>> welcome to "lunch money" on bloomberg television, where we tie together the best stories, interviews, and video in business news. i am matt miller, in for adam johnson. let's look at the menu. in stocks, could it be the best year ever? it is the rally that shows no signs of abating. big machines hard at work. we will show you the biggest earth crunching equipment on the planet. a nation, the regulator gary gensler gives his final word on the new roles for wall street. in fashion, one hot hoodie, is it the greatest hoodie ever made?

move over celine, elton, this is the new face of vegas. we will kick it off with the world. two days, two bombings in southern russia. a few hundred miles from the site of the winter olympics which began in six weeks. the first bombing came yesterday at a train station in volgograd. this is a video. the time of the explosion, a suicide bomber with himself up near a metal detector. 17 people were killed, 45 were injured. investigators say the toll would have been higher if it had not been for barriers that kept the bomber from reaching a waiting area. the second bombing this morning during rush hour. a suicide mission in the same city on a trolleybus. at least 14 people were killed and 27 were injured. here is your geography lesson. volgograd used to be called stalingrad. it sits above the north

caucasus, one of the most war- torn territories of the last two decades, if not the last century. >> there has been an insurgency going on going back to the 1990's. this is the most recent manifestation of that conflict. by carrying out these attacks outside the north caucasus, the terrorists are trying to show that people anywhere across russia are vulnerable and that they can take advantage of the media spotlight that is going to be on the country because of the olympics to really show that this is not a local concern, this is something much broader and that they have a much wider reach. >> that is the second reason the location of these bombings is so important. the winter olympics in sochi begin in six weeks. sochi, a town on the black sea, is 400 miles southwest of volgograd.

the distance between new york and cleveland. moscow, we have a problem. many problems. >> one is the risk to russia in terms of its public relations and its economy. i think in that regard, the games have already been a massive failure. the other question is what about the safety of the visitors and the athletes? i think everybody is terribly worried about that. as you have been talking about, you have the north caucasus region, you have separatist groups, you also have bordering closer to sochi, georgia and the separatist region and the insurgents in abkhazia. this is vladimir putin's pet project. here he is meeting with dmitry medvedev this morning. he sent his top ministers to investigate, that has been his only response.

we saw that when he released khodorkovsky, it was without any request, clearly due to his immediate embarrassment. >> he takes his international reputation seriously. he wants to be seen as a serious man a strong man. that is hard when things like this happen. >> what does putin do when it comes to sochi? >> they have plans for the olympics themselves. there will be about 30,000 police officers and troops stationed in and around sochi. but they are now going to have to look at the whole southern region and try to put in extra resources to prevent these attacks from taking place. experts are fairly confident that the games themselves will be secure because there are such

stringent security measures in place. the problem is that extremists will try to stage attacks outside the security zone. >> a reminder that this is the most expensive winter olympics in history. more than $60 billion invested in these games. what if investors and sponsors start getting cold feet? >> there is a lot of investment in these games, not just the $60 billion that putin and his oligarch buddies have invested. there is investment from companies and corporations. i think people will wait until the last moment to pull out. >> the security at the actual games at sochi will be tight. difficult for anyone to get in and out of the city starting in january, before the games begin. does that mean insurgents would try to disrupt the olympics by

turning to softer targets elsewhere, perhaps close by to the games in a symbolic gesture? >> that is something to be concerned about. the russians have invested a lot of effort and a lot of procedure in seeing that the games go off successfully. part of that means securing sochi to the extent possible. there will be a massive security presence there. it will be a difficult target for insurgents. russia is a large country. you cannot lock down everything at once. it is likely that you are going to see an uptick in attacks in places like volgograd, moscow, elsewhere around the country as the insurgents try to get their message out. even though the games themselves is going to be too hard. >> what more can putin do? >> that is a tough question. this is an insurgency that has been simmering now for 20 years. they have managed to tamp it down in chechnya that have

caused it to expand outward. it has infected the north caucasus as a whole. there are socioeconomic problems, ethnic tensions. most of the ethnic russian population has left. there is growing ethnic strife within russia between status of the north caucasus and ethnic russians. there is not a simple solution, >> deep-seated problems, sochi is at the same attitude as nice in france. warm summers, mild winters. what was the rationale for hosting the games in sochi? >> putin has a dacha in sochi. he thinks it could be a year- round resort. they have high mountains 15 miles from sochi. he found an opportunity to turn sochi into a resort.

not many people believed this was a good idea, including some of his oligarch buddies who have been making the investment to build up the ski area. they are calling for subsidies from the government and asking the government to buy them out. it is a very large question mark. they stored up enough snow under thermal blankets so if it does not snow at the time of the x they will be able to use artificial snow. only time will tell what happens. i do think that a $60 billion investment for this is something that has already not paid off and has only brought bad pr and bad publicity for the area as a touristy venue. there has been a lot of corruption -- a lot of pollution in the black sea. local residents are complaining they cannot swim anymore.

>> are investors concerned yet to russia's index is up after the attacks. stocks are a bigry in the u.s. as well. what are the pundits forting for 2014? we will have the answers to that. later on "lunch money," something chewing up the earth under manhattan. the best of big machines and 2013 is calming up. before we had to break, if you are heading to central america, you may want to stay away from el salvador. the country's chaparrastique volcano erupted, sending a column of gas and ash three miles into the sky.flights are canceled. drive or swim. ♪ >> in stocks, new year's

resolutions are getting made and stock pickers, analysts and academics, are making market forecasts. one guy who got it right and 2013 is a finance professor at wharton. here is what he saw in 2013 and his predictions for next year. >> 2014 will not be as good as 2013, this was one of the very best years. we had three worries of the market that passed. tapering, it did not prove to be a tiger. the debt showdown with democrats and republicans coming to an agreement.

there will not be a debt ceiling fightin february. syria and iran in the short run have been defused. that was hanging over the market. with those three items neutralized and stronger data in the fourth quarter, i don't think anyone should be surprised at the big rally. >> you were predicting it. what are you predicting next year? >> 10% to 15% up. my look at fair market value -- >> in 2014? >> 10% to 15%. my feeling is is 18,000 is the fair market value. we are a lot closer than we were years ago when i made a prediction on that. certainly, in the short run, we could go up or down. >> making the right call is not the norm. the best part about watching forecasts from stock pickers is knowing how wrong they will eventually be.

>> when you look back at what was predicted for wall street, you have to laugh. you look at the stock pickers' forecast for the s&p 500 and then were the s&p is today. look at how far off they are. the immediate forecast was a miss of 17.5%. analysts said they did change their forecast as the year went on. this is as the year began. >> you did not believe kreskin anyway. you have to put faith in analytical forecasting. >> what about stock analysts who come up with earnings forecast? they did -- forecasts for three quarters ahead. this is what they thought earnings per share would average for the s&p 500, this is what it turned out to be. no better at forecasting the future. do not necessarily take their advice about where it will end up.

>> shortly be economists, the academics, surely they can get the forecasts right? >> economists are just as dumb in forecasting the future as a stock pickers. they were no better at picking the future then stock prognosticators. >> obviously not. even outgoing fed chairman ben bernanke poked fun at his peer'' inability to forecast. >> given the difficulties economists have in forecasting. [laughter] even the next few quarters, i will point out an advantage to making a 100 year forecast, i won't be around to explain why it was wrong. [laughter] >> if you make a bad forecast, hide under one of these popular

hoodies. miami super sizing its port for big business. ♪ >> there are massive machines

working less than a mile from here underneath the streets of new york. it is the biggest transportation project in the country, the $8.2 billion east side access project. the most annoying in the world.

>> fire in the hole. [explosions] >> done!

>> and traffic will be horrendous until 2019. after that as well. 1300 miles to the south, miami is making room for big ships. three football fields long. an expansion of the panama canal means behemoths like these will need a place to unload. the port of miami wants to reel in this business. carol massar shows us how. >> it is a big day for port miami. the long-awaited delivery of cranes, costing $40 million. they traveled more than 90 days from shanghai, battling storms along the way. >> these cranes that are coming in, they are huge. >> four of the world's largest. they have a reach of 22 containers across.

they are the big boys. >> the cranes are needed for big ships, which now mostly dock in california. miami is hoping more goods will arrive. >> you will see ships carrying triple the volume. >> this means digging out port miami. >> this will go to 50 feet, the same depth as the panama canal. >> getting the goods to shore is one part of the strategy, getting them out as fast as possible is the other. >> it took us two years to dig the tunnel. >> more than a quarter of the money the port is spending is being spent on this title under the biscayne bay. >> we will provide a link from a

major interstate right to the port. >> the goods not loaded onto trucks will be on a ramp fanning out to destinations all over the country. art miami is hoping for a big payoff, a doubling of container business over the next six years and 33,000 new jobs. critics say that might be difficult, considering miami is one of several ports vying for the business. >> we are the first port in, last port out. we will be big ship ready. >> carol massar, bloomberg, miami. >> if you really want to buy big machines, there are a few companies that make them. caterpillar, the world's biggest maker of mining equipment. they make some of the biggest earthmoving equipment on the

planet. here are the top five biggest from the "lunch money" archives.

>> you can catch all of our best of bloomberg 2013 videos online or on our mobile app, bloomberg tv plus. coming up, the cftc oversees the $400 trillion dollars market. its chief is stepping down. an exclusive interview with gary gensler. britney takes to the stage in vegas in her new live show. we will take you there later. ♪

the most successful driver in formula one history is an extremely grave condition following a skiing accident in the french alps. he underwent emergency brain surgery after falling and hitting his head. retired fromld formula one racing for the second time in 2012. in his career he won the world a wavenship seven times.

of arctic air has lasted -- blasted the upper midwest. winds gusted to as high as 50 miles per hour and creating blizzard like conditions. the windchill temperature plunged to 50 below zero. the temperatures are forecasted to last until next year, january 2. the philadelphia eagles held off a comeback by dallas to secure the last playoff spot in the nfl. the eagles' win clinched the nfc east title, they will host the saints on saturday. one of four scheduled for this weekend as nfl postseason gets underway. in nation, after five years in charge of the commodity futures gary gensler is about to step down. under his watch, sweeping new rules were adopted for wall street and transparency was

pushed for. gary is still battling banks and fellow regulators on a number of new rules. >> we had five or six go into the courts and we struck the right balance, particularly across quarter. think of it this way. aig who up and 180 billion u.s. dollars had to go into it. out of london with a french tank license. the lessons of finances, we have to cover the offshore operations of u.s. financial institutions. >> one of the most contentious topics they had to consider was the volcker rule. >> it was probably amongst the most challenging. we were involved with 68 final guidances in rules and orders. that is the most challenging. to prohibit on one hand proprietary trading record raise the risk of taxpayers. it does look like that one is in

the courts as well. >> you were not afraid to but heads with the folks on wall street, former colleagues there, and regulators overseas. i heard dan gallagher said at one point in -- among european regulators, your name is like a curse word. are you ok with that? >> we are good friends and we used to commute from baltimore together. we chat about it and laugh about it since he said those words. i am all right and we remain good friends. >> you had to throw a few elbows along the way. >> i look at it this way. these are really important matters. the financial market derivatives is 400 trillion dollars in size. that is nearly $25 for every five dollar in our economy. there is no doubt there will be

differences at times. we were trying to bring transparency to the markets that inevitably might take away a little of the information advantage of wall street but help the rest of the economy. it was the 8 million people who lost their jobs as well. we found compromise. two thirds of our final rules were unanimous. two republicans and three democrats came together unanimously and 85% were bipartisan. ready good ratios for this town called washington. >> you can watch the entire interview, the exclusive interview, online. you can also watch on your mobile device, by the way, with the mobile plus app. the goto favorite casual friday attire, everyday attire for mark zuckerberg. we will hear about the hoodie next in fashion. do not pack. just rent. rent the runway goes to vegas. ♪ >> in fashion, we start with an

american wardrobe staple at least to the mark zuckerberg's of the world. it is a hoodie. the greatest hoodie ever made. customers often have to wait months to get their hands on the $89 fletcher. what makes it so special? >> the apparel industry and a lot of other businesses is when you get in the this and this of rolling out a lot of retail stores or between you and the customer, you are adding layers of cost. any business deciding to support the hundreds of retail stores across the country, make a decision about their business model that will be paying for all of that, which, by definition, to tracks from either quality or retail price, if you eliminate those things, it gives you a new way to approach an old problem.

>> your price point is not too far off. >> that is right. we make top-of-the-line quality and sell direct to customers, bypassing all traditional distribution models. no stores and no retailers. >> a lot of buzz around your product but you have a lot of trouble keeping up with demand. does that show the limitation of manufacturing in the u.s. as opposed to the apple model? >> you would think so. unlike the apple model, where it might be as simple as downloading an app, manufacturing requires an interesting matchup between consumers finding out about brands rapidly, matching up against manufacturing, so if someone tweets about our sweatshirt for clothes, thousands of customers can hear about it in an instant and then we have to make the product. it is an interesting dynamic in our business up against, we have been growing so fast that trying to forecast the amount of demand we will have is also difficult.

you are right we are back ordered on products in some cases up to a month. we are scaling rapidly and opening up new factories. we hope we get in front of the product that's the problem. >> you have done work in manufacturing for a while. you started setting out to make the world's greatest hoodie. what prompted you to do that? >> one of the interesting things about the apparel industry is that there is a dirty secret that the vast majority of what you are paying for when you buy clothes are things unrelated to the manufacturing process. i felt there was a real opportunity to eliminate those and build a great product and keep the price reasonable for great american-made clothes, which i think there was a lack of in the market. >> this next company is doing the opposite of the hoodie. rent the runway is expanding with a new showroom in las vegas. the founder of the retail site explains why. >> i try on the dresses and we figured it was a place where

everyone wants to dress up so opening a store there made a lot of sense. >> what is the purpose? do they sustain themselves or is the point to drive business online? >> they are different cases. we have our location and women are coming in for 30 minutes and trying on a ton of dresses and booking things within five events coming up. they are making sure it fits but getting there whole season plant. in vegas, it will be a lot of same day rental. among showing up and saying, short enough, tight enough, right enough. they come into our showroom and then try on our dress. >> is this to deepen the relationship you already have with customers or branch out for new customers? >> we have already started to do both. received both of these cases. existing customers write more frequently and then new people were nervous and are now coming to us.

>> you also have a cool new collaboration with the onset. tell us about it. >> the queen bee herself has picked out styles that reflect her personal style and you can rent those looks. it is in partnership with a world tour, actually in the new york area right now. >> did she design anything? do you have dresses in there as well? >> she did not design them but she and her stylist take them out. most reflective of her fabulousness. >> is she come to you? >> this is a partnership so we worked out terms that were mutually beneficial. >> you have a new pricing engine. explain how that will be different. >> we have rises that are 10% retail price. we have special pricing going on right now, $20 and $.14.

you cannot beat that. these dresses cost thousands of dollars. >> while you are trying on the expensive new year's eve dresses and suits, here is some fashion advice. >> one of the things i get asked a lot about is fashion faux pas is and what you should and should not do. there are no rules anyway so it is up to you. know your personality and body shape and job. the safest thing is a white shirt with a tie. personally, i like -- mixing patent with patent. it is about you. if you are in a creative business, graphic design and film, more adventurous. tried to get the shoulders. to the end of your shoulder, and not hang off. sleeve length is probably the biggest mistake most people

make. you will often see photos of weddings and the sleeve way -- sleeve length is wrong. that is not the bottom of your thumb and that is. it is where your thumb meets the rest area that is where you finish. look for suppression, closed that have some shake, so the shape should end up where you have suppression, hopefully, if you have not drunk too much year. know yourself and know your character. if you are a joke the guy and fun, you can wear a more colorful tie and fun thoughts. -- socks. if you are classic, do not take risks. the one thing you can do is have a suit with a funny side. just little things you can still

do. that is it. >> in vegas, still a lot of skin there. not least the cousin britney spears just opened her new show. we will tell you about that performance next. ♪ >> in pop, britney spears rocks

las vegas. she launched her new two-year show at the planet hollywood casino friday night. a sold-out crowd. what can you expect if you go? 90 minutes long. 21 hits. bottle service for vodka. she performs with a four piece band and 14 dancers. she is the first artist in residence at planet hollywood's newly renovated access theater. what goes in to britney's show? it is massive. seven set changes and a ton of elements and technicolor video content. a large team.

a large team of folks have been working under the creative director for almost nine months. >> why britney? why bring her to vegas? >> we love britney for vegas. a changing demographic in vegas from an older generation to a younger. it is driven a lot by the nightclub scene in vegas. what we are seeing is younger customers are coming to vegas more and more. the average was 51 years ago and now it is 46. we are capturing the trend. britney is the perfect set. >> how does her grand align with planet hollywood? >> it is perfect. all about fame and the celebrity element. we think it is the perfect fit. >> once you get all of these

people there, because it is a different and younger crowd that may be new to casinos. how do you keep them there and spending? what is the hook? >> it is easy here in vegas these days. the nightclub capital in the world. it is vegas. folks are coming here to be here for the bottle service and the parties and the tj's. folks are here. instead of doing nightclubs two nights, they will do one night and britney on saturday. not a difficult thing. >> what is the next that? >> the idea for this theater is to have a rotation of pop residence. she is the first contemporary pop artist to have one. what we are doing here is looking for artists that fit the different demographic. it is easy. open up billboard magazine and find the top 40, folks charting today or could potentially do residency with us.

>> britney is not the only one looking to create a unique life experience. groups are going holographic, as cory johnson found out. >> old dirty bastards young again and alive again. ♪ the hologram trend started at the music festival. tour tickets spiked and 15 million people watched the hologram on youtube. album sales jumped five percent. 75% boost in two weeks. why set the stage with a hologram? >> with digital music destroying the industry, old business models, live concerts have become the bread and butter of the industry. >> a vital part of the business. >> rappers are using the

hologram technology to create an intergraph this live performance with their long dead mentor for the rock the bells tour. >> bringing the live element in with the avatar and the whole existence of his life. we had to share that 18 years later. it is off the hook. >> this technology is an old trick. here is how it works. images of the artist performing our projected above the stage onto a mirrored surface. the mirror reflects those onto an angled transparent screen. >> you cannot pay for this. it is worth your money. >> cory johnson, bloomberg, san diego. >> today's mystery meat, go for the burn, christmas is over, but santa is getting a workout in serbia. ♪ >> it is 56 past the hour and

we are on the market. let's take a look at where stocks are trading on this day of 2013. the s&p was down less than a point. the nasdaq down as we head into the end of the year with the s&p

500. yields continue to get higher close to three percent on the 10-year. close to four percent on the 30 year. miller -- and matt miller is here. yields as we see the at inat are we looking terms of how high it will get? >> our estimate is 3.5%. look for a 305-310 level in january if we get a good solid december nonfarm payroll number. every data point that says the fed got it right. the yields will continue to back

up and the curve will seep in. >> what do you think of the work performance of golden 2013, is that another data prewitt -- data point that proves they got it right? >> the lack of the man and -- as the dollar strengthens as we expect it will is that story. if risk is not there, inflation is not there, it is about the relation with the dollar and we have seen that kind of weakness. >> if there are any suspense in the treasury market going into 2014? if you know the fed will keep -- you know or assume the economy will improve to some degree even if in fits and starts. are there any sort of big questions that you are looking to get answered? >> if the fed does not get it right. or if they tighten too fast. relative to what the bottom market is expecting. 375 if thesily be fed decides this is going full bore, we will -- perhaps the end

of the year and the bottom market is thinking a september type of ending. if they say we are too fast too soon and the economy goes into a stall, you will have the bottom market rally. thiso have tail immense at scenario. they're still there nonetheless. talking that much. >> do you have a favorite trade going into 2014? -- playing that global growth thing. have and have not scenario. i'm not expecting much from europe. it is playing overall in general a positive trend in 2014. there is a question as to what degree. >> would you look at sovereign debt in some of the emerging nations weston market -- emerging nations? trade happen in

italian, spanish, and portuguese dead. along the ecb there supporting it. -- they are supporting it. >> thanks for coming in. happy new year. matt miller, thanks for hanging out. >> always a pleasure. on the penultimate day of the year. >> for on the markets i am julie hyman.