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tv   Lunch Money  Bloomberg  January 3, 2014 12:00pm-1:01pm EST

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. . . >> welcome to "lunch money." motors hitting the brakes. carmakers slowed down in december. phone versus plastic. with chuck wins the -- which wins? crucial vote today over where it is going to make its next big jetty the 777. i hope you are you brought your new york apartment. professional bull riders are coming right here to new york city. first up in the snow and lots of it.
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plenty of subzero windchill. hundreds of canceled flights. theer storm smacking northeast. huge delays at chicago o'hare. almost two feet of snow fell in boston. western new york saw about a foot in the half of the white stuff. at this point, the store may be on its way out, but does that mean we are in the clear? i'd like to say it is moving away from whoever is impacted by it, but importantly, the storm is still impacting so many people because we are getting the rain, wind, and snow across much of the ease but bitterly cold wind chill. it is so cold it is -15 in some areas, -20 and others. you can see the went off to the coast. that in the blue. dangerous windchill will continue. >> brutal temperatures making it very hard for people who have to work outside. who is most at risk? in my book,bout it there are a lot of common injuries that happened during cold and snowy conditions.
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one of them is for men over 40 shoveling snow. we have a graphic to show you with some of the weather injuries that are common. typically, we see most of them occur in motor vehicle accidents or being caught outside off guard. not all of them are while shoveling snow, but it does happen. >> men over 40 should just stay home. >> sorry, dear, i can't recommend -- shovel snow. >> just don't over exert yourself. has transferred into a counseling, stay-at-home segment. >> the nfl is threatening the local market blackout since those playoff games have not sold out. not helpingratures ticket sales. >> many of the games will be played and bitter cold. only a handful in the history of nfl have been played in below zero. you probably find it hard to
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believe. wereve outside games temperatures are going to be much colder. you can see some of them here. >> people are concerned we are going to have the coldest ever. >> a big trouble weaken as people return or attempt to return home after traveling over the holidays. we are likely going to see ripple effects from the delays that can last well into the weekend. we spoke with the chief operating officer at jetblue and asking him about the impact of the storm. >> this is very much a return ofvel period for a lot vacation travel, so i think we will get people home, it will just take a little while longer meaning a couple of days longer, but we will definitely get them home. it usually takes us about a week to roll up the information. it is good to be with you guys. >> tell us that what point did
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jetblue make the decision that it was a better course of action to cancel flights and a run the risk of extended delays that could cost the company money and also, clearly, damage its relationship with customers? >> great question. we made our decision wednesday night to take the operation down roughly about 7:00 in the evening last night in the northeast, and that ranges all the way from portland, maine to the greater new york area. but we will see more cancellations today because even here in new york, we weren't expecting jfk airport to be closed as long as it was this morning. we are expecting it to open in the next hour or so. we willas it does, begin limited operations but it will probably take us two days large.t an operation is we ask our customers to be as patient as they can. check jetblue.com as often as they can. we will eventually get everyone back to where they need to be. >> to you think jfk was overly cautious? >> no, i think they had a
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tremendous amount of wind happening in the airport field and with snow this light and the amount they got, i think like 10.5 inches, they have a really hard time seeing visibility-wise for the snow removal equipment to get out there. >> meanwhile, how bad are the temperatures? >> you might think, how cold is -20 or -30? the current windchill, looking at the average service to mature of mars, that is -67. the lowest temperature ever recorded on earth, -130 5.8. the coldest we could ever imagine you can see here. wants tody else who put this cold into context, a resident canadian erik schatzker is more than just a little lot say on this. >> it was colder in winnipeg than it was on the surface of mars. this morning i was thinking, how cold is it in northern ontario?
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-- here we are, >> the booming metropolis. how many people live there? >> look come it is inhabited by humanity and it is -40. 15, you you get past - get into the real danger zone. >> i can guarantee you the folks are not prancing around naked in the snow. >> they know better. >> i get it. it is not as cold as canada, but still pretty darn cold for new york. "surveillance" team to notice of some of these people in the cold and try to help a driver who had his camaro with no snow tires on the streets of manhattan. >> there is a snow outside world headquarters. age goingmaro nowhere. >> the storm of the century for the guy in the yellow camaro.
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we have been monitoring this all morning. it is still there. thes catch up with "surveillance" camaro. camaro on 3rd avenue in the middle of the storm and expects to get it out in the morning? come on. >> that is the celebration. >> the camaro has not moved. there is tom in his yellow camaro who has been out there since 3:00 a.m. on 3rd avenue and 57th street. he tried to get assistance from a tow truck and they still can't move the beast. >> in fact, they put it in the middle of the road. >> salt trick on the back tires. does that work?
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>> no. "surveillance close quote coverage of tom in the yellow camaro. out earlyr crack team in the morning. the profanity has been deleted. this is on 57th street and 3rd avenue. full disclosure, after " bloomberg surveillance" our entire tv crew will exit out into the street, all of them will get behind the camaro and push that puppy to freedom. >> good morning. ♪
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>> they did it. all of this bad weather, bad for car sales. we will add up the december slowdown, next. the end of the year was actually very different for the manhattan real estate. ♪
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this is "lunch money." on bloomberg television. we are also streaming live. auto sales day in december was a disappointing month for the automakers. chrysler, sales were up but felt short of the estimates. italian chrysler has logged sales gains for 45 months in a row. of chrysler. 100% ford missed the december sales estimates as u.s.-like vehicle sales rose just 1.7% compared to
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forecast of 4.3%. worst of all, gm reporting december u.s. like vehicle sales down 6.3%. what about toyota? >> really disappointing across the board and not just for detroit, but toyota as well. both general motors and toyota saw the clients. their sales fell month over month. >> we haven't seen that for a while. >> we haven't seen a prolonged a long time. you know what they're siding -- citing, cold weather. ford missed the estimate. chrysler missed the estimate. gm and toyota as well. there are still superlatives for these carmakers. they're having record months for certain models. ford had a record month for the fusion. the best selling month for the fusion of all time. general motors had a record month for the corvette cover the
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best month for the corvette since 2006. corvette, the the jim doing quite well. they did not miss by little, they missed by a lot. a drop of more than 6%. we were looking for a gain of 1.5%. the biggest miss of all four so far. >> in contrast to the u.s. automakers. >> german car sales rose for the month of december. anyone who follows the auto is in thenows europe biggest lump it has been in in two decades. so when german car sales rise and here in the u.s. where we have a very healthy and strong auto sells market, we see a drop -- daimlerchrysler? >> ford and gm keep their prices
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above the industry average. chrysler right at the industry average. if you take a look at a graph of what gm has done with its prices as opposed to what dime x chrysler has done, they go in opposite directions. here you see gm and yellow, prices climbing, climbing, climbing. and i'm mark, the big luxury maker of mercedes, lowering significantly. >> and they also brought out cheaper models. >> they're really getting that entry-level luxury market. thean carmakers across board are lowering their prices. copies are raising prices. maybe that will have to change because were looking at so much inventory on the lot's of u.s. carmakers right now. seasonably, it is a slow time. you don't go out and buy a car in january because it is cold outside. maybe we will see a reversal. maybe we will see these companies have to come back on
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their prices, although, they definitely don't want to. >> land rover also having a tough day. some of the 2013-2014 vehicles are being recalled due to potentially faulty side airbags. i have a 2004 and i don't think i have airbags on the site. there are a ton of options. the sedan comes in five different sizes. why so many models? sam grobart looks at why luxury cars are multiplying. >> with the release of its new sedan, mercedes-benz now sells them about my count, 13 different cars here in the u.s. everything from the entry luxury four-door at $30,000 all the way up to the $215,000 cl65 amg coup.
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audi and bmw have been going at it like rabbits, too. why do automakers need to send -- sell 10 when truer for used to be fine? there is much more competition in the 1980's. accurate,s, infiniti, -- acura. you have to find as many new customers as you can with that competition meaning cutting up the competition into thinner slices, which now you can do given the massive amounts of data that automakers have to analyze the market and identify new subgroups of consumers. and thanks again to technology, now it is easier than ever for carmaker to spin off different models using the same set of parts. things like the chassis, engines, and other components can be shared switch model does require you to start from scratch. it changes the map carmakers use. if in the olden days you had to sell 100,000 cars of a given model to break even, now you can
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sell three different models at 30,000 cars each. pitfalls.here art sometimes a carmaker think there's a new market for a car when there really isn't. several automakers have some very curious offerings of late as well. it are some clever things you can do with platforms, but it doesn't always mean you should. >> from cars to planes, the next big thing in long-haul jets faces a very big test today and boeing is putting it to a vote. les, a target bull's-eye. circling the wagon over the data breach. we have two voices who say worry not about your own digital security. russian president vladimir putin is not afraid of the snow. he hit the slopes in sochi where the winter olympics begin in just a few weeks. ismade a few runs so sochi safe following those two deadly bombings earlier this week.
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all right, give it your best. ♪
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and shops, send in the category. target faces at least 40 lawsuits related to their breach of 40 million credit cards and debit cards. lawyers behind the suit seeking class-action status. it was only a matter of time. seriously, how big of a deal is this? >> putting data out there, but so what? it is very well protected.
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it is not a big deal. i have a target card and i shop there and my count has not been compromised. the card companies and the bangs cover that if it is. it is not that big of a deal. >> that was a cofounder of square which makes that white square box that plugs in a smartphones of people can pay with their credit card and not stand in line. he thinks this is no big deal. if that doesn't sit well with you, how about a second opinion? >> everyone should be worried, but the good news is that the security situation, despite the headlines -- >> despite target and all that -- >> the security on the web and on her mobile phone is getting nothing but better. ofthat was the former ceo paypal. you knows his stuff when it comes to paying electronically or even by plastic. the future is a digital wallet, but is plastic going anywhere? >> plastic is not gone. plastic will be with us for a long time. however, the thing we need to do and everybody wants is the ability to do what you do with plastic, but just by holding
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your phone. >> ok, hold my phone and it is like my big bank debit card or credit card. >> why should you have to swipe a piece of plastic? the phone has higher security. >> you got my attention with that because i've been one of the people victimized by that. what is the pushback on this? these and mastercard, are they behind the digital wallet? >> not really because it threatens their hedge money. the people who are really going to drive the digital wallet are the people who have the customer relationships already. so it is going to be apple, google, amazon. >> i go to stores and i'm checking out on the floor, apple is doing that, and i assume we're doing that in 2014, what is the new new to look for in the digital and what i do with my wallet? >> is not here yet and i'm not sure we will hear it -- see by the end of the year, but
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probably speaking, the ability for your phone to connect to the point of sale machine right on the storefront. the ability to say, rather than reaching for the plastic thomas boom, here's the phone and that is all you need. >> what did you learn over the holiday season with the incredible rush with plastic. department stores were up 89% in their online sites. how does traditional brick-and- mortar, do they need my digital wallet if there is going to be no traditional brick-and-mortar? >> there will be traditional brick-and-mortar for a long time. still, electronic commerce, although growing like crazy, still tiny compared to physical commerce. but if you look at the trends, physical retail, flat to down. 40% over thece, up last year. mobile commerce, up 100%. >> more from bill harris and square cofounder on bloomberg.com/tv or go to our tablet app.
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coming up, a big day for boeing and washington state commerce. iris, a credit downgrade for the whole state. les, the rodeo coming to manhattan. that is later in sports. ♪ >> bloomberg tv is on the markets. i'm julie hyman. let's get you caught up on where stocks are trading. back and forth between gains and losses. not much movement overall. the nasdaq down the most. the biggest drop in three weeks yesterday. we want to highlight to a divisional stocks. computer security firm and a company known for its linking
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cyber attacks on u.s. company to the chinese military. mosts are searching the since its ipo invest -- late september. more on the markets in 30 minutes. ♪
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>> this is lunch money on bloomberg television live on bbg television and streaming on your phone, tablet, and at bloomberg.com. pictures nowhere the video is the story. things just got a little work obligated for the stranded passengers and crew in antarctica. the chinese icebreaker whose helicopter airlifted several strata passengers is now itself stranded. a heat wave is breaking records in australia. 45-41 victory for
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oklahoma in the sugar bowl. meanwhile, it is a big day for boeing. machinists and the state of washington. today unions are going to vote for a third time on the dutch on whether or not to approve a contract to begin production next year on the seven heavens seven wide-body jet -- 777 wide- body jet. no, boeing will move production to another state, and washington itself has downgraded the credit rating so much but that is what is at stake here. at a verylooking strong backlog for the company and the industry, and boeing has already moved back over to the east coast.
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think they are clearly trying a legacywhat has been of benefits in regards to pension. i think if they are successful with this, i do not think it is a major chain, adam miller has already done this with a lot of their workforce -- >> so the 777 takes all the technology and fuel efficiency of the 787 dreamliner and makes it eager. so boeing already has over 300 orders on the books, some of the biggest buyers so far. here's boeing's chief at the dubai on a show in november. this was a very big show for boeing. is thena response overwhelming. we have secured lunch commitments for 259 airplanes for four of the world most highly respected heil -- airlines, representing the middle east and europe.
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the value of the commitments is almost $100 billion at this rice, making it among -- the nch int product lau airliner history. from the air to the ground. we're going to tell you about monster quarters happening. and also, the bull riding craze. across the pond in the u.k., they are dealing with very severe flood warnings. the department for environment food and rural affairs says they are spending over $3 million trying to tackle the flooding and coastal erosion. ♪
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>> in nation we're talking about a record finished in 2013 for manhattan real estate. sales of condos had collapsed earlier toe year about $3300. in 14ory is the lowest years, that means the market for manhattan was very tight. >> inventory right now is at the lowest level and has been in -- since we have been tracking in 2000. >> will you build more units because of that? >> it is targeted at the luxury segment. the top 10% of the market of a one-bedroom for 2.8 million dollars. it is not going to address the other 90% of the market -- >> i have to rip up the script. what is the taxes, the annual
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taxes on a $2.8 million property? >> $100,000. >> $100 -- $100,000 in taxes? so what about the rest of the entire country? >> it will take six months for lenders to kind of figure it out. they are incentivized to go queue and because it shelters there exposure to risk. they want to make sure that the consumer is qualified to get that mortgage, and then they are insulated somewhat from litigation down the road. >> will we see it in the data, the numbers? >> what we're going to see is a leveling off of sales activity compounded with the fact that interest rates are going to write a little bit carried -- a little bit -- on prices. chart let's look at the existing
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median home chart. there does. a nice pop, and little bit of reset of the beginning. what over the extent once -- about the next 10 months? >> we're going to continue to see what is going to probably be half the rate of what we saw do thousand 13 for the simple , you'rehat case-shiller talking nine percent to 30% depending on the records -- the metrics. nothing like the income rising rates, the unemployment, and tight credit support that support that price growth. see 2506 is a once-in- a-lifetime anomaly? thinkthe pros like you that we will someday return to that effervescence? >> what was different in 2005 in 2006 is that that credit was the polar opposite to back then, if
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you had a polls are could fog a mirror you can get financing. today lenders are not in the business of lending unless they are kicking and screaming. it is very different condition, and that is somewhat of a reality check that keeps us from flowing into a bubble. i have to tell you that when rates spiked at the end of the spring, i was relieved because we were really -- i was concerned that the price growth, we were heading in that direction of a little too much brought. etiquette exhibit of the edge off of it. when we look at housing to buy want to see a sustained. of growth -- i want to see a sustained length of growth, not a short one like 2013. >> we will have really a the 2014 where rates will spike up and take the pressure off the market? >> who knows. i do not see interest rates
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biking, but i see that as the economy improves a slow gradual rise in rates, which reduces affordability today, the edge off of the market. graduallyhey increase, but at the end of the day, it is still really historically low. what is going on here, wired that's why are people not pulling the trigger? >> there's been a slowdown recently, but i think it is because we had a surplus of activity, and on natural amount of activity caused by spike in race where pepys -- in rates were people rushed in to take advantage of it. we have really exhausted that, and we're getting back to where we would have been if we had not had that burst. --hink 2014 is going to be we're going to see improvement in housing, but nothing like -- >> boring. >> may be shopping for a home is a little bit boring for you.
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guess what, we have you covered. there is a new software that can actually make it happen. you can design your own go it is called the do-it-yourself home. ♪ i am mark. -- marc. home by me,ducing you can customize your house to perfectly fit majority have, but or builder house for furniture you're going to have. right now you have another problem that helps you get to -- a template to get a sense of space. you'll be able to to add
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additional avatars in the future, then you can really give life to your project. you have solutions that exist where you can find inspiration, or solutions where you can put objects in a room of or solutions that do many other things. we do not have a platform we can design your own house, you do not go to see an expert at yourself you can join -- you can do it your self. >> you need to come to new york. we have the professional bull riders in town. that is coming up next. ♪
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>> this is lunch money on bloomberg television. i'm adam johnson. it is a touchdown for the national football league, at least when it comes to the ratings. jump in ratings. it is like six -- up six percent since last year. cbs is up more than four percent of last season. the new york giants and not fare as well this weekend, but that does not matter because we have the professional bull riding championships coming to down. in foxborough with a 2013 world champion and the professional bull riders chairman and ceo about the effect of the winter
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storm on this event. >> the logistics to get one of these events set up in the there are always challenges that we are to prepare for. fortunately we have our stock injectors that have or animal athletes here early, so we would be able to get this thing picked up friday night at madison square garden. >> animal athletes? because weortunate, do have the best writers in the world, and you have -- riders in the world, but we also have great animal athletes. they get as much recognition as our writers do -- riders do. was the best one we had. $.5 million in his
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career, and made ads. he was quite the rock star. >> how did you get into this? >> my dad did radio, i rode horses, large undershoot. shoot.ned how to i learned all of this in my home in north carolina. >> did you always want to do this? >> yes. i wanted to be a world champion bullrider. >> what is it like to go up against some of these animals? >> he knows his job, he walks in the, doesn't move around when you gentlemen issued when you're getting on him -- gentle in teh chute when you get on and dated i've been on him more than everybody else. offs and aboutuck
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11 of them are made. >> last year we celebrated our 20th year. it started with 20 cowboys that wrote a thousand dollar check to start a sports property that has grown not only in the united states but also globally. we are in fiber countries. we have are built ford tough start here in madison square garden and go all the way across the united states and at&t stadium to anaheim, to up in washington, ending las vegas for world fighters in october. we drove all around the united states to a lot of major cities. in a chance to get a lot of exposure for our animal athletes and also our athletes and actually right of the bulls as well. well.e the bull's as >> is their business for those who got the rightful -- the
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right bull? like a thoroughbred business. we have major celebrities that involved. jared allen, wayne gretzky, they all own one. >> what is the cost? about average bull is $35,000 to $50,000, but the world champion bull goodby $.5 million to $1 million. three toverage between seven years old. they start slowing down a little bit as they get older. retire -- dong to they go into retirement? >> if they are like bushwhacker, yes. any sort ofve training to prepare yourself for the injuries you might get, how ,uch, clothing -- helmet
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special clothing? is likeear a vest that a r bullet-proof vest -- kevlar bullet-proof vest. >> is there any buck you have it out for? --there was, bush walker bushwhacker. i wanted to rip it to myself. them allbring around to meet. -- yto me. >> from braun to brains. our mystery me today, i nine- year-old white from china -- sold a room as cube in less than 12 seconds. ♪
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>> is 56 past the hour, that means that move that bloomberg is on the markets. listing a look at where stocks are trading today, after dropping a little bit yesterday, they are up just a little.
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falling.q is aid, sales rose two point -- rose over a year ago. more downgrades for the phone company today, s&p e now getting it to sell. an uphillay will be battle for any sprint deals. for retailers and opportunities for others. for a look at the winners and us from -- and us from philadelphia. i wanted a pure geography, because this is interesting to be. when you look at the retailers with the highest concentration
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of stores in the affected area, what did you find about what are some of the retailers that spec uck out?hat stock >> those that have the largest portion of their storm -- stores effect by the storm, they have about two thirds of their base covered by the storm. you could be a winner or loser depending on the type of product you are selling. >> are they closing their doors in any cases, or is it just that people do not want to leave their house? >> at this point it is these baits -- need-based purchasing, so those who are running convenience stores or home supply centers are doing really well. but nobody is held that heading out to the balls to do discretionary shopping when they cannot get out on the roadway and you're stuck digging out. lows, and home depot, are people going out and
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buying sold and the other things they need to cope with the weather? >> they went out and middle printers and advances of the -- made those purchases in advance of the storm, and you may see an impact on the heels of the storm because we have only been 10 days into winter. there's still a lot of winter left to go. effectsf the other you're looking at is the gift card effect. asy people got gift cards presents, and the stores do not recognize that as revenue until it is used. the getting is that you could use it online. >> that is right, about $30 billion. that is a liability for retailers until it is redeemed. not only the snow, but this cold weather, we will get really cold over the next few weeks of attila the major markets in the northwest and northeast, it is
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great for businesses that have boots, jackets, scarves, gloves, because the retail calendar actually shifts to spring in about 30 days. >> they had better take advantage of the cold weather. clear out that cold weather inventory. thank you for joining us to document the weather affect on business. we will be on the market again in 30 minutes. "bloomberg west," is next. ♪
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in san from pier 3 francisco, welcome to the early edition of "bloomberg west." and emily chang. our focus is on innovation, technology, and the future of business. snap chat issues an apology after hackers issued policies information on accounts. is promising an update area some of the biggest nfl games are this weekend. ogle fans may not to see them. we look into how tech is turning the experience upside down. and did the holidays save microsoft's tablets?

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