is probably going to be some money if you can hang in there. >> out of the money calls. >> selling them. >> think you so much. we are on the markets again in 30 minutes. >> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> blackberry crumble. eatsmart phone maker another slice of humble pie. a loss and $4 billion of charges from a manufacturing deal with foxconn. the beginning of the ad. like snobby or nice. not he or nice. for more shopping days until christmas. we play santa claus. gift of freedom. he was once russia's richest

man. after 10 years in prison, mikhail khodorkovsky walks free . it may seems like written's -- eike putin para restroika. don't be so sure. show for ericast and i for the year. we are going to talk about the blackberry. if you thought things cannot get worse, think again. shares fell by more than 50% in the last quarter and losses were far worse than analysts anticipated. are actually rising this morning thanks to a separate announcement about a new partnership with foxconn. we have julie hyman and cory johnson to break this down. walk us through the foxconn partnership. is a five-year partnership, foxconn will take

over some manufacturing and help market the phones in indonesia and asia. unclear about the financials in the conference call, how are they going to pay foxconn. there is some talk that maybe this would open more of a mass-market audience to blackberry products. it is not entirely clear. still have a strategy. that has been their big struggle. they change their business model a few years back to go into consumer products and try to grow that. now they are pulling back from that. >> focused on enterprise -- >> they talk a lot about enterprise on a call and in the statement. >> you would think that is their only hope. >> john chen, the new ceo, gave himself an out. he said i have only been here 45 days, cut me some slack as i dive in to this giant hole.

he did not use those words -- >> the numbers, he would not use the phrase a zombie. it is like is on the movie. i know it is coming, woah. year, theis time next four of us are sitting here, what will we say about blackberry? sign of as no turnaround. the products do not seem to be taking off. they have legacy costs that keep tripping up on them. they continue to lose contracts. cio is going to say we need to get our new blackberries -- who is going to say that? get oured to smartphones from the company that is targeting indonesia. that might not sound like a crazy idea, indonesia has 250 million people. if you are going after indonesia, you are going down market. >> i got a new blackberries this week. downmarket. >> did you buy that or is it

provided to you? >> i am not going to tell you that. >> there is one thing to be said, it is still a blackberry 7 on the old software. >> most of the sales were blackberry 7's. the point about what are the corporations going to be ordering, there was a write-down of $4.6 billion. was licensing agreements, and part it was carriers who bought blackberries and say we do not want these. asinventory write-downs, well. stuff they have been making and are not going to be able to sell. >> the single largest part of it was patents, licensing, and acquire technology. >> they said it was not so much patents, it was more licensing than patents. >> that was not clear in the release. >> on the call -- >> that never came to the desks, book value takes a whack. >> book value is less than half

of what it was before. >> it is amazing. why i technology companies getting revaluations? you see how fast things can change. nokia can be the dominant cell phone maker in 2005 -- >> you know the answer. is the word innovation associated with what you are doing, the market loves it. >> technology, innervation, the future of business. is the whole reason that apple says we want to hold onto our cash -- this is their fight with icahn and others who want to buy back shares? they want flexibility. you look at blackberry, nobody wants to be blackberry. i thinkur point, people, including the markets, get excited about the notion of the future and it gets a higher pe multiple than software as a service -- it gets a higher pe multiple.

software as a service is better than software. branding image aspiration. financial services -- their branding is terrible. innovation technology, people are excited. >> at the very least, this lesson with blackberry teaches us something. >> i am downmarket. >> in the world of technology, the notion of a sum of the parts analysis is bunk. so much of it relies on the value of intellectual property. at the very least, the analysts and presumably the investors do not have a clue what this is worth. >> you have got to know the business and have a unit sale understanding in order to understand. you have to know who buys this and when. >> great to get your thoughts. julie hyman and cory johnson. >> in russia, vladimir putin oil tycoone former who was once the richest man in the country. mikhail khodorkovsky walked free

after 10 years in prison. ryan chilcote has covered khodorkovsky for more than a decade and was in russia for his arrest in 2003. the world is easy to see move.kovsky's next there is a mystery, we know he hised in berlin to see ailing mother. we're getting word she may not be in germany. what is going on? >> he arrived in berlin, he is having been pardoned by the russian president on humanitarian grounds to see his mother who is battling cancer. he gets there only to find out she is in the russian capital. she did not know he was going directly to germany. he said he was unaware she was going to be a russian capital. he has had pretty patchy contacts over those years with his mother. ago, he was in prison. he walked out of prison after president can pardon him.

yesterday, president clinton said mikhail khodorkovsky -- president putin said mikhail khodorkovsky asked for the pardon. he was due to get out in august. he refused to ask for a pardon. in russia, that presupposes acceptance of guilt. he has maintained he is not guilty. in fact, this was a vendetta against him that president putin has wanted to get rid of him and basically pushed him out of the way to cement his grip on power in 2003. >> why did putin release him? that hewn rationale shared with journalists yesterday was that 10 years is a long time, his mother is sick. done his time. the fact of the matter is we are a couple of months from the winter olympics in russia. relationships between russia and

the u.s. and the west have been poor, particularly recently over the anti-gay laws. for a long time, the west has been calling for the release of mikhail khodorkovsky. they believe he is a political prisoner. he is a rival of vladimir putin. he spent most of his time in prison criticizing putin. this is thought of as a concession to the west to lower the temperature and relations before the olympic games. >> is it to divert attention from russia's agreement with the ukraine which also is a source of tension? >> possibly. that is what i was told by an analyst earlier today. it is extraordinary how the news cycle changes. i spent the beginning of yesterday talking about what to -- what9 putin had to say about ukraine. not looking to pick a fight with the eu. by the middle of the day, one of

the biggest stories in history recently in russia. the president pardoning his archrival, mikhail khodorkovsky. once russia's richest man, he is worth $13 billion. in two thousand three, despite an unwritten agreement between president putin and the that they could not enter politics, he did and funded the communist opposition. that is why president putin went after him. putin maintains he was a criminal. that is something that mr. khodorkovsky, until now, has denied. >> does this mean anything to investors in russia? >> it meant a lot 10 years ago. he was the principal owner of the largest company in the oiltry, the fourth largest company in the world, producing 2% of the world oil.

they had to close the stock market for an hour to try to bring stability to trading. yesterday, upon news, stocks went up by him or one percent in russia. they are still the cheapest stocks and emerging markets. theikhail khodorkovsky was poster child for everything wrong with the investment case for russia, he has been replaced. it is not a huge difference. >> any idea how much money khodorkovsky has now? >> the thinking is he still has several hundred million. he had a company worth $36 billion taken away from him as a result of fraud charges. hide at least several hundred million before he ended up in siberia. >> ryan chilcote reporting on mikhail khodorkovsky. he knows the story of the man going back to his arrest in 2003 and before. time for the news feed. the economy grew faster in

third quarter than estimated. gdp expanded at a rate of 4.1%, higher than past estimates. the economy is at its strongest level in two years. consumers stepped up spending on health care. the obama administration backing off on another provision of the affordable health care act, exempting more people from the individual mandate next year. if your insurance company refused to renew your insurance because of all i care, you will not be penalized if you do not buy a new policy. you will still be eligible for catastrophic insurance. this will cause even more confusion in the market. lamborghini has unveiled a new sports car capable of speeds up to 200 miles per hour. it is named after the spanish word for hurricane and made of carbon fiber and aluminum. typical liberties to not go for less than $200,000.

theetail scorecard, who are winners and losers this holiday season if my car is any judge? the back is filled with toys r us. >> we will be talking about private equity's incursion into rental housing. blackstonecalling their landlord. 40,000 homes and climbing. stay tuned, this is "market makers chirico streaming on your smart phone -- this is "market makers." ♪

>> welcome back to "market makers." the holiday shopping countdown is officially taking. four more days until the season ends. this longe waited like many of us, the easiest way to beat the rush would be to buy a few shares of retail stock. the question is, which firms are

a head? lori is the president of cross legend investment. here we are on the holiday season. who is the big winner? this season,k at it has been very promotional. friday was, -- black pushed up. that do not have to promote the store across the board or did not have to promote much. there are very few, but there were a few brands who pull that off. , apanies like anthropologie division of urban outfitters. they have been running ian un-promotional season. their same store sales look flat but they do not include e commerce.

their u.s. same store sales are very strong. continues to be on fire. >> it seems like i am getting hooked up as a consumer. are the retailers killing themselves over promoting? -- if youriot till pay retail, you feel like a chump because of all the deals. >> i kind of had to look at who are the few that did not have to promote. most of the others, it is a sea of 50% off. that is a tough environment. it is one thing when they can be scientific and say sweaters are not moving, we will take 40% off of that and keep other categories and tags. they have not been able to do that. >> lori, which retailers did presume this conventional -- did pursue this conventional wisdom that you have to discount and open early. and are not reaping special

benefits. teen retailers have had a rough go this year. if you look at some of the big guys, abercrombie & fitch and aeropostale, same-store sales were down. they had too much inventory. they tried to price things up. .aking 30% off when they are starting the season at 50% off, you can be sure it is eating their profitability. and already had to warn take estimates down. not an easy season. >> where are teens spending money? technology, or are there so many discounts? >> technology is a piece of it. also, there has been a big shift over the past few years. it has happened over time to the fast fashion retailer. forever 21.

you walk in and for $20 you are getting something that is trendy, not the highest quality but it looks good. there has been a big picture shift away from the classic, preppy americana that other teen retailers build business on. holiday shopping season a last cause for abercrombie and aeropostale? can something magical happened over the next four days? well, broadly speaking, this week and next week are the two biggest volume weeks of the season. to beis a lot of business done. the names you just mentioned -- they really have to pull a rabbit out of a hat. they are looking towards let me mark this down so i can start the new year with a fresh level of inventory. not a lot of hope they pull it off the season. >> lori, about forever 21 and howes like it, h&m,

competitive can abercrombie and aeropostale be against that? if what you described is a trend, it sounds like they're going to have to be much more to supplant -- much more disciplined with inventory next year. they have no idea how much people want to buy. >> this trend has been going on for sometime. last year, we were in a really cycle,ored-denim teen retailers participated. they thought they were back on track, but that trend fell off quickly. aeropostale has done a shift lo-vo driven. they are trying to get fashion show them. -- fashion driven. abercrombie has always been areically driven, they

going to try to drive more of the fast fashion. my sense is they think it is here to stay. >> what does it look like for luxury retailers. does not even care that price. they do not seem to be subje ct. >> we have seen a bifurcated consumer for some time. has not been affected by the 2% increase in the payroll tax hike. spending continues strong. some of the companies i mentioned like lululemon continued to be purchased. tiffany's had a good quarter as well. >> there you go. thank you so much. erik, i hope you are paying attention. lori cwachs. >> i have already done my shopping, it was not easy. imagine trying to shop for the girl who has everything --

stephanie ruhle. i did give some consideration to colored denim. you will be happy that i chose something else. you will find out. a little -- what a great idea. >> a $30,000 jacket. we will be back. ♪

>> what if your next landlord's name is blackstone? as in the private equity firm. is that good or bad? we are asking and giving you some answers. >> we are going to talk about a different kind of bowl, college

bowl season starts tomorrow. what the hottest tickets are, stay with us. ♪

>> america's single-family homes represent the largest physical asset class in the world. -equity firms are capitalizing to build a prices rental housing market. we took a look at how it is working. >> outside the clinic county -- the gwinnet county workhouse. high.rices may seem >> $228,000. >> this is a bargain for private equity firms. a block of homes have been seized by the bank. the hottest new asset class,

single family homes. the biggest players in this new throughlude blackstone invitation homes. colony in american homes, a unit of colony capital, and california-based american homes for rent. many of the houses they are buying were homes that want to families. they had been struggling with your monthly payments when they requested a third mortgage modification from their letter, citigroup. >> everything was on hold and we did not worry. >> after just a days notice, citi mortgage sold their home to the highest bidder, blackstone. >> it feels like our house was stolen. we were caught on guard -- off guard. notice, no anything. >> this woman bought the house.

it was one of more than a dozen bidding victories. she was more than a dozen bidders for blackstone. across georgia, the firm purchased more than 170 homes in one day. thanks to the rapid foreclosure invitationkstone's homes have dominated options. buying up 2000 properties in gwinett county alone and in cities across the country. these investors are placing bet on a vast number of single-family homes. have put in players about $20 billion to acquire north of 150,000 homes. >> what is the attraction of a city like atlanta? >> you can buy thousands of homes in nearby locations that makes the economics of serving

those feasible and aggregating large portfolios. >> when borrowers do not pay their mortgage on time, the lender forecloses and sells it at auction. hires an equity firm auction bidding company to buy it and a contractor to renovate it. finally, a leasing agent to rent it. the gather the income from thousands of homes. and blackstone's case, bundled as income streams together, price them, and sell them to investors. the number of rental homes has million to almost 40 million today, boosting demand for single-family homes. blackstone offered to let the family stay as renters. more than the monthly mortgage they could not afford. >> it is our job to worry. >> the latest family to be priced out of their own home and the american dream. >> it is not worth it. i would rather rent.

i never thought i would say something like that. reality fors new the many on main street that has created a profitable new business for the few on wall street. >> that was willem marx. he is here with us along with cristina alesci. are struggling with whether this is a good thing or a bad thing. in your experience, did you get a sense for whether it is better to have blackstone as your guy who than some lives a few blocks away? >> this week, erik said "di rtbag" on television. >> the families we talked to said some of them had difficulties contacting the property management companies for firms like blackstone. callhave to go through centers as opposed of calling

their landlord down the street. country around the can't complain about landlords. the question is, when they are scaling up, are they able to deal with problems that will -- >> and they provide us is very service? >> when blackstone bought this property, the family was facing foreclosure. >> they were several months behind. their point was that they never received a notification until the day before foreclosure. >> that has nothing to do with laxton. the bank foreclosed upon them. itit was not blackstone, would have been another investor. who knows how they would have run things. food is what kind of communication they would have had. from blackstone's point of view, not every family is in that circumstance. homese cases they do by that have been foreclosed or abandoned.

they are saying maybe these neighborhoods would have been blighted, we are investing. blackstone is in this to make money. they are going to make a killing on these investments. there is no doubt about that. they bought these in very distressed circumstances. >> blackstone is living the american dream. erik, could we say where is barney frank? has theily no longer opportunity to pursue the american dream. barney frank made people believe it was their birthright to own a home in america. that is the question. >> the larger context is really the difference in when you look at the fiscal policies we have had in this country and the content is easing, -- and the quantitative easing, you start to see who benefits. it has been the upper classes, the investors.

people with money have actually benefited more than people without. >> let the non-american waeigh in. >> without policies barney frank supported before the crisis, does the marginal buyer exists to soak up demand? instead of the private equity firm. i am not sure. people want to believe private equity moving in deprives low income americans of the opportunity to live the american dream by building wealth. if the low income americans cannot get credit, there is no way to build wealth. i'm not sure that a social crime is being committed. >> you have to bear in mind that people are blackstone have access to much cheaper credit. >> that is a great point. ding, ding. haveese are the people who had very bad credit over the

last few years. it will be difficult for them to borrow. at auctions,s, -- people do not have the access to cash to buy things on the spot. >> they could want to become homeowners or local real estate owners and they cannot when blackstone goes into these small communities. >> the banks are more than anythingo lend for blackstone wants to do. to put this in context, 3lackstone has spent $3. billion on u.s. single-family homes. if you look at their overall holdings in real estate, they are diversified way beyond single-family homes. they are the largest u.s. hotel owner. >> the question is should they be this local? "? hang on, "should >> we are talking socially. >> what market -- what market is

freer than the american housing market? anybody can get credit, anybody can apply for a mortgage. anybody can bid. you know -- you start raising questions. >> if you have bad credit, that was your own doing. >> in large part, that may be true. >> the moment we start using words like should is the route we start talking about regulating the housing market. >> this opens up blackstone to a lot more scrutiny. sees really difficult to them going deeper into this right now. they are already having to deal with questions that willem is raising about whether or not they should. whether or not that should be asked is a different story. it is difficult for them to go ahead without additional scrutiny. they will continue to buy homes,

not at the clip we have seen. 300hey were going from homes across georgia over the summer, now they are buying 170.. >> declining. >> fantastic reporting. number one takeaway? >> a lot of strip malls in atlanta. >> willem loves them. would be cristina alesci and william marx. are you ready for football? college bowl season begins tomorrow. so many holes. we have to figure out if there is a must see. ♪

>> welcome back to "market makers." ready for some football? games inollege bowl

the next three weeks. the big one is the bcs championship between florida state and auburn. which are the hottest tickets? we will find out. we have the founder and director of the oars marketing firm sports impact. he joins us from las vegas. many bowlelieve how games there are. it is the amount of holiday promotions. what are the hot tickets? >> of course, the national championship game will be the top dog. prices over $3000 for the january 6 matchup between florida state and auburn. cheaper than $250 the secondary ticket prices for last years game between alabama and notre dame. that reflects the fact that notre dame is a strong brand. has a majorlf impact. owl gamer, alabama's bw

is the second most expensive ticket -- the sugar bowl. it is over 300 dollars. last year, it was almost 100% cheaper. interesting how the matchups have an impact. >> is the increase in bowls about economics, trying to make money? games have try to create a platform for schools to market themselves. >> hold on. a platform for schools to market themselves? i do not think you mean attract new students. that is the point of a university. that means make money. >> to be honest, a lot of these bowl games, there is not a lot of money to be made. goes to thehat conferences of the schools that participate -- for about 25 of the 35 bowl games, the payout is 5 million toween $0.

1.5 million dollars and that money gets spread out amongst the members. some of them are hardly making anything more than the cost of going to the game. again that is here tomorrow, fresno state-usc. they are hardly making any money. does.nk about what it my kids do not know anything about fresno state. they watch the game and it is marketable. people care more. a huge financial incentive. they are not getting the payoff tomorrow. >> the marketing aspect of this is why these teams do it. ,he teams in the bcs bowl games their conferences are getting anywhere from $18 million for an appearance. the championship is a 22 million-dollar payout for the acc . for a moment about the point stephanie was making. fresno state, hasn't the

proliferation of bowl games cheapens the idea of playing in anything but the national championship? >> there is no question about that. i agree. there will be some smaller schools that will still embrace the opportunity. where else are they going to be able to get that? we crave football so much as both the professional and collegiate level, even though these bowl games tomorrow through december 30 and all of them except for the national championship, even though they do not have a real significance in terms of wins and losses. it does have a major -- >> doesn't really? at what point does it have value? if you are playing in the pino t noir bowl. i cannot imagine. that is not going to be a national stage.

broadcasters are not going to care. how many people are going to gravitate? >> erik, common sense i agree with you. but yet, if you look at the ratings, they are still strong enough that it makes it worthwhile. these schools still see bombs in a mission. -- in admission. >> there is so little on tv. another marathon of "the real sports.es" or live >> if they had to compete with you too, they would have no shot. >> how much do schools spend? what does it cost them to participate? in particular, lesser bowl games. >> and depends on how far they are having to travel. based on the data i have seen, .25 million to $1

million. usually that much to participate. he, thank you for joining us. watching a little football. founder and director of sports impact. merry christmas. >> when we come back, you will find out what i bought stephanie for christmas. this is without question -- look at the angst. >> you do not look that happy. >> the hardest decision i have ever had to make. ♪

>> it is the most wonderful time of the year. the holiday season is upon us. i gifts for the special people in our lives. i shopped for my wife, my my parents.

figuring out what to get this person, my partner. it was the most difficult decision of my life. >> boxing gloves? >> if i like anxious, it is because i am. i have got to buy a christmas gift for a woman in my life. my coanchor, stephanie ruhle. i am a terrible gift shopper. i have a digital queen at harper's bazaar, gift guru. >> lovely to meet you. >> i need to buy a gift for stephanie. >> she must be a tough woman to shop for. shot glasses. a private island you could send her to. it has a spa. >> ultimate luxury and stephanie

ruhle go in the same sentence. price tag? >> steep. >> not this year. >> tell me about stephanie's style. >> elegant. >> this is a pair of shoes. >> do they fit my budget? >> i have some other ideas. >> wow. >> stephanie seems like the kind of woman who would like fur. this is one of my favorite gifts for anybody in your life. yoga, pilates. >> i like it, this might be the one. no fur, no leopardskin. better to buy for the sporty stephanie. >> schatzky-poo. print.and leopard

>> if only i could find a leopard rent yoga mat. >> i love it. >> they do not make it in leopardskin, yet. >> everybody wants to get fit. i have my own blog for shape. god, wow. >> i gave you a great lift, he -- a great gift. less sporty. classght need a hot yoga to work erik's gift off. >> he is canadian. approaching 56 minutes past the hour, time for bloomberg to go on the markets. a little green or black. with the exception of animal print, green is my favorite color. red hat.

--orted third-quarter >> talking about gdp. >> i will let you go first. you start. go. up 4.1%.urprise, >> red hat, got the numbers after the bell. shares are soaring as morning. p and bottom lines and roads forecast for the year. raymond james raised red hat to outperform. red hot! is that good? >> green, red. christmas colors. >> "market makers" will be back in a moment. >> which ones are going to be most popular? people are hot for robots.

ceo of motive investing will be here. stay with us. ♪

live, from bloomberg world headquarters in new york, this is "market makers", with erik schatzker and stephanie ruhle. the start of the lets you make money from sharing your best ideas. we are good to speak to the man .ehind motif investing >> the obama invitation nears a decision on the outer virtual keystone pipeline. what are the consequences if the answer is no? >> we are going up in smoke. new york city says that it -- that when it comes to smoking indoors he cigarettes are no better than the old cat -- fashion kind.

,"lcome back to "market makers i'm stephanie ruhle. >> i am erik schatzker. >> is time to dig take you to the newsfeed. the top as the stories from around the world. my alma mater deutsche bank will will bendbillion -- $1.91 billion. agreement iimilar jpmorgan and ubs. a legal settlement may change the way you shop. --roup of businesses shoppers that use credit cards mandate more paying at the register and those who pay cash or debit card. credit cards have prevented merchants rob a two-tiered icing policy.

you cannot fight city hall. the new york city council has voted to ban the use of he cigarettes in new york public areas where traditional cigarettes are already banned. new jersey has similar bans. you will not have -- be happy about this. this comes on the heels of a mega loss, the smartphone comedy blackberry has inked a five-year deal. analyst,eading telecom he has a target rating on blackberry. it is hard to see through the dust at this point. a terrible quarter from a financial standpoint yet the

beat -- deal with frost, what does this all add up to? >> and adds up to the company saying that we are deemphasizing the consumer business and refocusing all of our r&d efforts at the enterprise at the high-end. >> can i interrupt for one second? what is indonesia all about? the company has announced that it has put this partnership together to serve the indonesian market. is that just a depressed market -- the enterprise market? >> no, they are doing a broader market. they're going to manufacture and help design and help manage the sale of a blackberry 10 device for a bit easier. we inspected that would then be expanded to the rest of southeast asia, possibly including china. and then we actually think that if the agreement goes well we could be seeing them take over all of the consumer business.

fox cannot do the enterprise business because of the security concerns. understand, the u.s. government has difficulties allowing non-us entities manufacture the library seven that are used by the government controlled agencies. >> now i am thoroughly confused. we started with you say they are focused on the enterprise, but now it's seems as if the indonesian venture is consumer- based. >> is absolutely right. >> i'm not trying to make this ethical for you, it is blackberry that is making it the globe for the rest of us to understand what exactly is going on. focusing on enterprise, are they still is muddled and mixed in their strategy is ever before? >> they are muddled and mixed,

yes, but there is some clarity emerging. that clarity, blackberry will not spend their money on the consumer market going forward. do thatl rely on fox to and hopefully expand that relationship to allow them to play some role in the consumer market. frankly, this is a halfway thing between shutting down your consumer business and/or selling it. they're trying to recognize the value of from it. >> for you, what is your price target, when you think of the next six months? >> we are still very comfortable with our price target. they're going to burn cash. the loss we had less quarter was a little bit better than expected, but there was a huge tax-free brunt that help them -- tax refund that helped them. . that keeps the cash balance a check here. refund a bunch of the taxes that they paid in the past.

going forward, the battle is in the enterprise for mobile device management. here you can see blackberry trying to get onto the iphones and android devices as well as try to maintain some core group of blackberry devices. >> i think you said it just there, but will we see blackberry outside of this indonesian venture? or will they really be making that many smartphones? seven,e the blackberry they are barely competitive with an iphone or android device. they going to continue manufacturing those for an enterprise customer like bloomberg, are they going to be getting out of that business too? dothey will continue to that. they have a runway there, they have a core group of clients. rightly, they do not want a coveted of device to iphone or android. they are not competitive, they

just want or print messaging or e-mail. the enterprises that are using this to not want apps or the internet rousing ocean that the android and iphone but -- devices offer. this offers what they want, and security is a big issue here. to those small group of enterprises that are focused like this, the blackberry seven will be the wisest choice. >> it is quite honestly try that hard to figure out what blackberry is doing. peter, thank you so much for helping us clear that up. >> another part of obamacare is being rolled back, at least a little bit. last night the white house said that the people whose health insurance was canceled, and who have not signed up for a new policy to replace it will not be subject to the individual mandate. that means he will not have to pay a penalty in 2014 for copying and short. we want to bring in the analyst michael vance.

how many people is this going to affect? these nuances are making it more confusing. >> that is a very good point, stephanie. most people are really trying to decide how may people are impacted. i think of you talk to the white house, they will tell you about 500,000 people, if you talk to the republican leadership they will say about 5 million people. let's take an educated guess and figure that the number is somewhere in between. > ultimately, if the number is in between, that is not an insignificant number of people. what does this really mean? it feels let but by bit that the administration is, there are no desire of its own, chipping away at the individual mandate to the point where it is really not going to become workable. it has to be workable if the insured can -- insurance company's are going to absorb the costs the, obamacare. the management companies are starting to feel like charlie brown trying to

kick a field goal with lucy only the ball back. the management companies have to have a balanced pool of people asked -- participate in the exchanges to make them viable. i taking this revision away from the individual mandate, there is peoplecentive for lessig to sign up for the stages. if you do not end up with a balanced pool of people to participate, you're absolutely right, because could end up being higher than the manager comedies had anticipated. >> where not here yet -- why are we not hearing yet from the ceo of the managed care companies? are we going to hear from them, or do they have by virtue of of the sides rolet, they have to be quiet? ,> they might end up losing some of the provisions within the affordable care act offers

some protection. some of those are risk adjustment pages -- payments. kind of really summarizing it, that means that if the managed care company and up incurring more losses than they thought they might because of the obamacare participation, than other insurance companies will end up paying in to help subsidize those losses. go makee idea that if i more losses because the actuarial assumptions that i made in order to price my product and up the incorrect, then other managed care companies that might have priced less aggressively will end up being able to go ahead and provide some relief for that. it is one of those things where we are all in it together, and at least for the first couple of years of the obamacare implementation, there will be some risk sharing that will hopefully subsidize them of those losses. >> it is not easy. t watch for -- thank you for joining us.

>> when we come back, how do you invest in an idea? how do you invest in a trend? there is a way. you can buy a motif. the hottest motifs of 2014. >> it is yearbook time. can you tell us who this inventor is? >> i've got this one. >> tweet to our show, three to eric, tweet to me. we want to give a shout out to this famed inventor. bloomberg tv, on tv, under tablet, on your ipad

and at bloomberg.com. ♪

>> earlier this year we told you about a new investing platform called motif. motive is about investing ideas, and it is very much diy. it probably needs a little more explanation than that, so have a look. >> imagine if you could invest in a big idea, something more readable than a single company or even an industry. isre's an app for that, it called a motive, and it could be the most disruptive innovation to hit the stock market since etf's. a motive is a portfolio stocks based on that idea, theme, event or trend. each occurred he is weighted to reflect this exposure. makes a motif different from mutual funds or etf's is fractional ownership.

you actually own your allotment of shares in each motive, and you can customize the way things. that is the secret sauce. plus, there's no management fee, no lows, and no tracking errors. buying a motif costs 995, -- $9.95 bud selig one is $4.95. motive has given investors the power to build their own. there are over 25,000 motifs, and he gives them a lot of information about what is excited about and what they're investing in. the ceo of motive investing is back on "market makers" to tell us what the data shows. what is going to be hot next year? you have a window into the future. >> we are trying to. we have a lot of top 10 trends.

the biggest one that surprises is robotics. gaining momentum, google alone bought eight companies in the second half. several talk about amazon, dhl, you have apple investing $10 billion, so robotic seems to be very hot trend right now. but how would a robotics motif work? it they robotics companies? arebig-time companies interested in them. >> you need visualization software to help you have the hands move about. those of the companies we put into a motif. valley, iposicon are hot. we have 182 ipos this year raising $43 billion, we think it is a sellers market and that's trend will continue to 2014. you have important names like drop rocks -- dropbox out there. >> what are the criteria?

ipos overhe top 25 the last six months. >> so new. >> it does rebalance as the time moves over. we keep the boat deep relevant unlike a lot of static products. >> stock rocks out -- drops out. >> and then we put in new ipos. >> what if you're a facebook, months more than six? >> good question. ipos, we door new not market cap await them we wait them by the issuance, and then rebalance them a quarter after volatility has settled in. that is what we did with facebook, and with twitter. of coverith a lot

names for your motifs. trendsly captures the behind us stocks that go to the basket. modern warfare. tell me about that. >> smart bombs and drones. sequester or no sequester, the military is looking for smarter deployment of their investment. they're going to look for things that have the biggest banks. modernapplications, warfare, water jets, left on the conventional side. >> looking over the course of 2014, we're going to see certain stocks set up, but would we cannot see are the themes and the ideas behind them. we can see that with motifs. what are the best performing of 2013? >> clean tech. tesla. biotechnology, solar.

between basket and stocks on your own is very expensive, we give you 30 socks for these rights of one, that is how we deliver value. >> what have you learned? >> it is a lot of fun being able to watch trend. study searchogle's pattern. you can take an index like case- shiller am an interesting index, and with our methodology we can tell you what young people and old people think about housing recovery, what peace corps volunteers think. we can segment data in ways that were never possible before. it is a really big interesting big data app. into you put your money certain motif thinking that they're going to sell, what are people not buying into? >> the ones that did not bring results, i got overhyped. topical. are

that were around hurricane sandy, they were doing well for a little bit, and then not in the rebuilding efforts. the obsession with pets would continue, it faded away a little in 2013. obamacare we have our same, both apl and keep -- repea l and keep. a gives you a sense of where we are in that debate. >> it take the emotion out of the equation. >> we are good to see more and more of those giving you more equations. >> what about follow the activist? >> we will see more.

>> is always great to have you. >> happy holidays. >> when we come back, time for a of christmas. it is hard to shop for erik. he is a special guy, he needs a special gift. if you missed any of our interviews today you can always orch us at louvered that, bloomberg apple tv.

>> think things are bad in

venezuela am try leaving the place? today's letter american report. the believer, the latin american currency are stuck with $2.6 at the in venezuela official exchange rate. they do not want anymore because it loses value every day. if you want to buy an airline ticket out of venezuela you need dollars, euros, or pesos. offered believeth, the airline said no chance. back, we'reome going to be talking about my business gift from erik.. governmenthe

approved the keystone pipeline? plus, who is this guy? tweet us with your answer.

>> sorry ee cigarette lovers, the new york city council voted last night to ban issa grants and public laces. this may be followed by other big cities. more on the potential impact on the ban on the industry. what is the rationale behind this? they say that this is the gateway to stop smoking, so there should be >> something positive about them. esa grantsthat the cigarettes are making it

normally acceptable to puff away in a café. negatives a really stigma associated with it. >> so much of the anti-groups have been saying that this are making it good to smoke again. on the board is richard but a former surgeon general who wrote a letter and said he is in opposition to the ban. this is an unsupported effort, and could constitute a giant step backward made he also spoke to the ceo, and says this is an emotional decision, . are a way out of

smoking. you can stop smoking real tobacco which is bad for you and start smoking vaping. i remember when i first read this, thinking are we going to go after everything? about renormalization. it is not normal anymore for people to be smoking in public. >> i do not want people to be smoking in public and think it is normal. it is a lot more bearish on the industry great -- on the ee cigarette industry. states in states like new jersey. is going tog that determine whether or not we change the growth contractor he -- growth trajectory is the fda.

he went on one of our rival networks recently talking about ease cigarettes and it next day his six-year-old kid but again i like a cigarette and was puffing away. what kids do not know cigarettes are. thank you for giving us the latest from the city council on cigarettes. >> when we come back, the keystone pipeline is still up in the air. we speak to the ceo of transcanada, the avenue that would build it, to doug but if they are not get the bed -- to talk about if they do not get the bid. ♪

>> early next year the obama

administration is likely to issue a final ruling on the keystone xl pipeline. thumbs up, or thumbs down. nobody has more stake in this decision that the ceo of transcanada. his company would be the one to build the what -- $5.4 billion pie. the oil stands in alberta to refiners. environmental groups oppose the pipeline, but they say it would increase carbon emissions. yesterday peter cook spoke with russ and asked him when he expects to finally get that decision. >> we are coming to the final of the environmental impact review. that comment time closed, and we are coming to the time of answering all of the issues and questions that were raised. i would hope that in the coming weeks we would see a permit. that is our hope.

since givene long up protecting exactly when these things are going to occur. >> i know you met not too long ago with representatives from the state department. what is your level of confidence today that at the end of the day the president of the state department is going to say yes? confident. very it is a very important project paid the u.s. imports 8 million euros to 9 million barrels a day. the greatest way to get that oil is three pipeline. -- through a pipeline. i remain confident that this logic makes sense for energy security, and all of the jobs and economic benefits that come with it. >> is a rail line an option for you if a pipeline is not? >> i think it some point in time our shippers will ross says -- process for having them bridge the gap for when this pipeline

actually comes on and when the production comes on. what we're seeing in canada and the united states we're seeing shippers that are waiting on both sides of the border. both have increased their rail movements. they will continue to do that and continue to look to us to help them reduce that gap until such time as a pipeline has been approved. we will work with those customers to do whatever we can to help them in that endeavor. >> there's a lot of politics and opinions about this project. billionaire former hedge fund manager who is taken upon himself to fight this project and have you had a chance to sit down with him? what would your message. ? be? driveunderstand the toward a less carbon intensive energy future. quite frankly, the opposition to

the keystone pipeline isn't likely to produce the exact opposite. we're are seeing an increase in inl movement, and increase emissions. we need to focus on the things we can do to reduce emissions and improved by environmental performance. we have nine solar plants under construction believe the biggest wind farm in connecticut. we just put $5 billion into refurbishment in ontario. those are actually ever been to and that israeli to focus my time and effort. if i can encourage them to do the same, we can make a difference in the emissions. denying the pipeline just leads to deadly more emissions, and higher cost. that is not in anybody's interest. >> at what point do you run out of patience and drop your hands and say enough is enough? and possibly walk away? >> i think when the market fundamentals tell me that that is what the right thing is to do.

they are still refining 7.5 million barrels a day in the old 4.5 billion coast, of that is -- million of is imported from around the globe. shippers tell me that we no longer want to connect production in canada with those refiners of the gulf coast is when we give up. at this point in time a hundred percent of those shippers continue to support us through their long-term projects. >> if the president were to say no to mug you have any legal recourse at that point? do you go to chance -- to court to challenge that decision? is att is on our minds the end of the day markets are dictate our to choices. i do not think it is productive

at this point in time to talk about those kinds of things. they're not on our writer screen -- on our radar screen, we're are not spending money or effort on them. relations.adian how much harm would it be to that relationship if the u.s. were to say no to this project? >> these are two countries that have enjoyed one of the best of trading relationships on earth between the two. energy has made huge component of that trade for decades and decades. canada has been a reliable supplier of energy and crude oil. it supplies about 3 million andels a day to the u.s., canada is the largest and primary supplier to the united states. in any kind of denial over that would be a message to command up -- that would be a message to canada, and it would not be as important as it was historically. that would not make any sense,

as we are neighbors, enjoy an open border, and energy trade has been a huge part of that for decades. i expect that it will continue for decades yet to come. russ, the ceo of transcanada, the company that would build the keystone xl pipeline. >> and has to be extraordinary tough for him to land his business without having a clear understanding of what is ahead. >> transcanada has already spent billions of dollars repairing to -- repairing to build the hype like a bat until the administration says yes or no, they cannot go ahead. of course it is tough. you can understand why people would have a problem with it, though. not because of the pipeline itself, but because of what the red would enable. oil is a tar like substance, it

requires a ton of energy text right -- extracted. it is sent to the gulf coast and refined into the light stuff that we use in cars and trucks. if you do not build a pipeline to get it to the gulf coast, and it cannot get to the east coast or west coast of canada, maybe it is stuck. it is noted to develop them and we do not get carbon emissions. >> from an investment perspective, not knowing what is going to happen there even though they have already invested billions. it is a tough stock. >> that is why brass has such a hard time talking about it. he says he believes it is going to be a market-based solution of and it is going to be a political solution, and it is all in the hands of the president. >> we need to go to commercial, and when we come back it is time hisme to give erik christmas gift. -- he is a gated guy

complicated guy who likes to rip it up off the air. ♪

>> ok. to head toting ready .he great white north i believe that is where saint nicholas is from. >> i thought he was from finland or russia. >> he is from canada. i needed to enlist some help with getting a gift. i went to hearst tower. we went through all the special aspects of this complicated man sitting next to me. tlb figure out the -- she helped

me figure out the perfect gift for mr. shatner -- erik schatzker. man someresent for the say has everything. but i'm not doing this al one. she is the queen of harper's bazaar, and she is my gift guru aboutn 2014 i went to be experiences. >> she is the mastermind behind spotted pig. for 14,000 hours she can come to your home and cook. >> $14,000? not happening. >> and very interesting guy, loves to travel. cool.s is so

i wouldn't mind sitting next to this all day. >> his favorite drink is bourbon? >> correct. done.mising, but i wasn't is from a pro cycling coach. >> if i had to pick anything, i love the bike, but i think i would go with this special but take -- special bourbon. this says party, hopefully one he invites me to. i would with the boutique bespoke bourbon. >> it is a great gift. this is the kind of thing he

likes. you think he is so serious. i was thinking just a few drops with some ice. i think our guest might even like some. harper's czar, and i do not know what i would've ne.e without julian >> i probably would have gotten bath salts. foot bath.th -- pu if you want to know the top 10 things to get, you do not want to be left out in the cold. >> our twitter followers also got the yearbook question right.

think thisou handsome man is? we will have the answer for you when we come back right here on "market makers." ♪

>> that is going to do it for "market makers," today. the lesson we are together

before 2014. >> we have to get to the yearbook game. we had a lot of people respond to us, i would like to give a shout out to lisa, a woman who answered first. one. an easy steve wozniak. who said one viewer that he loves the bourbon, and says he wants to join you drinking it during the holiday season. >> i amended generous spirit. >> thank you for joining us this year. watch bloomberg for the rest of the day, and at 2:00 p.m. president obama is holding in his comments, watch it here live -- a news conference, watch it here live. >> it is now time for on the

markets. scarlet fu, merry christmas to you and everyone else, see you in 2014. >> it is time for today's options inside but is never too early to talk about in earnings. we want to bring in a senior strategist at investment research, and he has a moderately bullish strategy ahead of apple's earnings report. this is a strategy in which you do not seem to be taking much of a stance on apple. it is not linked to earnings it just takes place before earnings. you're basically counting on stocks not to fall out of bed. >> you know it is funny, it is like this time of year typically if you look at most wall street offices it is a skeleton crew. next week is one of the best weeks to sell volatility. that is what we do in my house. the whole point is that i'm not expecting a lot of the markets

over the next couple of weeks. what age expected apple to at least hold its ground if not move higher. there is going to be lack for a bearish catalysts up until the earnings report on the 24th of january. my opinion was that i would to make the best that apple stays above $525. stayinge i'm doing, within the january 10 expiration, i'm selling the 520 points, five -- buying the five template, and you can do this for a dollar $.80, or a dollar $1.80, or $1.50 credit. you have a shot at making maximum profit. >> you're basing this whole thing on apple staying around its 50 day moving average. it has held above that level except for a few days in september. does it matter if apple dips below that? >> that would be the point at

which i would say this is a trade gone wrong. i'm glad you brought that up in -- wrap and statistical that up. being a statistical trading, that would be but i would pull the plug and walk away. >> do you take a new position on this as a way to make a little bit of extra money before the end of the year? >> this is the best time for that day when i will generally do around this time of year is look for a company with low data -- beta. apple has about 63. in my opinion i would put this on a trade and find other good stocks that do not have the high volatility to put this money to spread and generate some money over the holidays. follows apple's trajectory over the last eight months,

since april, would've bottomed below $400. i grabbed a can maintain that upper trend? fundamental side, people talking about this china mobile deal, talking about the delay of the iwatch or whenever it will be called. t,re's a fundamental poin google was the first to release an operating system like the iphone, but it was not polished. i do not think any negative will come until the earnings report of 2014. >> thank you. we are on the markets again in 30 minutes. ♪

>> welcome to "lunch money" where we tie to go the best stories and interviews. i am adam johnson. global investors are positioning themselves for a tapering kind of new year. in luxury we are going to go shopping for a private jet. n company, nike outperforms, or it could just be clever marketing. the nfl black out rule, that may get blocked out itself. another sign that the u.s. economy is picking up steam. g.d.p. this morning we found out expanding in the third ar