. it is whether or not it is affordable. they are not calling them young invincible's. -- i will not say how much he is making. he could get a subsidy. it would only be $80 per month. >> that is phenomenal. >> we're finding that 40% of our members have been able to enroll.

they are under 40. >> there's also the small business cycle. peter cook was telling us about how they look at small business. they are having trouble getting any kind of progress or traction. >> the so-called shop exchange has been delayed for one year. i guess that it will not happen. i'm guessing it will not happen because the benefits are relatively small. there is one year or two of text objections. it was never expected to be robust. the maryland exchange is not working terribly well. we are signing small businesses off the exchange. >> what about higher income people? they are finding that their cost are going up. politicallye engaged in socially responsible people who are speaking out. their cost is going up. >> red herrings. in maryland, there are 73,000

who were told that their plans were canceled. it is one of the states that allowed, under the edict, to reissue plans. people could read new plants. very few are renewing plans because many of them are bad coverage. it is important to point out that the affordable care act does not just do insurance reform. it also make sure that people have comprehensive health care. >> is this a jerryrigged socialized medicine? are we trying to be england or canada? we are in this cacophony. >> now. this is not socialized metal fan -- medicine. this is a full employment land for insurance companies. it pushes everybody into the private sector. this is not socialized medicine.

i use this all the time. it is complicated and it is complicated because there's medical industrial complex. they have set up many industries that rely on middlemen and middle women. there's so much money to be made and so many options that you have to put together this -- >> i am not going to get rid of the middlemen they will do well? , i could notr believe until we got to the insurance world how much -- why the administrative costs are so high. >> they admitted enrollment errors. that is happening for one out of every 10 people. this could sink the whole thing. >> this has got to be fixed. they are files that cover -- when people are enrolled, this

comes electronically. that has got to be completely correct. people need to be billed an insured. that is really the most important part. >> thank you so much for coming. every time he show up, we get clarity. i think that is great. thank you as well. if you find a bitcoin, let me know. >> i would love one. >> speaking of coin, how about the forex report? the yen goes out -- weaker yen. the pros follow the euro yen. you see it in the commodity space. the canadian dollar is weaker. at 6.07.the dollar yen ♪>> we have much more coming up. usid stockman will talk to

about the budget deal in washington. there is another deadline fast approaching. is congress talking to one another? the second hour is next. ♪

>> this is bloomberg

surveillance. >> as congress grapples with our debt and deficit surprise, the deficit narrows, another deadline looms. the planes are packed. explain why less competition is good. nd college counseling, the racket innovation is needed. junior is not going to the college of his choice. live from new york. t is monday, december 9. scarlett, and stephanie is here. our guest host this hour, the former white house budget director david stockman under president reagan. of course out with a wonderful book this year, very controversial book on the debt. >> we're going to go to david so i'm going to keep the brief brief. over the weekend japan's growth slowed more than initially estimated. the news highlighted head wins to the prime minister's efforts. and today we are getting

mcdonald's same source sales for the month of november. a key check on the health of the consumer. figures coming out later this week. the president leaves washington for south africa attending tomorrow's memorial service for nelson mandela. george bush and hick hillary clinton will join the president while jimmy carter and bill clinton will fly separately. how about you? >> let's start with technologies heavyweights taking on the nsa. calling on the u.s. government to overhaul its surveillance practices. the balance between protecting citizens and individual rights has swung too far in the favor of the state. the world's biggest airline takes off today. scheduled to sign final merger documents this morning on the almost $18 billion deal. the new company will be called

american airlines group. floating onsidering its operation. sounding off on investors to see if they would support the group. one plan to list a minority stake in its u.k. retail and commercial banking business. >> very good. congress has in the final week before the holidays key lawmakers are hopeful a short-term budget deal will reach to avoid a medium-term government shutdown. paul ryan and patty murray will chair the house and senate budget committees, they're working hard to reach a long-term agreement. get that short-term, medium-term, long-term? our correspondent is in charge of terms. peter, i'm budget conferenced worn out. what's different this time? >> tom, i hate to deliver this

bad news but on your birthday you will not be getting a grand bargain. the two of them continue their communications over the weekend. they're going to reach by all accounts, they're close to this smaller deal which will effectively replace the sequester cuts over the next two years, cap spending, replace those cuts with other sources of revenue, other fees, things like that. but no mage deer sigses here on taxes or entitlement programs. they're kicking the can down the road. dick doiben the number two senate democrat said negotiations are going in the right direction. >> negotiations are making progress moving in the right direction. they haven't closed the deal. >> they haven't closed the deal. what's needed to close the deal? >> there's some issues out there, sticking points. if they replace the sequester cuts there's going to be criticisms for the idea they put in place. one is asking more federal

employees to contribute more to their pension programs. this is adamantly opposed by a ot of federal workers. that's one issue. there are also questions about whether you extend unemployment benefits, emergency unemployment benefits. nancy pelosi would like to see part of the package. but that still is a question mark. it's going to cost about $25 billion. then the bigger question is at the end of the day can whatever ryan and murray put together, can it pass the respective chambers? there's still going to be some drama when this comes to the house floor given so many conservative republicans who will not like the idea that the control caps will be moving higher. >> the tea party doesn't like it. is there -- their voice that strong coming off the last few months where more and more people feel they're cannibalizing their own party?

if they don't like any agreement doesn't it say we should be working about republicans and the power that they have? >> the question is not just if the tea party doesn't like it but if you have some democrats like the hoyer and van holland camp. and you get enough parties of opposition. then you don't get a deal. the season this is taking so long is because they're crafting a deal that will likely clear both the house and senate. but this is a small deal. this kicks the can down the road. buys them peace for about 21 months. we still have a debt ceiling fight but at least through the holidays and next year means washington might not be as big of a threat to the economy. >> stay with us. your book this year, the great deformation, the corruption of capitalism in america, made a modest splash, what was it 942 pages with ample foot nodes. we're thrilled he joins us

here. why is everybody taking a victory lap? the deficit and g.d.p. is moving in the right direction. if you were working for president obama, you would be out there saying i think this is a fabulous migration we're making. why are we so miserable? >> i would be scared to death. this victory lap is unwarranted. we're in the fifth year of a recovery now. touf have context. if you take the one-time revenue windfall within the two-thirds budget you're running at 800 billion. that's 5% of g.d.p. no one's abolished the business cycle. sooner or later down the road there's going to be -- >> even if we get to 300 billion we're going to turn around and go the other way? >> that's what the cbo projections show. they assume that we get to full employment in 2017 and stay there until eternity. if you have a more realistic, non-rosy scenario, the deficit

gos back above $1 trillion. yet this increases the deficit and pretends they're going to offset it. >> who is being more stockman responsible, democrats or republicans? >> i think i would give a low grade to both sides. >> but which one is doing a better job? >> the lowest grade to the republicans to ryan. i think he's proving once again that he is a fiscal fake. it's his job to stand up and tell the truth. and when he says we can raise spending for defense back to the pre-sequester level or for domestic, that is just evidence that we're going in the wrong direction. we can easily live with the sequester. it's a washington beltway lie that we can't live with $600 billion of outlays for defense, 50% more than we had in 2000 and we've had no new industrial enemies come after us since then that we can't live with 600 billion in domestic

discretionary spending. again, 200 billion more than bill clinton left in real dollars today's dollars. and i don't think he was starving. >> in any deal we see out of ryan and patty murray a joke? >> it's a total joke. and i would hope that at least some of the people on the progressive side would understand if they don't get at entitlement reform and revenue raising now it's going to be far worse later. and the republicans on the tea party side would be right to reject this deal because it's nothing but a beltway scam. >> bloomer surveillance jargon alert there. david stockman using the word progressive. i believe he meant liberal. >> maybe. are people talking about the real possibility of another shutdown? >> not with this deal and all the optimism around it. they want to go home for the holidays. they do not want that hanging

over their head in january. that's the biggest deal this gets done. but it leaves the tough decision force another day. and there are a lot of people in washington don't think that's the wisest thing to do especially when it comes to entirement reforms. when are they going to do it? this puts it off at least 21 months. >> entirement reform doesn't get people elected. that's the problem with these politicians. >> to the election the "new york times" says the article on the three democrat senators, the southern democrats that are left, are they moving towards a budget resolution because the democrats are so concerned about losing the senate? >> the democrats are worried about losing the senate for a variety of reasons but it will have more to do with the health care law than the budget. but yes, those folks are worried about their seats. they don't want to see anything that causes pain in terms of their electoral chances. another government shutdown might help democrat's chances

because republicans would be blamed. so there's some odd politics but yes those senators are worried about their seats. and harry reid is worried about holding on to the gavel in the senate chamber but it's not a huge risk compared to few months ago. >> thank you very much. we'll continue with david stockman. fired up about chairman bernanke. >> we wouldn't have it any other way. coming up, a merger set to close today. what are the ingredients for success? not just combining frequent flier mileage. good morning, everyone.

>> good morning, everyone. to our guest host, david stockman has been a harsh critic of chairman bernanke and fed policy, particularly harsh on the idea of central bank to the rescue. janet yellen is expected to be the new chairman. also expected that david stockman will be kinder to the gentle professor from berkeley. are you going to ease up? >> this policy that we have, she's been one of the architects of. and i think it's been a disaster. i think it's doing nothing for the main street economy.

it is generating serial bubbles. we're in the greatest one yet. it is a wonderful gift to the 1% because it inflates financial assets beyond reason. but it is not driving any real vigor or growth in the main stream economy. >> the critics would say they're in the right direction, better job report, improving real g.d.p. we're not in recession. do you just need to be patient? >> this is the private economy. slowly recoverying on its own after the blow of late 2008 and early 2009. it is not the result of 0 i want rest rates. it is not the result of 85 billion a month being bought out in the bond market. it is just the slow healing of the economy and the fed should be getting out of the way, letting the market clear interest rates that would reflect real economics and real allocation of capital and risk. >> whether people like you or

don't like you or agree with you, i should say, they know that you've got an interesting public policy past. from your vantage point, are fed chairman predictable? do you know as they come in pretty much how they will be or are they like supreme court justices where it's a crap shoot? >> i think now it's very unpredictable because we're in unchartered waters. this qe policy that we have today was inconceiveable even 10 or 15 years ago. they've made it up on the fly month after month meeting after meeting since the crisis of 2008. now they're so deep in the corner that how they get out and how they explain how they're getting out and the pace at which they do it are total unknowns even to the members of the open market committee. >> it's monday. i've got to set up a question. if ronald reagan were president who would he select? would he have the guts to pick richard fisher? >> i think he absolutely would. one of the things about reagan

is he really was a conservative when it came to the central bank and monetary policy he never would have reappointed bernanke or appointed him in the first place. he wouldn't have filled the fed with all of these keynesian mind craters. >> you heard us here. coming up, junior can't get into notre dame. what are we going to do?

>> good morning, everyone. bloomberg surveillance monday. our guest is david stockman, former director of o.m.b. under president reagan, arch critic of fed policy. >> we have a beautiful woman who just joined. we're going to introduce her. tom can't contain himself. how about some news in the ukraine? hundreds of thousands of protesters poured into kiev.

ey fear he's going to lead a problem. vouse an investigation into the first riot in almost 40 years. almost 400 people rioted in the little india neighborhood following a traffic accident that killed an indian man. tension over workers in singapore has been rising. at the box office this one for me. frozen topped fire. disney's frozen took the number one spot with 31 million in sales. that bumped the hunger games catching fire to the number two spot. frozen has now taken in 190 bucks since being released just over two weeks ago. speaks to how powerful those kids are. >> they should do a link with mcdonald's and some of those

frozen treats. rfer i'm sure right now the happy meal toys are for frozen, frost. that's why kids want to go there, not those delicious burgers. >> i think the fries will win them over in the end. getting into college is hard. getting good advice is harder. there's only one college counselor for every 476 high school students. the new economy company that disrupts the thousand-dollar counseling industry by turning questionnaires into an actual road map. welcome. >> thanks so much. >> the key for your business here is that you don't cater to kids and families who can hire private counselors. why did you choose to target the lower and middle class students and families? >> for the past 8-1/2 years i was working as a private college admissions counselor for the high end families. >> you know those people well. >> and they're fantastic. but those are the types of students who are getting great advice from their parents, from

their high school guidance counsels. what i wanted to do is utilize the power of technology to help students who didn't have access to parents or high school guidance counselor to give them that advice. it's all all the mated. students can come on to our site and fill out a complete profile to themselves. and we use all of those personality metrics to match them to the best colleges for them in terms of their unique priorities and goals. and then from there using all of their high school resume data we tell them whether the schools they match would fall into their reach or safer categories. >> we don't know if it works. >> exactly. >> ok cupid works for the big uy here. awkward. >> how big are test scores? i'm sorry but it all goes back

to test scores. you have one school, five other schools. you can get thre you can get in. it's all about test scores? >> it's not all about test scores. more students are applying to school and we see every day that students with perfect sath scores are getting rejected from harvard. >> but there's another 285 schools out there, last i knew. or of course. but when you're trying to differentiate yourself from another student who has the same test scores that's where all the extra activities come in. >> what is the mistake they make? >> my frustration is they start thinking about it way too late. in junior year versus freshman and sophomore year. by junior and senior year they would never be able to do anything to improve their chances. >> i would say, you came out of michigan i believe, to me this is about harvard on the brain. everybody wants to go to four different schools and if they

don't jump out the window. and that's bologne. how do you get people to look at a broader set of great schools like hope college in kalamazoo michigan or michigan state in lance sng they did pretty well against ohio state this weekend. how do you get them to look beyond the hudson river? >> that's what we want to do. we want students to avoid looking at the top ten schools. we want students to discover universities outside of their comfort zone. >> but aren't students going to those schools because they want great career opportunities? and it is those five or ten that have extraordinary alumni support, extraordinary career services. if you want to get a job on wall street you need to have gone to pen, harvard. >> but that's the problem. you don't need to get a job on wall street. we ought to be encouraging people to go in many other areas of the economy, engineering, mining, agriculture even.

that's part of the problem we have today. we have a financially driven economy, a wall street obsessed stock market obsessed policy. >> and also, with that in terms of the type of careers, the people looking at wall streets are students concentrated on the northeast but we have a vast number of students not considering wall street. >> how do you bring the best practices of any given major prep school over to the public school kids who are getting no guidance, their parents are getting no guidance whatsoever? >> exactly. with that we're one of the only sites targeting students as early as ninth grade. from there, we are giving them specific timely relevant information such as different web nars and lessons at the appropriate times. we're making it fun. >> i love that, game if iication. founder and ceo of admittedly.

they turn questionnaires and algorithms for a road map to get into college. we'll have more coming up. stay with us.

>> it's time now for some company news. we start with fiat. map out its plan for turn around. they'll invest $12 billion on new models as it tries to end european losses.

it's also planning to roll out new models of mazz ratie and romro brand as well. service plans to bring in a minority investor after they failed to sell the business known as the freedom group. the gun business was put up for sale following last year's massacre in connecticut. general motors moves in europe will be in south korea. the auto makers production in that company could fall 20%. this is according to the company. about 90% of chevies sold in europe are made in south korea. >> i wanted to taung about another company. herbal life. acman has spent the last year clearly accung them of being a pyramid scheme taking a short position and urging its share holders to sell their stock. now they're reporting that their advisor are approaching investors in his hedge fund and

suggesting they pull their money saying acman is risky and irresponsible. officials for all the involved parties declined to comment. but i want to bring everybody in here. bill ackman has said this is not a hedge fund where last week i spoke to kyle bass he said it's about an investment. but when you see a company like herbal life now going to ackman's investors saying this guy is taking risks, this makes this a war. this is not about doing your homework. >> there's a lot of hedge fund titans against him. >> that's what's interesting. when i sat down with bill there aren't big-time investors on his side. it's kyle bass, it's -- it was dan. so even if bill ackman has this trade right fundamentally, if

he's that big, he could still lose. and that's an argument to be made here. there's a difference between a crusade and a trade. if bill is on a crusade he's not going to win. >> the chart here is direct. stephanie, how bad is he getting hammered? >> let's put things in context. this is a short position. so if he was just outright short he could get taken to the cleaners. if this thing goes to 1,000 he's dead. he could get carried out and he said he will take the trade to the end of the earth. but he has modified the trade so he's limited his downside risk. so you're talking about a $12 billion fund. this is clearly a major position. he has other trades on. ggp is a huge win for him. but he is so outspoken, so definitive about this trade it is making people feel uncomfortable. >> you spoke to him earlier in november. did he give any indication on

how his thesis has evolved since herbal life has been attacking back? >> that's one thing that's interesting they haven't come out and said anything publicly. we were supposed to see their audited financials in december. kyle said he might feel differently if they don't see them. herbal life has said almost nothing. >> david stockman, former omp bm director. he has been in business. are wall street and main street just that far apart as we hear steph going about the herbal life games? >> i think this is meaningless basically. it's the kind of speck lative froth you get at the top of a cycle where valuation loses any anchor in the real world and in earnings and in the prospects of the economy. take the russell 2000. that's main street company, small, mid camp. 85 times trailing reported

earnings. that makes no sense. >> so any equity markets is above? >> of course. of course it's a bubble. it's grossly overvalued. >> you would not own stocks right now? >> i think it would be dangerous to own or buy stocks. the 500 is trading at 19 times trailing earnings reported through the third quarter. in the last two years the s and p is up. the reported earnings are up 5%. >> when we come back -- we have expansion driven by the liquidity injection. >> so who is to blame the fed or wall street? wall street is just a player. the fed is the one who sets the game and they're the ones who have accommodated monltry policy have hooked these brothers up. >> it is a question of who has taken whom hostage. wall street demands that the fed keeps dishing out the liquidity, keeps dishing out the monetary heroin as i call

it. they have a hissy fit if the chairman of the fed even suggested they might begin to taper four years into a recovery. so the question is -- it's a codependency. it's a very dangerous thing. >> good morning, everyone. are f our interviews available on media. david stockmap with an interesting controversial book this year on the fed. he has been more than critical. >> we're back with jessica brondo founder and ceo with admittedly. previously she was founder and ceo of the edge in college prep. this is the time of year when students, high school seniors are getting some of their responses back from colleges or beginning to apply for college. you've described your company

as game if iing the process through algorithms. can you demystify the college application process? is it metically driven on their end or is it a bunch of people sitting around a big conference table following their gut instinct? >> we would never want to discount the value of an actual human analyzing the students applications but there are certain met rirks that do make up a college application. the biggest chunk is definitely academic. then the other percentage is everything else. volunteer work, et cetera. and that's the kind of soft pieces that we're helping students understand what's good and what's kind of focused. >> how about these schools just investing in more in terms of people working at these universities interviewing these kids? what if i'm in middle america, what if my teen age kids worked at mcdonald's after school, what if they don't have time to become an expert fencer, what

about being a great american kid? >> what's interesting is how amazing it is for students to get jobs. and college admissions will 100% say that a high school student having a job is almost better to going to fiji and volunteering for the summer. so that's one of the things that we're trying to demystify. doing the normal things, someone working in a clothing store or a lifeguard are things good experiences. >> will that overcome the fact that the test scores and grades will not be as perfect as they need to be? >> it's not going to totally overcompensate because the students need to prove they can fit in at the school. but when you have a dean analyzing two equal students, that's going to outweigh. >> i remember talking to the dean of admissions of a school in new haven where there's good pizza and the dean said there's so many applications of good quality, we don't know where to

start. how about giving the top 200, 400 schools filling in slots? >> what the dean of admissions and the office is building a campus community and they're working to create different pockets of students there. so they're not going to be able to admit 20100 tubea players. they're going to have to have some tuba players, soccer players, and make it a cohesive community. >> david, weigh in. >> i think going back to our issue. wall street is grotesquely profitable. it's way too profitable. it's due to the fed's man iplation of the financial market. when you make interest rate 0 for six years you're enabling a carry trade as a result of the excess profitable it attracts talent, focuses on schools that feed wall street and there's a much bigger world. >> this to me is the heart of the matter. you went to lakeshore high

school, went to michigan state, 47,000 people. i know they have 185 tuba players but the bottom line is yale is 1/10 the size. so there's different colleges. how do you get people to look at the other 800 colleges across bill bennett's america? >> what we're doing on the site is we're not having students preselect their own schools. they fill out questions that they're not even sure why they're answering. >> they don't know where carlton college is >> right. we're presenting students with schools out of their comfort zone. >> thank you. >> should they know where carlton college is if they want to get a job out of university? >> well, yeah. definitely. carlten college is a great school. it's not something where we only want students to focus on the ivies, especially with a lot of student debt, we want students to consider schools that might give them scholarships. >> this is only a good argument if everybody has a mart ni or manhattan in their hands. >> an argument is always better

with any subject then. >> this is great. >> jessica, founder and ceo of admittedly. we'll be right back with more bloomberg surveillance right after this.

>> a conversation with a congressman in the loop, with betty lue. >> and american airlines and u.s. airways will formally become one airline today. the deal creates the largest american airlines but what will make it a successful deal? and how will it impact fliers? joining us now, george, what needs to happen for americans to make this thing work? we know it's worked for investors but how about actual fliers, the people that it should matter to? >> so what are they going to do to make it work for fliers. i think what they want to build here is a business airline, an airline that's going to work around important business hubs so they can build their yields, get paid the right price for flying customers around their network with the frequency they provide. they don't want to be in the business of trying to fly leisure travelers to orlando. that's cheap business.

so i think the company has to work on getting that business traveler on the network and getting paid for their job. >> what are they doing wrong now? why do they need to make that transition? >> i didn't say they're doing anything wrong. what we've seen since the bankruptcy and american's reorganizational round, we've seen yields come up nicely with american and the measures we measure them, their profitability have come up better than united. so they've made great improvements. i think with u.s. air they'll pull in some other parts of a network, they'll pull in reagan international, the most parent of it, pull in a nice management team. but there's work to do but they're getting there. >> the aneck dotes i get is simple. they don't trust the airlines. they believe airline fares are going . to take la guardia, am i right that there will be new competition there? >> i think it depends on again

where you're going, what kind of customer you are. if you're a business traveler, i think you're down to three really important airlines in the united states to get you places so they've got a route network and a frequency that will get you where they need. >> does that mean it's going to be cheaper or more expensive? >> i think if you're going as a business traveler, it's going to be probably as expensive as it is now. if you're going to orlando for vacation, i think the world is getting cheaper for you. >> what about flying outside the united states? this strengthens their role domestically. how about globally? >> american has really what i would call a small footprint in asia. u.s. air has none. so i think there's a big gap. when we look at the asia markets, it's really pretty weak. that might be a benefit but in the long term they need to find some route structure out in asheavement american has some great partners. america's got the british air

partnership out of london. >> what does it mean for my favorites, virgin america and jetblue? >> i think jetblue is trying to find a place here. it's trying to act as a business and leisure airline. >> all right. >> merger day. >> we're going to come back and talk about tech titans lining up against the nsa.

>> tomorrow, bruce rat never will join us. the nets are they in third, second, last, first place? everyone is under 500 with the nets. we'll talk to bruce about his very successful bar clay's center. >> they have had some incredible concerts. >> now about the nasa colloseum? it's huge. >> >> we'll talk to spiritter real estate. >> this is bloomberg surveillance. our guest host is david stockman former director of the omb under president ronald reagan. let's get company news. china mobile set to take orders

for the i phone, the biggest carrier will begin accepting orders this thursday. china mobile has not released its pricing plans. the chinese search engine said it was suspending because it was unable to safeguard interest. and technology's heavyweights are taking on the nsa including apple and google are calling on the u.s. government to overhaul its surveillance practices. a letter says is the balance between protecteding citizens and individual rights has swung too far in the favor of the state. >> it is an open letter to washington. is it lip service or a real national security reform? richard joins us, former white house security adviser and contributing editor. richard, here it is again.

how will the nsa in washington respond to the tech elite? >> they do not like this at all. the obama administration, however, may like it, i think. president obama has already indicated that he will be proposal certain reforms to these processes and has a review panel going over them with a report due by the end of the year. so it's possible some of these ideas will line up with president obama's own reforms which may be resisted by his intelligence community. >> when it's resisted by the intelligence community, i guess that takes us to whatever the next crisis is, whoever wants to predict that. but does this drift away given the next security crisis for the nation? >> no question that if there were another attack, and these practices were faulted, that would be a disaster. and all efforts to reform them would then stop. and what this letter essentially is arguing is that the economic benefits to the

u.s. economy and to these companies outweigh the reduction in risk that arises from these surveillance practices. that's a very controversial point. they're good arguments on both sides of it. and it is in a way the crux of the matter. >> what i found interesting is david kirk patrick was pointing out that you have a lot of tech companies calling on reform of the surveillance practices. but amazon was not one of them. does a company like amazon benefit from these practices? >> the good question. they certainly don't benefit a very large ve cloud computing contract with the central intelligence age sifment i'm not sure why amazon was excluded. what unites these companies is first they're all american companies and second this is all in their economic interest. when you look at this letter i think the first thing to understand is this is economically motivated. this is not a civil liberties statement for its own stake. >> the president is on an

airplane for services to nelson mandela. i'm going to guess he is going to be briefed along the way on the ukraine. inform americans about why we should care about the unrest in the ukraine. >> ukraine is a transitional economy and political system. and it has decided in the latest round to essentially enclodse its relations from russia and get further away from the european union. this is not as good for the u.s. interest and for the quality of democratic government inside ukraine. the country is being torn apart by historic division between the western oriented and eastern oriented russian dominated population and it's playing out on the streets right now. >> richard, thank you very much. greatly appreciate it. bloomberg contributing editor. it's like a back thing for americans but it just won't go away. >> the pictures of the ukrainians toppling over the

statue of lennon startling. >> they might have gotten the mem mo by now. if they are only toppling the statue of len inn now, come on. so there's a more -- >> but david that signals a large support in the ukraine to look north to russia. >> i agree. >> david stockman former director of the o.m.b. as the guest host this morning. it is time for our agenda. i want to kick it off here because we had some unexpected numbers out of japan. g.d.p. showing a stronger than expected slowdown or i should say a more exanl rated slowdown than first reported. the prime minister leading the way with his economics. he called for a cycle where growth propelled everything. bloomberg sat down. listen to what he said. abe re's no end to

nomics. the cabinet will prove the related politics. we will announce the timing of their execution and minister assigned to put forth these policies. >> there is no end to abe nomics. that's why you're seeing the yen weakening. you wonder when it's going to get to the 110 level. >> what's stunning to me, this goes back to paul volker in 1985. and i'm not used to it yet. this idea of japan in a trade deficit. >> it's a bizarre world. >> it's a changed an unique japan that gets a level of uncertainty into next year. >> we do know that the auto makers are cheering on that weak yen especially -- >> but the people of japan are not. it's absurd. it's the end case -- >> can you blame ben bernanke for this? >> yes. he urged they do it and they finally got a politician stupid enough to actually take ben

bernanke's advice. they are trashing their currency. ey are 100% dependent on importing commodities. real wages are still falling in japan. that's not doing any good. >> do you think ben bernanke is stupid? >> i said the policy is stupid. it is very stupid. and to think that a country with 250% debt to g.d.p. is going to borrow even more money, which is what he is doing today, they're going to print more money even though the balance sheet of the banks of japan is 30% of g.d.p. this is just the extreme leading edge of what is essentially the lunacy of all the central banks of the world in a race to the bottom. >> and i would for really focus on what mr. stockman said on leading edge. i think the idea of japan out front is critical. >> you mngsed bernanke. should we trust what the fed tells us?

it was in may when he said once we get to 7% unemployment we're going to be -- it's going to be off the table. here we are at 7% and the paper hasn't even -- taper hasn't even begun. should we trust the information is out of the fed? >> not for a second. it's evident they've been wrong for so long. they couldn't see subprame. they couldn't see a housing problem. they couldn't see a recession coming. they forecasted 3% growth and 4% growth for 2012 and 2013. they have no idea what they're doing. they're making it up. none of this has any grounding. and anything we learned in economics whether it was on the job or in college any time over the last 40 years. these people are dangerous. and it's time the public woke up. >> all right. the big-time investors know what they're doing? because activists are on my mind today.

bill ackman, herbal life fighting back. so the question to everyone, is this just become a playground whether we're talking about dan lobe dipping hit toe in or whether we're talking about eddie lamp ert in serious? should they just stick to stocks and bonds or to taking down companies? >> we'll see how it goes. it's been a train wreck for five, six, seven years. and more soap opera. my agenda for the day is what's up front with the journal and at times today bloom bloom bloomberg.com. and the reality of 8 and $12,000 deductible. the surprise cost in lack of coverage to a narrow group in the united states. >> and it's sml we'll continue to monitor. our thanks to david stockman former omb director under president ronald reagan.

bloomberg surveillance continues. in the loop is coming up next. have a wonderful morning, everyone.

>> good morning. it is monday, december 9. here withn the loop." us is cory johnson.

you are going to be joining us for two hours all week long. >> it is very early in the west coast. it is only 8:00 here. >> you are not jetlagged, are you? we are going to walk through some of the top stories. we are all over healthcare.gov. iter the dub octal when first was initiated, it has come back. about one million people have visited the site since september 2. today is the deadline for lawmakers. >> they have a dose of their own medicine. i thought it was very telling on cyber monday. the walmart site had problems. at the same time -- i am not sure which is worse. areome of the lawmakers getting an ugly surprise, including john boehner. he said that the premiums would double. co-pays are going to triple.