lackberry, nokia, scarlet bottom all. good morning, everyone, we are "bloomberg surveillance" live, it is monday, december 16. scarlet fu and michael mckee is joining us. you are going to brief us on this strange monday. there is economic news of two sorts print euro area manufacturing is growing at a faster pace than anticipated led by germany. the french economy collapsed overnight. their manufacturing numbers are bad. chinese manufacturing are not particularly good, falling to a three-month low, indicating the country is vulnerable to a slowdown. we get our turn later this

morning with the economic data in u.s. at 8:30 a.m.. then a tertiary index and industrial production and capacity. on the schedule today for companies, it's the first day of the skifor montclair, fashion manufacture, up 41% in its milan trading debut. draghiesident mario speaks to the parliament this morning. >> let's do a data check. futures are doing better after a challenging week last week. the euro is up after a poor showing end of last week.

the two-year yield is higher. it is a risk on field to the american economy. chart to get your economic week going. the fed will have an important meeting. overl sales go way up 2007. our industrial production is way behind? >> you have different grades of manufacturing like utilities in that ip number but manufacturing is way down from where it was. >> it is two separate economies. >> we are buying more stuff from overseas. >> stay tuned for our full coverage of the fed meeting

tuesday and wednesday. here is scarlet fu. >> we talked about a spirit of compromise in washington last week but it appears to be gone. it may have been short-lived. republicans and democrats actually compromise on a budget deal. the house approved it but it faces opposition especially from senate republicans. paul ryan and patty murray said republicans will insist on more concessions before agreeing to raise the debt limit. >> they are doing that again? >> we knew there was something wrong with the budget you when it seemed too good to be true. could hit their limit in this bring. we know how the government can stretch that out. april, probably first quarter. snowden, the nsa leaker, the nsa is considering offering

amnesty to him. they are assessing damage just how much the leaks caused. they said amnesty is worth thinking about if he agrees to stop leaking documents. >> it's really not in the morning papers. >> this is something that has been percolating based on what edward snowden had been slowly leaking to the press and the damage he is getting to the u.s. government and they want to get him out of the way so maybe amnesty is an option. our final front page story this morning is about google making bets on robots. it just bought boston dynamics, a company where robots can climb hills at 25 miles per hour. it was founded in 1992 and has been designing robots for the

pentagon but no word on the price tag. it is the eighth robot company that google has bought this year. the effort is being headed up by andy rubin. he started up the android business. that's what caught my eye. honor thes it will current military contracts at boston dynamics. it is probably interested in developing robots for more commercial use. >> it seems like pure research and development. you wonder where it is going. front pagere our stories. >> it is a busy week but we are two weeks away -- next week is a four-day work week? a zero day work week for tom keene next week. >> it's a rumor. after the glow of 1986

compromise, capitol hill looks for to rancor. senators and congress people have hit the ceiling over the debt ceiling. phil mattingly is with us now. what is different this time about the debt ceiling debate? >> the problem is is that nothing is different this time. the budget deal last week that was negotiated by paul ryan and patty murray and the senate is likely to approve the deal by wednesday. there is republican apprehension but enough will get on board to move it forward. on sunday, paul ryan said when we reach the debt ceiling, february 7, we want something. no longer world built be clean -- no longer will there be clean debt ceiling agreements for it we thought we were out of the woods and now we will have to deal with shutdowns for the next two years?

we have to deal with the debt ceiling and quickly into 2014. >> what is it they want? the budget has been going down with sequestration. what are they looking for? >> it's about cuts. they don't have to be specific. they just want cuts. about a necessarily specific cuts. it's about numbers, being able to go back to their constituents and say we are reducing the to and bring down the deficit. that's all they care about. they want bold numbers and that's why they had problems with sequestration being raised. theyyou will see is that will regroup after a rough couple of months and come back in january and go to retreat and come out with some specific proposals. ofthe minority runs1/3 government, they need something, like a lot of

politics. we appreciate it. our guest host this hour is the author of " bargain fever." mark elwood joins us. nic thompson is with us as well with "new yorker" magazine. how is the holiday season? saw the same store sales increase in november, it was 13% which is the lowest it's been in three years. >> is it just shifting to new retail venues? have you been into a store recently? >> no. >> there is a feeling of desperation. >> what does that mean for the post-christmas sales? >some people hold off on buying things until after december 25.

>> i think it will be like rummaging in a bizarre. immediately after christmas, we 70% off or more. it will be a frenzy in a will be interesting to see in january after they review the season. i think there will be few people who have done really well. >> if you search for whatever you are looking at, you get 14 things right away. i don't need a robot to do google search. why are these guys doing well? >> they are trying to build up a clientele for google glass. >> that's a good as answer as any. >> they are building up robots and trying to change the world around us. they want to change everything about life that is inefficient so they want robots that can clean up their house and robots that can deliver packages and robots that can do everything

humans can do now that humans don't like doing. >> can they get a robot to search google for me? >> absolutely. montclair, you cannot keep the codes in. -- coats. they are up 41%? >> the jacket is like $1000. >> montclair does the one thing every one is doing which is keep inventory tight. they are tight about what they produce. it's not like a spew of stuff. >> if you go to cambridge university, you say spewing. [laughter] let's spew you with company news. >> i don't spew.

aig is closing in on a deal for one of its units. aig would get $3 billion and another $2.4 billion in aircap stock. aig has been narrowing its focus due to new regulations. apple, walt disney, and ibm are pushing a stock i've back to record levels. the stock choir equaled 6.4% of daily trading in the russell 3000. that passes the previous high of four percent. its first will hold auction in india this week, about $8 million in modern and contemporary art will be up to sale at the event in mumbai. it has attracted the attention of the auction house, the buyers in india. the buyers there grew 22% last year. they won't need montclair

jackets and most of india. >> when they travel, yes. 40 one percent is our number, 6.5 billion dollars, that's a much business could be generated by facial recognition products by 2018. we will discuss this coming up on "bloomberg surveillance," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. ♪

>> good morning, everyone. i am with scarlet fu and michael mckee in this week of the fed meeting. great to have you here.

it is december 16, a busy day. right now, my face -- >> all of our faces. it is the price of privacy. this is a security issue with business implications. the white house will focus on facial recognition technology early next year. we are furring to tech knowledge he is the stuff of movies. remember "minority report." pictures of your face and advertise to you and target your ads based on who was walking by. a patent just awarded for facial recognition technology and that could potentially be used for a future iphone or ipad. facebook already uses this software to tag photos of friends and families. one of the pioneers of the industry calls it disrupted. tech knowledge he that facebook had launched

using face recognition is a game changer to some extent. as more and more people start putting images of their lives on facebook and automatically create a database, it allows you to search and retrieve and create links. >> creating links for you and your social network profile and advertising has targeted as. lockheed martin is looking for potential uses for this facial recognition software. >> security is an obvious application but it will probably all come down to advertising. >> walmart is looking into a way to reduce what they call shrinkage in the industry. magazine" isyorker on the cutting edge of face recognition technology. do you bite this idea? -- do you buy this idea? >> i think there are many users

and one was described in the wall street journal which is china making sure that people are over 15 years old. facial recognition technology can tell if you are older or not. it probably comes down to advertising and security. large-scale facial recognition like crowd skimming -- scanning does not work. >> does it work for travel? can i take a picture of my ugly face? >> in your case, yes but for the rest of us not yet. it's coming. they have applications that use eyeball retinal scans for security purposes. they talked about that for airlines. >> the big question is whether people will allow this technology to be used on themselves. do you have to sign off on this? >> a lot of the security cameras at scores -- at stores

are being upgraded so you can identify a frequent shopper and tell they are in the store. i want this for a party. i want to be able to pick up my phone and recognized someone that i already met. that would be helpful. >> most people can tell who you but youd on your phone can turn your phone off but you cannot do that with your face. it is one of several reasons why it is under scrutiny. >> the commerce department will meet with the companies involved in this and come up with some ball and terry rules of conduct. -- some mandatory rules of conduct. this is moving forward. the white house is involved with this. >> that is our question of the day. should edward snowden run our facial recognition? what should google do with robots?

i'm thinking the offense of line of the new york giants. >> they could use some help but robots might not help them. andy rubinfact that who headed up android is in charge of this. he had a good track record of hits. we will stay with technology because coming up him a the samsung smart watch or the black very phone, we will show you which were the biggest tech flops of 20 13. that is coming up next on "bloomberg surveillance," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. ♪

>> good morning, "bloomberg surveillance." last week, everybody left on

friday thinking the news of the economy was good at in china, the preliminary reading of the hsbc index falling to a three- month low. the pace of growth is slowing as the effect of government stimulus for grams where all. in japan, abenomics, japanese companies cutting their capital spending. the projection for his third increase in 4.6% at the largest companies. bird months ago, but forecast was for 5.1%. it snowed over the weekend on the box office numbers," the hobbit" took in the number one spot with $74 million. and $22 million in box

office receipts. petere movies, after o'toole died saturday at the age of 81, his performance in lawrence of arabia earned him the first of eight academy award nominations. " lawrence of arabia" is that knowledge as one of the greatest movies ever made. the amount of money it took back in 1962 tells a different story. arabia won seven academy awards and was nominated for three more and made a total of $70 million worldwide. hobbit" made $70 million in the first weekend. it's also on more screens. that is back when you had the singleplex. >> i saw it in rochester, new

york. widescreen was big at the time. david lean change the movie business. >> how many people who are under the age of 40 actually saw "lawrence of arabia?" >> maybe in school. movie.s a five hour long they will not show it at school. >> you would be surprised what they do at school. this is about technology and how it does not just do things for us, it does things to us. the president was involved in a selfie not so long ago during

the nelson mandela event earlier this week when he was -- when he was with other world leaders. >> you wonder how that will reflect in five years. all this stuff is somewhat disposable. everybody takes a picture and forgets about them. >> more coming up on "surveillance," including dirty one percent which is how much jcpenney increased discounting during cyber week. we will talk about that next. ♪

>> midmorning, "bloomberg surveillance." it's a federal week this week. of the have coverage meeting midweek.

after a difficult week last week, the s&p 500 is up seven. a stronger euro on a back-and- forth morning. nymex crude has done nothing. scarlet fu and michael mckee are here. newon retail, what's old is especially at jcpenney. there has been two years of declining sales there but now, the department store chain is posting gains as it trims higher end brands. jcpenney is back to selling more of its private label brands that they can produce more profitably. >> there it is, christmas or no christmas, we look at what we are due and we are obsessed 24/7, americans have bargain fever. written"od has

bargain fever." does that transcend up to the luxury brands? >> it is more evidence of luxury brands because everyone assumes mass markets are discounting. very secretly, the highest end brands are doing it and they say they don't discount. i hope they have their fingers crossed because they are all lighting. --lying. at will i see 40% discounts bergdorf goodman? >> chanel can do what many can't which is resist the lure of discounts. so many fashion brands are being bullied by wall street to show growth. chanel is privately held. montclair nowmean has to do the same because they

are publicly traded? >> carrie bradshaw bought luxury labels and then her boyfriend was the one, the real- life mr. big pushed those labels into the mall. they also pushed for more growth. the upper label brands, how do they discount? or to walmartne if i want something cheap. >> you are going into bergdorf goodman and your sales assistant has called you and says right at sales started a week before the regular sales, would you like to shop secretly at 40% off? sales are being used smartly as a reward for loyalty. they are happening in front of your eyes. >> you are acclaimed for your research. you went to the university of chicago and dove into a topic. what did you learn in your research?

>> i think it's important to think about the psychology of shopping and the psychology of retail. it is the way we respond to prices which is very much at discount chemical reaction. also how we are manipulated by every store we walk into. >> are you saying we should get drunk before we go shopping? >> no, shopping will get you drunk. what did you learn at jcpenney this weekend? they finally ended two straight years of declining same-store sales. are they ready to turn things around? getting into a doctor who moment by getting and undoings everything that was done in crossing their fingers. they are reinventing the store like it used to be. >> will the customer go back to that? >> we are talking about holiday

retail which is different than ron johnson a few months ago. >> they had one price point. >> it was a sterile and pristine presentation. this is the michael ullman we love. >> the problem is is it is triage to make sure it jcpenney does not go bust. even though ron johnson had a bad attitude toward customers, them --msaan teaches treats them with more reverence. >> big discounts? >> can they survive? >> i think jcpenney will survive but it was about profits when ron johnson took over and i think it will end up that profits -- about profits once again. >> who is their competition? >> i went into a garden state plaza mall in new jersey and jcpenney is in the same mall as

a neiman marcus which is fascinating. >> that's the bifurcation of america. is sitting there like their leg has been amputated. i don't know if the jcpenney customer is the amazon customer. if you look at a lot of real value shoppers, you would be fascinated by how minimal the penetration of smartphones is. they are not show rooming. they are just clipping old- fashioned coupons. >> you mentioned amazon. amazon is broadening its customer base. costcoe now going after and sam's club by opening up a wholesale business to help it expand into that growth area. shipping and the prime business at put together. what do you think about amazon making this foray into club shopping? >> i would like to see them

make a profit before they expand into anything else. everyone treats amazon like a golden child. at some point, i want my money back, not market share. this amazon pantry, there are lots of little asterisk problems. it will be certain weight and then it will qualify and that just oozes problems for me. i want to order 10 bottles of laundry detergent so i/o don't have to carry them home. that will be too heavy for that service. customers can buy because shipping will be free. >> i can order a one-year subscription to "new yorker magazine" and it will fit in the box. >> it's a steal. >> is that the future for "the new yorker magazine," subscriptions to amazon? >> subscription certainly but

magazine subscriptions are relatively easy to handle compared to shipping laundry detergent. >> is amazon big in the united kingdom? >> it is but the uk is a smaller country. it is more dense so shipping and ordering things by mail is a very american hobby. it was very novel and amazon did this. we can just drive to the mall more cheaply or jump on the train. to answer aot able glaring need in the same way. it was only a little bit cheaper. >> the malls are getting more dangerous in this day and age. throughill see this december 24. you wonder what next weekend will be like. >> it is usually the biggest shopping weekend of the year. it is the weekend before christmas. >> it's terrible. >> i hear tom's phone ringing that bergdorf goodman is on the

phone for tom. >> it's a terrible year. >> coming up, the chart of the decade-the u.s. is not recouped all the jobs in the great recession but we are getting closer to breakeven. ♪

>> good morning, everyone. "bloomberg surveillance." >> manufacturing in the euro area grew more than forecast this month, jumping to 831-month high because of manufacturing in germany rising to a 2.5 year high. french production fell to a seven-month low. to beginrkel is set her third term as the country's chancellor. will sign their official agreement today on the group announced their cabinet choices yesterday. they will be sworn in tomorrow. one of the ecb members is joining the german cabinet. a record number of private college presidents a pay package is worth more than $1 million per year. the highest-paid is the university of chicago, robert

zimmer who earned $3.3 million. in all, 42 private college presidents earned more than $1 million in 2011 up from 36 the year before. those are the top headlines. they spend most of their time raising money at colleges. one million dollars for college presidents is probably worth it for making the bacon. has done better than good. it is time for a better than good single best chart. >> this is the chart of the decade on the long road back in the u.s. labor market. published numerous times but it is a reminder of where things stand. the number of jobs lost in this recession vs post-world war ii recessions. it shows how severe the job losses have been in this recession in terms of percentage and how much longer it is taking to reach the pre-recession

peaked. there are fewer payroll jobs than before the recession started. at the recent pace of growth, it will take about seven months to reach the previous peak. >> we are getting there but that's an amazing chart. this is histores is. >> many people who cannot yet and get -- get employed out of the workforce and lose their skills. do you get a lower paid job? it is hard for them to do that and hard sometimes to get those jobs because people say you are overqualified. >> what is the research on people who are out and stay out because it is worth staying out versus getting a job. >> it is not definitive but there is some research that suggests that people do that. unemployment benefits will and

it the end of this year for some of them. >> i saw a terrific set of photos. our first one is interesting. theyands of cell phones -- lit up the sky in the ukraine tummy tuck. the protests were in teaming over the weekend. it is in its third week. it has heated up. some of the power is shifting to the people with cell phones. senator john mccain was at the protest site on saturday and met with opposition leaders over the weekend and he tweeted calling this a display of patriotism. >> interesting. >> the final ceremonies were held over the weekend for former south african president nelson mandela. he was buried on sunday in his hometown. 4500 people attended the service, smaller than the nationwide service for his memorial. andce charles of angling --

charles of england was there and oprah winfrey and jesse jackson were there. blackrial of the first south african president officially ends. >> what did "the new yorker" do on this? >> we had a series of lovely essays remembering his beginning. this is what he meant and we had some essays saying this is the legacy he left. he left and economic legacy. >> he was on debts door for so long that people were able to prepare. d that the minute he died, everyone went live with whatever they came up with, all the magazines. >> peter o'toole passed away saturday in london, most think or his role in "lawrence of arabia." he received eight academy award nominations. he never won.

and's born in ireland that it at the royal it had a me of dramatic arts in london and had a healthy theater career before entering film. he was 81 years old and wrote on on thevator -- and rode elevator once a bloomberg with me. i looked at him and he was standing next to me. always aine was " bridesmaid, never a bride." >> only peter o'toole could do an acceptance speech when he got his honorary oscar. >> he was not the only hollywood icon. joan fontaine just died who arguably was a bigger figure in golden era hollywood. >> what is the importance of theater in london? so many americans don't understand the old vic or the bristol of decades ago. >> i think theater was one of the reasons british actors do so

well at awards. they go through boot camp. when you are acting in the west end, it makes you a better actor. the issue now is that a lot of the west and this sort of tv stars to drive ticket sales so i wonder if the next year of british actors may not be able to grab the awards as easily. >> there is hope for us. >> on broadway, scarlet fu. very exciting. coming up next, 2013 is just about over and we will take a look at the biggest tech flops blackberry,-- nokia, blackberry, the list is growing. ♪

>> this is "bloomberg surveillance." this is company news. are falling.fing has been studying antitrust concerns.

a group of amazon workers from germany are taking their case to the company's seattle headquarters today. workers have staged strikes throughout the year in germany demanding higher pay and a better work environment and structure planted some of the amazon german locations. start theill help world on fa recognition. some companies will have input into facial scanning technology at the commerce department. a number of companies plan to offer products from security to sales. >> it's here. 2014 is now we do something with it? >> we will see how it develops through the year. it will be deployed. >> you already have it on facebook. with how you tag people. we recognize you. >> if you are not failing in

technology, you are not trying, it is said. there are plenty of tech flops this year that made people cringe. with us to explore the best of the worst is nick thompson. let's start with blackberry. it has to be in the top three. it came out with such fanfare and it flopped. >> there was a moment early this year when i thought it was the rejuvenation of blackberry when the stock came up. we have been talking about it falling apart. it's a very sad story. >> they are experiencing rain drain by losing their cfo and other executives. people are talking about what kind of value about breaking it up. a it was a fire sale for couple of months ago about selling patents. there is a final chance and this is a company that missed android

and the iphone and got crushed. >> what about a company like samsung and smart watches? this was hyped but overhyped? >> samsung has had a great couple of years. they put out their smart watch. thought this would be amazing and it turns out it does not really work and it looks weird. it's a little too expensive. this has to be the single gadget that flopped the most. people are wearing them? >> i haven't seen anyone wearing them. do you believe you cannot succeed without flopping? out enough tech products, you will flop with some of them. the first thing in the marketplace does not have to flop. look at the apple iphone.

the smart watch did not have to flop. we will eventually have smart watches that work that it might be longer than we thought. >> it reinforces the perception that samsung is good at copying but not necessarily good at innovating. >> that's partly why they pushed the smart watch out early. ago, i saw a surface but i have yet to see another one. i saw one in miami beach. of wanted it to succeed. it is good if there is a more competitive tablet market and it sold like 400 million in the last quarter and apple sold 15 billion. it was an interesting product but it did not really fit together and they did not have a customer and microsoft has not been great at building it. >> microsoft bought the handset business of knoc nokia. does that fit together?

>> it probably was a good idea. it gives them a chance to compete in the phone market and gives nokia a lifeline. there was integration between the two companies. in some ways, microsoft seems like a flop for the year. the stock is actually up for the first time in a long time because steve ballmer is leaving. software or concept flops count as well. patch is where it is at microsoft and they held on and last week they said enough of this. >> do you see more next year?

do they continue with experiments? >> technology is relatively easy to start or end a new idea and we will see things come out and some collapse. >> thank you for giving us the three worst tech flops of 2013. report --ign-exchange what will the fed due to the dollar? 12,105.nesian ruopea, a much weaker indonesian currency. now.body is watching this the australian dollar continues soft and there is canada both ways. the pros look at 1.06 canada and the tourist dollar which is how so youvert it is .94 can flip the reciprocal. i did reciprocal map on monday.

>> i'm not sure that's a good idea on monday. >> reciprocal thursday is coming. >> the reciprocal 7 a.m. hour, coming up, the future of advertising on "surveillance." ♪

become aded house will divided senate in 2014. rid lock shifts on capitol hill. we speak with a member of the house armed services committee. will this week's fed meeting be the last for ben bernanke as chairman? he tapers off into the sunset. a fashion update, so 20, scarlet must the seen in montclair. it looks like a walking snow leopard. good morning, everyone. this is "bloomberg surveillance." it is monday, not -- december 16th. are honored to bring you kevin roberts this morning, worldwide ceo of saatchi & saatchi. right now, we need a brief transformation. coat?uit, the montclair what the hot -- what the heck.

the euro led by germany, numbers are down. the chinese manufacturing index unexpectedly falling to a three- month low, indicating that country is vulnerable to a slowdown. here in the u.s. we get our turn at 8:30 in the morning with empire manufacturing and a tertiary index, but people do not pay attention anyways. we will see how manufacturers did in this country. out shares of montclair, and trading for the first day, up 41%. mario draghi, speaking to the european union parliament this morning, we will see what he has to say about monetary policy there. >> scarlet fu has important company news. >> google is betting big on robots, purchasing boston dynamics. google says they will honor their current military contract but does not plan on seeking out

new defense deals, perhaps paving the way for a commercial application. soaring, montclair, the ski wear maker opened up 41%. investors have thought about 27 times the amount of stock available. montclair went public after private equity owners raised 784 million euros. they followed their successful trading debut of other luxury makers as asian demand for high- end products attracted investors. facebook helping to write the world on face recognition, they and other companies will have imported regulations on facial scanning technology, shaping the world in february and a number of the companies intend to offer a face scanning product on everything from security to very targeted sales pitches. >> shaping the rules is the key. it is truly a new territory. >> there is a lot at stake for

everyone out there. >> we do not really have rules on privacy. >> you literally wonder how they can be privacy rules if they so recognition is on facebook. it is fascinating. facebook, butoff not if you are walking around. >> are you looking at me on cosmetic surgery? what do you think? e-mail me. >> botox is not exactly what we are thinking of. >> i am getting a radio facelift . good morning to all of you, worldwide. well, that was short. compromise,like capitol hill looks forward to dissonance over the debt ceiling . phil mattingly is with us, our white house correspondent. we are going to look at the defense budget in this hour. how much has sequestration and budget battles involve

themselves in our capabilities? >> it was an enormous part of it . the cuts, the sequestration was put into place with deep cuts, hoping to draw republicans into some kind of compromise. what we saw last week was not only a budget agreement that eased sequestration, about $30 billion for the defense department over the next two years, obviously a big deal, but something that happened shortly thereafter was a bill to fund the defense department that was passed. positiveovement in a direction if you are at the pentagon right now, but there are still major cuts in play and what you are seeing from the defense department is they want more, some type of leeway out of congress going forward. >> everyone was all excited about this budget agreement, republicans eating together with democrats, the fox sitting down with the hound, then one of the foxes came out and said well -- no, this is not a new era of cooperation, we will have a showdown over the debt ceiling

again. >> take the budget disagreements off the table for two years, everyone has a high five, then you have the debt ceiling. house republicans control the house, not the senate and not the white house. they want leverage, a place where they can get some of their policy through. they feel that if they hold the debt ceiling hostage, the administration has to come to the table and give them something. president obama has made it clear that he will never negotiate over the debt ceiling again. all ryan said that during the sunday shows that this hasn't changed and it is not going to any time soon. >> very quickly on the sunday shows, 60 minutes is reporting, i guess, or is it just two people talking? about nsa in this raging debate. how big will that be in this december week in washington? >> what you will see is them stoking the conversation again.

the president will talk about that in january. this is the huge debate in congress. while the nsa is talking right now, they need to defend themselves publicly. there will be major legislative curtail theirto abilities. >> thank you so much, phil mattingly. guest hostoast -- for the hour, kevin roberts. we say good morning to fernando, watching on apple tv, sure to bring bloomberg television to you. it really speaks of this new digital world. we are here, we are there, all of a sudden we are on apple tv, a world we have to deal with everyday, so what will next year bring? agers now.all screen none of us are ever away from our screens, right? mobile, television, everything

is connecting, who knows where it will go, but it will be intimate, social, and transactional. >> is it good for your industry? >> it is exciting. >> i did not say exciting, i said is a good as opposed to the cbs, abc, nbc? >> it is much more fun. ideas of the currency of tomorrow and these screens are opening up idea after idea. there is this great switch of power. the media no longer has power. >> you saw them last night. >> fantastic. >> advertising, entertainment, journalism, they are all melding. >> people have the power in it is all about them. >> what about this facial recognition technology that companies are starting to integrate? will we soon see advertisements based on what someone's face looks like?

>> i would not want anything focused on what tom's face looked like, but with yours i think that consumers want that. >> but i do not want ads targeted to me because i have black hair. >> you will always have the opportunity to opt out. it is not what consumers say or do that matters, the winners will be the people who can do what you said, figure out how you are really feeling. not lay it on you, not throw it at you, but figure out how you feel. >> everyday is different in your business. we saw this over the weekend. beyoncé, with columbia records, said no, i am not doing this. she launches an entire album. it is like a throwback. remember when you bought an album? 13 songs, three dollar net profit. weekend, she took

us back to the 1960s. >> she said she was doing this all for us. she delivered intimacy, social connectivity, a transaction that you can buy. theaty perry retweeting out beyoncé surprise album. you have like 8 million messages. forget it. a marketing campaigns of these record companies, they are done. >> marketing as we knew it is dead. >> explain that. >> everything that we learned about creating a brand, creating brand awareness, creating a demand and all of that, that is all gone, you have to do what she did, create a movement. >> a surveillance movement? >> with every company? that is too many movements. >> you have to. we all want something bigger than the brand now.

every beer tastes good. >> really? at therman roberts surveillance break exclusive, every beer tastes good. that is to help you get through the day. how about a data check? currencies, commodities, futures doing well, dow futures are up 77. we will quote sterling here for kevin roberts and nymex crude. look like you want a new ski jacket. >> i do. listening,you are coming up, 1200 $20 quilted polyester jackets, montclair shares are up they on their ipo day. ♪

>> this is "bloomberg surveillance." kevin our guest host, roberts, ceo of saatchi & saatchi, iconic in the 1970s, they coined the phrase "labor is not working." affrontedfirm is digital and mobile marketing. simply -- do you and i want advertisements on our cell phones and tablets? i saw one this weekend, i was so intrusive. convince me. >> you do not need intrusive

ads, you do not need ads that do nothing for you. you need ads that inspire you to be a tiny, tiny bit happier, that is all. how can we help you get more information? how can we do it quickly? to 2016, going out 2017, 2018 and say -- this will not work? >> this is forever. it is about people to people. if you look at how we are using mobile devices no matter the age these for are using connectivity. advertising is popular culture, entertaining, and here forever. >> tell me about the merging of content. you people are legendary, worldwide, all the different campaigns you have done. how do you keep engaged today with the content of creative people at saatchi & saatchi? >> they have never been more

excited or uplifting. there are no rules. we live in the age of the ideas. ideas will make the difference in our world. debate, not not governments, but action and ideas drive action. >> how do you take the best practices of, say, apple computer and bring that over to more prosaic industries? >> you never tried to do that. you start with the consumer and the industry. and not only do you listen to them, because what consumers say and do is not that interesting, it is how they feel that matters. you have to be anthropologically close. >> you can do that on a cell phone is verycell intimate, he or she will tell you anything. >> if you mention she, i am useless. >> you have got potential. >> i have potential?

great. where will we be in 12 months? >> i mentioned it before, we are all screen agers. the world is moving to smartphones. prices are coming down. every american is going to be connected to their smart phone. >> kevin roberts has taken the kool-aid. coming up, google, robots. robots. this is "bloomberg surveillance ." good morning. i will be turned into a robot. ♪

>> good morning, everyone. our twitter question of the day, what should google do with robots besides map your local street? a our robot crazy. what should google do with robots? good morning. ,carlet fu and michael mckee our guest hosts. kevin roberts, part of the communications

firm. help me out with us, publicist? >> that is the american vision -- american version. >> peter o'toole was a publicist. >> our top headlines this morning, we are meeting with economics and a surprise jump in manufacturing in china, preliminary purchasing index at a three-month low, forecasting a slight rise, the report still showing expansion, but the pace of growth is slowing, the effects of the government stimulus program wearing off. japan is stimulating, japanese companies cutting their forecast for spending. projections for an increase of 4.8 are sent of spending by large companies this year, three months ago that number was 5.1% according to the bank of japan's new survey. the weekend box office numbers for "the hobbit," easily the number one, making the top spot, second film in a trilogy, 70 $4 million in sales for warner

bros.. "frozen" place second. >> one company that we need to focus on this morning is montclair, the luxury ski wear maker making a debut on the milan stock exchange as much as 45% above offering price. investors clamored for the shares, seeking 27% of what was available. the montclair ceo spoke with bloomberg television this morning. he said that long-term vision is key to building the company's strategy. listen. >> 41% is a good number. i do not want to watch the share every day. i want to think that my next step is in five years and i really want to ill but a strong company with strong roots and i do not want to watch the company every day to see what is going on. >> hans nichols joins us from berlin right now, i know you were on the slope not too long ago doing reporting on luxury

ski wear. how much montclair did you see on the slopes? village.n the ski there was no indication on the slopes until we actually showed the footage. look, switzerland is fantastically, outrageously expensive, which is one of the issues with montclair, this is in the luxury space. this is a ski jacket for the very wealthy. i know that tom keene likes to most, but with your own money would you spend 1200 euros on a parker? >> absolutely, but i am wearing the kilt this year. [laughter] thelet, you have got quilted brocade down jacket, $1070 across the street. even something that is like good in july costs $1000. what are they doing right? what is the distinction in europe?

growth, right? 35% growth in the last year, they are the hottest thing. the challenge, and they have done a great job marketing a ski again is the challenge 75% of their product is just the winter product, so excuse the pun, that is not something insulated from global warming. >> our guest host for the hour is the author of "how to discount -- shop at a discounted world." montclair is a brilliantly run brand, essentially the collection on the website, it looks like there is a vast assortment, but there is not, really. do you know what they are selling? a premium puffy jacket and it keeps their stock perennial, very high. everything around it is just to get magazines to cover it. >> like the kilt?

>> exactly. 70% of their inventory is perennial. deep down they are just the company. >> they want to dress the whole family, how about the $344 infant av boy hooded jacket? >> it is very pretty. >> i bought two of those for my grandkids. we are talking about the wrong stuff, guys, this has nothing to do with brands. there is no point being brilliant at the wrong thing. pricing is the wrong thing. >> kevin roberts, saatchi & saatchi, what are we talking about? >> they whose three things, mr. he, sensuality, and intimacy. great quality, great benefits, great attributes, and delivering priceless value. [laughter] again?that >> priceless value. not price. you are all talking about the

wrong stuff. this is delivering a dream. my daughter-in-law is italian and she dreams about montclair. >> that is the thing, they are lifting in italy and really depending on italy for a lot of their sales right now. >> 25% in italy, this is one of the hardest hit countries from recession. but it is aspirational. the goal here is to get everyone. they are selling a lot to the newly rich. it is aspirational, you want to wear something and show other people that you can afford it. it is the whole luxury space of ipo that is back in italy, the biggest since 2010. people over here are talking about the crisis being over. >> the crisis being over? they have to be setting their sights on something acre than italy, going for the luxury consumer in asia as well. marknichols, joining us, ellwood, thank you so much, and of course, kevin roberts. >> the kilt in. bose is not

going to get it done? >> it will be a bit chilly. >> you try interviewing someone and it. >> so? >> a target from both sides, can it last? we will ask the congressman at the center of it all. ♪

>> this is "bloomberg surveillance." lets you to some company news right now. aig striking a deal with air cap and under the terms of the deal they will get $3 million in cash

and another $2 million in air cap. -- stock. tesla, launching their chinese website, they plan to sell their cars in china starting in february and are now taking orders for both models. they opened the show room last month in beijing as they prepare for the launch. christie's will hold its first auction in india this week, $8 billion of modern and contemporary art will be sold. increasing sales have attracted the attention of the auction house, with high net worth individuals topping 22% last year in india. >> india is a fascinating and huge market. but the divide there is just like here in the united states. .> the gap is just huge scarlet, what do you have? >> we are taking a look at google, who are going all in on

this robot that -- bet. cory johnson joins us with more on their latest acquisition. the reason that we care is because this is the eighth robot acquisition for them this year and the guy in charge of it is andy rubin. >> nice work. that is transportation in silicon valley. .es, he ran the android object >> very thessaly. >> which was a huge endeavor, one of the most popular cell phone operating systems now, and is now running this robot project and it has a lot of people scratching their heads, google is making very aggressive onorts in acquisition mountain view, but they are not saying what they are doing or why they are doing it. >> do the people in the valley jump to conclusions?

>> i certainly do. i look at projects that are very far afield from their bread and the platform for advertising, right? i look at those cars, i look at these robots from boston dynamics, it is very interesting, government contracts showing these things off, but to me i just think back to peter lynch and i look at these guys and i say -- what do they do with these acquisitions? certainly they have big master plans. >> what is the difference in master-planned development at google as opposed to apple? what is the distinction between those two? >> with google we have seen a lot of explication in different places. solar, driverless cars, robotic. with mobile it was sort of obvious, computing from one place to another, they wanted to make sure that their searches

are prevalent, therefore they could sell ads against them. some of the other things are bigger stretches. the solar stuff was a lot smarter than it may have seemed at first, there were certain substances and subsidies that they used to get that municipal debt, so it was a clever financial vehicle. >> the advertising angle, though, we have the perfect guest host on that. what is the connection between an advertisement? >> i remember they became excited about roadblocks going into automobile manufacturing, right? it was the big story. what happened? carimpact of robots on manufacturing? miniscule. advertising is about people the people and i do not see robots feeling like people. so, i am bemused, but quite excited, because i am a boy.

within google there is a lot of exploration of big ideas. they have really honed back on a lot of this. but some of these projects do continue and on some level, andy rubin has been such a valuable asset to that company. isone of the things nowadays that if you spend your whole life searching for the big idea, nothing happens. what you have to create is a culture where you have lots of small ideas loving and flowing, and that is what google has got. >> a culture. the robots are about culture. cory johnson, have you moved to now permanently to new york? >> it feels like it, but it is a momentary gain. city ofary loss for the new york. >> east coast technology? >> i am doing my best to help it technology in new york. >> cory johnson, person of the week. >> we do have some economic data

coming up, this is fed week, after all, the fomc make their announcement on wednesday, empire manufacturing coming up at 8:30 a.m., 10 year yield little changed, the euro-dollar 37.9 three. >> good morning, everyone. bloomberg television, bloomberg howo, we are on apple tv, cool is that? look for all of our interviews on the brand-new bloomberg.com as well. keene, with me is scarlet fu, michael mckee is with us, and our guest host at this hour, kevin roberts, worldwide ceo of saatchi & saatchi. we are thrilled to have him with us on this monday. istomorrow the senate expected to pass a compromise budget from the house last week. debtit prevent another ceiling fight next year?

will we revert to the politics of blame? we have a read on congress and the new year. welcome, congressman. >> take you for having me. >> does this open field between john boehner and other mainstream gop leaders with conservative fundraising backgrounds and links to those direction that a new for the republican party? there is a lot of talk about that. >> important thing here is that work. want government to through this deal we have the opportunity to return some level of certainty to government. they even have the issue of setting aside sequestration that will have a devastating impact on the military going forward for the next two years. in that two years of certainty you do see some political stability. >> we did until yesterday, now paul ryan came out to say they would have another debt ceiling fight. that workout so well for you

republicans the last time, why do you want to do that again? needs to be taken up separately. right now we have the issue of the budget, trying to lift the cuts that we are falling on in the department of defense. >> you guys agreed to. >> the president's proposals from the white house was a penalty to cause the kind of compromise that has come out, the ability to look at how we fund the government in the future. of you worldwide, michael turner is an actual congressman who actually administered something for years. dayton, ohio, you were a force. at 35,000 feet i want to make this granular, right? the patterson air force base. jimmy doolittle, the whole thing of bombing japan, you bring it to your reality.

that is the real debate of a budget. at thebout real bodies patterson air force base. >> what people miss is that it has already been cut. part of the original budget control act compromise between john boehner and the president, $500 billion of cuts, the sequester had an additional 500 billion dollars in penalties, taking half of the overall cuts applied to less than 18% of the budget. in my community that was 12,000 people been furloughed. looking forward it would have affected an additional thousand of -- thousands of jobs. debthave to go back to the ceiling question and paul ryan saying that we have to get something for this. what i want to know is you have deficitet going down, spending going down, what do you want for that?

>> no one is satisfied with the way our current deficit stands with the current level of spending. certainly part of the budget compromise looks not just to mandatory and discretionary spending, but we have to look overall at the economic health of the nation and how we spend our money on the government side that is an ongoing and continuing debate. how we fund the government during this time is certainly important, but also the future. >> are we cutting too quickly? if we all say that we need fiscal responsibility, is the flypast to sudden? where the cutss are occurring. as we discussed the sequestration, 18% of the budget, defense was shepherding 15% of the overall cuts, how do we look throughout to get rid of waste? >> can you explain the ohio state loss? >> i cannot. like michael turner, with us

from the great state of ohio. >> thank you, congressman turner. beyoncé album sales surpassing 400,000, surprising numbers coming up on television and radio. ♪

>> good monday morning,

everyone. and clearork, snow skies, scarlet fu and michael mckee, we have monday morning movers. >> we start with a pair of chipmakers downgraded to underperform with oppenheimer, what i found interesting was market pressure was at the top with customer apple and content on the five s and five c phones asling to five dollars opposed to four dollars against the previous iteration. >> we are looking at sprint this morning, the company possibly in anothero acquire company. t-mobile. yes. don't know why i forgot that. had purchased sprint, and now softbank is walling on the news, which is usually what happens if they acquire, they

lose some ground. >> a lot of consolidation in the telecom space, people wonder what this means for their operations in europe. beenrint and t-mobile have the left behind in the at&t verizon fight. >> due to rivals make a leader? >> that may be what they are betting on this morning. >> analysts cutting into neutral and underperform, tom, i know that you were up in arms last week about twitter changing their locking policy. >> they did a 180, they came around, we will talk about that in a bit. i would say, however, that it is linked to the advertising revenue question. >> certainly a big? there, took -- twitter needs to come up with the big numbers. >> shares marching robotically higher this morning. >> look at that. i did not realize it. >> what do you do with robots?

no one knows, but by the stock and anticipate. >> kevin roberts, on the twitter blocking move, they blocked and turned it into a mute upper or, completely reversing and five hours, it goes to your theory that customer is king. >> we live in a world that is volatile, uncertain, complex, and ambiguous. that is what you are seeing in those five hours. >> twitter, for marketers, is all about the big eta, but advertising has always been about creativity. where does it fall on the spectrum? >> big day for technology, but emotion is what counts. you cannot drill nonsense into consumers. the consumer is not a, she is your wife, right? she wants to being gauged. content is king. >> can you fit that into 140 characters? >> you had asked me before something is a fad or not,

twitter has got to watch itself carefully. i think there could be something fad like in this space. a little bitlk more about that and how twitter fits in with facial recognition. is it the future of marketing? we will discuss, next. keep it right here.

>> this is "bloomberg surveillance." our guest host for this hour is kevin roberts, worldwide ceo of saatchi & saatchi, part of the world's biggest communications firm. let's get you some company news right now. it was a big weekend for warner bros.. "the hobbit," taking the number one spot at the box office, 74 million dollars in sales for the studio. in the meantime, a group of amazon workers from germany are taking their case to the company's seattle headquarters today, staging a protest at the same time as a workers from the german locations go on strike as well. amazon workers in germany have

staged strikes throughout the year, demanding higher pay and better work environments. facebook will help to write the rules on facial recognition, inputting into regulations on facial scanning technology, shaping the world in february, a number of companies plan to like highlyts targeted sales pitches to security. >> in the markets the futures are up nine and 81. >> before the fomc on tuesday and wednesday. the big question is whether we will get any word of tapering anytime soon. any thoughts on that? >> my agenda today is the fed meeting this week driving everyone's conversations. right now the interesting thing is analysts are anticipating that anything could happen. because of what they did in september, nothing is off the table. >> but do they simply wait and

honor? what is the history of a vice- chairman waiting? >> according to harry reid in washington, they will not vote on confirmation until the end of the week. there will not be to chairman at the meeting. >> interesting. >> i wonder what kevin roberts thinks of all of this. when we talk about the fomc and the federal reserve deciding on whether they will scale back stimulus, how does that affect you in the real world? >> the most exciting thing for me about this show is "the hobbit," because i am from new zealand, we do not have a federal reserve or a lot of legislation, we are just winning the world from the edge, so i am excited about all that. obviously we are looking for the u.s. to come back next year. we think the global ad market will come back. >> lead the way. --because europe is still

>> in recovery mode. >> very good. crawling along. we need the u.s. stimulating. >> my agenda item, of course, peter o'toole, the iconic actor to say the least, dying on saturday. michael mckee and i saw him recently as he walked through our world headquarters. he has been aged for a number of years but he was something. what he did to find everything. he could look off into space, look off into the distance differently than anyone i have ever seen. whether it was drama, comedy, shakespeare, whatever, there would be those points in a movie where he would stare into the distance. >> one of those legendary characters offscreen. people looking back this morning he said "i remember the nights in paris where you would go up for a drink and wake up in corsica the next morning."

>> it was tumultuous. kevin roberts is with us. i watched "my favorite year," and last night. --," last night. cried the whole time. 1954, is that still in our advertising world? >> peter o'toole, what a great guy, with or without the camel, right? he lived the life and you need people like that. he was inspirational to all of us, a creative genius, and i think a lot of the world that we live in right now is missing those kinds of characters. >> and we you're in for that. >> of course we do. eulogies over the mandela. what is that saying? it is saying god, please give me a leader. >> was advertising better in those days? what's it was more fun for

creative people and a lot faster and sexier. >> everyone glamorizes the 1960s as this era of creativity. >> tom hanks coming out with that new mary poppins vehicle. has the risk, the sheer financial risk of "lawrence of arabia," it shows the value of egg. can we still do big? >> we live in a world of and and, not either/or. you will see fantastic tv shows -- i am a complete addict to "blacklist," right. of cards, amazing. you have these terrific investments there, blockbusters coming out of hollywood. and you have got all of this youtube stuff. beautiful world, is it

not? >> you need giant robots these days. >> i am still thinking about "the kilts." not doing the kilts for you. >> on my agenda this morning, beyoncé, with a surprise album released last week and sales numbers are in, a stunning 600,000 albums have been sold and i cannot get over how she kept this secret until the day of release, kind of unheard of. >> issue not number one in 90 countries? that is the other staggering thing about this. this is not a u.s. phenomenon, this has gone global overnight. >> are stunts the big thing in advertising? should you focus on them? >> they are not stunts, they are ideas. >> what are the -- what is the attraction for those who do not know every song? >> her dancing? >> she is a classic fearless role model of today.

>> does she laugh? >> she does laugh. >> know, last, in the sense of the beatles. >> the beatles and beyoncé, apart from the beginning letters else in have nothing common. but will they lot -- will they last longer than dusty springfield? yes. >> dusty springfield, a surveillance informant from another place. >> same something like buffalo something or other? >> different. >> that was james mussina. >> my gosh. >> springfield. >> sorry. >> that was the "surveillance," moment of the week. here,ething is happening i do not know what it is. >> that is our agenda or this monday morning.

>> michael mckee is still here to answer our twitter question of the day. what should google do with these robots? eight acquisitions this year? google needs to get the robots involved in the agriculture industry. >> rachel crane from the digital group did a story on robot lettuce pickers and it is apparently very hard, they are delicate. >> there you go, they are ahead of the curve. rent?o work, pay my >> we all want a robot like that. >> this is the plan. of tom keene robot. .hile tom keene plays golf >> tom keene does not play golf, though. >> but he could learn to do something if the robot took over the show. >> maybe hockey. i don't know, i am intrigued by this.

kevin roberts, google dominates advertising so much. do they risk taking their eyes off the ball by going into these random areas like giant robots? >> first of all, consumers dominate advertising. there is no more power even for the mighty google. >> it is just a vehicle? >> it is an enabler. ideas and creativity still dominate. are they taking their eyes off the ball? no, we live in a broad world where ideas are the currency of the future, right? they are just looking at various ideas to see where it leads them . it is a smart, interesting, exciting kind of initiative. >> whatever it is. >> robot advertising. >> andy rubin is leading the initiative at google, which makes it interesting as well, he has such a great track record. kevin roberts, thank you so much. great to have you on.

"bloomberg surveillance," continues on radio. "in the loop," with betty liu, coming up next. have a great morning. ♪

is monday,rning, it december 16 and we are live from bloomberg world headquarters. a lot of big news -- aig is

getting out of the airplane business finally. it agreed to sell its jet leasing unit. the price is $5 billion. elon musk is getting ready to sell tesla cars in china. it tesla has unveiled its chinese website and is inviting customers to put down deposits. cost $100,000 in the united states but it will cost $200,000 in china. the price of privacy is on our radar today. your face print could be a huge tool for marketing. there are companies drafting facial recognition code. the congress department will meet with companies in february. it's anin