>> jack lew checks in. u.s. treasury secretary wants more growth and more restructuring from europe. >> back in the u.s. is the coldest day in decades. millions of americans will wake up to record low temperatures and even more travel chaos. >> the world's largest smartphone may post its first drop in sales since 2011. >> good morning, everybody. you are watching "the pulse."

i'm guy johnson. >> and i'm francine lacqua. we will be talking about tech. we're taking you to the consumer willronics show where we show you an app that makes your home smarter. continues tovortex wreak havoc on the united states. chicago set a record with a temperature of minus 27 degrees celsius. >> that was colder than the south pole. the high in new york will struggle to reach a high of 18 degrees, creating chaos. itsetblue airways suspended operations overnight, contributing to the cancellations of thousands of flights. the weather is also testing america's energy capacity. grids have tried to bring more capacity online.

>> temperatures are life- threatening and can freeze the skin in a matter of minutes. moment, if you're in that region, stay indoors. >> talking of warm welcomes, the treasury secretary of the united states, jack lew, managed to avoid the travel delays by the u.s. weather. using harris today. he is meeting with the french resident francois hollande and his finance minister. >> are international correspondent joins us now with the very latest. what is lou here to tell europe? >> he's going to be the bad cop first for france and germany and in a good cop in portugal to reward them, to encourage them for continuing with their reform programs. francine, younce, see the french finance minister taking a defensive tone. he talks about all the

unprecedented attempts france's doing to encourage competitiveness. he talks about what you need to do in france in terms of getting the private sector to stimulate the economy. i am not certain that is going to comport with jack lew's view of the world. he wants more reforms for france and for germany he wants more spending. with hise meeting counterpart in germany in berlin. there will be a little bit of hectoring from lou and there the be some updates on what new coalition will do. how much spending and what is the minimum wage law going to do to spur growth? that some the day french workers have taken their management team hostage which is also going to make interesting headlines as well. the fact of the german retail sales numbers jumped today, euble willang scha be using to that jack lew today.

>> a good numbers out of germany will bolster their case that they are doing what they need to do to stimulate the economy. i suspect there will be a little bit of that. as will be a two-way conversation. the germans and french will be demanding from jack lew just what the u.s. will be doing on the debt ceiling. yellen was confirmed last night as the first female that president. it was a 56-26 vote here that still means there is a fair amount of discontent in the united states senate and you could have another fight on the debt ceiling in february. >> following that story throughout the morning, actually throughout the next few days. >> it'll be interesting to see what he has to say over the next few days. today anderences tomorrow. let's turn to tech, our big thing for the day. black berry is betting on

keyboards. chanceilcote has more on turnaround strategy. it seems so simple. let's just go back to the keyboard. >> blackbirds problems with the touchscreen are well documented. more than a billion dollars of excess inventory that they had to write off. we all know why we like the blackberry. to feelot the only ones that way. like barry is going back to its roots. have a listen. >> i personally love the keyboards and so you will look to blackberry going forward to keyboards. i would not use the word exclusively, but predominantly. simple going back. it is not. for example there is a company that produces something called the typo, a snap on keyboard for your iphone, for the iphone 5 that allowse 5s

you to have the best of both worlds. a physical keyboard very much like the blackberry's keyboard and the functionality you have in an iphone, which is one thing that blackberry is very concerned about food they're actually suing that company called typo products, backed by ryan seacrest from american idol. it gives you an example of how serious they are taking the reintroduction or reemphasis on the keyboard back at blackberry. >> just give us a sense. blackberryople use like it because of their little keyboard. they got rid of that to be cool and what they're thinking is innovating by putting the keyboard back but also with cool apps. , and i think there is another issue. the idea in itself as long as the phone becomes more useful and they're able to get the apps that don't exist for blackberry back. it all sounds like it could work, but there are problems.

people have been migrating to other smart phones, to androids and iphones. to targethey want corporations and governments. they are made up of employees who are consumers. for a good time now many employees had been telling the companies that want to bring in my own phone. what are you put the software and need for work on my phone. in yourlled byob, bring own device. this is a good idea to bring to bring backard, customers who have moved away from blackberry in the last year or two. >> maybe, we will see. ryan, thank you very much. ryan chilcote on the latest from blackberry. >> a disappointing quarter for samsung. the company posted its first decline in profits in recent years. caroline hyde has more on the story. hosted a drop in

nine quarters. >> more than two years profit, down eight percent of its sales come the slowest growth for nine quarters as well. a bit of a dismal quarter for samsung overall. they are getting squeezed in the middle. the other top and, apple introducing the new iphone 5s and 5c. they sold more than 9 million of those in september. samsung galaxy for has sold only 4 million in the whole quarter. remember, they signed a deal with china mobile, so there will .e competition the competition coming up in the first quarter as well. the cheaper manufacturers, the ikes of htc and whil -- and they're being squeezed in the middle of mobile phones. that 60% revenue for samsung,

also tvs not selling so well at the moment. the only area of growth is about ships for samsung. -- which is where it becomes interesting. >> take a look at the share price. where will all feasting for christmas festivities, many were selling of samsung shares in a big way. they lost $19 billion in market capitalization from december 24- january 3, about 10% in terms of share prices. have beennvestors worried about the competition, what this will do for profits in the fourth quarter. remember, the profit is down eight are sent. in large amount of that is because they have given a bonus to their own employees, they have given some $655 million to get them back on board, getting them innovating once again. blip,aybe this is just a but it is interesting the focus on innovation coming from the very top. early this week, the chairman said you have to

innovate and move beyond and focus on hardware as well as software to really maintain growth. i say that they unveiled today in the ces galaxy gear. remember the watch? they now control p m w i three with that watch. that is an innovation and they may well invent bendable screens for television. they are on the chase that they are down for the profits in the fourth quarter. >> when you say control the car, -- >>main controller car you can check on the drivable range, you can check if your windows are shut in that sort of thing. >> i was just worried about that for a moment. caroline hyde, our european business correspondent. >> transformers director michael bay was supposed every scripted conversation about samsung's

enormous 150 inch tv at the ces but when the teleprompter failed he walked off stage. >> viewer escape heard when i try to do as a director is i try the type is all off, sorry. i would to swing this. >> tell us what you think? >> we will wing it right now. i have tried to take people on -- >> theal ride and curve? how you think is going to impact how viewers experience your movies? >> excuse me, i'm sorry, i'm sorry. >> yeah, it is slightly embarrassing. >> awkward nerd >> yes. the world's largest shipping company plans to sell its stake in a supermarket business. it will look again at 2.5 billion dollars from shares into

doing his chains. >> to managers at a goodyear tire plant in france have been taken hostage. they're being held by union members in the conference room. goodyear employs about 3000 people in france heard >> coming up, the world's biggest smartphone maker feels the heat. we will discuss samsung's struggle to stay at the head of the smartphone market. the next big gadget that he has quite literally up its sleeve. ♪

>> first. bloomberg. >> welcome back, you're watching the pulse. imagine a house that response to your needs from bringing her coffee to playing your local news area and

>> five years ago she was online to stream music live.

since then the value has surged. don't feel too bad for lily allen, she is still worth more than 6 million pounds. ♪

>> welcome back to "the pulse." we are here in london live at bloomberg's european headquarters. here are the top headlines. today could be the coldest day of the 21st century in the u.s.. in her, car and train travel have been disrupted as much of the country struggles with and arctic blast. chicago set the record with a temperature of -27 degrees celsius. that is colder than the south pole. jpmorgan may pay more than $2

billion in fines for allegedly oh years to warn about ernie made off who ran the biggest ponzi scheme in history. we have new numbers from the german high streets. it seems people in the country are spending. november retail sales rose 1.6% when compared to a year earlier. he also have some pretty good unemployment figures. >> docking unemployment, let's talk about the survey we have from the british chamber of commerce. risemic growth is on the and it will be happening in the short term. that is according to the bcc's latest economic survey which is closely followed by the bank of england and the treasury. jonathan ferro joins us with more on this report. fairly up the. the rest of the economy. the data has been very up beat. look at some of the readings in the manufacturing sector, the they're back to

precrisis levels. this is very encouraging. iraqis businesses to go out and do two things, to hire and invest. now they have the confidence to do that. >> was holding him back? you have a european recovery that is fairly anemic. there are problems with credit. >> it is all about the credit for it when you dig down into the survey, you have companies that have the confidence, but cannot get the credit to help their cash flow. you have a strong order book, great, you're profitable, fantastic, but if you can't get credit you have that cash flow you are screwed. we are talking to the director general of the survey and he was saying that he visited companies that are seeing themselves turning down orders because of a lack of credit. that is a big concern. every time i talk to him he drives his forward as the id of the british bank that is very similar to the ksw in germany that provides credit. maybe things will improve.

but that is not going to come soon enough. >> but we are seeing is business lending slump in the actual data. this story is told with hard data. business lending slump, mortgage approvals, they are rising. this goes back to an idea of creating headline growth, but grading balance. -- but creating balance. this, anotherll concern is prices going up for a lot of these companies. and they have to offset that by putting up their own prices. that is a concern for the consumer in this country while wages remain pretty flat. >> that is certainly not going to help the squeeze that consumers are seeing. we will talk about this more later. francine, back to you. the blackstone chairman has predictions.

manus, anything outrageous? >> the dickensian market in the u.s., a big call on currencies, but a surprise is a one in three opportunity. it off, dickensian, i thought that was only christmas. but you have the best and the worst time of your life. the worst times first. take the pain up front, i say. it is going to be at your politics. 10%correction of more than is on the way. then it is off to the races and up 20% on the s&p 500 when it comes to the u.s. economy. growth is above three percent. unemployment below six percent. what is the dollar go? and 120ainst the euro against the yen.

it is what he said about shinzo abe that i like the most. there are 10 of the surprises. these are the three that i picked off. he's the only leader who understands debt. deficits don't matter. they really don't matter, do they? then there is a small tax hike coming through and then a 20% correction which is different than the story you covered this morning in terms of what happens with japan. >> these are the highlights. what nearly made it on the list? >> it going. i love the fact that they're someone else's words. from $25 toge nearly a thousand dollars. reality is going to strike. there are 21 million bitcoins in the world. 11.5 million are issued. but it lacks the power and substance of gold and it is not accepted as a collateral and it can't be used as a collateral. we will indeed realize that one day. the principal use of bitcoins are really for businesses and involve anonymity.

couldnfidence in bitcoin change. >> manus, thank you so much. the biggest gainer on the stoxx 600. the biggest wind turbine maker has upgraded its estimates for cash flows to one billion euros. was 500 million to 700 million euros. the chinese automaker that is backed by warren buffett plans to introduce for models in the u.s. by the end of 2015. nissan has unveiled a redesigned version of the traditional london taxi. it tweaked the car after local authorities say they wanted the model to look more like the city's iconic lack cats. well, the vehicle will go on sale in december. it doesn't look too bad, eight, guy? i'm attached to the traditional black cap, but it is not that. >> i am more attached to bob the

builder, but let's not go down that road too far. bloomberg's hans nichols was on could be a bigis boost to jobs as well. >> there will be 300 jobs. what mercedes is doing is working with the local community on how to take over this army base and turn it into a massive proving ground for their cars of the future. let's have a look. >> on these wide-open fields where nato infantry once trained mercedes-s roamed, benz is turning this into a new proving ground for new vehicles, electric, driverless, what they want to bring for the future. dime letter executives have mapped out a multistage plan for more than 1000 acres of terrain deep in the black forest. importantea is highly

. it is important for nature and protection of nature. >> this installation where tanks are washed clean, will be modified into a mini city for simulated urban driving. this sunken shooting range will turn into a test tunnel for light in a clearing in the forest to let loose driverless cars. can developrea we autonomous driving which is highly important for the future of our country. >> it is a hundred million euro for a sleepy town. the mayor estimates 300 new jobs. there are 36 bunkers. a few of them have to be demolished, but the rest will be .onverted into quarters this is one of the biggest transfers of military properties in german history.

this landmass is six times the size of manhattan. they will invest in acres of solar panels and some in luxury homes. some changes will be necessary. for example, these answers will need to be hauled away to >> guy,tank graveyard. we were there, we saw hundreds of troops drilling. they were practicing. they will all be slowly moved out. diamond will take over, they will test their cars there, but as you said, they will make accommodations for bats. there will be a couple bat and the new property. >> that is the bit that really stuck out in my mind, the potential for the batmobile to be part of this process as well. this could be kind of cool. i want to see how this works out. had massivekers doors on them, so there are 36 of them. they're demolishing three and

that is wherthe main test track is going to be. you talked to the diamond engineers and their enthusiasm for this property is infectious because they see a chance to have something close to stuttgart to test a new vehicles where they don't have to worry about anything. it can all be in one place. again, other companies are doing this as well. bmw has a little bit of land outside munich that that they have taken over, but this is a massive use of land heard of these other property, it just goes on and on. they would do it in stages. the shooting range dips down. that is where they will test a tunnels. at that about everything. we will try to go back when it is fully operational in 2016 as the main mercedes proving ground. >> they have to do something cool with the bats. the slthe gull wings, looks kind of batmobile like, there is definite potential here. particularly with the range. hands, thank you very much. our international correspondent joining us from berlin. back in the warm office after being out on the battleground. he will be back in a couple

minutes as well to give us the latest on the big story in europe this week heard u.s. treasury secretary jack lew is in paris for his first stop. well we will continue the conversation and discuss whether france is europe's sick man. bnp area for europe's about will join us next p -- bnparibas will join us next. ♪

>> first. bloomberg. >> welcome back to "the pulse turcotte u.s. treasury secretary jack lew is in france today meeting president francois hollande and the finance minister. this comes at a time of concern for the french economy. let's get back to hans nichols with the very latest. with ast stop is paris very clear message. lew to thefrom jack french. they need to implement balanced reforms to spur economic growth. you saw a little defensive posture this morning in a radio interview that the finance minister gave where he talked about the need for your for

corporations to spur growth. he also said that what the french government is doing for competitiveness is unprecedented. not sure that will comport with jack lew's message. lose message go survey conflict in germany where he has already been harshly critical of germany's efforts to stimulate him and want the same time germany has economic figures on their side during their posting strong numbers. to portugal where he will be more conciliatory and encourage their reform efforts and what they have done for their rescue package. hans, thank you so much. let's continue the conversation on the state of the french economy. >> the advisor to the management b and c paribas. is very fashionable to be critical of the way the french economy is

being run. you only have to look at the pmi data to get a sense of why the criticism exists. how real is the economic blight that france is facing from your perspective? >> well, two things. first, the pm eyes have been behaving badly recently for france, as opposed to the average. has to mitigate this interpretation because the has deteriorated recently. nevermind. what we have in mind is that growth in the fourth quarter should be very limited, summer around 2.3% at best third that would make it the second year in a row. the outlook for next year is not formidable. 0.5 androwth between

one percent which is low. this is one point. we have low growth. employment orst reduce employment -- or reduce unemployment. the other has to do with what is required to have a more dynamic economy. the economico with policy, especially when it comes to reforms. to the analysis of the anglo-saxons fears regarding the french economy. i think there is a part of truth in their. we need more flexibility in the labor market. there was something done, very limited, at the beginning of last year. we need also more flexibility in the goods and services markets, which means more competition. service --o with the >> let me cut you off, because you think this meeting between

jack lew and francois hollande right? >> ibe -- is somethingade very positive for welfare. meeting can have a good outcome the cause as one knows, when free trade is good it might hurt this or that sector and give birth to some kind of resistance. there are effects that have to be dealt with, but on the hold this kind of conversation can be taken only as positive, of course. philip, why is the bond market trading france so nicely? you have to wonder what is going on here. everybody's concerned about the french economy from the ecb to

the u.s. treasury secretary. and yet the bond market is not worried. >> we don't know what would have happened without ecb launching what it has launched. the second thing is the fact there were a lot of efforts made in terms of fiscal policy. we look at the budget deficit where it was in 2010, 17%, it is down by three percent. in order to achieve that, the effort has been even more important. the thing is, this effort was taxes, quite entirely on not on expenditures. that has a negative outcome probably. the effort is there. this is the first thing. the second, you could say

probably that now either france or germany quits the eurozone, which is bull ship. the euro would disappear. i say that is the main reason. philip, thank you very much. >> glenn stephani announced she is getting back into the ranks of other stars with eco-friendly businesses. we discussed the rise of sustainable fashion next.

new energy we are focusing on sustainable clothing as london's menswear fashion week continues. so-called eco-fashion involves recycled materials but also reduced water consumption. singer glenn stephani has joined the likes of bono's wife in announcing a new fashion line. it is good to have you on the program. this is something that more and more women and men are conscious of her they want something that is not as bad for the world. it is not only about consumerism. >> more and more people are wanting to find that their close will keep them good for longer. that ties in well with the trend, if you will hurt i don't

like that word because it implies something passing. along with new fibers and technologies being used in sustainability. when i think of sustainability, i think of great close that you have -- that the wife of going -- that the likes of grant stephani or the wife of bono. what they are not mass production. dresses and gowns cost 4000 pounds and they are of a certain high-end designer fashion. we are seeing on the high street more brands and retailers selling a more affordable fashion item. new fair trade jewelry company have done collaborations with top shops. this is about 15-20 pounds. there is a different level of

things being sold. this gives you -- >> you're probably props, which i love. the polyester could have been in bottleslls -- in water -- >> there could be 15 to 20 water bottles used for this. this ist thing about that it is waterproof. over time the waterproofing will go. when you wash it again, the waterproofing comes back. it is assigned for longevity. >> if you come closer, you can really see what it is made of. this is pure recycled. we use less energy and basically become more sustainable. is up cycled. redesigned. we can't be used anymore and are

damaged they literally get thrown into landfill. this is made by an amazing who sees any waste as a challenge. they want to find ways to up cycled these and use them. belts, ipadfflinks, covers. i think hardly it is down to the economy. people will always buy on a budget. other people do want to buy things that last. there are statistics coming out that lung people want to be more sustainable. think -- >> more want to do good in the world. i one of those. thank you for coming in. guy, we have managed to talk about fashion and new energy? how great is that?

>> first word is up next. coming up next. we will continue to talk tech. ♪

>> jack lew jets in. the u.s. treasury secretary wants more growth and more restructuring from europe. the coldest day in decades in the u.s. americans will wake up to lower temperatures and travel chaos. samsung sales slowed on competition from apple. good morning to our viewers in europe. welcome to those

waking up in the united states. i am guy johnson. >> this is "the pulse." we are getting bring me -- breaking news. inflation is at a low level. this is a word you're going to hear a lot about this year. we have seen lower figures recently. numbers coming through a 0.8%. veritable reactions as you can see. we will see if it develops over the next few minutes. we are trading at 1.3635. -- 1.3625. >> a polar vortex continues to wreak havoc on the country and more than half the population has felt its till. >> chicago has set a record with a temperature of -27 degrees. that is colder than the cell

pole. the high will struggle to meech -- to reach -12. jetblue airways suspended its operations overnight, contributing to the cancellations of thousands of flights. the weather is testing the energy capacity. >> gas and electricity grids have issued systemwide alerts. officials say low temperatures are life-threatening. you can freeze skin in a matter of minutes. we will update you on conditions as they develop throughout the program. >> we have avoided the travel delays caused by the icy weather in the u.s. >> hans nichols joins us from a stop you will make tomorrow in berlin. what are we going to be talking about and how are the french going to react to the arrival of lew? >> he may get a frosty

reception. arefrench art defensive -- defensive about what they're doing to stimulate their economy. the french finance my mr. went to radio -- finance minister went to radio about the steps they are taking and the need for private sector economy to compete in the economy. he wants to see more growth or spending in germany. it could be germany and france were jack lew is the bad cop. then he goes to portugal where he will be the good cop. he will encourage them to continue with their labor market .ecord -- reforms when you look at the evidence that germany will muster, there could be some fireworks. they will talk about increased retail sales. consumer is spending more. unemployment is down.

they may say that we are growing, we are growing at a sustainable rate, keep your own house in order before you come over here and lecture us. >> what about the banking? this is another point that jack lew wants to make. you cannot have the usb in a weaker position -- the u.s. be in a weaker position. he is going to press the germans on banking union to go ahead and put something together. there needs to be a comprehensive european banking system. that is the view from the states, the view from jack lew, throughout the administration. one thing you'll have to explain is the janet yellen boat. vote.o 26 yes, she is the next fed chairwoman, but if you look at int ben bernanke got, he got

from 70 to 30. it shocked people that 30 people voted against ben bernanke. you could have the debt ceiling. he needs to be raised in february. jack lew will have explaining to do. >> hans nichols, thank you so much. we will be following jack lew's movements. hans nichols will be on that story. >> let's go back to our tech theme. blackberry. it is betting on keyboards. this is according to its ceo. he spoke to bloomberg in an exclusive interview in las vegas. ryan chilcote has more. ryan, if you think about blackberry coming think about the physical keyboard. it has struggled with everything else. the blackberry 10, the

hybrid, it had the keyboard, but it still had the touch green. the selling point has always been the keyboard. that is why we like it. the ceo is going to tape library back to its roots. take blackberry back to its roots. >> i love blackberry. we're going to go back to keyboards predominantly. one example of how serious they are taking this return back to the keyboard is how much the company believes in this idea that that is the way they can resurrect himself. they are suing a company that is making a snap on keyboard for the iphone 5 and the iphone 5s. they say this infringes on their design on the copyright they have with the blackberry.

the problem is, is it going to be enough? >> i will be the devil's advocate. theurveyed analyst on stock, and only 43 think you should buy blackberry. , since theers ,ntroduction of the iphone 3 have migrated to apple or android. android has 80% of the market. you look at governments, yes. blackberry is very difficult to crack. are in the u.s. government or defense, it is the only device you are ok there. corporations, john chen was talking about how they want to go back after corporations and move away from consumers. corporations are made up of

employees and they have their own phones. they have been saying, i want an iphone. >> post nsa, do you think -- people are becoming increasingly security conscious. this is something that was a headline banner, this stuff is trying to cells -- trying to sell to the banks. >> blackberry people will tell you that it is too late. companies have been watching the demise of blackberry and saying, what happens if blackberry goes under? what are we going to do? there are companies out there that have more than 10,000 employees. they have a plan b. it has been so long that many of them have enacted plan b. they have already switched over to android and iphone. byod -- switch over to bring your own device. it has to have apps.

you carry phones because you want the functionality that you got elsewhere. >> ryan chilcote there. a disappointing quarter for samsung. the posted there's -- they posted their first decline since 2011. there being hit by apple and cheap handsets on the other side. a profitasn't posted drop in nine quarters. >> profit is down eight percent. the first down we have seen in nine quarters since 2011. we haven't seen such slow sales growth since 2011, either. it is pretty dismal for samsung overall. as you mentioned, they are being squeezed from either side. at the top end, you have apple releasing new product. they sold 9 million iphones on

the first weekend alone back in september. only shipped 30 million in the whole of the quarter. there being enough away from the bottom and. lenovo, the cheaper handsets are up market. they have a down market price tag. market issues are there for samsung. it is not just about mobile phones. that is about 60% of their revenue. you have led displays slowing down as we get smartphone saturation. you have that tv unit with lackluster sales. the chips area is an area of increasing sales. >> you have been talking about market trends. this is something investors would watch out for.

they brace themselves for the slowdown. >> look at the selloff we had. samsungs were selling stock. we saw about a 10% this klein -- decline in samsung. that is $19 billion in market cap. that is bigger than htc, blackberry combined. remember the profit, down just a percent. largely, that is because he is trying to repay the employee base. of $655s got a bonus million. they were trying to encourage their workers to innovate again. the chairman and south korea's richest man. he controls samsung. samsung controls gdp and south korea. he is urging workers to animate. -- to innovate.

unveiled thet galaxy gear, the watch, the wearable technology. you are getting bendable screens for tvs. new smartphones with curved exterior so that you can see the angles -- the messages from all angles. >> thank you very much. caroline hyde. with samsung.ng what else is on our radar? director was" supposed to have a conversation about the samsung tv, but when the teleprompter failed, he walked off stage. do, i tryve tried to -- the type is off. i will wing it.

i try to take people on an emotional ride. the curve -- how is a going to impact our viewers experience your movies? >> i'm sorry. >> that created an awkward moment for samsung's vice president. it is never comfortable to see someone -- >> he is on stage and is not having a fun time. this is what we should do every time the teleprompter failed. d has its eyes set on the u.s. car market. >> the company already sells electric buses to american fleet operators. team managers and a goodyear tire & rubber and have been taken plans -- taken hostage.

the company announced plans to shut the factory. >> that is also very awkward. themel return to our tech after the break. ♪

>> welcome back.

let's take a look at the currency markets. the turkish lira continues to be under pressure. this is it versus the u.s. dollar. political concerns and the enormous deficit weighing on the currency. minister is talking again this morning. he is talking about this being a short-term effect. the decline of the currency is not going to be long-lasting. he says the 10% decline will generate a 1.5% increase in inflation. at the to take a look credit markets for evidence. he says it will not last long. >> let's return to the conversation on tech. we have already had a glimpse of what could be the big tech trends this year. joining us now is christopher nicholson. thank you for joining us today. is quite exciting.

is quite exciting. is there anything that has caught your eye? wearable devices. i think that is a big area. one angle we like on that is wearable devices incorporated into clothing. ch is very interesting. we could see how that could be a potential market winner. we like be 3-d print -- we like the 3-d printing. whether or not it has a true retail market is a different issue. on the nano tech side, we like anything that is health care related. also, new materials. we are key on -- we are keen on things like graphics and processes like that. the areas we think it is

inticularly interesting technical clothing for sports would be the retail market and before that you're talking about professional clothing for certain types of jobs. solar into clothing where and this allows people on specialist jobs to have a secondary power source. that could be popular for sporting activities. there are ways into the market. where is it practical, where would it attract an audience? the health care side is a natural place for to go as well. going to be the winner from this process? the bunnies are investing a great deal of money -- companies are investing a great deal of tech is going the to impact our lives in the health-care sector, is it possible to deduce who is going to be the winner or winners in

the sense of space? i think it's impossible to tell at this point. based on the way technology is generally developed, it is a difficult one to get right. you are better off taking a broad view and saying these are the main players who have -- >> we don't know if it is going to be samsung or apple. his companies are going to be investing money into the space. are there any clues? >> you are probably better going for start all -- start up then main players. you can go out of fashion and you can get it wrong. someone else comes up with a certain amount of capital and they come up with the ip on a product that everyone realizes how they can use it. at this stage, it is early to say, but you cannot ignore the

big players. it is about patents and who has them. that will be important. >> who has them? who are your favorite companies? we talked about samsung, blackberry, anything that you like? >> i think pebble is a very interesting thing. think apple may have been passed its best now. the samsung numbers indicate the upward trend is perhaps over. that doesn't mean they cannot come back. >> these two companies have dominated the smartphone market. it is something that has grown enormously over the last decade. we have taking -- taken it to its limits, and a software evolution is next. you wonder if the same companies that dominated the previous 10 years are going to be the ones to dominate the next 10 years.

>> statistically, you have to say no. samsung is facing the following pressures -- first of all, there's not that much growth left in the european markets and in the u.s. that is where smartphones were purchased and growth was. people coming onto the market with a sub $20 phone. this completely squeezes samsung out. samsung and htc are facing the same problems. they're being squeezed out at the bottom end. there's not much growth at the top end. where they got the higher margins come if they want to sell smartphones into the likes of india, pakistan, etc., they're going to have to come down on the price point. they are not going to be able to deliver the margins. we're doing the flip now. another statistic is 7 billion

uses on phones by the end of 2016, maybe 3.5 billion are smartphones at that point. i know a lot of people are saying they will all be on smartphones. we don't see it that way. we see 2019, maybe. the market is basically saturated. >> thank you for that. christopher nicholson there. >> we're going to take a break. you can follow us on twitter. we will see a couple of minutes. ♪

>> that give you three stocks in focus. up.ical maker they raise the stock to buy from neutral. if cyclical recovery in the u.s. and a rice target of 96 euros. let's move it on. we have that sir. vestas.we have we're up a further six percent. let's move it on to the biggest shipping container company in the world. they are selling at the shoot -- supermarkets -- selling off the supermarkets and grocery stores. mean higher dividends?

that is it. we will be back in two. ♪ >> you can follow us on twitter. i am at @flacqua. ♪ .

>> welcome back to "the pulse." these are the bloomberg top headlines. >> today is to be the coldest day of the 21st century in the u.s. air, car, and train travel have all been disrupted as the country struggles with an arctic blast. chicago's a record of -27 degrees celsius, colder than the south pole. maybeies were jpmorgan announced as early as today according to "the wall street journal."

jpmorgan may pay more than $2 billion in fines for failures to warn about madoff. in 2009, he was sentenced to one hundred 50 years in prison for his ponzi scheme. nissan has unveiled a redesigned version of the traditional london taxi. it tweaked the car after local authorities said they wanted the model to look more like the city's iconic black cat. >> that one is going to take a bit of getting used to, to say the least. dime lurks i get is turning a former nato trading ground, including its shooting range, into a site for its latest car. hans nichols was at the site. a big area of the digitally big jobs fight for this. >> that's right. this is a little bit of turning

weapons and guns into plowshares. 300mayor says it will be jobs, but for the mercedes executives, they say will be more for growth and they can barely contain their enthusiasm. on these wide-open fields or nato infantry once trained, mercedes seize land a can convert with few environmental research ends into a proving ground for new vehicles, electric, driver-less, what they want to bring for the future. dime x gives cap map out a multistage plan -- daimler executives have mapped out a multistage plan. for the nature and protection of nature. >> this installation or tanks are washed clean will be modified into a mini city for simulated urban driving.

tunnel turn into a test for lights and the clearing the forest to let loose driverless cars. develop which is highly important for the future of our country. >> the mayor is eager for it estimated 300 new jobs. the main test truck will circle .round these roads of bunkers there are 36 of them. a few of them will have to be demolished, but the rest will be converted into quarters. it is all part of the biggest land transfer of military property in german history. as the u.s. and britain close cold war bases that total 143 square miles, or six times the size of manhattan. envision luxury homes, others, acres of solar panels. mercedes will make fewer

changes. so modifications will be necessary. for example, these will need to behold away to another tank graveyard. question about the tank wash where they wash the cars, isn't the purpose of the tank to get it dirty? this is where they wash the tanks after they have been used. forill be idling cars there hours, backing into things. they're basically going to re- create every condition you can potentially drive in on what was thisthis nato -- still is, nato proving ground will now be mercedes testing ground. >> this is germany. you've got your number that. they're not looking for messy tigers. there tanks have to be nice and clean. what i think about the story is he have finally found the -- this is where the batmobile will be coming from. this is gotham city. >> look, this is the one part -- there are laws to make sure they

are environmental of sound. one of the reason they chose this drop is because they don't have to make too many -- the reason they chose this route is because they don't have to make too many changes. this piece of property is grandfathered in under old balls. they are converting these massive bunkers into condominiums for bats. there is a place to drive cars in there. i don't know what happens if you drive a car that has bats sitting above them all day. they will be more -- the more washing, let's put it that way. look, how long is this going to take? what is the timeline on putting this into reality? they took ownership of part of it. they should have the driverless area. this is so crucial to all of the car companies futures. how do you get autonomous driving. 2016 is when they convert the shooting range. the shooting range has this

sunken area and it will use that for the telling part. my question is, isn't the shooting range one of the first things you want to decommission? the entire time we were there, we heard rifles going off, reports of rifles. we did not hear any big tank explosions. we did see where they test the tags. unfortunately, they would not let us drive the tank. you go with what you've got. we had plenty of time on base. >> oh, yeah. .hank you very much i'm looking forward to seeing the follow-up on that report. marketsnd out how the are trading. take a look at the european story with manus cranny. >> is banks, telecoms, and insurers driving the european equity markets. tofidence is high according those in the u.k. at 8/10 inflation amen of one percent.

yen moving lower, dollar moving higher. overall, equity features of u.s. are nudging a little higher from the last check we did earlier in the session. s&p up one third of one percent coming in at 18.27. -- 1827.8. consensus estimate is 110 by the end of the year. the most accurate forecaster in foreign-exchange, dollar-yen. they say get ready for 110. they say you will see more momentum built, and that is one big move for them. the second one that i thought would take office the aussie dollar. the aussie is dollar. going to trade through the three-year lows.

the two key currencies. i will leave it there. you don't know what i'm watching, do you? come in tomorrow. >> thank you so much with the latest on the markets. coming up, "surveillance" with tom keene. you are looking at the arctic weather. >> it is really arctic weather. it is amazing the cold from chicago and minneapolis, now all the way over to new york. boston is surprisingly warm. new england avoids the incredible cold. 1921of the going back to and even statistics for chicago going back to 1884. it is a different kind of cold this january morning. we will talk to ian bremmer about a different type of geopolitics. in economicss over and finance, but very real in

foreign policy. we will talk to one of our most popular guest about the idea of 2014 and the focus on the united states and our foreign policy. one of my heroes will be on the show today. name inhousehold canada. he changed the game of hockey and change the idea the canadian could go to college and get an education before they entered the nhl. you will join us, the giant of the montréal canadiens. >> i don't know much about hockey and i'm looking for to the interview. at a lot of these great sportsman, there's a parallel between the way the team is run and business. >> absolutely. he left hockey to go to law school and went on to an theemed career within canadian parliament and the liberal party of canada. ken dryden is like roger staubach in our football. he has really made a go of it in business and his career after he went to cornell and was with the

montréal canadiens. >> tom, thank you so much. "surveillance" in 20 minutes from now. now more on the cold weather in the u.s. >> some amazing numbers for you. one particular number in celsius.r, -52 that is the record making windchill factor for montana is the arctic blast makes its way across the united states. authorities say exposed flesh will freeze and cause frostbite in only 5 minutes. expect these conditions to last until this afternoon. ahead, bloomberg gets an inside look at the new business pot ineational colorado.

as we go to break, a british singer has a regret, turning down a gig that would have paid her in bitcoins. she said five years ago, an online firm offer to stream her music live and pay in the virtual currency. don't feel too badly for her, she is worth more than 6 million quit. ♪

>> good morning.

welcome back to "the pulse." up to speed with company news. boeing has reported record jets release for 2013, handing over most increase the ever in a single year. 65 dreamliner's despite the aircraft being grounded for three months in the beginning of 2013. library planning to return its focus to physical keyboards. the phone maker has struggled with customers with touchscreen models. the new ceo tells bloomberg q burstyn loves the physical keyboards and said a scooter models will feature a return -- says he personally loves the physical keyboards and said future models forward turned with the feature. company already selling electric

bumpers to american fleet operators. more on the story. >> let's bring in jonathan ferro. >> we have heard all about these u.s. carmakers going to china, for good reason, a lot of this metal crystallizing -- middle- class rising. chinese brand looking to go the other way. that is what we've got, a company backed by warren buffett to looking to go into the u.s. and introduce some cars in 2015. >> the main selling point, would it be the fact it is cheap? we look at the same thing with phones. they have massive phone makers in china. they have really gone outside the boardroom. if they do, it could be big. >> it could be big. the first thing you associate with china is affordable items. because they're focusing on electric cars, they probably won't be cheap. if you see that one right there, it is like the child of a land rover defender.

it is quite bulky. but it is not cheap. because about 40,000 pounds of this country. but electric cars right now aren't. i think if you're buying electric car, it is the less of, hey, look at me, and more about the car and a reflection of investment in this country. really on the technology of electric cars. >> would you buy chinese car, you think about security, there is been a boycott here in this country and other european countries, but without warren itfett stamp of approval, makes it somehow more possible. >> you would hope so. as for being validated as well, a brand going into the u.s., if it is successful, you have a chinese brand elevated to some extent. coming up next, he will be interesting to get his view on "surveillance." it is a big challenge to penetrate the u.s. market. >> and it means big money if they succeed.

>> thanks very much. marijuana ino buy colorado for recreational use. a new and controversial method of getting high on pot has some in the pot industry worried. it is a new twist on an old high. >> this is a blowtorch. >> it is packing a heated punch. >> very pure. a lot of people are thinking this is the new wave of cannabis these days. >> he uses a blowtorch to the super concentrated hit of thc, the chemical in marijuana that makes people high. >> along the sides you will see all of our mothers. >> he sells pot in denver. >> the joint is made up of flowers which has anywhere from say 13 to the high 20% thc.

the extract we have here today is around 90%. >> 90%? cocaine, that is what this is to pot. same drug, just made more potent through chemical engineering. >> it is just a concentrate of cannabis. health,kes the thc and marijuana flowers are rinsed. >> it goes into the tank through the top, washes over the extraction. the material comes out of the bottom into the collector right here. >> what is left behind is a sticky, almost hear glob of thc called you take hash oil. >> this is the concentrated cells. heated up until it is red-hot. once he gets it to that point, he will put this dome on it and the dome basically captures all of the smoke. recreational use of pot is

legal in colorado and washington state. and that includes this. their marijuana movement's message has always been [indiscernible] as these striking videos show, amateurs have caused explosions while trying to make putamen hash oil in home kitchens. and there have been reports of gappers passing out from intense highs. that has some worried about what y legalmeans for the newl matter one a business. could it hurt the business? >> absolutely. people have made it comparable to cooking here one. we don't need that. let's do this responsibly, carefully. >> some people are put off by this. it is scary looking. does that hurt the industry overall? >> i think the naysayers and those opposed to marijuana like to use this as ammunition.

they like to say there are blowtorch is an fire in danger, their marijuana has never killed anybody. dabbing oil is more expensive than pot flowers. a gram of oil costs $50 versus $15 for a gram of pot. but because of the high concentration, a little whacks goes a long way. >> the joke is, a dabble do you. >> are you feeling it? right now? >> of course. >> ok. let's go from one hide to another as we head into break. the crew pulling off outrageous with ant the stadium arenaline junkie jumping off stadium, zip lining down. of course, they're wearing cameras so you and i and everyone else on the internet can head along for the right. we will take a break.

see you in a moment. ♪

>> welcome back to "the pulse." the banks week we get of england and nonfarm payrolls. let's focus on the turkish lira, under pressure once again today with the dollar rising. his is one of the fragile currencies people are focusing on -- this is one of the fragile currencies people are focusing on in 2014.

the pressure keeps coming. watch out for inflation. >> imagine a house that responds to your needs. sam grobart's was at the consumer electronics show in las vegas and found an app that turns your home smart. doesn't really look like the home of the future, does it? outfitted with some of the latest home automation technologies. i'm goin to talk to a guy who founded a company that is bringing the home of tomorrow to us today. is smart things providing? advantage of a lot of these new technologies to make it very simple and accessible to make your home into a smart home. >> i can lock and unlock doors over the internet? i could do this from new york city. is something anybody can do. we are at open platform. there are more than 5000 developers building new connected things. it is opening up the possibility

-- possibilities. here's how it works when you wake up in your las vegas bed and say you're wearing a jawbone of 24 and you've got smart things in her house. you push a button on this wristband and that will start a bunch of systems in your house. >> the beauty is how simple it is. smart is he not having to open the app and do things. it is the house knowing what is happening in responding to your needs. >> when i open this cabinet, and motion detector will trigger for daily update. and because i have asked it to, start playing the news. to play theart local news now. >> what are some of the other ways the system can be used with home security? >> it you woke up in the morning. it c detect when you leave. the same sensors would become a security system.

if we were away from home and there was motion on the front , a prohibitedhing sound to be play for potential or color. [dogs barking] >> there are a lot of companies here. you hear about the smartphone, smart home will stop what are you expecting to see this year in las vegas? >> for us, it goes mainstream. it has become easy enough and inexpensive enough for sort of really anyone. >> fake dogs, genius. >> i'm thinking of getting a dog. abi just needed -- >> on speaker. >> that is it for "the pulse." keep the right here, "surveillance" is here with a very chilly new york. >> you can follow both of us on twitter.

yesterday we were pretty the angelahat chancellor merkel was heard. today, her first appearance on crutches. ♪

>> this is "bloomberg surveillance." of 1884.o sees a cold the temperature plunge in new york city has not been seen since 1921.

yellen considers a better american economy. she also considers the unemployed. the tech world gathers and 43 degrees las vegas. is this blackberry's final show? good morning, this is "bloomberg surveillance." we are live from our world headquarters this tuesday, january 7, i'm tom keene. betty liu has come back for more agony. cristina alesci with this. where is scarlet? >> she is stuck. >> scarlet if you're watching this morning, we hate you. >> overnight, everybody has their eyes on samsung because it posted its first profit decline since 2011. we will talk a lot more about that. on the economic front, in the u.s., trade balance today