winner. >> our editor joining us from detroit. we're on the market in just 30 minutes time. "market makers"kets again in just 30 minutes. "market makers" starts right now. >> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. ciao, chrysler. italian carmaker fiat buys the rest of chrysler. we will take the new company for a test drive. >> and getting home, a massive storm is coming. we will talk to an entrepreneur whose black car app will surge pricing. >> vintage 2014. champagne glasses are back on the cupboard shelves but there's more where that came from. we will take a cross of the high-tech future of winemaking. happy new year, everybody. you're watching "market makers."

i am erik schatzker, here, 10:00 in new york city. >> i am carol massar, everybody. stephanie ruhle is off today. >> we have raking economic news. this is a gauge of the u.s. manufacturing economy. just coming in right now, 57 is so reading, the economists we surveyed were looking for 56.8, so call it in line. above 50, carol, indicates an expansion, so it is not the u.s. manufacturing economy is on fire, but it is growing. for thers more evidence continuing growth of the u.s. economy. with all that final reading on third quarter gps 4.1%, surprising just about everybody. >> and that latest regan manufacturing up -- read on manufacturing up. let's get to the news feed.

macy's settled a legal dispute with martha stewart. whether her company reached a contract buys selling items with j.c. penney. the deal does not affect its claim against pennies. cosmetics maker revlon shutting down its operations in china. revlon has not been able to get much traction there. china accounts for just a tubing percent of revlon sales. of revlon sales. government tests found that donkey meat contain the dna of other animals including fox's sold it walmart in china. donkeysis neither about or about fox meade, that is bizarre, we are talking but the first big deal of 2014, and fiat has finally done it. reaching an agreement with the the 42% ofed by chrysler fiat did not already

own. this transaction is valued at almost $4.4 billion. bloomberg's auto experts are with us right now. matt miller is right beside me in new york city, and in detroit, jamie butters, a busy man this morning. he will beabout what a will to do now that fiat is going to own the rest of chrysler, and it looks as though the deal will be completed in the next few weeks. is what has been working toward for almost five years, since he took chrysler off the hands of the u.s. government as part of the bailout and government finance banker see restructuring, let them integrate the operations a little more concretely then already, the guy was ceo of both companies. what it really does, the big price of this is to let and get thatrash -- the cash chrysler has an user to reinvest in fiat while the european auto market is really at a bottom, try to kickstart that, and then really execute globally. >> jamie, this is a great deal

for fiat. >> oh, it is a very good deal. i would say that the uaw trust, which had almost no leverage at all, they cannot strike, they cannot -- they had almost no leverage all. they try to get a value for their retirees, for their members, you know, they were trying to find billions of dollars in retiree health care liability from a bankrupt dump me. they have got billions to go toward that, probably some concessions down the road. he got the company for very little cash. it really expands the reach of fiat on all the technology and the brands they have their in europe. >> they could have forced an ipo. this is the threat -- i would argue that they wasted time and money in trying to force the ipo to begin with because sergio marchionne wanted to give them $4 billion from the start.

now what happens -- he gives them 4.3 5 billion dollars, and the majority of that money coming from chrysler. -- $4.35 billion. that everybody knew what happened -- >> the original offer -- >> how the banks get paid as a little unclear to me. they must have -- they knew this was a very high likelihood and must have a factor that into their equation. $4 billion was not sergio marchionne's initial offer, so they did get an increase quite a bit over time. really, chrysler becomes more valuable as the key is generating cash, but they need money to pay their bills, and this worked out for everybody, even if it is only 10% more. that is $400 million that can go toward a lot, by a lot of -- >> one of my favorite parts of the deals is that 700,000 will be paid over years.

they're getting less than $4 billion now and by 2018, they will get the rest of that $4.35 billion. so it depends on what you think about the present value of money. the best thing is really for the whole company, they will be able to invest $12 billion on as jamie said, he in the italian plants as other european manufacturers in europe are just a shutting down plans as quickly as they possibly can. plus, he is going to be able to onthings like old maseratis these platforms. he is going to be able to import more -- well, start importing alfa romeos into the u.s. he is going to be able to offer more models come and that is what chrysler -- that is what the whole company needs to do but that is especially what chrysler needs to do. >> jamie, how competitive can a unified fiat chrysler be against

a volkswagen or general motors, the other two global auto companies that come to mind? >> on a global scale, they are still way behind gm, volkswagen, and toyota. those are really the global big three, the big automakers reached continent. they are about half the size of those companies. but they're going to ultimately get to those sizes, they will need a third or fourth partner. sergio marchionne originally came in saying they needed to be in top five. to really compete at scale, get through the ups and downs of the global economy. you start thinking they will need something with more asia focus, they need more into china, which they are working on through jeep already, but the southeast asia, a lot of big markets where they are really behind. >> all right, jamie, good to see you this morning. that is bloomberg's jamie butters and detroit, matt miller here in new york city, looking ahead to fiat's full ownership

of chrysler. >> turning from detroit to d.c. were the senate may vote to raise the minimum wage as soon as this month. 13 states raised their own minimums as of yesterday. is inerg's phil mattingly washington. which states are we talking about? >> it is a very interesting thing. it really started in the northeast. rhode island, connecticut, new jersey, new york, but also washington, california. the thing that underlies right now is that the states have really led the way on this. as of yesterday, there are now 21 states with a minimum wage over the federal threshold of $7.25, and that has driven washington. just take a listen to what president obama said in his income any quality speech earlier this month -- airportow there are workers and fast food workers and nurse assistants and retail salespeople who work their tails off and are still living at or barely above the poverty. and that is why it is well past

the time to raise a minimum wage that in real terms right now is below were it was when harry truman was in office. [applause] when president obama gave that speech last month, early december time frame, his aides told me that was basically a state of the union like, so jenny were 28 when he gives the state of the unit, expect them to come right back at this. he has support from senate democrats. senate majority leader harry reid likes the idea. it is something that could move as soon as this month. not just abouts policy. there are plenty of politics at play here as well. >> absolutely. startthe senate might consideration of a, there is murder little chance that this goes anywhere through this divided congress. againstans are very it because big business has a major promise -- major problem with that. retailers, restaurants associations, all those folks -- a very difficult issue for the two embraced politically.

democrats seize on this because it is very popular politically. again let poll -- a gallup poll said 70% of americans polled like this idea. what you have seen as a progressive populist movement, have grabbed onto the income inequality debate, and they are running with it. bill de blasio obviously a been new york city, and you'll will see with state candidates in the 2014 election year. >> bloomberg white house correspondent phil mattingly. the stock market and a warning that it could pop at any time, we will talk with jim rickards. he is back with us. as a cure for the common hangover -- doesn't really work you go we will ask the ceo of a company that makes one. you are watching "market makers ," on bloomberg television, streaming on your phone, your tablet, and at bloomberg.com. and you can watch all of our interviews streaming live and on-demand on apple tv. we're just getting started on this thursday. ♪

>> i am erik schatzker, you are watching "market makers." what is not to like about quantitative easing? 2013, thee down 32% economy is growing at a for 4% clip. jim rickards says there is plenty not to like. he a senior managing director at tangent capital partners allsop after all those seemingly good things, jim, what is wrong with qe? >> your talk about market that are not have markets. with indices, prices, but no more markets left. markets are places for parties to engage in prices cover in exchange, but when you manipulate the dollar, which is what the fed is doing, you manipulate directly or indirectly every market in the world. we are looking to markets for price signals, guidance, but what we're getting is a false signal because they're all being manipulative by the fed. if that has said, bernanke, yellen, all of them have said

this is unprecedented. if you read between the lines, they do not know what they are doing. ok, that does explain to stocks. what about economic growth in the unemployment rate? >> it is not great, but it is much better than it was a few years ago. >> third quarter the par 4%, but we had a 4% quarter in 2011, but then it petered out again. this is not the first taper. 100% taper, qe 2 was 100% taper. they tapered twice before in a failed twice before. they came back and started asset prices is -- asset purchases again. qe 3 is three for a reason because it failed to times before. >> has this been a tough year for you? believe in qe, yet the market has done really well, economic, fundamentals are improving. >> i manage a hedge fund, we were up 19% for the year, so i am very happy with that, but it

is a long short equity fund. >> another was up 30%. sooner than later, the market will be down 30% -- >> when? sorry. >> it is an unstable situation. the problem is we have inflation and deflation at the same time. deflation is natural. they come from the fact that we are in a depression. they fight each other at a standstill. isn you see 1%, 2%, that like standing on the san andreas fault one is not shaking. it is not mean is all good. it is hard to know which way it will break. but certainly 2014. to carol's point, i looked like in an interview you did a little more than a year ago with bloomberg in which he said several things that caught my attention. one that u.s. was in a depression, two, that gold was andg to go between $3000

$7,000, that european stocks would do better in 2013 pan american stocks, the yen was wasg to be fine, and there going to be a currency crisis in britain, which did not happen either. so i want you to walk through the predictions for 2013, and then let's talk about what you are thinking about 2014. >> basically, none of the fundamentals have changed, though i questioned the yen. i said it would go $1.10 to $1.20. maybe check on that. gold, the price target of $7,000 or higher, it did not happen this year. it is a good buying opportunity, let's put it that way. isdamentals -- big thing there is a lot of manipulation and people say why would you invest and goal at that is being manipulated, and the answer is manipulation is unstable. the floating supply is disappearing. it is going to vault into china. it is going straight to china, mining output is going straight to china. they're putting it away and it will never see the light of day

again. the paper shorts are increasing, so that technically -- >> how long do people have to wait before the thesis plays itself out? >> it could be one-year year, two years, three years. i do not care. i own goal, i do it without leverage. i'm very happy to sit on that the one thing with gold is you will not be a will to find it. >> ok, gold, we know you like, what else do you like? you are not all in here. >> you should not all in -- >> people who accuse you of being a gold bug are wrong in that regard. >> i am not a gold bug, i am an analyst. gold moves inversely to the dollar, was so when people say gold is down, the way i interpret it, the gold is constant, the dollar is up. what it really means is the up.ar is down if gold is i'm saying.

a gold rally is really a dollar collapse. >> is there a chance that this could ultimately work out? there've been questions all along since the crisis in terms of the moves we've seen by the fed. is it possible that this could possibly work out, it could be managed well? >> if it does, it would be the greatest -- stranger things have happened. i see this basically as an unstable balance. if we get back to 3% growth, on the planet goes down to fighting percent, inflation levels off around 2%, i would be very wrong about all of my analysis and that would be a great outcome for the fed. could it happen? yes. is it likely to happen yo>?? extremely unlikely. they are still buying assets. tapering is like slamming on the break so nice. they are so going to buy $400 billion even if they do $10 even if theyth --

do $10 billion a month. here is a lot to play all -- out here. >> that is the point -- the fed has got your back. so if you are an investor, or if you are willing to take that risk, then the fed has your back. there is no reason not to be there, that is the argument. >> i actually agree with that hasment, erik, the fed your back, which is what creates bubbles. the fed should not have your back. way, i thinks u.s. stocks are going to go up. european stocks, adjusted for the currency, you have to give a topspin on the exchange rate, you cannot just look at these indices, you have to look at the currency. >> so stocks are going to go up -- >> for a while. >> where are we going to be in the middle of 2015? is the fed going to be raising interest rates? >> no.

if they do, it is because inflation has taken off. >> what they want ultimately is somenflation -- they want inflation. >> they absolutely one inflation, but they think they can dilute up to 2, two point five, i've heard the president of the chicago fed said he would take 3. goes 2, 3, 9. a the key is velocity. velocity is behavioral. when you change these psychology, you cannot change it back again. >> we will be having the same cover station a year from now. >> possibly, but i want to change my position, i like 10% in gold. there are things to do in the stock market, i think stocks will go up, but i do not like them personally because it is a bubble. >> managing money longshore, you short, you'reg not investing a macro anyhow. >> that is correct. warren buffett disparages gold at every opportunity but look at

what he has done -- he bought a railroad, an oil pipeline. how do railroads make money? they are a hard asset stock. warren buffett is dumping dollars getting into hard assets. watch with they do, not what they say. >> thank you again to jim rickards, senior managing director at tangent capital partners. >> coming up, bonus time for bankers. some will be smiling more than others. they are the ones who have gotten a lot of compensation in stock. we will have that story when we come back to you on "market makers." ♪

>> we are approaching 26 minutes past the hour here, so it is the for bloomberg's on markets. stocks are starting the year off down. points on the dow jones industrial average. do not look for a fundamental

explanation because today the economic data are good, initial and continuing jobless claims coming in lower-than-expected. , coming inng index line with economists' predi ctions. >> people say we are waiting for a couple -- for a correction. >> halal, when you are up 30%, take some money off the table. >> not taking money off the table is urban outfitters. it has gained big time. raising 4%.rey is you talk about the market doing well, urban outfitters is doing better than the s&p 500, that stock is up about 32% in 2014. >> i want to talk about twitter, another stock that crushed it in 2013. he stopped up a little but today -- the stock up a little bit

today. twitter already well past 52. twitter is going to become a platform for video viewing. ofn we come back, the ceo the black car service. stick around. ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> shares of u.s. banks say they are coming off their biggest annual rally, more than 16 years, a bone to wall street employees. for more on his surgeon, station, we are joined by .loomberg's laura >> if you were paid in deferred stock, you are probably pretty happy now. now we're looking at 30%, the warrior percent bank -- 40% gains. i would be pretty happy with

that. quite first of all, let me ask you this, we're are going to find out just how good deferred compensation has been to these bankers when we start to see the proxy filings role in for firms like goldman sachs and morgan stanley and jpmorgan because the ceo's just like the rank and almost well, they get all of their compensation in deferred stocks. >> exactly, look at jamie dimon, his pay which was cut in half last year because of the derivatives trade. he got an $11.5 million pay package, 10 million of that was in deferred stocks. they somehow his shares did this past year, the value of that aid packages up $2.6 million. >> jpmorgan shares have done great. but one has to wonder how much be paid thisl year because he just came off of a $30 billion settlement with the justice department and other multiple investigations, and for which it has had to pay a lot of money including a next or $1 billion for the london well.

>> exactly. one of the analysts told me if you look at what happened with the bangs, revenue was not that great, it was not the best environment for banking. we saw fixed income trading take a huge dive during the summer. so a lot this rally was based on the fed and how they were pumping trillions of dollars into the market. that helped equities, which -- >> the trading start of this, not the equity side, the question is does this continue? way back when, who knew it would play out as well as it did, and it did. so what about the future? >> we do see. analysts see stocks going up a little bit this year, certainly not the 30% gains we saw this past year. what investors are going to be looking for is revenue growth. and we have mortgage these constantly coming down, we do not have the fed -- the fed is tapering its bond buying, so it is still not the greatest environment for banking, and if investors do not see revenue growth, then maybe their stocks will do as well.

>> but the whole point to deferred confidently form of stock is to align employees interest with shareholders interest in the rate. so if shareholders do well, the employees do well, if the shareholders do not do well, why should the employees do well, that is the theory. bankers as we know find any number of things to complain about when it comes to pay. there is always something wrong with the way that they get paid. if it is a stock base, it will be good in some years and is not so great and this year happens to be a really that -- >> not so great. >> and this year happens to be a really fantastic year. wayf you go back to the credit suisse did it, perhaps the most innovative firm, making the bankers and traders either own cooking when they give them toxic assets. there.ded up doing great >> sure, and we do see some of the banks referring -- reverting back to paying more bonuses in cash. we will see what what that means and if other banks follow

suit. >> we are going to watch for those numbers. ek,omberg's laura marsocin thank you. >> wine comes to a family owned robot business in napa valley next. ♪

mr. ball. bloomberg television's rachel crane traveled to hold vineyards in the heart of napa to get a taste of high-tech wine.

>> people have been making wine for centuries. this disorder is the future of winemaking? >> and this is the future. >> but never like this. napa valley's hall wines is one of the first to incorporate automation into their craft. this new technology replaces hand sorting with machines. but their job? identify the best route. >> it compares against the greats, and if it is not a match, it will take that out. >> this is where all the images are taken. >> right. this is what makes it all possible. >> the robot takes pictures at 10,000 frames per second and analyzes them instantly. >> the picture was taken, except in, it was a match to what i had said was ok, and then the ries will comeer across on this conveyor and be dumped into a bin of good fruit. if it is rejected and does not match, there will be a puff of air that comes out and will blast out the one that is not

match. this was the one that was rejected. i do not want that one going into my tank. the old methods, hand sorting and people use comps and there were different things that affected the condition of the grapes. this allows me as the owner to have an open season. >> why are critics skeptical of this optic sorter? quite a bit they like the romance of having people sorting -- >> i think they like the romance and tradition of having people sorting. like this is how you do it. >> this is how you do it. old school. there is probably enough to do. i would say there are probably three or four bottles. i american strength a lot more than three or four bottles. americans is only -- and drink a lot more than three or four bottles. the thirst is only increasing. 100 $35,000.

it is a sizable, but it is interesting compared to the cost of labor, the sorting, we will see the return in a couple of years. quite how do you expect -- >> how do you expect it to impact your business? >> a lot. it is a pretty cool choice. >> all betting that this wine will be there best vintage yet. if this optic sorter takes off, if more wineries adopted, are we going to see better wine in the next 5, 10 years? >> i think so. i think every vintage will be better to go through the optic sorter. >> still feeling the effects of new year's eve? what if i told you there was a way to beat that hangover? ha claims to be a will to beat the effective after feeling. he is a former senior vice president at "playboy." you have an interesting background. let's talk about the product no, let's talk about

that. quite how did you go from porn to the business of hangover prevention? am from tell people i the adult industry, always go to something you can apply your skills with a higher multiple. the beverage industry, the multiple's are fantastic. noho fell onto my lap. if it had followed into him my lap earlier when i was in college, i probably would have graduated. >> what are we talking about here? let's be honest -- there is no cure for the hangover, you cannot get a hangover and then do something, whether it is eating greasy diner food or drinking water, tomato juice, it does not matter. you cannot cure the hangover. you claim to be able to prevent the hangover. how? >> technically a hangover is like a flu or a cold. you cannot hear it, you can try to mitigate it like with flus and medicine. with hangovers, we help her vent

it. just like taking vitamin c, partnering yourself or the winter months, we prepare your body for the consumption of alcohol. we fortify it with the nutrients and minerals to boost your system up so your body as it theesses and metabolizes alcohol, we actually boost your system, so as the nutrients you need, potassium, magnesium, iron, zinc, we fortify your body with that as well as everybody knows you get dehydrated, once we have sodium to help your body stay hydrated and retain water, and then we put -- >> it all sounds good, you can also avoid a hangover by not drinking -- >> number when way to avoid a hangover -- don't drink. twice i am curious about the research you have done that this really works. >> one of the groups that we work with in germany did a 500% test, we had a 95% effectiveness, which is pretty amazing. >> people felt nothing. >> either nothing or lesson. it depends on how much you

drink. if you drink one prior to consumption and one at the end of the nightly you had 10 or 15 drinks, you will feel at little slept two, if you hours, you are so going to wake up feeling tired. >> the fda does not endorse your claims. >> the fda does not endorse anything when it comes down to a disease, someone would have to literally go through a full study and then you would be on the front side of the hangover meeting you are trying to cure a hangover, which likely said earlier is basically impossible. we are a dietary supplements so we follow very shortly be rules and regulations that are set forth as a dietary supplement, and then our noho gold is a beverage that we launch in january. >> it is important to be a will to draw the stations between a dietary supplement like vitamin c might buy to help you build versus a druggym because when we talk about a drug, we talk about drugs and medical terms, when we talk about dietary supplements, we have to be careful. >> absolutely. you have to watch what your plans are and what you are

claiming to do. that is what we look at the category right now. all the other products are saying we can cure hangover, we can do with snake oil, those are very bold claims to try to make. it is like people came out without all earners -- another dangerous claims. >> you can make claims, but the success is whether or not it is failing. talk about revenues or profits. >> revenues have been very strong. , this yearear growth was a very strong year for us as well. in allch our gold can, the nightclubs in america, we also went public in america, so we took on a lot this year, we set the tone and the pace for 2014, so we're looking at massive sales. >> what is massive? >> i did our projection last time i was on bloomberg life that we would have 100 million plus in sales in three years. >> what about 2013? >> we have not to our numbers jeff. -- yet.

>> what about year to date? to 30. next year, 25 >> you expect to sell $25 million worth of stuff? >> i already have reorders. -- pre-orders. we look from a global standpoint, we look at our domestic growth, which is really strong. our new product has taken off, our noho gold. >> what is your international growth because you talked to us about this before and it is important? >> we just signed so i can ask or talk about it, we just signed a deal for all of asia, hong kong, taiwan, as well as china, which is a very large growing section as well as a deal for all of water -- all of russia, most of the baltic countries, and northern europe. very strong for all products. >> at the end of the day, doesn't matter whether it does or does not work?

again, we're talking about something you take before hand, so there is no way of proving that it does work because i might be able to go out and drink have a bottle of vodka, wake up the next morning feeling fine without having taken a dietary supplement. that is not necessarily mean i would not feel different if i took noho, as long as you can persuade people that there is a potential for hangover percent -- hangover prevention, that is all you need. >> there is always a present -- a placebo effect, and that is a good question. we are the number one selling shot at circle k, the number one selling shot at total one and more. our repeat sales show that we are successful. >> is that more than your i initial sales? >> yes. it says a lot about the efficacy of our product. >> a lot of people will look at our packaging, fate is really

cute in a taken and there is no effect whatever. that is one sale. i am in it for the long haul. i do not want to put something into a bottle or a can that is not effective. >> you are in it for the long haul, all of your customers care. but he was very much, jay gr dina is the ceo of noho, a company that claims to be able to prevent a hangover. pre-k's next time you have a bottle of vodka, you can try it before him. the northeast is bracing for a bigest note storm -- the snowstorm. coming up right here on "market makers." ♪

>> all right, a live shot outside our windows. the northeast is definitely bracing for a whole lot of white snow, on-demand transportation companies are betting the storm will bring a lot of green, and uberaxi cab ouapp generated a lot of headlines when his prices went up. app ceo is here. and a licensed taxicab driver. you have been thinking about this idea for a wall. >> yes, i had a similar idea in

his 2009, and that is when i started doing my research, got my license in 2009 when i was on wall street. i have been thinking about this for a while. how to hail a car, how to price it, -- >> and you have driven a cab in new york city. >> yes, just for fun, which i highly recommend. >> a lesson in reality. let's talk about the surge pricing because that is the topic of the moment. in new york city, we are about to get the snowstorm. it means there is going to be a lot of demand. some people object to the idea that you should have to pay more at a time when you are desperate. companies like yours is being predatory. what do you say? >> i do not know if people object more -- >> maybe how much more -- >> it is how you price it. there are two prices, the off peak time price and the

price. across many businesses, being able to charge higher when there is more demand during peak hours is fine. ,hen people say price gouging right, i think in the conversation, the definition of price gouging has not really been fully defined. price gouging, basically the definition is the price that you charge above the market price when no retail alternative is available. and i think the key word is alternative. i think the only reason that uber has gotten away with charging so much was because consumers have no other option. would likeernative they could take a walk or a subway. >> see, that is not really an alternative. the alternative is something of comparable experience in my opinion. for those not familiar, the package of experience is in the comfort of your office or your

home, pulling out your phone, two tabs, the app knows where you are, and 30 seconds, you have a car assigned to you, you open the app, you have the driver photo, you have the phone number, you have his rating, where he is, you can watch him come to you, same with you get in the car, pay by credit card. >> let's go back to pricing. what is the kickoff you are going to do when it starts to get crazy here later on in york city? >> new yorkers have not had an alternative, so our model is always flat and transparent. >> when it snows a lot later on, you are not going to kick up prices? >> we will, but it is flat, so on new year's eve for example, tonight before, we charged $30, and it was over e-mail, overtaxed, over social media, we ride wasapp, every subject to $30. the peak time that we collect

ranges anywhere from $10 during the average peak time, which is about a third higher than our average ticket, to let's say $20 in a snowstorm, $25, up to a peak of maybe $30. >> so pricing is a big part of your business model. how else is it different from the other apps we know, say uber and halo? >> we have the same cars in the same drivers as uber, we have black cars and in new york city. in other cities, london, moscow, saint petersburg, we have taxis. i think we have a better app, a better experience. let me explain how it is better. you can pre-book your ride with us both of you cannot free book with uber. >> i was 80 fundamentally. -- i wasks directly thinking phenomenally. uber were starkly with the driver, and you work with the

lack are directly? >> we send the drop strictly to the driver the same way that has a device uber inside the car, so do we. you do not have to call in line, have been put on hold. these are it is the same. >> but is working with the fleets themselves going to -- what does that do to for you? why not just contradictorily with the drivers themselves if they are all independent contractors? >> that is a decision we have made. uber has grown to over 2000 cars in the city. basically we come in, we know they are 2.5 years ahead of us, our platform is why we have to stop you there -- >> we are going to aggregate supply and demand. >> jing, we wish you well, thank you for joining us, once upon a time was an intern here at bloomberg. "market makers" back in just two

minutes. stay with us. ♪ . .

>> from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> the ultimate triple play -- the biggest deal of the new year might be for time warner cable. we look at the companies considering bids. -- find outhe mark why warren buffett has fallen for the first- time in 44 years. --rocky mountain high recreational marijuana is illegal in colorado. we'll talk about the long lines and the legal challenges.

>> a lot of happy smiles. >> there are smiles in colorado. it is a new year. i am erik schatzker. >> i am carol massar. stephanie ruhle is off today. once we start with the top stories from around the world. first-time claims for jobless benefits fell last week to the lowest level in a month and the ism manufacturing index shows the sector is expanding with the november reading that was the highest in 2.5 years. the rich got richer last year and nobody had it better than bill gates. he reclaimed the top spot on the bloomberg billionaires index. his fortune totals almost $79 billion. carlos slim is in second place. ford is unveiling a new concept car that uses solar panels to recharge itself.

display nextgo on week at the consumer electronics show in las vegas. it comes with a canopy-like parking cover. it is not for your indoor garage. >> not a lot of sunshine today. a blizzard warning has been issued as the region of the northeast prepares for a winter storm that might dump more than one foot of snow in some areas. this is a live shot of cleveland, ohio. snow is already starting their. the snow is moving through the midwest. we have bonnie schneider for more on what to expect. talk about how serious this storm could be. >> looking at the live picture of cleveland, you think they have so much snow, but it is

only a couple of inches with the wind pushing it around. we have a blizzard warning for long island and blizzard-like conditions in new york city. blowing and drifting snow will make it dangerous. we are forecng eight inches, possibly more in new york and over one foot in massachusetts. >> shouldn't we be tougher about the superlatives -- if this is very serious, what comes after very serious? >> anytime you have zero visibility, it is dangerous. that is what we are looking with -- at with an travel. we have seen numerous cancellations. in chicago, 198 flights are already canceled. newark, 136. cleveland, 108. >> this will not be a multi-day event, is it? >> it will be a two-day event or

at most advisories continue -- event. most advisories continue until 1:00 p.m. friday. it is a busy travel day. we estimate between 70 and 80 million people are impacted. >> stephanie ruhle has been anacted, waiting for airplane. >> she supposed to be live tomorrow. it might be you and me. >> is this definitive? >> the models are in agreement. earlier in the week, they were not. the moisture from the south is coming up in cold air. then what happens? >> not only does it stay cold, but it gets colder tonight and tomorrow. in new york, the windchill will be down to zero. 12 wind's negative

for boston tonight. dangerous cold. it is very hard to shovel when it is frozen that solid. thank you, the -- bloomberg meteorologist bonnie schneider. chartn malone's communications is offering to purchase time warner cable, and sprint might make a bid for t- andle, combining the third fourth-largest mobile companies. alix steel has been looking -- we have been looking at both stories. stops -- >>ing nothing stops john malone. that is the one we should see first. he could see that as soon as next week. i will be the strategic time. the way this might play out,

charter would send a letter they would strategically open up to the press by saying this is what we have offered time warner cable. it will probably be $135 a share, maybe less than that. john malone has told advisers, maybeestors, that he -- investors, that he expects the bid to be rejected. this is just starting the process to get the price out there so activist investors could jump into time warner shares and put pressure on management to get a deal done. >> let's talk price -- were members are thinking $150. ?ow high does this go >> it depends on whether or not comcast gets involved. so far, comcast has sat on the sidelines, waiting to see what charter offers and then think about options. they could bid for the entire

thing. that could have regulatory problems. they could break up time warner duty, and ifint that happens, the price might creep up. >> the potential for competition potentially song interesting. that is not the scenario at t- mobile. there is one natural buyer, sprint, correct? >> that is right. mobile, taking out t- takes out a competitor here is different from -- competitor. it is different from the cable warner andere time comcast did not actually compete with each other. aeal in that area would -- deal in that area would be more likely to be approved by regulators. when at&t tried to bite t- mobile, regulators did not go by t-mobile, regular

did not go for it. it carries more risk than the cable situation. you take a week number three in spent and a weak number four, and you have players that could create more price competition, the better for consumers. it is different than at&t and t- mobile, but it is still taking four to three. >> how concerned are they with the viability of t-mobile? sprint has the deep pockets of softbank. t-mobile clearly still has deutsche telekom in the background. you have to wonder how long they would be prepared to lose in the u.s. market. they have been creative and innovative in pricing strategies. maybe that is enough to make the regulars want to keep them. >> it depends on who you are asking. some say the deal would be more likely after obama because his

administration has taken a hardline line on this when you look at at&t or the airline industry. >> sprint shareholders will have to wait until 2016? >> that is a lot of patience. >> that is what the regulators are -- what softbank is looking at. where are the regulators? there are three competitors in japan. that is what softbank wants u.s. regulators to look at -- see what we did here? we have three strong competitors. that might be a model for the u.s.. >> what does 114 look like in terms of deals? >> if the time warner-charter deal goes through, that would be $62 billion to start. even that offer would be the third largest deal offered, accepted or rejected since 2009.

only the vodafone-verizon deal and the pfizer deal were more money. >> is it possible this could take as many months to play out in for the value to increase the ay it did with dell? >> i think that is the most likely scenario. if time warner cable continues to push back, it will drag out. the annual meeting will be in may. that is when the fireworks will start if charter the size they will nominate a new board of directors. that could be a few months down the road. >> you spoke to the ceo of time warner cable. he would like to do something. >> he is willing to sell. >> alex sherman, thank you. always good to see you. alex sherman, covering the time warner cable and t-mobile stories. >> we will head for a break.

social media found out how to monetize video. what happens is here? we talked to the head of a video ad company. >> in colorado, this buzz is for you. pot shops are open. ," live onkers bloomberg television and streaming on your phone, tablet, and on bloomberg.com. if you miss our interviews you can see them all live and on- demand on apple tv. ♪

>> first. bloomberg. >> it is time for "bloomberg west" tech and media headlines. apple says it never gave the nsa access to product. there have been claims that the nsa gathered information from text messages and voicemails. apple says it will defend customers against security attacks, to who is behind them. milliont handles 350

this is that disappear within seconds every day. they were warned in august that data was laudable. the chairman of the world's saysst smartphone maker the company has to move beyond hardware, urging employees to adopt new ways of thinking. shares fell in 2013, the first time that has happened in five years, maybe one reason the chairman is thinking differently . >> that will do it. 2014 could be the year of a digital ad boom. how will companies capitalize on the trend? ofare joined by the ceo brand ads. great to have you with us on "market makers." what should we expect in 2014 when it comes to video ads?

>> thank you for having me. with regard to video ads, it is the most effective medium for advertising. it will come over to connected devices. what we will see is a move toward a shorter form of video, bite-size video advertising and content for the social mobile platforms. >> music to my ears -- we will ads?ave to watch 32nd >> it depends on the environment. premium one-minute television advertisements, but vine and instagram have established a six-second bite of content the consumer wants to zip through and that will be a new standard. , help me out.

i do not sit through commercials. research says 80% of users would find these video ads intrusive. how will this be a success? >> it is a good question. ultimately, the consumer is trading their attention, their time for free products like facebook, twitter, or broadcast television content. the trade-off will make sense once you see the ads as more engaging. there is technical and creative experimentation with regard to what goes viral, to what people want to watch. branstad tapped into what consumers like -- funny content, emotionally-moving content, entertaining content, that will strike a chord and not be considered annoying, but more engaging. >> what does it cost to produce vine?second ad for

>> it is an interesting question, and one where there is an enormous spectrum. agencies willive charge an arm and a leg and produce great content, but there are interesting platforms popping up out of hollywood where you have this crowd- sourced creative execution or video production. i think it varies tremendously. you could have a $10,000 video or 250,000$100,000 dollars video spot. it varies on the platform. the case --ecoming advertisers are relying less on traditional sources of advertising content -- moving more toward these little, disruptive, more innovative spinoffs out of hollywood because the user experience is so fleeting and maybe this ad does not need to be that

permanent and require the same kind of investment? >> sure. i think that is a trend, not only in regard to the content creation and the actual video, what in the context of the pipes that create the efficiency. software is ultimately disrupting deficiencies, and as a result, the market will receive a much greater return on the investment and real-time feedback on the data that informs those decisions. >> how quickly do they make the money back because a lot of platforms will be offering these video ads. what does that do for pricing? how quickly do you make the money back on those ads >> the money depends on the particular advertising. schools -- direct response, and then more traditional brand advertising, those that have been advertising for decades. they are moving toward the

formats like social mobile environments with bite-size pieces of content, and also on personal computers with longer form content and video ads. you see a quick return on investment, oftentimes when it is a smaller investment or if there is a call to response -- the consumer can click or consume right there and then on the internet. if you are selling a beverage, snack, or an automobile, it is a different dataset, and that will become available to marketers. we hope with that data. >> what are the likes of twitter and facebook doing to get people to actually watch the ads? scrolle a promoted tweet by, nothing about it makes me want to watch that. what will they do that makes me do that? >> sure. first, you make a great point. a promoted tweet or sponsored

story -- because these are native units, they feel and look , oftentimes consumers are engaging because it really is the type of content they are interested in. the huge win, the big opportunity for the marketer is to find execution in partnership with these unique publishers and environments that face the ads to resonate and engage the audience, so that it is not ignored is the type of ad you want to see now, but the kind of content you would care about and share with your friends. >> we will leave it there. thebrown, talking about trends to watch in 2014. >> when we come back, we will be talking about legal marijuana in colorado. pot,an line up, by generate tax revenue for the cities, the state and we will

find out how much is at stake when we come back. this is "market makers." ♪

>> for the first time in 44 years warren buffett will miss his self-imposed target of increasing network of berkshire hathaway at a faster rate than the s&p 500. he said the continued rally would have berkshire falling short of the goal. up 29%, 32% if you include dividends, bringing the five-year return to 128%. network per share was increased by 80%, not too shabby, but it will be hard to

close the gap in one quarter. >> it is hard to ignore his long-running track record if you go back decades, and he was hurt by ipm -- ibm. >> he is also his own victim in the sense that he set the target -- >> it is a high bar. >> and also, it is apples versus oranges. there is underlying profit to s&p 500 companies, and then there is the multiple expansion. if you wanted to increase at the same rate as prophets, that could've have been closer to the mark, but investors became much more bullish on stocks. % was multiple expansion not actual improvement. >> like i said, hard to improve the track record. we will be talking about what is going on in colorado -- legal to buy marijuana for the first time. we will talk about that.

>> yesterday was a big day for colorado and it could be a big year. pot tourists. we will be talking about obama core -- obamacare. 2.1 million people have signed up. ♪

>> from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. eyes and cameras were on colorado yesterday when shops opened in denver to sell recreational marijuana legally to anyone 21 and older. they project $600 million in sales. where will all of the money go? matt miller is joining us. who are the winners of this green rush? >> besides those getting high? >> decides that. >> really, the schools and the people in the towns getting the

tax revenue. one of the small towns outside of denver that has more shops than any other, the mayor said he does not have any potholes because all of his streets have been repaid with the tax money they have gotten. >> from pot. >> from pot. conservative estimates are for $600 million in sales, and $67 million in taxes, but other estimates have $100 million in tax revenue and almost $1 billion nationwide in additional pot revenue. 2.43 billion.ting it is legal in many states for medicinal or process, and legal butnot only in colorado, washington state will be selling it for recreational purposes. you can legally buy this plant and use it however you like as long as you do it in your own home. it will be a boom to people that

need jobs as well, at least the jobs you would get working in these shops. 6000 people are employed in the state of colorado alone working at these shops, a with the money collected in taxes they will hire another 300 people for schools, and all of the people that are working on the farms because colorado can only sell pot grown in colorado. >> there is a difference between the amount a colorado resident can buy and somebody from out of state. >> a person that lives in colorado can buy one ounce at a time. out-of-state, one quarter ounce at a time. supply and demand will fluctuate. it will have flooded into colorado to buy weed because they do not need a medical license. that prices have started to go up. the first guy that bought legal recreational weed was a u.s. four $40. bought 18

it is like everybody, selling for $30 to $50, but now the prices will go up. somebody bought one quarter $430 yesterday, which is expensive. >> it sounds expensive. >> thank you, matt miller. a city representative from denver. mary beth, thank you for joining us. >> my pleasure. how much taxvely, revenue might legal marijuana generate for the city of denver in 2014? >> we expect about 3.4 million in the first fiscal year, and in the second year maybe 7.5, $7.6 million. >> what will city council do with the money? that will predominately use it for enforcement of regulations,

and education program to help kids and parents understand what the effects are, and also to give people information about what they can and cannot do. education and enforcement primarily is what we will first spend it on, and then it will be in our general fund. >> it is important to note that all of the taxes collected on marijuana sales in colorado, 85% will go to the state, and 15% will go to local government. >> that is interesting, mary beth susman. talk about the costs involved in legalizing marijuana -- what does it cost for your city? >> we have not judged it yet. we do not know exactly what the enforcement is going to require. i expect the enforcement will be less because it is legal. predominant enforcement will be keeping people from using it

publicly, and there are certain areas in the city that you cannot display it. you cannot put a joint behind your year, for example in the parks or downtown. talking with the police chief at one time, he also expected that perhaps the enforcement will go down because it is legal. it is one of the things that was the intention of legalizing it. >> mary beth, did you really do your masters thesis on marijuana? >> i sure did, in 1972, and that is why i feel like i am in "the twilight zone." little did i know that 40 years later i would be regulating it. i studied what the social and psychological effects were on people that were stoned. >> and your own, personal experience? >> i was only theoretically interested in it. i had been a nebraska girl, i never heard of marijuana until i came to the big city. -- it is legal,

let's use you as a case object -- any resident can legally buy a quarter of an ounce. >> over 21. , areer 21, which you are you going to try it? >> i do not think i should avail myself of the new law. i do not think it should be -- it would be seemly of a councilperson to imbibe. >> it is interesting, it is although i do not know about you personally, a council member would have no problem treating a glass of wine were having a beer , and arguably, those are more harmful to your health than a similar amount of ingestion, no? >> you know, the sigma is still stigma is still there because there has been this war on drugs, so to speak.

it has the stigma to it more than alcohol, but, yes, it appears in the research that to some extent it is less harmful than alcohol or cigarettes. there has not been a lot of research on it since 1944, so you could find research that will validate any point of view that you have about marijuana. beth, colorado is doing it. washington state, and possibly more to come. what does it do for competition and tax revenue down the road for your city? >> it is hard to tell. i understand there are some 20 states considering legalizing it, and i would not mind if it became ho-hum. it is legal here in colorado, but legal everywhere. i think to deemphasize it will help people worried about kids taking it.

it is hard to rebel against something your parents can do. potsually, adults smoking are getting it from kids, and now you have to stop it from happening the other way around. >> that is exactly right. that is good. i hope it becomes ho-hum. >> are you excited in the interim a about the prospect of tourists, people arriving at denver international airport specifically to avail themselves of provisions of the ? law? the new >> i am not excited that we would have the moniker -- come to colorado to smoke pot. there are a lot of reasons to come to colorado. you cannot carry it in dia or have it on your possession. i hope people come to colorado for all of the other wonderful things colorado provides, and --

it cannot beonest, a bad thing. >> people go to napa to drink wine out why wouldn't they go to colorado to smoke what you grow their? >> i am sure they will. people will come here exactly for that reason, and in a way it will fill hotel rooms and other things, but i would prefer not to actually have that title of the pot capital of the u.s. right now. >> but you are. do you see colorado, denver, boulder, as been living, breathing experiment in legal marijuana? >> i think so. we have been very careful to understand how we are going to regulate this because we want to decriminalize it. it does not make sense to put people in jail for this. how do you make something illegal? it is like prohibition.

we looked a lot at prohibition and what they did to legalize alcohol. you can't take the criminal element out of it -- you can take the criminal element out of it, heaping people out of jail. we were careful to see, and it is experimental. we are not sure we have it all box like we need to. >> what you think you have missed? >> for example, we have not limited how many pot shops there can be. you can only own one liquor license for a liquor store in our state. we do not have that regulation on marijuana. growve required that you tot you sell -- that feed sell thing. you cannot do that in the rest of the united states. you cannot own the means of production and distribution. those are called monopolies. here in colorado, we have made a

rule about that. we will see how that works, the monopoly is there when you have to grow what you sell. we do not know how much you can buy in a day. you are out, you can buy a quarter ounce, and somebody jokingly said if you are to smuggle it, you would need a pound, and that would mean you timeso go to the store 64 , which kind of made me laugh. although you cannot have more than one ounce in your possession at any time. we do not have that role -- how many times can you go into the store? >> we will all be closely watching the real-life experiment in colorado. thank you for joining us, denver councilwoman, mary beth susman. >> are enough young and healthy people signing up for obama care? we look at the numbers coming up next on "market makers." ♪

yes, indeed, obamacare is here. as of yesterday, more than 2 million americans have health insurance they bought at healthcare.gov, so the big question is not how many, but who are they. an analyst from bloomberg government -- why is that such an important question to answer? >> first of all, we want to make sure that obamacare is actually doing its job, so it is important to know who are these 2.1 million people that have signed up. are they people like contractors, small business people renewing contracts, or are they new enrollees? remember, the goal of the affordable care act is to reach the uninsurable and insure them. of they, the success program depends on a large number of people signing up. that is what will make insurers

participate, and it is also important that healthy people sign up to offset the costs. these numbers will need to be teased out. >> do we know at this point, have any clue, how many of the 2.1 previously had no medical insurance? the first two at months of data, and our health analysts did just that, looking at the first table you will months. that caveat this. the october and november numbers are far less than what we saw in december, however it looks like in the first month, october, a lot of affluent households were signing up. in the first two months, only forof enrollees asked subsidies. the cbo had projected 80%. that signaled that these are affluentnt -- households signing up, at least --tially, which goes to be a

goes to the idea that these are insurable's. badt is not necessarily a thing if affluent households are signing up because they will have to shoulder the cost, right? >> sure. that is a good point. here is where the metal hits the road here in january. the law is clear on this. in order to be covered, you have to pay the first months premium. that starts today. we do not know how many of these 2.1 million people are going to write the check. that will be a clear sign of whether this is a viable program. there are all lying months, but for january, you have to pay the whole month, or you do not get covered. >> nela richardson, you talk about numbers. 7 million are expected to be signed up by march.

do you think that will happen based on the trends we have seen ? >> not according to our analysts and several of the wall street analysts as well. people think more between 4 million and 5 million people will sign up, partially because of the botched rollout in october, and somewhat because of the republican opposition in the distrust of the program altogether, but altogether it looks like the numbers will be far short of the 7 million that were anticipated. >> it is all in the numbers. thank you, nela richardson, senior economist at bloomberg government. we'll take a break, everybody. "market makers" coming right back. ♪

>> that is going to do it for "market makers," today, the first working day of the new year. >> tomorrow we will talk about cars a lot. >> we are, and it might be you's and me if stephanie's airplane

-- it might be you and me if stephanie's airplane does not take off out of miami. speaking with the head of mercedes-benz usa. >> a lot of technology in those cars. amazing. we will talk to an analyst bullish on coinstar. ♪

the hour, which

means bloomberg television is on the markets, and it is time for today's business insight. outrnior strategist expects to break out. jarrod leavy, talk about this call. >> it is an interesting stock. i wish they would have picked a better name than outer wall. it does not speak to what they do, but they left it ambiguous to get the company is reinvesting it -- reinventing itself. is not like there is this fear that dvd and cds and blue rays will go away tomorrow. i think people already know that is going away, and that has been factored into the stock. it is trading at 13 times earnings, and across, analysts are doing nothing but raising

estimates ahead of this report. basedng an earnings- trading service, it makes sense to me that this stock is likely to beat, which will propel it above the $70-mark. i am looking at buying the $60 call, selling the $70 call, using the february expiration, paying $5.50 to do that, you can make $4.50 on the trade or about 80% return on your money. in this situation, that is viable and a fair risk given outer wall's reputation. >> it is really, jared levy, a call at of earnings, correct? >> is. it is a fundamental call, but there is a technical aspect as well. there is strong support at $65, which is right around break even, and there are some tops around the 60 eight dollars level. .- $68 level

i think we see the breakout and people will come to the realization that in the near term outerwall is not going anywhere. two years from now, it might change, but for now, the stock remains strong. >> i go back to september. we saw a dip in the share price. it is not one for the weak stomach, is it? >> it is not. that is why i chose a spread like this. you reduce your risk down to five dollars. that is fair. they had a recent injunction from a huge hedge fund to the tune of a 13.5% stake. normally, funds to not take that stay, stay have high believe in the company and i also do not believe we will see the volatility necessarily that we had seen late last year, at least until the earnings report. >> you talk about your maximum profit, more than four dollars, what about the maximum risk? what the maximum risk is the $5.50 that you pay, which is,

sort of, fair. what i would do, if you decide to get into this trade, buying it for $5.50, place your limit aroundo sell right $5.50. i would be happy making two dollars or three dollars on a five dollar trade. that would be my way to play it. have you been watching the name closely for the last two weeks or the last few months? >> i just looking back at this name. a colleague of mine wrote it up last week as his bowl of the day and i found it intriguing. i have traded the stock before and i think the potential is there on the upside. that dvds and blue rays are going away. i do not think there is a negative surprise that is going to jump out and share -- scare the shares down to $30, $50 or something like that. >> i would be remiss to let you

go on the first trading day of the new year -- your take on the market environment we see, especially heading into earnings ? >> i think earnings season will be a good one. earnings estimates have actually come down for q4. i believe it will be a decent season. the first half of 2014 will be positive, last half, i am not sure about. >> jared levy, thank you. we are on the markets in 30 minutes. "lunch money" is coming up next right here on bloomberg. ♪

>> welcome to "lunch money." we tie together the best stories in business news. take a look at the menu. from worst to first. 2013 was a huge year for netflix. 2014 might not be as big of a hit. competition expanding beyond the yellow cap. -- cab. ote real economics behind p in colorado. baywatch.king about time to shed those pounds. a workout that is fit for a