>> live from bloomberg headquarters in new york, this is "market makers." >> washington may have a deal. closeers are not anywhere to raising the debt ceiling. we will look at the next big fight in congress. going native, it looks like a headline and reads like a news story but it is not journalism. it is advertising. regulators may step in to make that clear to consumers. hungry like a wolf. leonardo dicaprio. we will introduce you to the real wolf of wall street and show you what he is up to after his fall from grace. good morning, everybody. happy monday. this is "market makers." 10:00 in new york city. stephanie will be here in a few short minutes. we will begin with the newsfeed. top business stories from around the world. stocks are bouncing back this morning after their worst week since august. all the three major industries

up around one percent. the games withng 173 points. we saw positing -- positive manufacturing data. bige could be a very decision this wednesday. in italy, shares opened up 41% higher than the ipo price, putting montclair on track for its biggest game -- i cost more than $1200. the latest hobbit movie came up date. in almost $74 million in the north american box offices. it is the second film in this trilogy. "frozen" finished second. aig is selling off one of the last of its so-called non-core businesses. the company has agreed to sell international lease finance corporation.

holdings willy pay $500 in cash and stock. last week, steve miller was here talking about how ifc was on the block right here. >> even though it is a great company, it is not a good fit with an insurance company balance sheet, particularly with all of the new regulations. intensiveital business like that does not belong in insurance portfolio even though we love the company and the earnings. we will get on with selling them. class that was steve miller. with us now, zach, who covers aig. milestoneant is this in aig's comeback from the $182 billion government bailout. >> this is the last they wanted to sell. it completes 70 billion worth of investors they have done since the crisis. >> what does it mean for aig?

what does the ceo want to do now that he has not been able to do while he has been distracted? reduceas been wanting to debt at aig so he can do things like by back stock and put on a dividend on the stock to lift that. there ispossible something else they might like dosell, or can they not anything else without beginning to cut in? >> they are pretty much done selling. billion, head 70 crews in japan and new york. >> the list of investors years is pretty amazing. there are pretty big ones. aia group was a $20 billion deal. that is right. they sold headquarters, consumer , a bunch ofe u.s.

asian life insurers. intothey are moving back life insurance at least in some parts of the region in a small way. of a company is aig now than before the crisis? >> significantly smaller. it's hard to say because they focused so much on being a life insurer only in the u.s., and maybe half the size. was this? theyt themselves were important for any number of reasons. they had to pay back the government. but also, they needed to focus. a lot of work to do. how important is this milestone is a reallys? >> it important milestone. it is an insurance company. this lets them focus on the core casualty and life insurance businesses. >> good of you to join us. zach covers aig and its comeback

for bloomberg here in new york city. in washington, the senate is likely to vote tomorrow on the bipartisan budget deal. there is one big thing missing from the compromise. anymore agreement on what to do with the debt ceiling. peter cook has more on the fight yet to come. are we going to be back to crisis mode, february? >> it is not that far from now. there is no deal on the debt ceiling within the budget agreement. could andy our moment quickly. we heard from paul ryan over the weekend on this topic, the fact it was not included in the debt ceiling in this final agreement. he made clear he and his fellow republicans will want something in return for an increase in the debt ceiling. >> we as a caucus will meet and discuss what it is we want to get out of the debt limit. we do not want nothing. we will decide what it is we can accomplish out of the debt limit fight. >> the deadline right now,

february 7. that is when the enforcement suspension basically comes to an end. i am told the treasury department has maybe a month or so of extraordinary measures they can implement. they will not have as many weeks to play with it because the timing here is the for the tax receipts come in. it is the same time they need to send out tax refunds. mid-march is when the debt ceiling fight comes to a head. they will have to reach some sort of agreement by then. >> what was paul ryan talking about in court -- practical terms? already know what kinds of things they may ask for. >> the last time they had this fight, they went to williams berg and met behind closed doors. democrats toom agree on a budget plan and budget resolution. patty murray did that so they got over the hump. it is hard to imagine they will ask for anything so

extraordinary and after this most recent fight that it will be different -- difficult for them to reach a compromise. they pulled a low hanging fruit from the budget tree on this latest deal. i cannot imagine it will be something so challenging that republicans really want to spoil for a big fight. democrats are you willing to accept? >> they want an increase in the debt ceiling no matter what. could they sign off on some sort of commitment to talk further about long-term spending issues? sure. but nothing that automatically enforces them to make decisions. we will not see sequestration. democrats feel they can meet at the table with paul ryan but they do not have to commit to anything. that is what you should be in february. >> ceos are encouraged by the fact there has been a compromise on the budget.

congress left a whole lot of unfinished business on the table. talk about that. >> a long list of things. a budget deal is not done. the senate has to vote. we have got indications they will support at least five have to join with democrats to support this. it seems clear they will. they want to get home for the holidays. undone, therees is a multiple tax credits tax changes that affect the business community and always expire at the end of the year. they will not be done. emergency unemployment benefits -- that is a big deal. the 1.2s know about million americans that will see that play out. that is not insignificant. from the business community standpoint, a lot of it has to do with the tax credits and those sorts of tasks expenditures that get kicked over. they could do it retroactively when they come back, but it does

not add to the level of certainty in the business community. >> thank you. peter cook. aming up, google is on shopping spree for robots. eighth robotic companies in the past six months. why? .ou will find out and does leonardo dicaprio get it right? we will hear from the scam artists who he plays in the movie. this is "market makers." ♪

>> welcome back. better late than never. eric might say, glad you got here. i was hoping you wouldn't. i'm here to talk about robots

because google is on a robot shopping spree. the internet giant just scooped up its eighth robotics company. what will google do with a company whose robot can climb hills and move 25 miles an hour. with us on the phone is a manager -- managing director following the robotics industry for over two at -- decades. also here, cory johnson. >> robots. google is doing these acquisitions of robotic companies and no one knows what they will do. >> robots are cool. >> they are cool and silly. look at this one. that is my dog. that is my dog. do not have dos like that in new york? in silicon valley, everyone has dogs like that. >> that is why we live in new york. >> so, we do not know what google is doing with these. as akin took at it

what they are doing with driverless cars. robotics talks. >> let's bring you into this conversation. what do you think google will do now that it appears to be consolidating the robotics business? >> google is taking a very long-term view on this. example, the dynamics robots, while they are plenty scary to see the videos, they have serious issues about how you para were them -- power them and the like. you do not have to worry as you are being chased by a google robotic cheetah. google takes a long view. think about the history of street view. launched back in 2007, but they acquired keyhole years earlier. this is something they are looking out a decade or more. >> at what? what do they want to be in the

robotics business? >> let's focus on what we see today. scary robotic dogs will get a lot of conversation around the dinner table at christmas. what we have today is robots slipping into our lives unnoticed all over the place. air.irst ones are in the the faa has got a congressional mandate to allow robotic unmanned aircraft in our airspace by 2015. so, people will see these in the havend they will and already seen specialty robots that do narrow tasks. if you look at what is going on with robots today, just pull the string out and you see a rapid increase in capability and function. scary looking get google robots, everyone will shrug and say, what took you so , ig? >> the thing we like

think why we are interested in these things is the answer -- anthropomorphizing ones. we do not think about robust in vacuum cleaners. we are looking for the ones that look like our dogs and cheetahs. the thing that gets fascination. are their true business case is being developed be on drones? >> yes. while we are peering at the theropomorphic prototypes, non-anthropomorphic ones are sneaking up to surprise us in the business space. robots that do not look like humans are taking over narrowly defined tasks that are dangerous or boring and that humans do not particularly want to do, everything from the little machines that move papers and drugs around the hospitals, to , andic manufacturing

foxconn three years ago announced it would have one million robots in the company and what they are doing is ringing in an interesting looking robots that do a lot of precise things humans used to do. google reviews them? google is an advertising company. >> yes. in the same way amazon is a book company. is about collecting information and turning that information into useful purposes. guess at what the other things are doing. they are huge and robotic car development. >> larry page was supposed to be focusing google in the way the chairman was not able to. this does not feel like focused to me. >> i have got to agree. i think it is interesting comparing the keyhole acquisition.

there was a private company that became the basis of google earth. what did that lead to? to google having the best mapping function out there of any of the companies trying to do mapping stuff. google has a thing with employees where they have 20% of the time they can spend on passion projects that might lead to something. this may be an outgrowth of that . it looks like an expansion pack -- expensive passion. google is throwing off a lot of passion to do things like this. loty has really shut down a of these other kinds of companies, including a 180 person research facility in australia they completely shut down, which means australia is one of the hottest in the world right now because there are so many google people out there with big ideas. >> great to get both of your insights on the topic. special thanks on the phone with a managing director and our own cory johnson, bloomberg west

editor at large. >> i was kidding about my dog. my dog is a black lab named there. "bear." >> very good. when we come back, we will not talk about cory's dog or robotic cheetahs. andill talk about how apple disney are taking advantage of record low interest rates to buy their own stock. we will have that coming up next. ♪

>> welcome back. it is the buyback bonanza. everyone from apple to ibm is on board. the number of companies buying their own stock back make up more of the u.s. equity market than ever before. olivia sterns is here with more. what is driving this trend?

>> definitely low interest rates. they are borrowing the money to finance the share buybacks. the other reason is the catch. you were always breaking activist investor stories. they are pressuring big -- put theo push cash to work their the best example, apple. einhorn is putting on what -- pushing on what apple did. they borrow money because of low rates. money tothe biggest ever borrow for a buyback until rise in, selling $49 billion worth of debt because of these low rates. class how could the fed's decision this week influence what companies are doing apoplexy speak to money managers and a lot of them think the trend will continue because if we look at apple, the cash piles have not been dented that much. they sit on a lot of cash. low rates are expected to continue. taber is pulling back the pace at which we are buying bonds. rates are expected to stay low.

the other issue is valuations. if you look historically, a lot of these stocks are still cheap. the p/e ratio is still 16.7. that is the highest level in four years. historically, that is pretty cheap. companies a -- are expected to keep buying back their stocks. >> investors love it when companies return surplus cash earning nothing. many would prefer they get it in dividends as opposed to stock i back. the dividend gives the investor the choice of what to do it the money. the buyback is management's inter -- determination about the underlying value of equity. >> grade-point point. you have seen a lot hiked dividends. when you are one of these ceos looking at your options, you have to think about the broader economy. it decelerated in the u.s.. if you sit on a lot of cash, you have seen a lot of great investment opportunities to build your business. >> ettore to be sitting on cash than not. thank you so much for giving us buybackte for the

bonanza across corporate america. >> we are approaching 26 minutes past the hour. time for on the markets. we begin by showing you what is happening. the dow is still up more than 150 points. investors increasingly anticipate the fed may begin to taper quantitative easing this wednesday. supporting evidence today, u.s. industrial production climbing the most in a year. pond inuring across the europe, a 31 month high in the month of december. keep ite companies that sexy -- semiconductors. in the second-biggest semiconductor deal of the year, average no agrees to buy for 6.6 billion dollars. stockholders will receive 11.15. per share in cash. it is soaring on this news. go is also rising. semiconductors are feeling it. a big day.

back, one come company can make all the businesses work. we will talk with the ceo. >> your tuition dollars at work. wait until you hear how much college presidents are making these days. they are rolling in the big. streaming on your phone and tablet and bloomberg.com. ♪

>> this is "market makers." companiesppens to unable to get bank credit? some of them end up hands. he runs a private equity firm oft -- allies is in the debt issuers and into a controlling equity position. fields, the mrs. cookie company. the yogurt business and the auto

business. you are a hands-on guide. how can you be hands-on with businesses so diverse? >> good question. i do not know if that is a common. -- complement. we focus on buying companies that have great franchises. we try to partner with very good management teams. they are running the business at the end of the day. he tried to give them the room to do their jobs and also apply operational skills and resources. get in involved with -- in most cases, it is more. consumer base. are you making a bet? >> good question. we are a data-driven

we are notn. terrible optimistic about the consumer these days. a company liketo mrs. fields, etc., we are making pretty conservative estimates on the consumer. if you look at the consumer today, in our view, it has become very bifurcated. consistent same- store sales growth retailers, you have got tiffany's on the one end. they are feeling pretty good about the economy today. up inial assets have gone value. on the other hand, look at all the dollar stores. same set -- same-store sales growth, pretty consistent -- and simply -- consistently. retailers in the middle are having a rough time. our consumer view is consumers are savvier than ever today. they are smart and all have smart phones. they know where to buy things and intelligently do so.

it is something you have got to be very sharp with these days. >> what is the secret to tapping into consumer demand? >> you have to be in tune with the consumer. the consuming population today, they are the millennial spirit you have to get into their minds and peel to spending habits and be connected to them. >> how do you make them want cookies. >> who does not want one? >> we are in the gifting business. it is all about franchising the stores and being more relevant to their spending habits. yogurt is a healthier alternative which resonates today. silk we introduced a product from almond milk, which has resonated quite nicely. tcby get hurt? they are

the original yogurt makers and i looked on -- in new york city and there are a lot more in that space right now. >> there is. no question. space has grown dramatically over the last few years. tcby is the oldest yogurt concept in the country. it started a traditional format. you walk up to the counter and order. now they have gone to self- serve. tcby celso are met -- cell format franchises are in the self-serve format. we actually think there is a fair amount of whitespace you will see in the u.s.. areas like chicago and detroit and boston, they are areas for potential growth. we are also seeing franchises take over other locations of failed franchises of pink berry, etc.. we think we have the best product. we have a good group of franchises.

>> why detroit? >> we have done market studies. that kind ofck of consumer spending especially in the suburbs of detroit. >> have you been finding it harder to find things to buy given the fact you were here almost 14 months ago. since then, we have had a whole year. spreads are very skinny in credit markets. it is true not all companies can issue bonds. is it easier for them to do that now than it was? >> rescue anancing certainly have been part of credit markets over the past year or so. the market has also been very forgiving. very aggressive capital structures. the area we focus on, for the most part, are the loans that

reside on commercial banks balance sheet. if you look at the opportunities for us, we have got about 300 billion dollars of commercial and industrial loans on the banks balance sheets. they are so-called criticized asset. we primarilyrea focus on rather than looking to wall street for ideas. >> i know it is not your style, but what do you make of the rise certainlym? >> is something over the last decade or so that we have in the growth in. i remember danny starting out in the weight room back in the mid- 1990's. >> i wish we had video of that. >> yes. he did such a great job. he did very well for his investors. all the guys grabbing the headlines today, i do not think that goes away. you feel yourself drawn to

the activist orbit? you have taken a clause i activist position with gaming. >> i look at it as a very minority shareholder comes on the scene and they have ended in the they are trying to promote. in our case with affinity gaming, we are actually the largest shareholder. we bought the debt of that company and converted it to new equity during the bankruptcy process. along with that were hedge funds that came along. think we are the best advocate for the company long- term to build value. thinks more of an early monetization viewpoint. on the other hand, we have constructive conversations with that group. >> we wish you luck. nice to see you. c n also theo of president. >> when we come back,

advertising in sheep's clothing. government regulators are looking at ads disguised as journalism. ♪

>> welcome back. asked -- ads are otherwise indistinguishable from journalism around them. the potential for deception. earlier this month, there was a native advertising workshop in washington. -- to defend the practice john, good morning. wordsof people hear the native advertising and do not

understand it. sure. you can ask 10 people what it is and they will all tell you something different. is is anylieve it paid advertisement that takes on the look and feel of the user experience on a website. >> is that fairy? should there be advertising that takes on the look and feel of regular journalism? should 901 u.s. going nice thing? >> you absolutely should. all native advertising -- advertising should be labeled as advertising and add in something as clear and conspicuous as he can be. it is a little oblivious. there is -- -- there are so many lee --s of flower flowery language. >> it is produced in-house by

the set -- the same collies of journalists that produce the real news. that is one? >> format. native advertising can take on the form of editing content or have -- news headlines, which is what we do. six years ago, the news rolet at unit. he will say banners are dead. they are not. they have just been around all the time and they are the background of the internet. >> no longer as effective. >> what does news bullet do. when i read the word news, i do not think it should be an advertisement. >> it is a thumbnail image and a text set up to look like a news headline. when you get to the end of an article, we place a block of our ads there. everything from brand advertisers like american express, the lending tree, or

like sports illustrated and time to do content marketing. all of those are at. they have to be labeled at -- as advertisement. >> this advertising has been around as long as newspapers have pretty much. that said, it has followed serious up-and-down cycles. do you believe this time is different or does it seem like is moree -- there native advertisement now because we are approaching a peak of a cycle? as far as online advertising, we are still in our infancy. the reason it has become more popular now is because publishers are trying to generate revenue. find betterrying to ways to engage with the consumer. >> but there is more content and more legitimate content now than ever before. bad content.ore >> more advertising content than ever before. at some point, does one not

crowd out the other? >> there is a lot of noise. a lot of noise out there on the internet. people on twitter and facebook and blogs and everything. >> then they will be distracted and they will not necessarily going to read native advertising. >> consumers can choose to read whatever they want. it is up to them to decide what they want to engage with and up to the advertiser and the publisher and us as a digital to helpchnology company facilitate that. >> what should the regulators due to facilitate that? >> they should make sure companies are not misleading consumers. it is not only bad practice, but it also does not work. it is bad for advertisers. atyou click on a news bullet unit that was not labeled as

advertising and you thought it was an article and you get to a filland it is a form to out to refinance your mortgage, will you be upset? >> i do not know if i will do anything about it. thinkht make me start to about lending tree. it might be a positive. five but you will hit your back button. bounce.a >> you believe some form of industry guideline and regulation is a good thing. >> i think they have come out to some extent saying native advertising should have clear and conspicuous labeling. is not asthink it clear as it should be? >> some companies are being very misleading. i cannot say who. there are definitely several competitors in the space. there is also individual publishers doing native advertising. master bowl, the huffington post, they do a great job with it. they are very specific about how they label things.

constitutes awhat good job? >> labeling your advertising so a reasonable person can tell. >> i thought a good job means actually publishing something we might want to read very >> that is an obvious. you would hope. >> do you know what i will do if they do not? i will bounce. give me good advertising or i will bounce. >> john is the senior vice president of operations at a firm that's pesce lies is in content style advertising. >> when we come back, the real wolf of wall street. was his life anything like the leonardo dicaprio movie? we will hear from him when we come back. ♪

>> welcome back. the woeful wall street is one of the most anticipated movies of the year. asstars leonardo dicaprio the one-time financial health the dog who struck fueled rise

and fall became the stuff of legends thanks to a best-selling book. .loomberg sat down with him qwest my name is jordan. turned 26, i made $49 million which really me off because it was short of $3 million a week. wherever i went, i brought my sanity with me. qwest was all this legal? absolutely not. qwest in the movie, we get a cautionary tale, of what to do and what not to do. when i was at the bottom and everyone was writing what a terrible and awful person i was, i was probably not as bad as people were saying and when i as at top, i was not as good what people were saying. qwest greed is not good. >> he is looking sexy as hell with his $2000 to an private

jet. a lot of people bought into the notion there is something noble about making as much as you can as fast as you can and not focusing on who gets hurt along the way. it is not true. i was taking enough drugs to sedate an elephant i was not really focusing on the value. on thet making any money books or the movie. the only way i will is if everybody got paid back but until then, i do not want to make any money. as a broker or traitor, you're not really making anything. you are trading off the ingenuity of the user. there is an absence -- emptiness to the money you make. you try to of that -- attach value. >> jordan. my favorite line, i was taking enough sedatives a day to knock out elements. following this moony -- movie,

so many people are asking, would you want your kid to work on wall street. i have not seen the movie yet. he seems more studio 54 steve rebel to me. i have a tough time saying this is a clear depiction of the industry. but it is an industry with big winners and big losers. there are a lot of characters. in tons of businesses, there is always a boiler room. .ne might say herbalife >> i saw noise on twitter this weekend about how you should not see this movie because it glorifies scumbags. i am not sure that is a case if the movie documents the rise and the fall. as long as you see the fall. >> also, twitter might glorify a few scumbags out there. billionaire boys club is alive and well for ceos, but it turns out college presidents can form their own clubs.

here with a list of the top college leaders in this morning's off the charts. we criticize wall street for making too much money and now going after college presidents and professors. qwest 20 people point out the disparity between nonprofit colleges being under pressure to watch budget cost cuts and less state assistance, and the fact president posses salaries keep increasing year after year. this is chronicling higher education, which crunched the numbers for annual salaries. they found the university of chicago's president was the highest-paid, $3.4 million. that is because of a one time deferred compensation earned over several years. that is the same reason the northeastern president also has such big paydays of at least $2.5 million. you could see that is pretty high up on the list. columbia university's was the large -- highest-paid ivy league president. robert takes the top cake.

chicago 10, but that college is an outlier for me. >> are you trash talking the college? >> i kind of am. >> it comes back to people saying it is hard to pay for top talent. that.ave to pay up for qwest that is the justification? >> no. it is one of the nation. it is something that has caught a lot of attention in recent years. a lot of it is because universities are run more like businesses than they ever have. >> we want them to be. >> a lot of ceos go out and have to speak with investors and shareholders and presidents of universities have to go out and raise money. always on the fund raising beat. think about college were trustees. they are increasingly made up of high powered individuals who run their businesses on their own. ceo's. they are used to dealing with big numbers in their own world and they may be bring over some of that. once that found trustees with business occupations make up 53%

at private schools in 2010. that is more than half. >> the other reason is college football coaches are getting paid so much. qwest that is a good one. >> what about the argument it is not a football powerhouse. qwest that is true. we complain wall street, the individuals make too much money. why not pay other industries more money instead of paying less? qwest the college president gets paid a lot, more than four times what the average professor at this school makes. >> it has to do with what the job entails. >> a lot of fund raising. -that is not easy. qwest thank you. our chief markets correspondent. taking an opportunity to dog on college football. to dog on that college. where did that come from? >> i'm just saying it was an outlier. which one does not belong. >> we could get a taper

decision. could the fed really back off quantitative easing? the data are increasingly supporting a bullish case for the economy. we will be back in two minutes. ♪

>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> ford tries to stay focused. the automaker gets ready for the rollout of its new model with speculation that the ceo may drive off with microsoft. neverompany that will forget your face. using facial recognition. we will see if anyone is looking out for your privacy. >> this is "market makers."

a monday in new york city. i am erik schatzker. and i am stephanie ruhle. time to get you the top stories from around the world. major indices are down from session highs, but still up close to one percent on the day. what is behind this? factory output down by the most any year and the fed began a two-day policy meeting. chances say there is a that the fed may start reducing stimulus -- that's right i'm talking taper. company of agoor has agreed to buy lsi. shares of lsi were 39% after the ment of the deal. for the first time in its 325 year history lloyd's of london has a female ceo -- that's right

. she was most recently the ceo at an insurer. lloyd's of london is members ensure risk. stephanie, a -- big week for the federal reserve. whenernanke may step aside janet yellen is confirmed. it may not just be bernanke's last meeting, but the most challenging one in years. michael mckee is here. mike, what is on ben bernanke's mind as he thinks about this -- teees, what time is my time? the problem at the fed is, yes, we have seen things get better, but then they go back.

he is a scholar of what happened in japan and japan went through the same thing. they want to make sure that everything is going smoothly that the strength will continue. train untilo be the congress got involved. now we have a new wrinkle because congress has this budget that does not extend unemployment and if it's. you a job toe looking for get unemployment benefits. if they do not have to get a job, they may drop out of the labor force -- >> what does that mean? let's say they are sitting at home watching "market makers" every day at 10 a.m. -- >> don't have anything better to do. >> exactly. what happens then? >> if they all quit some a you .ould suddenly see 6.5% that could obviously screw up everything the fed has been

telling us because they would not raise rates until we got to 6.5%. plan -- findd to out what plan b is going to be. >> michael, do you really believe, do put a lot of stock in what the fed tells you? last time ben bernanke said when the unemployment number get to -- >> that is the problem that janet yellen is in part responsible for. she was the head of communications for the group. she will have to take this up as chair. thatwant you to believe their strategy is what you tell them. forward guidance. that way you don't have to be surprised and you can keep interest rates lower because we are telling you you can do that. if the data and these things do not match up with what the fed is telling you, what do you do? that is a real challenge or them. >> in between the lines -- not even in between the lines, in the fine print. the fed has said, oh, we will

have to evaluate other fact is to determine if the labor market is healthy -- they have tried to make this clear that we are data dependent. contemporarye data, the jobs market data has been very good. the question is, does the economy support continued improvement in the jobs market. what about gdp? salesd a strong retail report for the month of november. people say, maybe people are regulating inventory. the economy the -- the economy is getting better. >> that is the problem with making yourself data dependent. in theory it should be less. >> we need to get to tapering, let's do it. or you could say, what difference does it make question mark let's take out some insurance. >> we know what you will be taking -- we know what you will be a new attention

to the rescue week and it sure won't be secret santa shopping. ford will roll out the 2014 line up at the detroit auto show. that is right. matt miller's super bowl. but there are questions about ceo alan mullally. he is said to be on the candidates for the top job at microsoft and that is becoming a big distraction. is this all the people at ford headquarters are talking about? noteems like people are talking about the delays in the ford f1 50. it is all about mullally. >> the people at ford would like to switch the focus to the new f150 coming out and be ford is one of the most important cars they have coming out. when they released the mustang, that is what all the questions

were about -- will he stay or will he go. mullally himself does not make it clear. >> is this a navelgazing problem at ford? all the consumers care about our cars. >> if there is one thing alan mullally has shown it is who runs the company makes a huge difference, right? in the first three years they dollars, andion since 2009 they have made $35 billion. he really turned the company around. if you don't have a healthy company, they do not come out with good cars and consumers do not get what they want. >> can all that success be attributed to one man, alan mullally? one good say that his lieutenants are looking at each other saying, oh, i think we had a hand in this. >> they certainly did have a hand in this. the hand that they had was guided by alan mullally picked

up in to work together. detroit has always had a culture of back i think. alan mullally created an environment where they actually irked collaboratively. they couldly gone, lose that. >> so the folks at ford that are worried about this and not worried about the cars they are making now that the cars they will be making two or three years from now? if mullally is a distraction, presumably he is a distraction to all of those things that need to go into ford's future success. >> they are also worried about the cars they're about to introduce. they have 23 new models. 16 in north america. they want to get attention on that. if all the headlines and up being about mullally and a microsoft, you have wanted all the introductions on these critically important models. they want to make sure that is the star. >> is this frustrating board members? do you think that the board

could push mullally and tell him to make a decision here or there? >> you have one of the most . heessful ceo's in america is a rockstar. do you really push that guy out the door? it is similar to the problem that chrysler had 20 years ago with lee iacocca. would you do with a situation like that? you would like a graceful exit, but it's not very graceful right now. >> keith mcnaughton with the trouble at ford. and be sure to check out the story about how the u.s. auto industry came back from the brink on bloomberg.com. now, there is one more way for companies to know who you are. your face print. at a moment, we will look at a company that makes racial recognition and other marketing tools. >> plus, does congress pass or

fail? al hunt will be along with the capitol hill report card. ♪

>> you are watching "market makers." on bloomberg television. i'm erik schatzker. time for some bloomberg west headlines. a delegation of strikers is gone to seattle to campaign for higher pay and a better work environment. the german workers will be joined by american union makers. npr has received $70 million in grants to improve news coverage and develop digital platforms. npr is getting the money from four foundations including the one run by the gates and his wife linda.

director james cameron will go to news england -- two new zealand to shoot three sequels to "avatar." ineron shot the first movie new zealand. it has earned 2.8 billion dollars worldwide. >> facebook, walmart, apple, lockheed martin. the names. what do those companies have in common? potentialooking into uses for facial recognition technology. your face good we a huge tool for marketers. megan hughes joins us with more. what is being done to protect our privacy? will this be a reason why sell towants to stephanie? i'm worried about it. >> it's definitely creepy to think about and the white house did instruct the commerce department to take a look at it. the commerce department will be bringing together -- it is a

multi-stakeholder process so they will read ringing together the national retailer foundation along with privacy advocates, groups like the aclu. they will have a code of conduct, a voluntary code of conduct by june. remember that movie "minority that had this002 futuristic world where cameras were in double places and they could target specifically to that person? yet, butt quite there the technology absolutely is. a lot of companies are experimenting with it. geolocation, as you know, is everywhere. addicttalked to joseph -- addicts. he calls it a disruptive technology and a perfect storm. being used fory facial recognition is a game changer to some extent.

they are putting the images of their life on facebook and creating a tag. andllows you to search retrieve and create links. >> this could be big business. one researcher says the global market for facial recognition products good reason six point $5 billion by 2018. privacy is a concern and regulations could impact the bottom line. >> people know at this point that facebook, twitter, google has so much information on us and it does not stop us from using them. >> the question going forward from the privacy groups at least to optpeople being asked in, and are pictures being taken , being used in public without their permission? it is not just facebook anymore. it is being able to be anonymous in public.

that is where you see the tension between the privacy groups and what the retailers want to do. for the retailers, it is a matter of stopping any regulation that could block the product. >> i just wonder once they develop facial recognition what they will try to sell me. support hose, teeth whitening. the formering in deputy homeland security adviser in the bush white house and bloomberg contributing editor, richard falkenrath. scaredlways makes me every time he is here. >> why? sohis information is always dangerous. >> it's not scary now. that's coming in the future. >> are we living in the world of "minority report," that tom cruise money. >> not yet. >> yet. did you hear what he said?

"not yet." individuals can be pulled out of the picture intact. >> your iphone can identify the same pictures. >> there is the distinction between the public environments. -- youe give them the have given them the permission to do that. that is called express consent. there is another domain called implied consent which is it you step into what walmart you are giving implied consent for them to monitor and track you. that is an entirely different right to see doctrine and that is where the crux of this debate is. >> do you know who this makes me worried for? not you -- your daughters. your teenagers. when they get on social media, m.com, theyet on hand do not realize what they are

signing up for. they are signing away their privacy. >> you are absolutely right. it is a huge issue. did tick no one -- you a box and a bunch of minors, your children tick the box. that no one read and understands the implications. does.k that is why he is not on facebook. >> it doesn't make a difference. i am and i tagged you in a picture that is on there. so, it does not matter. >> came over. >> here is the question i have for you. sphere, consent -- the domain, arena, what ever you want to call it. what about the government? could the government decide to unilaterally use facial recognition for border control to spot people? >> on the border, it could. the border is a special place in

terms of privacy law. the interior of the country is a little different. they're already doing it in a controlled way with drivers license photos. it is a headshot, shoulders square, straight into the camera. there is facial recognition happening for those past court -- passport photos, drivers license photos. what the government is not doing is what you saw in "minority report," general observance of crowds. >> go back to the word yet. how far are we from "minority report." years?r, five >> more than five years, honestly. this technology is regressing quickly. when i was at the in my peggy -- when i was at the end my pd, we had very sophisticated surveillance -- when i was at ypd, we had very

sophisticated surveillance. >> was the technology is ready, will it be legal? >> it is not clear. there is no clear law governing this and no clear jurisprudence. >> aren't we lucky this is all up to congress? >> it is not so much up to congress as to the court. legislation may be required. congress moves so slowly and struggles keeping up with technology. it is most likely to be settled through jurisprudence, through cases brought forward an aggressive apartments like the doing something and being sued and it working its way up the judicial system for a final ruling. >> good to see you. a fascinating discussion about facial recognition with richard groep -- richard falcon wrap. >> he always makes me scared. we will look at what is behind this rally in a moment. we are

going to take you on the markets. ♪

>> welcome back to "market makers." chile, they might as well be singing "good to meet the new boss, same as the old boss." the vote.ed 62% of she was previously the president and is the first to win a second term since chile return to democracy. to provide promising a free education for everyone with higher corporate taxes.

there has been whitening inequality and that is what -- widening inequality and that is what she is promising to end. >> it is 26 past the hour. it is time to take you on the markets. i am going to lead. why? because we are in the green. it is extraordinary given the week we had last week. it seems like some many people are taking confidence. look next time, stephanie, to make you happy -- in the green. exxon at an all-time high. why? or one goldman sachs rots it's stock -- valued its stock at a buy from neutral. inexpensiveares are relative to his oracle data. >> the market seems to be

agreeing. it is a classic case. the government looking for a place to dump thousands of tons of nuclear waste. we have that next. stay with us. ♪

>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> welcome back to "market makers." i am stephanie ruhle. thrilled because we are taking bitcoin. -- back to to back the virtual currency, why not put it in your retirement account? we have our own matt miller. i know you have been digging into a fund that allows people to put bitcoin in the retirement account. this sounds crazy. you would think you would want

something stable, steady, not high risk. >> no, you want extremely high risk so if something goes wrong you work at mcdonald's for the rest of your life. at obviously this is not a great idea. the bitcoin investment trust has also said it is incredibly risky. you either come out with nothing not a do very, very well. retirement fund option for him, but it has been possible to do that if you want. i should mention we will have berries silver on later today on "street smart." he is the founder of second markets which made the rounds during the facebook ipo which allowed you to trade nonpublic companies. but his investment trust is only for accredited investors who have more than $1 million net earth or institutional investors. indirectly into it with a minimum investment of

just $25,000. fidelity did briefly allow people to put it in their ira's, although that decision was reversed almost immediately. >> i am going to play the senate. i am assuming the role of the cynic. reality, he is a believer. >> he is. hard-core. silver, second market. wouldn't you say this is something he had to do because facebook is public now? >> i do not know. >> you are going to ask him though? >> i will ask him. but i never assumed that second market only traded facebook. >> hold on. silbert, whyrry not get involved in this? this is an opportunity? why not get involved in bitcoin?

>> second market was the secondary market for private company shares. >> it still is. >> i am going to ask what he is up to as well, but he is very much behind the point. he thinks that 2014 is the year that wall street has to get behind bitcoin. reading about companies investing in bitcoin, i have found interesting players. obviously the big venture capitalist. gates is onat roger the board of a bitcoin company in boston and he was on, i think , the vice director of the consumer financial rejection bureau. -- one ofout elizabeth's warren's top deputies. you think of elizabeth moran as representing the meat and potatoes -- elizabeth moran as

representing the nation. >> she plays the role of the cynic occasionally. >> it is no longer going to be this frictionless currency, right? all of these companies need to make a spread. they will charge it to you. it will no longer be this dream world of borderless, frictionless currency. respectfully disagree. arry wants to disrupt the status quo. that is his role. >> we are disrupting now? anyway, watch it 3:30 because barry will be here. >> that is meant -- that is matt miller on the sixth day of the 12 days of bitcoin. we're talking to top regulators right here on "market makers" next. ♪

>> the first new u.s. nuclear reactors in more than three decades are scheduled to come online in the next two years thanks to subsidies. in the meantime lawmakers and regulators have not figured out what to do with the several thousand tons of nuclear waste scattered around the country. president reagan and congress mountain,use yucca but yucca mountain is still a white elephant. a nuclear regulatory commission was ordered in august to review the site so it can move forward. we have the chairman of the nrc here on "market makers." thank you, madam chairman, for joining us. let's talk about yucca mountain. the government has made commitments to utilities as far as we stood disposal, but clearly there is no decision

yet. how does this affect the country's nuclear future? >> well, eventually the country will need a plan to deal with spent fuel. >> a lot of people would say it does have a plan, yucca mountain. are you optimistic that that site, on which $15 million of taxpayer money has been spent, will be used for nuclear facilities? >> it is not for me to judge that or have a view on that. is licensing the facility. right now the court asked us to use the money he have attached -- the money we have -- which is $11 million -- to evaluate the safety. >> but we have spent fuel sitting around in concert around the country. how risky is that? >> it is quite safe. >> it is quite safe.

but it would be better if it were in a mountain in nevada? beeventually it will have to disposed of. >> some would say it could be exposed to terrorism. do you disagree? >> that is a concern. >> either it is a risk or it isn't a risk. where would you put terrorism on risks and discerning nuclear waste disposal? >> it is a risk we need to consider. security atng nuclear reactors. >> i should hope so. >> we do. >> let's talk about nuclear generation. new clear plants -- new nuclear plants being developed. it has been a long time thanks to the three mile island disaster. questions have arisen around the viability or the need for nuclear power given that gas is so cheap and the country has so

much that. what are your thoughts? >> again it is not up to the nuclear regulatory commission to prognosticate about the future of power. our job is to make sure that our facilities are constructed safely. we have five nuclear reactors under construction. they have been going along well. >> when might we see one go into service? >> december 2014. >> and the last one of those five under construction? >> the 2019 timeframe. >> will we see new licenses beyond those? >> he will see. >> are utilities still powersted in nuclear given the low cost of natural gas? >> yes, some utilities are very invested in nuclear power. >> but there are others decommissioning lance. decommissionede

has been accelerated given that we have cheap fossil fuel? >> that is what a couple of them that have decided to shut down this last year referenced. they referenced the low price of natural gas as a factor in their condition -- decision. >> madam chairman, are you at all concerned that america will a domestichout nuclear enrichment facility? >> we do have other enrichment facilities. there is one in new mexico that will be starting up. >> and become a commercial site? >> yes. -- to the problem degree it is a problem -- it may only be temporary? >> it may be temporary, yes. there are a few other facilities potentially online as well. >> should we be concerned about the need to import and wrist material from other countries? >> i think that is a decision for congress and the administration to make. >> all right, madam chairman.

thank you for joining us. , chair of thene nuclear regulatory commission, with us on "market makers." be with us with his congressional report card, coming up next on "market makers ." ♪

>> welcome back to "market makers." i am stephanie ruhle. congress is going to finish up the year this week and by one measure it has been the least productive session since the 1940's. they have passed the fewest new laws and have the most unpopular public approval -- below 10%. even with the new budget deal expected to pass the senate

tomorrow, they are leaving a host of things undone. my favorite, our political columnist, al hunt, joining us live. what is your great for congress this year? if i were to give them a grade, it would surely be at the, maybe ,n f. at the are heading home and so much is undone. the institution where i teach, your producer was one of my students. i am an easy greater. i agree with you. i would probably give them a d. the only thing they did with the small budget deal -- >> you are giving them credit on this deal? what do we get out of this deal that is substantial? it is better than the status quo and it gives us a little bit of certainty. i think it is a very small accomplishment. it's just that or the not doing it. beckett them up to -- that gets

them up toa d. it's not just that they did not pass anything, but 46 times the house repealed obamacare, and of course it was going nowhere. you can hate obamacare, but 46 times seems a bit much. immigration, just sitting there. immigration -- just sitting there in the senate. the farm bill. it really has been a dreadful congress. >> you speak to political leaders every day. how self-aware are they? a you sat down and said to number of them, republicans and democrats, what would you grade yourselves, what do you think they would they? >> i think most democrats and half republicans would agree with what you and i said. there are a handful of the tea party republicans, and not all, he would say we were sent here to do nothing. the problem with that is, they were sent here to undo things.

this congress did not even on do things. you think it is fair but the tea party republicans would say they were sent to washington to do nothing? they would say that they were sent there to do something, which is change the way that washington does business, which i think we would agree is terrible. >> that is a good point. they were sent to change the way that washington does business. they haven't. they were sent here to take away regulations. they have not done that. i would say it has to be a disappointing session for -- to make ait awkward case for the tea party, but why not? ?hat options did they have there were only a few dozen of them. it is not like they can take over the house of representatives. they have to use the tools at their disposal and the tools at

their disposal right now our obstruction. and it sometimes works. larger are a little bit than that. your point is well taken. to repealou can vote it 46 times. they can offer alternatives. i do not think anyone thinks the current health care system is great. we have not really seen alternatives. immigration. what are they doing on that? >> is immigration where we could see a glimmer of hope next year? when you look at the budget deal, people say both sides of work together somewhat. where is the next place for real bipartisanship? could it be immigration? >> immigration has the best shot. paul ryan he was the architect of this teeny little budget deal would love to do something on immigration. he is a strong immigration reform advocate. again there will be a lot of people in the tea party who will resist it. it is fine to say no. at it is

fine to resist. you should come up with alternatives. that is where they have fallen very short. your seasonal greeting reminds me that we're only a couple weeks away from the new year. are you optimistic about the are formants of congress in 2014 over what we have seen in 2013? >> i hate to say this, but if anything it will be worse. by two,at are divisible election years, are usually less productive. >> you are not wearing green for the season -- >> i am wearing green because i thought it would match steph's red. >> we will let that pass. he thought you were being a greenwich. i love your grading. i think maybe they should the a f.

thanks for joining us. when we come back -- if you missed any of our interviews, you can watch them all on bloomberg on apple tv. we are that cool. you do not want to miss it. ♪

>> that is going to do it for today, makers" everybody. tomorrow, we have the cofounder equityworlds largest

firm, steve schwarzman of blackstone. you know, blackstone. secondary couple big deals last week. 56 past the hour. that means bloomberg television is going to take you on the markets. scarlet fu has more. scar? >> microsoft shares moved to a 13 week high. that was on speculation of the new ceo. steve ballmer said he would retire back in august. and i am joined by our guest with his strategy on playing microsoft as we await the news. if you have a stake in microsoft right now, what do you do to hedge that position? >> that is right. risk thiso de- management decision. , mostly ons up

speculation that alan mullally will come in as ceo. that has been dampened a bit. because of that we want standard mansion -- manage the potential downside risk. in january, we want to sell a 39 strike out. we want to turn around and buy a 34 strike puts. you are putting $.10 in your pocket if the stock is between nerdy four and 39 at expiration. -- 34 and 39. not a bad thing if we get there. then if were -- then in return, we have that put, if the market does not love who it is named as the next ceo. >> that is if microsoft stays on schedule and names the next ceo. what happens if they do not name successor by the time the

options expire? >> that is a great question. we would want to roll that out. we are expecting by the end of the year or very early next year. we could widen out -- i'm sorry, selby 34 strike all. put.e 34 strike milar structure. we do expect it to be imminent. do -- >> you do expected to be imminent. do you cover all of your microsoft shares or just a portion? 30% of yourk at position or so. it really depends on your view that. if you think, as we do, and outsider could come in and pose significant risk, maybe you want to hedge your entire stake. >> what is the latest intel you who is next about to be the next ceo of microsoft?

>> is he has a $30 neutral on the stock. his view is global he sees sales are expected to be down 11% in 2014. there continues to be a lot of pressure on the business. who could come next, anyone internally he sees as a risk because bill gates is on the board. he would think in that scenario gates would exert significant control going forward relative an outsider with significant restructuring background, like an alan mullally. there is the difference between insider versus outsider. outsider we saw stephen montcalm -- qualcomm mentioned. >> he was mentioned. >> another very viable candidate

taken off the boards. plenty of risk out there. many more risks with internal candidates. >> internal candidates does seem to be what microsoft is looking for after alan mullally indicated he is happy staying with ford for now. >> exactly. >> his recommendation is to do a trade on microsoft right now because of the impending announcement it will be naming a new ceo. perhaps internal, perhaps external. "lunch money" is up next. ♪ ..

>> welcome to lunch money, where he tied together the best stories, interviews, and videos in business news. what's take a look at our menu in politics. the senate prepares to pop -- to vote on the budget passed by the house last week. we are talking about the robots and drone delivery men. and using a face print instead of a fingerprint. and the hobbit crushes it at the weekend box office. and the nfl legend talks coaches, injuries, and whether college players actually get paid. the senate will vote on the $1 trillion budget agree