>> welcome to "lunch money," where we tied together the best stories and business news. i am adam johnson. around the world, north korea uncle of kim jong on. more airlines want that airplane. this is a bloomberg exclusive. in media, spotify is giving away its service, but it does, the price. to keepcard, how

virtual currency safe in our 12 days of bitcoin. we are kicking it off with world right here with a purge in north korea. the word purge is not often used in political discourse, at least in western nations. it is when a person or people considered undesirable in power , but itved from power happened this week in north korea. jong un was kim accused of theft and immediately executed. the news was reported on korean television. >> however, despicable scum who was worse than a dog, committed acts of treachery and the trail and turned on the internal love shown by the party and the leader for him. >> that was a mouthful. that was the evening news, run

by the government in case you couldn't tell. party leaders also got behind a purge after he was arrested last saturday. him is ang and purging thousand million times justified. >> as a person who had been trusted more than anyone else in the party, he has undermined the in our chemical factories. such ungratefulness. >> you can see other party members nodding in agreement. you will not find much opposition to this move in north korea because that is a way life is there, unquestioned support of either ship. but who was he anyway? -- support of leadership. who was he, anyway? >> he was considered something of a liberal, in north korean

terms. he was picked by the father of kim jong-il as someone to mentor kim jong un, and now he is gone. sittingxecution is not well with south korea, japan, china, or the u.s. either. theh korea is seeking ability to deliver nuclear warheads on long-range missiles. the latest development only makes the korean peninsula that much more unstable. >> south korea does not want a failed state on its northern border and china does not want north korea advance north of the border. >> the country is deeply worried about the developments, deeply so. the defense department is also stepping up surveillance. >> our government expects that north korea's recent development could bring a bloody reign of terror. we are watching rebellious

her obligations -- int the south provocations against the south. >> the question is will south korea do anything beyond surveillance? rex i don't think -- >> i don't think south korea does much other than stay vigilant. seen as one of the few relatively moderate minded north koreans. not as if his disappearance represents the ascendancy of a new wing that one's engagement. if anything, it is the opposite. a time to stay vigilant, but i am not sure that korea or washington need to do that much actively. this speaks volumes. >> he is old school. he does not care about his

family. he will kill on a whim. this may have been partially a personal grudge and who knows what else. it does not bode well when you start knocking off people in your inner circle. sense a little history lesson here. >> stalin wrote the book on how to be a despotic leader, and one of the things he did was create conditions of external threat in order to maintain internal repressive rule. if there is a power struggle inside pyongyang now, kim jong kind ofcipitate some crisis in order to justify a continued crackdown. that is one of the things despots have done throughout history. purge ofecution and kim jong's uncle is the biggest shakeup in north korea since the 1950s. a big dustup at twitter. we will explain.

your next flight is about to get a whole lot louder, maybe, and you will need some sort of mobile communication if you are these guys, prince harry and his fellow travelers. ony set out three weeks ago a 200 mile trek across the snow to raise awareness for wounded soldiers. >> one more full day tomorrow than the hotel friday. rex how are you feeling? >> not too bad. [laughter] [indiscernible] ♪

quakes this is "lunch money" on bloomberg television.

we are also streaming live on your tablet and smartphone. today, a big blow for airbus. air canada replaces boeing as the supplier of airbus jets. but the airbus ceo is not worried about the future. here he is with an exclusive interview with guy johnson in london. toi believe we will be close 30 aircraft delivered to our customers every year. in 2015 and beyond is achievable. >> what about doric? >> doric is a partner, and this bring flexibility to customers who do not want to invest too much with friends. to be --ys were going a380 was builte

for. >> we cannot deny that traffic will grow by about five percent a year thanks to asia, china, middle east. we will double every 15 years. can you imagine two times more traffic? the aircraft of the future. >> we are going to see that aircraft having a story in the united states. how do you change perception of the airline? >> good point. first of all, we have about 300 aircraft ordered and 350 to be delivered. but you are right. when aircraft are restructuring, they are not looking for growth, 380 is the aircraft for growth. now that we have gone through

this phase, i am sure some of them will be much more interested. >> air travel is about to get better or worse depending on who you talk to. the fcc voted 3-2 to allow passengers to speak on their cell phones during flights. >> without this proposal, you would not be able to text, e- mail or surf the web. the department of transportation is going to address the .ehavioral issues we are cutting away the onhnological underbrush behalf of consumers and competition. >> it is bad enough being herded like cattle on these planes without having to listen to boorish idiots have needless conversations on their cell phones. "other said, and i quote, eating stuck next to a gabler on -- beingr flight to

ber on a six- a gab hour flight to san francisco, i fear what i will do with my cutlery." "-- wrotead simply, simply, "nooooo!" and those were just from my family. exempt thelane is sub hunter. no talking.

>> the poseidon airspeed is 564 ines per hour and it weighs at about 183,200 pounds. the redies line in carpet, not in hollywood, but in silicon valley. we will tell you why. and people are lining up to see the largest gingerbread village in the world. it is in the new york hall of science is in queens.

the guinness book of world records has given gingerbread lane a seal of approval. cable cars, subways, and a skating rink. you can eat all of it, by the way. it will be on display through january 12. ♪

>> twitter dealing with some very unhappy users as it temporarily converted its block function into a mute function. twitter has since switched back. for the last several years, twitter has allowed users to problematic follower. last night, they decided to mute people you did not want to hear from. those folks could still read you

and retweet you. they could see you but you could not see them. twitter apologize last night. thank you, twitter. qualcomm, a big promotion for cheap operating -- chief operating officer. he was said to be considered for a top spot at microsoft, and qualcomm said no way, this guy is ours. is a fairly quick turnaround, but you have to , they have been talking about him. they said we want to keep you. we are going to make you ceo. it shows you how qualcomm can turn on a dime while microsoft is spinning around. they can take up to a year although they want to get it done this year. >> i have been fascinated by how names have risen up and then

fallen off the grid. alan mulally, although now there is talk that he does not have the experience in technology. he has dropped down the list. >> i think it really shows that within microsoft there are differing views of the future of the company. should they bring in a tested guy like alan mulally who has turned around ford and is a seattle-based guy? should he fix the culture there? or, you go to a guy who has been running the crowd services business and could be the future of competing. or do they focus on mobile with someone from qualcomm. you can see the different focuses of the board. >> but they can't make a decision. >> while qualcomm made a decision overnight. >> qualcomm moved fast. does this mean microsoft moved

too slowly in its ceo search while trying to replace that guy? >> we are really deciding what business we want to be when we business, cash transitional into mobile or a growth business? i think that takes a different kind of leader, and my believe is it is going to come from inside still. be waiting toay roll out the red carpet for a new leader, but in silicon valley, scientists are actually getting the red carpet treatment. this is not the academy award. we are talking about breakthrough prizes awarding excellence and innovation in science. emily chang takes us there. to come to an awards show that is only going to be an hour-long is a remarkable thing. i hope hollywood will learn a

big lesson from the scientific community. the real for this to oscars? >> i prefer this. going to be a fun evening. the average sat score here is higher. >> you make fun of actors. can you make fun of scientist? >> no, well, they are nerds, so yes. >> it is really amazing that there are these people who are pushing the envelope all the time that are completely unknown. is the latest ontario? >> who? >> area. >> can you tell me anything about the robot and he is working on? >> i will leave that to andie. >> you give money to a lot of things. why this? >> i think it is exciting and bold. it has the potential to be transformative over time.

>> it is exciting to see the geeks in the nerds have a fantastic night. thee are here to discuss fundamentals of science, time space continuum, black holes, particles, and you are worried about late-night television? that will sort itself out. >> tough crowd. stay with science, genetic testing company 23 me has been running into roadblocks with the fda recently. >> we are here talking about big innovation, big science, when the fda has halted part of your attempt at big innovation. what is the latest on that? >> we are working aggressively with the fda and i believe the fda is committed. there should be a consumer path for individuals to get access to this and there should be some kind of way we can have this big science so that everyone can get access to their genomes and there can be a massive community

like 23 me where we are solving the world's health care. >> do you think it is unfair that they are trying to make an example of your? >> we fell behind in our communications, and i think it is a complicated area. we recognize that. it is not a clear path about how to regulate genetics in the new world of sequencing. we are committed to it and we're going to do everything we can to show the fda that we are committed to this process and that we are going to do it. >> what is the likelihood it will be back on the market, the personal genome in particular? >> we still sell raw data and ancestry products. we are working with the fda to get it back on very soon. i would love to give you a date, but i don't know. not diagnoseill your illness, but it could make you feel better. we are talking about music for

free on spotify's new mobile service. we will hear from the chief content officer next. plus, how this brand is marketing itself as before rory of theocean -- ferrari ocean. ♪ any six minutes past the hour which means bloomberg tv is on the markets. i am olivia sterns. let's get you caught up on where the markets are trading right now. stocks up and fluctuating. we have seen gains and losses throughout the day. the s&p is up by about two points. the dow jones is up by about 27, 28 points. the nasdaq is adding about eight points right now. for the week overall, this is the worst weekly drop for the s&p since august. a couple of individual movers we want to highlight. the first is honeywell. they have done -- they have set

a $5 billion buyback plan in motion. we also want to sell he -- show you what is happening to and arco petroleum. faces a potential $14 billion settlement.

"lunch money" on bloomberg television, streaming at bloomberg.com and on your tablet and smartphone. i am adam johnson. it is the last day for public viewing of nelson mandela's body in south africa. police had to turn away thousands of mourners due to long lines which stretched for miles in the tory. mandela will be buried sunday in a remote village which was his childhood home. security will be tight. dozens of heads of state are scheduled to attend. a man who disappeared in a ran seven years ago -- in iran seven years ago was working for the

cia on an unapproved mission. his family said he was on a private as ms. tripp but reports now say -- private business trip, but reports now say he was part of a team of analysts the cia had sent to gather intelligence in iran. there is no confirmation on who him.aptured a storm hit jerusalem and other parts of the middle east with torrential rain. syrians of thousands of refugees have been living in tents in lebanon. the snow also forced the closing of schools and even the georgia stock exchange. amazing pictures. the digital music service spotify announced free service for smart phones and tablets. this means customers no longer have to pay $10 a month to listen on mobile. cory johnson caught up with the chief content officer. >> it allows users to experience

free service on the device of their choice. the majority of users get introduced to spotify on a mobile device. there is a distinction between premium and what free users get to do, but they get to experience cool features while maintaining the clear benefits of premium, play on demand, no ads. >> people can create their own playlist and listen to ads and her's first. >> -- interspersed. >> that is correct. it is better than radio. if you want to listen to bob marley, you can listen to bob marley all day long. it does not have the restrictions of pandora. frank sinatra is under

contract at the capital. music was specific to the medium. for a long time, there was no sin not true music available on cd -- there was no sin not true music available on cd. -- frank sinatra music available on cd. the stature of led zeppelin, it is not uncommon for them to have those rights, which makes it all the more gratifying for us that they had the right to say yes or no and said you know what? we want to embrace this model and introduce our catalog to a whole generation of fans. >> i wonder what your progress has been regarding lowering your cost. we think artists deserve to profit. no business model is going to be successful unless it aligns itself with the interest of artist. as daniel mentioned today -- our

cofounder and ceo -- he that we pay 70% of our revenue to the rights holders. to rightsrectly holders and copyright holders. we are proud of that. we think everyone deserves to make a dollar. >> here is what competitor rhapsody says about spotify's new mobile service. >> we believe great music should not be interrupted by commercials. if you are having a dinner party, you do not want an ad for target interrupting the moment. >> and you feel consumers are going to agree with you? >> we are seeing her he percent quarter over quarter growth in our model. quarter% quarter over growth in our model. >> what does a subscription get you? i have so many options, i don't know what to go with. what is rhapsody offering me?

>> choice, fundamentally. completely in control. unlike itunes, pandora, spotify, the listener is completely in control. you can access your playlist on any device come a including connected tvs. , including tvs. we have announced a deal with bmw to be integrated into their cars. we have expanded to 24 different countries. consumers are in control and they want choice, and smartphones give them choice. have 25 million songs in my pocket right now. >> how do you get all that music on rhapsody? >> we have label partners. our catalog is 25 million songs and growing on a global basis. you cany any artist find on our service today.

25 million songs is more than enough to plus -- press play when you are born and listen gital music service iss old. >> obviously disrupting the traditional music industry. so is this music producer who is part of the electric -- --ctronic dance music is business. >> i started my own label. i found traditional labels were too stuck in their own thinking. label, i didd the it with a good friend of mine. we were one of the first labels to sign up with itunes and have a deal with them. we were able to communicate directly. we do not need a label in the u.s. anymore. we run from the netherlands. i think that is interesting because we do not need a u.s. label, per se, on u.s. ground. we work with radio people here, radio promoters, but we do not work with a u.s. label.

>> can you only do that because it is funny 13? >> absolutely. internet is a great way to -- because it is 2013? >> absolutely. internet is a great way to communicate directly with your fans. this is a whole new world opening up. >> and the music industry is catching up. >> absolutely. >> he is doing something right. theburen was names -- named world's best dj five times, and that's a record. have you bought your lotto ticket yet? it's over $400 million. here's one way to spend it, on the edge of space. ♪

>> trading bitcoins could leave you dry according to the european union's top regulator today. other central agencies are weighing whether to regulate virtual securities. arounds a host of worry bitcoins. >> you have to be pretty motivated to figure out how to use it. >> and you have to give up private information. >> you have to give up private information. if you are using an intermediary or a peer to peer network, which is more complicated, you maybe don't. who are the users of this? internet people interested in real technology and criminals. >> this is an easy way to do money laundering. >> i would not say it is easy, but it does provide a really unique opportunity to circum- normal circumvent

controls. paul -- paypal and whatever are regulated and closely monitored. if you can have a peer to peer network, you can circumvent the middleman completely. that is a harder challenge for government. >> megan has some details on the pole i just referenced about what people really do know about the poll i about just referenced about what people really do know about bitcoin. >> most people not only don't know how to use them, they don't even know what they are. this is a bloomberg poll that was done over the phone on december 9. people were asked what is a bitcoin? 46% had no idea at all. was two percent thought it a virtual currency. six percent thought it was an iphone app and six percent

thought it was an xbox game. some people do know it is being used by criminals. what is also interesting to point out is the demographic. those under 35 are most likely to know what bitcoin is. i could say something about its future and who is likely to be picking this up. >> it is friday the 13th, considered one of the unluckiest days of the year, but lottery players across the u.s. are going to try their luck at a massive, $400 million jackpot. olivia stern breaks down the numbers. of one -- youre odds of winning are one in 239 million. you are about 30 times more likely to be hit by lightning. you are about half as likely -- two times more likely to make two holes in one in a single round of golf, so not very good, but if you think about the , the tickets cost one

dollar apiece. in theory, say you are warren buffett. buy up all the number combinations and potentially reap a $150 million profit. tohow does this compare current millionaires? >> we compared it to comp for ceos. jamie dimon made one third of tomorrow's jackpot. john paulson, as we know, on the about 450is down million dollars. >> he could use the lottery to pay for his losses. rex by the way, if you were to try to -- >> by the way, if you were to try to buy all of the number, nations in one place, it would

take over seven years to print all the tickets. coming up, we are going to tell you why you might prefer to stay here and cruise on the water. ♪

>> in luxury, balloon travel is going high-tech. it could actually take you higher than you have ever been before. the people at worldview enterprises one to send you high enough to see the curvature of the earth and the deep lack of space -- black of space. the price? $75,000. that is cheaper than what richard branson is charging. >> i have been involved in commercial space for my entire adult life. the whole thing fascinates me, going to space and seeing the

earth from that vantage point. a handful of people have been up to this altitude in the 1950s. i think the first person went to 100,000 feet in a helium balloon in 1957. the idea itself is not new. however, the idea of taking all of us is new. >> is this a profitable opportunity? what is the driving force to make this a reality? >> the market right now looks really promising if you look at what is happening in the luxury market. people are now wanting to spend their money on incredible experiences, not on luxury goods. that is one aspect. personally, i am really excited about the idea of going myself and seeing that view. >> of course. >> that is sort of the basic question. am i going to get back down? >> of course, we are building in all kinds of safety features. i wanted to be absolutely as safe as possible. if you look at the animation on

our website, you see what effectively looks like a parachute. it is redeployed. that means it is out all the time. effectively turned your capsule into a glider. >> do you have oxygen? a the capsule is like spacecraft. >> it is actually a beautiful looking capsule. we're looking at pictures. it is a very attractive capsule. i am not saying i necessarily want to get in it. what do you think? >> i think it is very cool. richard branson has been on this show many times. he is very excited about virgin galactic and what they are doing. versus 75 thousand dollars. how are you able to undercut the price so much? >> well, it is an incredibly different thing. he is using rockets.

we are using a helium balloon. it gives you a very different experience. you could go up there and be up there for hours. >> may be the next time we do this interview it will be in one of your capsule. >> wouldn't that be fun? >> if you would rather try cruising, maybe you should do it on a yacht. >> today, we are boarding the riva boat. this is the liner. stages.e four this is the first stage. we start in the engine room. we install the first cable. here we start to install the machinery, the engine and that tanker, and then we start to see -- see thea here

boat. here we placed the deck. we start to see the boat and shape the boat. we spend 11 days to finish all of this and we apply 20 layers of varnish by hand. last test. here we check the boat and all systems on board. all the nautical systems. and then, when all systems are done and ready, we started to test the boat directly on the lake. >> all right, below the water is where we find today's mystery meat. this is a nativity scene for sharks. ♪

>> it is 56 past the hour which means that bloomberg television is on the markets. i am olivia sterns. let's get you caught up on the markets and see how they are trading right now. we are in the green on all the major benchmark indices. the s&p is up by about two

points, the dow jones higher by about 26 and the nasdaq up about six and half points. also want to show you what is happening on the treasury markets. yields have been swinging between gains and losses as well. of course, the big catalyst is the possible taper. investors have been upping their bets that the felt -- fed will in fact start to taper next month. i want to bring in james r.i.m. ellie, a strategist for keen on the markets. up by about 26%, but this week we are on track to drop about 1.5%, the biggest drop since august. is this a short-term correction or do you think it is the beginning of a broader selloff? >> i don't think it is the beginning of a broader selloff. we look at how well the market has done this year, and we look

back historically, there are not that many instances where we have had a negative december after the kind of gains it has posted this year. i am staying long through december. i think investors are getting of alertness before next week's fed announcement. as markets trade dinner closer to the holidays, it is easier trade center closer to the holidays, it is easier for us to see transparency. >> you are not taking any money off the table. if you look at the vix, you do not see a lot of signs of panic. what are your top plays for next year? >> i am looking at focusing a lot of my attention on us-based oil refiners next year. we all know the u.s. has increased its production of oil by quite a bit this year and the refinery capacity is not quite there to cover all of that increased production. they have been kind of choppy this year. i am looking and filarial and tesoro. both have an choppy, but as soon as we -- valero and tesoro.

both have been choppy, but both of these stocks have moved quite a bit higher in the past three months and now we are seeing institutional money flow out through january and february, indicating they think the stocks will continue higher. that is a trend i want to follow. they have not gone to ron yet. --of course, the big risk is gotten it wrong yet. >> of course, the big risk is we think the fed will move next week. taper, how dohe you position yourself to invest refiners but protect against the taper? >> i look at trades where i can limit my downside risk and have a well-defined upside potential. this way, i am able to have a little risk for a big upside just a long was

only investor, i could look at buying puts on the market at these levels. we have seen a big move higher on the vix at a percentage basis, but it is still trading on a relatively low level, holding just above 15. >> thank you very much. we will be back again in 30 minutes. in the meantime "bloomberg west" is up next. ♪

>> live from pier three in san francisco, welcome to the early edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i am emily chang. our focus is on innovation and technology, and the future of business. let's get straight to the rundown. he was on the shortlist for microsoft's ceo, but now he has the new job as they had of shall come. -- of qualcomm. time warner cable has been a subject of takeover talk for weeks, and now it could be just days away. charter communications is prepping offer for less than $140 a share. and the royal payout in silicon