>> welcome to "lunch money." i am adam johnson. motors hitting the brakes. carmakers slowed down in december. phone versus plastic. which wins the security test? boeing -- crucial vote today over where it is going to make its next big jetty the 777. i hope you already brought your new york apartment.

professional bull riders are coming right here to new york city. first up, the snow and lots of it. plenty of subzero windchill. hundreds of canceled flights. winter storm smacking the 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 at this point, more 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 wind 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? >> i wrote about it in my book, there are a lot of common injuries that happened during cold and snowy conditions. 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. >> this has transferred into a counseling, stay-at-home segment. phil?re is dr. >> the nfl is threatening the local market blackout since those playoff games have not sold out. arctic temperatures not helping ticket sales. >> many of the games will be played in bitter cold. only a handful in the history of nfl have been played in below zero. you probably find it hard to

believe. we have outside games where 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. -- super bowl ever. >> a big travel weekend 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 travel period for a lot of 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 jetblue make the decision that it was a better course of action

to cancel flights then 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. as soon as it does, we will begin limited operations but it will probably take us two days to reset an operation is large. 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. >> do you think jfk was overly cautious? >> no, i think they had a

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 surface temperature of mars, that is -67. the lowest temperature ever recorded on earth, -135.8. the coldest we could ever imagine you can see here. >> somebody else who wants to 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? and here we are -- >> the booming metropolis. how many people live there? >> look, it is inhabited by humanity and it is -40. >> once you get past -15, you 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 took 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 snow outside world headquarters. >> that camaro ain't going nowhere. >> the storm of the century for

the guy in the yellow camaro. we have been monitoring this all morning. it is still there. let's catch up with the "surveillance" camaro. we got some movement. >> who parks a 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? >> no.

>> continuing "surveillance" coverage of tom in the yellow camaro. part of our crack team out early in the morning. the profanity has been deleted. this is on 57th street and 3rd 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. ♪

>> 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. condo boom. that is later. ♪

>> 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. fiat now owns 100% of chrysler. ford missed the december sales estimates as u.s.-like vehicle sales rose just 1.7% compared to forecast of 4.3%.

worst of all, gm reporting december u.s. light 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 declines. 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, the best month for the corvette since 2006. not a car, but the corvette, the gm 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 industry knows europe is in the biggest slump 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 sales market, we see a drop -- >> daimlerchrysler? >> ford and gm keep their prices 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 in yellow, prices climbing, climbing, climbing. and daimler, the big luxury maker of mercedes, lowering significantly. >> and they also brought out cheaper models. >> they're really getting that entry-level luxury market. german carmakers across the board are lowering their prices. u.s. companies are raising prices. maybe that will have to change because we're 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 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. if you have a mercedes -- 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. audi and bmw have been going at it like rabbits, too. why do automakers need to send

-- sell 10 when 3 or 4 used to be fine? there is much more competition in the 1980's. you have lexus, infiniti, accurate, -- 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 so each model does require you to start from scratch. it changes the math carmakers use. if in the olden days you had to sell 100,000 cars of a given model to break even, now you can sell three different models at 30,000 cars each.

now that there are pitfalls. 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. there 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. he made a few runs so sochi is safe following those two deadly bombings earlier this week. all right, give it your best. ♪

>> in shops, send in the calvary. target faces at least 40 lawsuits related to their breach of 40 million credit cards and debit cards. the throng of 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. 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 -- banks 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 your mobile phone is getting nothing but better. >> that was the former ceo of paypal. he 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 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? visa 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? >> it is not here yet and i'm not sure we will hear it -- see by the end of the year, but

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, 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. online commerce, up 40% over the last year. mobile commerce, up 100%. >> more from bill harris and square cofounder on bloomberg.com/tv or go to our tablet app. coming up, a big day for boeing and washington state commerce.

a credit downgrade for the whole state. the rodeo coming to manhattan. that is later in sports. ♪

>> this is "lunch money" on bloomberg television live on bbg television and streaming on your phone, tablet, and at bloomberg.com. today's moving pictures now where the video is the story. things just got a little work complicated for the stranded passengers and crew in antarctica. the chinese icebreaker whose hair -- helicopter airlifted several stranded passengers is now itself stranded. a heat wave is breaking records in australia.

in a big 45-31 victory for 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 whether or not to approve a contract to begin production next year on 777 wide-body jet. if they say 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. >> the union there is looking at a very strong backlog for the company and the industry, and boeing has already moved back over to the east coast.

i think they are clearly trying to reset what has been a legacy of benefits in regards to pension. i think if they are successful with this, i do not think it is a major change, 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 bigger. 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 auto show in november. this was a very big show for boeing. >> that a response is then overwhelming. we have secured lunch commitments for 259 airplanes for four of the world most highly respected airlines, representing the middle east and europe.

the value of the commitments is almost $100 billion at this price, making it among -- the largest product launch in airliner history. >> from the air to the ground. we're going to tell you about some 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. ♪

>> in nation, we're talking about a record finish in 2013 for manhattan real estate. sales of condos had collapsed 27% from the year earlier to about $3300. inventory is the lowest in 14 years, that means the market for manhattan was very tight. >> inventory right now is at the lowest level it has been -- 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 taxes on a $2.8 million property?

>> $100,000. >> $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 their 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 rise a little bit. >> here's a chart on prices. let's look at the existing median home chart.

that's a denver chart. 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 in 2013 for the simple reason that case-shiller, you're talking nine percent to 30% depending on the records -- the metrics. nothing like the income rising rates, the unemployment, and tight credit support that price growth. >> do you see 2005-2006 as a once-in-a-lifetime anomaly? or do the pros like you think 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 you had 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 froth. 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 2014 where rates will spike up and

take the pressure off the market? >> who knows. i do not see interest rates 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. >> maybe they gradually increase, but at the end of the day, it is still really historically low. what is going on here, 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, an unnatural 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. i think 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. guess what, we have you covered.

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right now you have a template to get a sense of space. you'll be able to to add 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 anything, you can join yourself 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. ♪

>> 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. a huge jump in ratings. it is up six percent since last year. afc games on cbs is up more than four percent of last season. the new york giants and jets did not fare as well this weekend, but that does not matter because we have the professional bull riding championships coming to town.

in foxborough with a 2013 world champion and the professional bull riders chairman and ceo about the effect of the winter 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? >> we are fortunate, because we 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 riders do. bushwhacker was the baddest body we had. he won about $.5 million in his

career, and made ads. he was quite the rock star. >> how did you get into this? >> my dad did rodeo, i rode horses, large undershoot. -- learned how to shoot. 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? >> bushwhacker knows his job, he walks in the, doesn't move around when you gentlemen issued when you're getting on him -- gentle in the chute when you get on and i've been on him more than everybody else. there are 52 buckoffs and about

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 5 different countries. we have our built ford tough series and we start here in madison square garden and go all the way across the united states and at&t stadium to anaheim, to tacoma, washington, ending up in 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. -- ride the bull's as well. >> is their business for those who got the rightful -- the right bull?

>> it is like a thoroughbred business. we have major celebrities that get involved. jared allen, wayne gretzky, they all own one. >> what is the cost? >> the average bull is about $35,000 to $50,000, but the world champion bull could be $.5 million to $1 million. >> they average between three to seven years old. they start slowing down a little bit as they get older. >> do they go into retirement? >> if they are like bushwhacker, yes. >> do you have any sort of training to prepare yourself for the injuries you might get, how much, clothing -- helmet, special clothing?

>> you wear a vest that is like a r bullet-proof vest -- kevlar bullet-proof vest. >> is there any buck you have it out for? >> there was, bushwhacker. i wanted to prove it to myself. now they bring around them all to meet. -- to me. >> from braun to brains. our mystery meat today, i nine- nine-year-old from china -- boys from china sold a room as cube in less than 12 seconds. ♪

done with you were me? gasol been. -- gets again. is :56 past the hour, that means that move that bloomberg is on the markets. a look at where stocks are trading today, after dropping a little bit yesterday, they are up just a little.

the u.s. treasury market. 2-year note. the day.changed on here we are it in the first couple of days of the year with a not too much happening. we saw many sectors and eagle without much happening. we are watching the bank index. a 2013.ed 35% in it's the best year since 1997. there are people questioning whether financials can continue to outperform. one analyst said it is a good place to keep your money. he made his case earlier this morning. take a look. >> one of the areas that was crushed the most will stop the p/e ratio for the group contracted the hardest. even though as you said, the group did well last year, there are balance sheet repair that has to be done with the big banks. the editor financials --

insurance, banking are churning out earnings. you will see a combination of growth as well as multiple expansion. takee asked him about his on the jobs picture at how that can influence the fed plan. >> unemployment is probably going to fall faster than what most people think. if you look at the recovery in and taperinghe fed and we will see some talk of rates going up this year as opposed to 2015. there's a good chance that promise. >> finally, they spoke about investing in bonds versus stocks. >> if the ten-year reaches 3.5%, the question is could pull people back into bonds? you probably need to get to 4% to reject that threshold. we have done a numbers study.

that knocks out a lot of people. >> and there you have it. for theon the markets hour. i am stephanie ruhle. ♪