new york. saudi arabia camtek north africa. feeling hung over, americans binged on tv, forget ads. this is "bloomberg surveillance," live from new york this friday, december 27. i am scarlet fu. tom keene is all. michael mckee and trish regan, caffeinated. >> it will be a long day but i am looking forward to it. >> great to see you this early in the morning. >> we should talk coffee futures, we are driving them. >> give us the morning brief. >> japan's inflation has accelerated to the fastest pace since 2000 eight. good news for shinzo abe. it brings the rate closer to policymaker's target. it threatens household spending power unless you see employers boosting wages and you see

people bringing more money in. at least, finally, they are getting a little inflation on abenomics. in the u.s. -- >> no eco data. what are you going to do? >> go home. >> take it easy. not much on the economic front. we have something else, the president has signed two more pills. he did this last night. vacation in hawaii. one is the budget deal crafted by senators paul ryan and patty murray. the other cracks down on sexual assault in the military. joe biden leaves for vacation today. they stagger their vacations. like we do here at bloomberg. they stagger the vacations so one is always on duty. >> bermuda or the bahamas? >> no adults in charge.

you could argue that is always the case in washington. obama is in hawaii. thank you, trish. a data check. going on.e lot markets overseas have been quiet. the friday, next week there is a holiday, nobody is at work. who told us that only the third level junior traders are at work. >> and us. theery light volume in futures market. futures down. towards ae headed lower opening for the first time in days. with this little volume, you really cannot tell. here is what we are watching, 10 year yield. are we going to set a new range for trading. we are at 2.99% this morning. the economy keeps getting better. we hit numeral three percent yesterday, do we go through 3%

and move higher? dollar down against the euro. a little bit. it has been up over the last couple days. >> slow creep higher. unrest sense of the lira to a record low against the dollar. no change in the dollar/yen. despite the good news out of japan. high britain pound, 2 year against the dollar. >> u.k. economy. >> not cheap. getting cheaper at all. let's get to our front page, we have scoured the papers for stories. all over the front pages -- s up 63% since the ipo in november, trading at almost triple the offering price of 26 dollars a share.

they have not even released financial results as a publicly traded company. >> party like it's 1999. no earnings. >> i have a theory -- a lot of people -- retail investors and portfolio managers, the windowdressing this time of year. inot of people want to be social media. they say what can i buy -- facebook and twitter. facebook has been around for a long time. people are saying what is new? twitter. there is a mad rush to have aitter in the account, in portfolio, you want to be exposed to social media. up 70% this month alone. >> is a remarkable rally. we will get perspective from in a minute. our second story, delta saying it will honor tickets sold at incorrect prices.

customers were snapping up bargains. a round trip to hawaii for seven dollars. the airline does not know how many tickets were sold. we have seen pricing glitches become a fairly common event. >> the obama's were able to use there's. -- use theirs. >> they honored this one. in most cases they have been honoring glitches. happened has had this four times since march by 12. in some cases they honored him. >> do they do this deliberately? "surveillance" we talk about delta. >> there is a social media -- >> what about a hacker? make a serious turn. violence in the middle east iraq thing. -- erupting. blasts, one in beirut and the other in egypt.

in nehru, a blast cause casualties, including the former finance minister. irut, a blast cause casualties, including the former finance minister. the exact cause is unknown. in cairo, near a university campus and five were winded. there has been a lot of tension in egypt as they try to sort out what happens domestically. up, we will get through some of this information and talk to us about what is going to mean for oil. >> joining us from barclays. former cia analyst as well. all this unrest in the middle east and northern africa, what is happening in lebanon is spillover from syria, we are seeing the repercussions? >> absolutely. you had the government official that was a casualty, he was a big backer of the syrian

insurgency and a critic of hezbollah. expectt expect -- we can more in 2014. watch the spillover from syria into iraq, that is where you will see it hitting the markets. story atis its own this point. internal politics. >> the big question for 2014 is the does the crackdown on muslim brotherhood do? extremism.r produce this is not a good harbinger. this is a hangover from the arab. the euphoria has faded. >> the economy stumbling along. the support ofh countries like saudi arabia. the gulfbeholden to states. this blows up their budget meeting they need higher prices to balance their budget. >> have we taken a ran off the

table with this deal? -- iran off the table with this deal? >> there is no sense there is going to be a military strike on iran. i don't think there will be a strike. what if you don't get a final deal? what if congress refuses to remove sanctions o? what happens if those expectations do not materialize, we have to watch. >> you will have a busy 2014. >> watching media and talking about twitter prices. porter bibb. original publisher of "rolling stone." i want to add that. street cred. porter, the to see you. twitter up 70% this month. you heard my theory, people feel like they want exposure to social media and twitter gives

them that. is it getting frothy? >> i think you nailed it. there are only two places you can go, facebook and twitter -- >> what about linkedin? is the driving force in marketing and advertising. there are thousands of ways you can take advantage if you are a marketer. toot of them are going facebook or twitter. what both of those two companies really worry about right now is the intrusion factor. it is really starting to rise up. twitter users -- i am a twitter user and i do not like komodo tweets on my newsfeed. most people do not. tweets on my newsfeed. most people do not. same problem with facebook. i do not want to see that. >> do we want something for nothing? algorithms are

embedded in other websites. that is what is benefiting madison avenue. they can target advertising to you. nothing beats word-of-mouth. that was always the best driver in marketing. that is less social media does electronically. >> twitter has graduated to cult status, you see that playing out in the share prices. by more than 1% in the premarket. more coming up with porter bibb and helima croft. ron buyingextr beechcroft after beechcraft emerged from the grips he earlier this year -- from bankruptcy this year. a recall of general motors cars recalling 1.5 million buick and chevrolet vehicles due to defective fuel pumps. even cause crack and

a fuel eleak. onle renews a call for a ban some of samsung's older model smart phones and tablets. a judge had rejected the request earlier but an appeals court ruled in favor of apple, clearing the way for them to try again. >> more going on, a really big number -- $42.7 billion. that is how much merchandise was purchased the of personal computers this year, a 10% gain from last year. at the center of this is amazon. taking a look at amazon's retail dominance. this is "bloomberg surveillance." ♪

>> coming up on bloomberg television, cofounder and runway onof rent the "market makers." renting designer clothes for new year's eve. you can always buy a just on amazon. >> if it gets to you in time. >> or go to bloomingdale's for 70% off. >> a ups debacle. i am a little bitter. >> did you get your gift card apology? the gifts arrived. i made the mistake of waiting until the last minute for some gifts for my children. >> adam johnson was planning parents who did that. >> i want to point out that mommy got the major stuff in person, daddy waited.

they are guaranteeing christmas eve delivery. they are guaranteeing it. the guarantee does not always work. we had presents arrive yesterday, not much good now. >> at least your kids got presents. >> i had gone out to the store and bought them, my husband got them on amazon. at the end of the day, my system worked better. fault and i would argue that the brands themselves, amazon -- >> tainted in this. numbers,ook at the amazon blue things away. more than one million customers became prime members in the third week of december's. >> that guarantee. >> not. >> analysts estimate that amazon has at least point million prime subscribers paying that $79 annual fee, they buy twice as

much as nonprime customers. that is why your husband was like i am going to go for amazon. >> he does not want to go to the stores. items sold on cyber monday, a new record. 400 26 items per second, up 39% from last year. it tell us about this country if we know what they sold the most of? kithe miracle grow garden beat out the current -- keurig coffee makers. you can grow your own herb s. that was a best-selling item. >> porter, did you get that? >> i did not get that or a chia pet. >> maybe helima croft got those earrings. >> she wants to know why.

the deliveryo debacle. why did not either of these companies -- they knew the buildup was happening before christmas. everybody was doing what you did, guaranteed delivery. why didn't they deliver on christmas? >> some angry bosses are yelling exactly that question. they are blaming the weather and things like that. toi wonder how it is going affect next year's behavior. coffee.d more thele are not going to make same mistake again. they will either shop earlier, to adam johnson's point. or they are going to say i am going to do this in a brick-and-mortar store. they are probably not going to rely on any of these internet companies to get me anything by christmas eve. a strategy, partnering with 3000

brick-and-mortar retailers. they can get you delivery down the block instead of having to come across the country. >> the good thing for the country, i was talking with all of her from citigroup. a year.s comes once a year from now, people will be back to trusting. we are procrastinators. >> i ordered everything online. disagree, if you are a parent and your children are expecting a certain gift from a certain -- i have to be careful because we do not know who is watching. it is critical that that gift be there. memory, children have a memory that they did not get that one thing. the only thing i wanted. >> fortunately, you planned ahead and you got that. >> jeff bezos, call us. we will give you her phone number. a giftneeds more than

card. that was left of the big stories. our twitter question of the day, what was the most overhyped story of 2013? tweet us. the twitter's rise, amazon-ups debacle. tweet us. >> did tom keene wear a bowtie on vacation? is "bloomberg surveillance," streaming on your tablet, your smart, and bloomberg.com. ♪

this is "bloomberg surveillance." i am scarlet fu with michael mckee and trish regan. tom keene is all. trish has top headlines. >> japan, inflation hitting a

five-year high. prices rising 1.2% in the last month. this puts inflation closer to the central banks goal of 2%. it threatens to erode household spending power and less wages rise. a corruption scandal in turkey moves closer to the prime minister. investigations focusing on a foundation run by his family. a prosecutor accused the government of obstructing the investigation by disobeying court orders. the scandal is battering turkey's lira, plummeting to a record low against the dollar. >> the christmas box office was the second on -- second-best on record, $28 million in tickets. >> familiar. hobbit," it was pretty good. $9.3 million in box office

receipts. behind that, "wolf of wall street," $9.1 million. 2" command to -- "anchorman rounded out the top three. >> i do not have two hours 52 minutes. >> a half hour of previews before. it is an evening's commitment. >> or watch "surveillance." " lego.t a "hobbit >> this is my favorite academic study of the year, perfect for this program. the study is called why the continued existence of cows disproves capitalism. you know that it is based on rational decision-making.

people do their best to maximize their own welfare. academics studied india. world'se 1/6 of the population and a quarter of the world's cows. households earn negative average returns from holding cows. and 39%e 64% a year with buffaloes. all the costs of having these animals and he benefits from keeping them. you have a huge net loss. >> if you buy the milk it is cheaper than keeping a cow at home. >> that might be one of them. people want fresh milk. >> is it seen as a status symbol or a luxury? >> they are sacred. >> most people are very poor. there is nowhere else for them to save, they do not have banks. this might be a negative

interest rate. >> helima croft, what do you think. >> is a question of why poor people would own callous. -- own cows? milk, slaughter? >> the sacred animal part does not explain buffaloes. >> here we go. worships aon that lossmaking investment. >> we will be right back. ♪

>> this is "bloomberg surveillance." i am scarlet fu with mike mckee and trish regan. friday, december 27. tom keene -- he is off for the week.

he will be back next week. >> he will tweet you. we need a data check. as i predicted, we are coming back a little in the futures markets. when you have light trading, they are not a good guide. s&p futures down just a 1 point. dow futures unchanged. 10 year note yield is still at 2.99%, not enough people in the office to deal with that yet. as tom wouldnch, say. not the case of the last few days. >> twitter shares had been on fire, one of the best gainers yesterday. a lot of volume in twitter. perhaps a lot of funds are rotating out of facebook into twitter, shares have jumped 70% in the month. >> they're adding twitter because they think that is the new hot social network. record high of $73.

ebay shares, down and out 2%. same-store shares for ebay slowed from thanksgiving through december versus thanksgiving through the second week of december. am a bit of a moderation, retailers getting hit. zulily as well. west -- >> west texas intermediate edge into a 3 week high as south nigeria plungeya, into disruption. wise, wening may be might see higher prices again. how much? we turn to helima croft, geopolitical strategist at barclays. what we have seen so far is a range. we have these crises and hit the top of the range but are not going up. do we see that kind of things we saw in 2010 and 2011, or is this

as bad as it gets? 2011, you have the same amount of disruption this year. we had nearly 3 million barrels off the market because of civil unrest in countries like the vi lybia.e have the north american story, we would be and -- if we have problems in iraq, that would propel us to a higher price environment. north america alone cannot offset problems if we have a situation in iraq. >> how much do prices have to change for a to be noticeable to american business or even consumers? >> this is interesting. if we get to a situation where we are in the $120 situation, that is when consumers feel it

and the government starts talking about releases. in this range, people feel comfortable. everyone is going to watch do we see something happen in another big producer. north america right now can seemingly offset these problems. we are not in a low price environment, we are trading in a range. if we get a big blowout and things get worse in a situation like nigeria or worse in iraq, that is when you see the oil price go higher. >> aside from the middle east, i wonder as we see the economy get better and all the data suggests that we are moving in the right direction. at what point does that translate to -- i guess more demand on the energy front. on the oil front and potentially, higher prices. will we see any inflation. we have not seen a ton. will we see any inflation as a result of the economic

situation? >> one thing that propel china.was a man in do we start to see asia recover in terms of demand? do we see china picked up in terms of commodity demand? if that happens and you continue to have supply disruption, that will put you in a higher price environment. north american is what is keeping prices relatively moderate right now. if we have anything change on the demand side, even emerging-market demand moving higher, and we still have a s supply problem, that is when we have a problem. >> are we going to get movement on the u.s. allowing oil experts -- oil exports? we are seeing increasing exports. the question is are we going to move to crude exports. that will be challenging politically. we have told the american public we are insulated from the middle

east unrest. if we turn around and start exporting crude, and a lot of people will say wait a second, are we giving away the benefits of north american production? that is going to be harder than natural gas exports. abouthave been talking what happens if prices go up. what are the odds that prices could go down in 2014? >> for that scenario, watch whether libya comes back. we have one million barrels of libyan crude off the market because of unrest. lf and wecan right itse get those back on the market and north america continues to perform well, that will depress prices. if we get a settlement on the iran nuclear issue, that could bring those million barrows back. that is how you get a supply glut story. >> is there a number on the bottom side we could hit? >> you want to watch for a

situation. do we go on the print price into th -- on the brent price into the 90's, middle eastern countries will feel that. $90's,get into the low that will bring on an opec meeting and they will try to push prices higher. >> to what extent does opec matter anymore i met with the u.s. producing oil, could that put an opec country out of business? not done with opec yet. if you have a situation right now where saudi arabia believe that they need to propel prices higher or stabilize the floor, they can do so. going forward, if north america continues like it is, it will be harder for countries like saudi arabia to defend to defend the floor. for now, they can. >> helima croft, oil is an ongoing story. the other story, obamacare.

the law of unintended havoc with this -- consequences. members of americorps have been told their government provided insurance does not meet the requirements of the new health law. americorps says it's numbers are not employees and does not have to comply with the individual mandate. i guess these people are on their own. they are in limbo. forhey will have to sign up a plan on healthcare.gov. >> they missed the deadline to be enrolled by january 1, they are extending those. entire system -- the only way it works is if you get enough young, healthy people there and rolled. it is very clear that they are not going to meet the numbers that they need. g advertising fail. >> for comedians this keeps delivering. a when you think about it for

media perspective and the media blitz, it has only been one piece of negative news after negative news. news side of it, but the marketing side that the administration has put out is as inept as the technology failures on the internet. >> do you think it was rushed too quickly? should they have come up with a marketing plan? >> they only had three years. it was lack of -- >> and a 20-year-old social media expert could have done it in two weeks. handed usuld have over to facebook and solve problems. if any of you have seen some of the ads, they are heavy-handed. >> porter bibb, the white house googlehave outsourced to or facebook. we will continue this discussion. coming up. a good year to be able -- a bull . our single best chart, next.

you can watch our interviews on bloomberg on apple tv. this is "bloomberg surveillance caracol ♪ -- this is "bloomberg surveillance." ♪

>> this is "bloomberg surveillance." i am scarlet fu with michael

mckee and trish regan. trish has top headlines. going to beirut. a car bomb killed lebanon's former finance minister in the center of the city. 50 were injured. the finance minister it was a leading figure opposing syria's assad. the marine base and open now is moving to a less populated part of the main island. endsgreement to relocate 17 years of negotiation. telephone you taking the top spot in biggest borrower -- california taking top spot in biggest borrower of municipal bo rrowers. new york went to number two after bond sales fell 18%. a good thing that we are not the largest. i don't think there is any pride in being number one. we can give that to california. easy to give up. time for our single best chart.

this is done on bonds, not muni bonds. >> on equities, record highs day after day. this is from investors intelligence, measuring the sentiment of individual stock advisers. sentiment or -- sentiment has the euphoriah, uta reached 11. you can see the two lines cross in 2011 but have been steadily moving in the opposite direction to the point where the gap is widening, which brings us to our second chart. the spread between bulls and b ears. this goes back to the late 1980's -- excuse me, 2008. the spread has never been wider if you go back to the late 1980's. technical analysts track sentiment and use it as a contrarian indicator. if there is too much bullishness, there is no one

left to buy stocks and bid prices higher. >> if you think about the challenges the market was facing in 2008. august 2000 eight, declining versus where we are now. that should tell you something. if you are a technician, you do not like that. if there is too much positive sentiment out there -- >> stocks are ready to decline. there is -- a violent selloff could be on the way. helima croft of barclays. factor in these technical considerations like contrarian sentiment indicators? >> we are mainly a fundamental shop in terms of supply and demand, but you have to look at sentiment and the idea of our wave?-- are we riding a >> it is fundamentals at the end of the day. >> sentiment is driving this market right now. for tech stocks particularly. we will get to twitter.

no earnings. >> that is all sentiment. >> if you're sure went back to 1999, imagine what it would show. chart went back to 1999, imagine what it would show. >> it is the highest since the late 1980's. >> with all the economic data that suggests we are on a good path, the market is in the job of predicting the future. ders are trying to be six months or nine months ahead of the curve. you cannot help but ask yourself is it they -- is it baked in? the fed will continue tapering, might we start out at this level? >> it is the battle between value and growth. look at apple. $700, it was to the growth stock. it is now down to 500 -- $500,

it is a value stock. that is driving technology companies and seeping into other industry sectors as well. >> serving us to keep in mind, we have talk to analysts about this. today, nobody is at work and volume is light. are people are saying we going to see a correction in the new year when people come back areork and think prices overdone, we will come back down. whether or not you have a crash remains to be seen. as trish said, the market is looking for growth. that is where technology is still going to stay up. the momentum is behind all these tech shares. >> do you like my thumbs up? communicating to the producer. taking a look at media trends. the engine viewing -- binge v iewing. "his is "bloomberg surveillance on bloomberg tv. mike, scarlet, we will be right back. ♪

>> this is "bloomberg surveillance," i am scarlet fu tom tom keene -- actually, is not here.

michael mckee and trish regan are here on this friday, december 27. mistake me forot tom. i am not to be mistaken. no bowtie. >> some company news. amazon evaluates and shipping companies. the online retailer reviewing companies that handle orders around christmas. this is an effort to find out why some packages did not get delivered in time. apple has renewed a call for a ban on some of samsung's products. asking a judge to ban sales of more than 20 of samsung's older models of smart phones and tablets. the judge had rejected the request earlier, but an appeals court cleared the way for apple to try again. microsoft's deal for nokia could face limits and china. chinese phone makers when regulators to make sure the takeover does not lead to higher patent fees. asked for

conditions on this deal. that is today's company news. everyone is battling it out in china to see who can get a leg up. >> the chinese economy is such a possibility. everybody wants in. the chinese are not sure -- >> one billion consumers. >> there was a book written, i will space on the author's name. we have him on "bloomberg surveillance." he said there are a billion consumers but they do not like the same things we like in the u.s. people will be disappointed. >> people make a lot of money trying to figure that out. to understand your customer. there are people who are going to make money helping you do that, consulting firms. little things like taste. food product, the chinese are not crazy about sleep. we have someone coming on to talk about stevia.

>> in the second hour of "bloomberg surveillance." on.ant to move it has been a pretty busy year for media companies. twitter went public, netflix shares climbed over 300%, aereo disrupted tv. looking at the media trends of 2014 with porter bibb. your first trend is binge viewing. you just watched four hours of "house of cards." helima croft watched "downton abbey." this is here to stay. feature ofdisruptive viewing, movies, television or original products like "house of cards." >> the thing about binge viewing, it is not a solitary activity. netflix commissioned a study. they found that the majority of people like to watch -- binge

watch with somebody and then go toto forums and twitter discuss the episodes. there is a new occupation of tv show recappers. >> it is totally disrupting the old model of television appointment viewing. it was 8:00 and you had to watch the show because it was always going to be there tuesday nights. that is off the table. it was just in my the under 30's, now everybody is getting into it. i am into it. if the product is good, you want to see as much as you can. itertisers are in a muddle, is tough to insert advertising into binge viewing when you do not know when people are going to binge. >> can you do more sponsored content? >> that is going to happen. cocamebody is drinking a

-cola. weave in a product into a storyline. >> that is being done every day. >> we see that in movies. is that the future, how to -- capitalize? viewing, you binge are with a group or whatever and you will tell people that you know. >> you told us you do not want to see advertising in your twitter feed. by --s is brought to you it will be promoted. that is the conundrum that madison avenue is facing. they do not know how to put unintrusive advertising into social media. >> what does it mean for companies like nielsen? >> nielsen and can't score, not of them are doing a really good job of measuring the viewership, they do not know how. has its own

proprietary numbers and has learned a lot. old mediat advanced company is cbs. doing private marketing and measurement of cbs products off network and off cable and charging advertisers for it. >> walk us through that. companies tocial do surveys and see who is watching cbs -- >> online? >> online, on mobile devices, on anything. also network. nielsen is working as hard as they can to get into that market. there is no measurement of off network viewing. look at the advertising companies and they have been so late to the game in terms of the digital front. they have got their system that has worked forever -- >> it still makes a lot of money. >> scarlet mentioned that you can watch "surveillance" on

apple tv. >> shameless plug. >> no one knows when they are watching or how many people are watching. >> why can't apple measure that? >> nobody has asked them to. >> helima croft, how are you going to change binge viewing? >> i don't think i am. i am hooked. >> "downton abbey," moving onto her next hit. >> she will be watching "bloomberg surveillance." cards" over "bloomberg surveillance." >> i did not say that. >> it is having a huge impact on traditional television viewing. you cannot watch two things at once. >> the forex report. in current seas, it is a day of movement against the dollar. the euro and the pound at two-year highs against the

dollar. the turkish lira at an all-time low against the dollar. lots of movement and forex. to thank helima croft of barclays and porter bibb. we will be right back with more "surveillance." ♪

merry christmas for

twitter. shares surged almost 80%. what has wall street learned? artificial sugar goes all-natural. we go to the source. farming a sweet $10 million industry. how to code a big -- best seller. how netflix for books will change how and what we read. this is "bloomberg surveillance." we are live from our world headquarters in new york. i am scarlet fu. tom keene is off, with me is michael mckee and trish regan. us, josh roger. before we get to our guest hosts, we want to kick things off with the morning brief. >> we have been talking about japan. inflation seems to be working. ais is good news for mr. rob -- mr. abe.

it threatens household spending power, less employers, and reduced wages. tell mikey can take the rest of the day off. there is no economic data. what do you do on days like today? >> sit here. president is busy, even though he is on vacation. he signed bills into law last night. one is the budget deal that was crafted by paul ryan and patty murray and the other cracks down on sexual assault in the military. joe biden is leaving for his vacation today. >> where's he going? >> isn't he going to the bahamas? >> and the president is -- nobody is home in washington. >> the president is on u.s. soil.

>> it is not exactly close. >> he doesn't need to be close. he is close in spirit. >> maybe the white house will be the same. >> company neustar for the twitter story you talked about. company news starts with the twitter story you talked about. shares are trading almost triple the offering price of $26. analysts are poor -- pointing to share purchases as they catalyst for a rise in the stock. --erger and the jet industry cessna is buying beechcraft 41 $.4 billion. $1.4 billion.

they expected turboprop planes to complement its business of private -- business and private jets. delta will honor tickets that they sold for as low as seven dollars. the cheap fares were available for two hours. airline is not sure how many tickets were sold. did it for the pr, publicity value. >> i have a "bloomberg surveillance" correction. the bidens, they are not going to the bahamas. they're going to be u.s. virgin islands. i just want to make sure that we're all clear. islands --. virgin they are going to get a chance -- eight a.m.. -- a tan. porter bibb, we start with

you. twitter, there isn't a single catalyst driving the shares higher. there isn't any news. the rush of major advertisers, mcdonald's, burger king, the major car companies, they have signed up to jump onto promoted tweets. theou mentioned, the heavyns, institutional buying has driven the price up. not a lot of rationality behind all this. this just in, macquarrie has just cut twitter. underperform and they say there's nothing to justify the 40% gain since they initiated coverage. they see a bright future.

now we are down to seven buys, 12 hold, eight cells. -- eight sells. >> there is no place except facebook and twitter if you want to take advantage of investing in social media. those of the two companies you go to. social media is spread across the internet and you will see a little bit of a deflation and twitter. >> where valuations are getting stretched everywhere else, it is easy to go somewhere where there's future expectation rather than current reality. any ideas on what an alternative is? if you are someone that is saying i want to be on the social media's days, but i don't like the idea this is a stock that has jumped 70% -- >> and makes no money. >> where else can you go? >> there's nothing wrong with yahoo!, google, there is a company that will be going public in 2014, glam media.

it has three times the traffic of yahoo!. doesn't roll off the tip of your tongue. >> but it is full of social media and they are reinventing the past. they are all digital and they are coming into print in 2014. >> i love this comparison when you look at twitter. it's a valuation is north of $40 billion, which makes it worth more than cbs, delta, target. >> you buy the stock, you don't buy the company. >> we have seen this scam before. remember aol time warner? we believed the new media was going to trump and control the old media, but you put all the eggs in a single basket like that, that is a little bit

crazy. >> you have seen the highs and lows throughout the banking industry as well. what day do we see a day of reckoning? >> next year is going to be a watershed year. it won't be the catalyst or unfolding, but at the end of the the short and move and the long and not really move, we're going to have an interesting time for the industry. if you look in terms of consumer credit, it continues to rise, but revolving credit is struggling. the abilityseeing to price lows higher. >> it is some sign of stress. init is a sign of stress consumer financing. we still have a real problem of financial intermediation. we have to remember that before the crisis, two thirds of financial mediation happened outside the banking information.

we have a consumer who has a very tight access to credit, generational headwinds, demographic headwinds, they did thatxist before the crisis are going to put a lid on the ability of consumers to continue to relet for it. age.elever the media industry is benefiting from the upward movement in economy. it is going through a change right now. old media is definitely on the way out, and it is trying to transition. we know print is not there. radio, local television, they are all changing. >> radio -- we took a car trip last weekend, listened to pandora and spotify the entire way. can you remember when we used to have to keep flipping the dog -- the dial because there were so many commercials?

have a national radio station, but most people in their -- kind of listen to their own radio station. the point is, the media and the d sales model works the same. ,ow do you analyze something you go back to 1999, did they get so many clicks or something like that? how you look at a company and know what it is going to be worth? irrationall this exuberance that people say, the technology, the new technology has to grow and the old technology and old media shrinking. it is. it has to change. some of the will, some of it won't. >> beyoncé broke tradition when album,eased her bypassing traditional retailers. men and sold 300 million copies on the first day. >> and sold 300 million

copies on the first day. >> two of the biggest retailers are smarting from the snub. amazon and target chose not to sold the -- to sell the physical album. what she did on christmas eve? she went to walmart and got on and saysphone everybody, i am giving you a christmas present. purchase --first >> target is hurting itself. both, target and -- they should have said, this is great, we will ride the wave. >> is a something we will monitor and talk on. ♪

this is "bloomberg surveillance." the housing recovery of 2013 is a myth. people buying homes saw their price drop. will 2014 be the year that the bubble pops? there's some contradiction here. 2012, there was no appreciation in primary residence. in 2013, we saw some decline in

the investor share as a percentage of the market. share was driving much of the appreciation in 2013. it was the investor share, the rent to own movement, we are not going to see a lot of all of her on that next year. we saw, as rates rose, the decline of reprise which killed parts of the business. next year, the fed continues to taper. credit access may get easier, but the cost of access is going to go higher. affordability is going to get worse. institutional investors don't typically buy new homes. they have been showing a steady recovery. boughttional investors single-family homes. >> it is the same thing we saw before the crisis in terms of pushing in from the bottom. if you have the secondary market , existing homes being pushed up

by a high bidding process, it creates follow-through in the primary purchase market. the question is, where is the follow-through as affordability sharees, as the investors of a portion of the market stops being such a large participant and as existing homes, the market next year. >> is a strong rental market the sign of a strong or weak housing market? >> that depends regionally. when you look at regional markets, the renter market, you risingwith some prices anomaly, but you see re-breeding -- rebating to get people into homes. properties that are not meeting expected hurdle rates. >> doing need to be more like germany? a nation of renters? know if we need to or don't need to. affordability is going to be a key issue and we are going to

continue to see the homeownership rate declined. -- decline. >we may overshoot to the downsie there. >> the federal reserve driving a lot right now. up, you think wall street predictions were on track for 2013? think again. we will take a closer look at that on "bloomberg surveillance." ♪

>> this is "bloomberg surveillance." tom keene is off for the week. let's go to trish with our top headlines. lebanon'somb kills former finance minister. the explosion also killed four others and injured 50. the finance minister was a leading figure. to japan. coming hitting a five-year high.

put them closer to the central bank goal of two percent. households earning power, unless you see wages rise along with it. u.s., christmas box office was the second best on record. number one for the holidays was "the hobbit." right behind it, "the wolf of wall street." these you guys saw one of . hobbit." thumbs up. >> it is too much of a time commitment. three hours. year of thethe losses, the year the volcker rule. more2030 be smoother and

-- will 2014 be smoother and more profitable? we're going to start with you, josh. is this going to be the -- something is going to happen. what and when? when is the next london whalish kind of thing? going to see the volker rule data getting collected next summer. there was an interesting story about the château warehouses. shadow warehouses. you wonder whether that information is coming out as a willt of the living requirements under dodd-frank, that the banks have to submit living wills how they will be resolved through bankruptcy processes if they could. they have to give all of the data and details on their

business. who knew about these shadow warehouses? >> given the regulation that we are seeing, a lot of this has in, but given the regulation, do you think we're going to see a changing industry? shopping, are they gone? >> it will not happen overnight. it is a long-term process. it is important to remember this is not new. thehey are going back to utility function? >> we are moving slowly back to that. the trading side spun off into private entities? >> we don't know that they will be spun off. see as much activity as you have previously seen and that migrates more to the private sector. >> i think that is right. that will be a slow process. the pushing out of the derivative books has been delayed.

it is an important piece of this puzzle. that will end up supporting the movement -- >> here's the thing, rick member -- remember long-term capital? they want to prevent 2008 from happening again. even if it is a private -- itution, a private bank think back to long-term capital and how that threatened the industry, couldn't you haven't -- have a situation like that again? >> if you look at the hedge fund industry today versus then, it is much less leverage. the average hedge fund runs 2.5 times thed leverage. call on thet have a fed through the window, it doesn't matter if it is not a leveraged institution. now, but levered and who says it won't be leverage six months from now or a year from now.

aren't -- the banks ultimately control the amount of leverage the hedge fund get. >> do they still make loans? dashn entrepreneur and a in a textbased still get the money they need? >> there are so much private equity capital, venture capital, that private source of capital is exploding. >> where are they going to make their money? >> if you go back to the -- just we saw thereason investment banks merge, it was the ability to win lending business with the balance sheet. rather than competing and having to do so on intellectual capital tied to a ballot it -- a balance sheet, the corporate sector is flush. isn't there a conflict there?

if you are lending to make a deal happen and you are advising to make a deal happen, -- >> and your fiduciary to the investors. >> maybe we are seeing a migration back to the old model. >> what kind of banks would benefit the most? would smaller banks, regional banks been in a better position? up there, the investment banking business will be attractive. it will be more cyclical and that is part of the reason for the integration. at the peak, it will be more profitable. smaller banks will be more successful on the lending side than the largest banks who are seeing their business narrowed. >> change in financial industry, for sure. stick with us. coming up, the sugar hive from all of the christmas cookies. have you considered alternative

sweeteners? we are going to look at the fastest-growing sugar substitute in the u.s.. all natural steve ef -- all natural stevia. this is "bloomberg surveillance." we will be right back after this. ♪

>> coming up on bloomberg we will be joining street smart with adam johnson trish regan. you're going to talk about britney spears' las vegas show. >> she will be at planet hollywood.

they guess is an interesting place. i have a documentary that is -- they guess is an interesting place. i have a documentary that is coming out. more thanlly become just a gaming spot. concert,ke this, this they are designed to get as many people there and in the door. the in-house artist at planet hollywood, which is not just a restaurant. it is a hotel. kurt going to talk to about it and how it is going to do. >> we look forward to that. to 5:00 p.m. on "street smart." there's a recall of general motor cars in china. they will recall 1.5 million the it was due to defective fuel pump brackets.

they could crack and cause a fuel leak. audi ups the stakes in the battle with bmw. they plan to send $30 billion -- spend $30 billion to develop new models and technology. they achieved its goal of delivering 1.5 million this year. a merger in the jet industry. 41.4onix buying beechcraft $1.4 billion. they expected turboprop lane to complement its line of business and private jets. that is today's "company news." one of the fallacies out there is that we can note the future. we reporters? economists? >> anybody. and say whatther

is going to happen in 2014. one of the things we do is gather the stock pickers out of wall street and say what is your target for the s&p 500 at the end of the year? we decided maybe we should look back and see how they did. not aunately, most was good year for stock pickers. if you look at the numbers, everybody missed by huge amounts. the median mess was 17 and a half percent. was 17.5%.an miss analysts thought for the coming three quarters, they had not made their forecast for earnings over the next quarter, but they were just as bad as the stock pickers. they could not get the earnings correct for the next three quarters. effort.difficult lack of visibility, you never know what is going to happen.

areudy of it shows, there the analyst. that was their prediction. the number is nowhere near what they thought it was going to be. shows that nobody really knows and the more you ask somebody that is an expert, the less likely they are to be right. >> you look at economic predictions as well, if you were to compare equity analyst with economists, who is more often right? >> the answer is, they're both wrong. take a look of the economy. we have the economist data here. >> there were a bunch of obvious things missing from the chart. in.e cannot fit them all i have the data and, if you want to ask me. this is the economist. their quarterly gdp forecast, you can see how they turned out. they missed them tremendously as well.

>> largely because of the silo nature that everyone is looking at their own little world and not looking at where the various segments of their world connect. who doesn'tlyst talk to the thrift analyst who doesn't talk to the agency analysts who doesn't talk to the housing analyst as an example, it is part of the reason everything falls through the cracks. -- when year when had .e had market fall they might do you think the retail investors going to make it back? -- >> do you think the retail investors are going to make it back? tapered driven year. are we tapering, are we not tapering. every time we came to it, the market shot up. >> speaking of the market,

here's what they're doing right now. we have come back a long way. dow and nasdaq futures are positive and the s&p 500 was unchanged. the 10 year yield has hit three percent. >> this is "bloomberg surveillance." we are streaming on your tablet, smartphone, and bloomberg.com. i am scarlet fu. do you eat a lot of sweets? >> yesterday i had four cookies in one sitting. >> everybody brings that stuff in. >> carroll makes the most amazing cookies. she is using real sugar. if cutting down on sugar is one of your new year's resolutions, you have probably heard of stevia.

it is an all-natural, zero calorie sugar and substitute. -- sugar substitute. i have to admit, i am still using the regular sugar. it is my one little luxury. this is important because your product is a natural version of equal, mike's blender, a, equal,like splend and sweet and low. >> it is a green part -- product. it has been called the holy grail of the sweetener industry because it fits the niche between the full calorie sugary drinks and the artificial sweeteners. three in five americans believe that artificial sweeteners are

not safe. once they make that decision to drop sugary beverages, once they decide to avoid holiday treats, the first thing they ask is, is it artificially or naturally sweetened. that is why stevia has had such success. >> how does it taste? >> the current generation of tv -- stevia tastes pretty good. bitternessry little or licorice like aftertaste. know is market will that these next generation stevia sweetman -- sweeteners will do a lot to reduce off taste and they mitigate some of the problems that are endemic to all sweeteners. >> d wanted to taste like regular sugar? mostat is the goal of

people. to make it as sugar-like as possible. combined with next generation stevia has the potential to go further and be more sugar like than anything else. >> this is a commodity that you are packaging? >> we are and agricultural company focused on producing a modern supply of stevia. the market and industry was built 30 or 40 years ago, mostly in china, catering to the japanese introduction of stevia in the 1970's. went from sub 200 million to 1.3 or 1.4 billion last year.

can it grow anywhere? and we have stevia plantations like we have sugar? grows across a variety of climates. california is perfectly suited for that. has been used for hundreds of years in south america. it has been used for hundreds of years in south america. what about cavities? >> it won't cause cavities. >> might it increase your sweet tooth? might you want more? >> there are some preliminary evidence out there that even with the high potency sweeteners, that it develops this want of sweetness and of sweets, but what we are working towards the reduction of sugar. that is the big thing. >> i am going to try it.

thank you for being here. day,witter question of the what was the most overhyped story of 2013? twitter,nge viewing, visit bloomberg surveillance on television and radio. ♪

>> good morning mrs. "bloomberg

surveillance." -- good morning, this is "bloomberg surveillance." tom keene is off. >> and we are all here working. >> he will be back next week. you was listening to talking about the paid advertisements and sponsorships on social media. someone to blame for all of that is ted murphy. , do you know him? paid blogging was something he created. he sponsored a spoke -- social media advertising. he has worked with general i.ors, and kim kardashian big 2014e on with his predictions. we will have him on today.

>> when someone else pays for them to blog for them, that's not authentic. memo most viewers see through that. that is the problem. >> is that going to go down? it used to be that paid blogging woodwork before because there was not enough content to sponsor. -- it used to be that paid blogging would work, because there was not enough content to sponsor. kardashian blog about? >> that is one of scarlet's favorite topics. then i just like to gawk at her outfits. -- >> i just like to gawk at her outfits. >> here's something you do not see everyday. ice.is a ship trapped in

it is nearing rescue after a ship named snow dragon louse towards it. it is not in danger of sinking gon is stillw dra about 12 miles away. what a way to spend the holidays. somebody tweeted from the boat. let's take a look at what they said. they said, first of three vessels is progressing. this is a slow moving a rescue mission. you are looking into this. >> in addition to the chinese rescue boat, there are two coast guard icebreaker's better steaming towards. >> it is an international mission.

>> the boat is frozen, but it is not in any jeopardy. they need icebreakers. >> coming up on "bloomberg surveillance," getting up close and personal with your data. how publishers are using data to write your favorite books. that is next on "bloomberg surveillance." ♪

>> this is "bloomberg surveillance." i am scarlet fu. tom keene has the week off. let's get company news. is evaluating its shipping companies. they are reviewing the companies that handle their orders around christmas. apple is renewing its call for a ban on samsung's products. they asked sale -- a judge to than 20 off more their older smart phones and tablets. an appeals court ruled in favor of apple, clearing the way for apple to try again.

chinese mobilephone makers want regulators to make sure the takeover does not lead to higher patent fees. they have asked regulators to set conditions on this deal. this is according to people with knowledge of the matter. that is today's company news. during thetalking break about reading e-books. out, and this fits the theme we have been talking about, the books are now reading you. companiesa couple of out there, scribd is one of them. agree to them knowing what you read and how fast you read on whether or not you go back and reread sections over again. thosempany is using analytics to help publishers and authors cater to their readers.

they are subscription services. they will find out what you like. if you like more spice in your books, they will know that. i presume the question is not why are they doing this, but what took so long? >> netflix is the market leader right now. interestingly, where does netflix gets metrics? from amazon. amazon is miles ahead and they are the main supplier of algorithms that netflix is using. it is invading every aspect of marketing. >> the amazing thing is you want to know what is going to sail -- to sell, and you want to know -- and they are making this information available to authors. now, you are telling authors, scarlet likes tall, thin heroes.

if you are targeting scarlet, you're going to write a book with a tall, thin hero. >> we have seen this happen in television. you can get a minute by minute and look at what people are actually paying attention to work stopping to watch. this seems like a literary version of it. >> the tv networks and the producers have not been using the metrics of what people really like. they will roll the dice on a $3 --lion production without $300 million production without knowing anything but we have a big star, a story, and a hot director. you go with what works. what works becomes formula. >> it is intrusive. onoved "house of cards" netflix, but now i am getting

pummeled by netflix e-mail saying why don't you watch this. >> are they right? >> absolutely. intelligence is invading every aspect of the market in the media. >> what happens if people start signing up because they want the free books and how can these work?ies' business models >> that is nirvana from a marketing and publisher's one of you. they want that to happen. there is a reverse impact. you find it intrusive. after a while, you will want to try something different. you don't want the same thing every time. some of the early data shows that the longer a mystery, the more likely people will jump to the and to see who done it.

a chapter of a yoga book is really all anyone needs to look at and people speed through romances, the "50 shades of grey" kind of books. know that going to everybody is buying the big biographies, we are going to know that you didn't read it. it stifles creativity and stifle something that we, as a society and culture, have done so well, this great tradition of literature. if there is too much marketing, too much capitalism that creeps in, you wonder what that does to our traditions. >> that has always been the goal for marketers in media. it is self-defeating. you want to have something new, something fresh and original.

>> unanticipated. >> exactly. >> it is time for our agenda. we take a look at the stories taste -- we take a look at the story for today. >> were going to talk about the forecast. it is that time of year. the latest forecast is that we're going to see 2.9% growth by the end of next year. , this year,s low economists were forecasting we were getting 1.6%. we are running way ahead of that right now. they're looking for unemployment to be 6.6% by the end of the year. the fed is going to start tapering at 6.5% and now supposed to be 2013. if the economists are right, ma -- it raises new questions for 2016. of the stock tickers we showed earlier were wrong.

the s&p was so much higher. trish, what you have on your agenda? >> i am watching the amazon thing. i ordered some gifts online, they did not arrive until after christmas tommy even though --zon guaranteed delivery until after christmas, even though amazon guaranteed deliverry. more to do. they have to figure out how they can manage this kind of traffic. now.e in a different world people don't want to go to brick-and-mortar stores. they like to shop online. we have seen it in all of the data. you need a system that can keep up with the demand and you don't want to run the risk that you are not going to get those -- >> you wonder if amazon will have to pay a price for this in any way. >> they should. it tarnishes their brand because they are the one that i bought

the gifts from. >> trish's mad at amazon. >> everyone had a warning. >> you are saying it is my fault. >> we're going to watch "streetsmarts" this afternoon and watch you guys argue it out. trend is to turn it around. they are triple the offering price. this is a company that has yet to report its first set of results of that ipo'd in november. it now has the same market value as yahoo!. it is quite remarkable. >> the air is going out of this bulletin. >> just way? come january? >> there is a prediction from porter bibb.

overhypeds the most story of 2013? -- it glass thought seemed like it was going to take on the iphone. that didn't happen. >> apple tv. government shutdown and tom keene going on vacation. as a runner up, those 12 awful days of bitcoin. >> how can anyone say that? something might come along to replace it. bitcoinyou seen the competitor, dogecoin? >> this is not an area where

first mover necessarily means you're going to win. >> surveillance continues on radio. mike mckee is heading over right now. with betty lewis next. ♪ . .

>> good morning. it is friday, december 27. we are live from bloomberg world headquarters. ."u are "in the loop i am betty liu.

the 2013nounces shopping season was their best ever. soldix items per second or . the online retailer also added one million customers to the , addingrime program enough customers to deliver one gift to every household in america and they probably did. twitter shares are continuing to in, a 63% jump since the ipo november. blogging site has not released financial results as a publicly traded company, so what is behind the surge? president barack obama signed two important bills into law last night while on vacation. one is the budget deal crafted by paul ryad