wechsler looking "lunch money. menu, wallok at the street, leon cooperman speaks, tells us where his money is going. a bloomberg exclusive. motors? tesla has five cars that are friendly and cheap. gop comes out firing against some new numbers showing the impact on jobs growth. fashion? hot topic expands into the u.s., we will speak to the billionaire owner who reinvented the opera. the met tries to an just tries

to attract the younger set. kicking it off with one of the biggest companies in the u.s. kicking the habit. >> cvs caremark saying that they will stop selling tobacco products by october 1. very interesting, they say they will stop selling tobacco products. >> a big change. the 7600 stores that they operate in the u.s. are going cold turkey. their largest provider of prescription drugs says that this will cut animal -- annual revenue by $2 billion. they are losing sales not only from cigarettes, but from people who might have been stopping in and buying other things. this is as they try to become more of a health care company. >> every day we are helping millions of patients manage tronic conditions, like high blood pressure, high cholesterol, and diabetes. all of these conditions are made worse by smoking. tobacco products have no place

in a setting where health care is delivered. when we asked ourselves where we expect to be in the future as a health care company, it became clear that removing tobacco products from our stores is the right thing to do. >> president obama thinks it is the right thing to do as well. he put out a statement saying that as one of the largest retailers in america, they set a good example and that the decision will help to advance the administration's attempts to reduce tobacco related deaths and bring down health care costs . that is from an ex-smoker. walgreens said in a statement that they have been evaluating the product category for some time and the balance that customers expect from them with ongoing health needs as well. they will continue to evaluate the choice of products while helping to educate and providing smoking cessation products and alternatives that help to reduce the demand for tobacco products.

this nude change will be part of the big change at cvs. you can see the new no smoking logo on their website and on the twitter page. the question is, will this branding move help them to make money? of playboy, what does she have to say about it? >> cvs and walgreens have been trying to reinvest -- three -- reinvent what it means to be a drugstore. becoming a part of peoples daily health needs. the board seems to feel that this was a strong way to reinforce that healthy living brand. i think it will put pressure on walgreens to decide whether they are going to -- going to follow suit. i think there is an interesting question that comes from when you substitute judgment for your consumers judgment, where do you go after you have started down that slippery slope?

>> do you stop selling candy? soda? like some people do not like that they sell condoms or lottery tickets and i wonder if they have thought through the implications of this decision. e-cigaretteswhen become more dominant? it is a big step. >> cvs may be willing to leave it all behind. they generate about 70% of their sales through prescription drugs. leon cooperman has the right prescription. outlook.s own recordis on track for profits after years of crisis. what is driving the recovery? we will tell you, coming up. and it started with high school is 200 the 1970s, now it feet of snow and ice sculptures.

this year they salute statues that depict winter sport landmarks from around the world. just think, that stuff is all made of snow. ♪

money," onlunch bloomberg television. we are also steaming i'm -- streaming live on bloomberg.com and on your tablet. leon cooperman knows how to make money, one of the best. it is not any one trade that has made him famous, but his ability to consistently bring returns year after year. it earned him a spot on the bloomberg market magazine. get this, 22%. that was just through october. he talked to arm "market makers" -- he talked to our "market makers" team this morning.

>> it creates opportunity. i think that the correction was to be expected and healthy. could ben they expected was there were too many players on the same side. you folks have an exhibit on your terminal where you solicit and display the opinions of, i think, about 21 different strategists. it was interesting, at the end of the year 20 of them had the market up for the year, one of them was down. the vast majority of people were investing long and stocks, long on japan, short in the yen, and all of a sudden they were not thinking about it at that time, emerging-market issues. were not thinking about some slowdown in the economy. the market took a quick five percent hit. for a number of mark -- for number of months i have been arguing -- >> you pointed out that the market is down, and based on what you are saying about strategist outlook, is the stock market going to end the year up

or down? >> up. for a number of months i have been saying that profits are growing very slowly. in a world where crowe -- corporate profits are growing five percent, six percent, the answer is the multiple that you want to ascribe to the earnings. i have been thinking that a 16 multiple on the s&p being theonable, that is $117 on index this year. i do not want to sound like a statistician, but we all are, a little bit. if you take that multiple, that is 1872. last year the market ended at 1848. there was not a lot of room for appreciation if the 16 multiple was right. certainly, one could not make an argument that it was dramatically undervalued. i made the argument that it was in his own affair valuation. after the end of this year, things look ok for the economy. going into 2015 you could market

up by six percent for the improvement on profits that one might anticipate next year, getting you around 1960, very close to the consensus number of 1950. >> the problem is that not everybody -- you are right, everyone is at times a statistician, and sometimes people are reasonable, but they are not always as reasonable and rational as you are. why do you believe, why are you certain -- why is this correction not going to lead to a bear market motivated by fear and panic? >> number 1, 1 is not certain about anything in life. it would be dangerous to think that you know all the answers. but i would say that traditionally there are several phenomenon in place when you get into a bear market. i would say that in my view, i would get bearish as opposed to being modest.

been saying that for months. i am no raging bull, but i would get negative if i thought that a recession was coming and saw evidence of that. the reality is that all the economic data supports you deck, growth, including today's adp number. what is the big deal? you can get a big number on friday around employment and it is just change. the first thing i would need to get bearish would be the expectation of the recessionary forecast. i would say that reading the economics, speaking to the companies, the chance for recession is probably one out of 20? five percent? the second thing, and i said this a month ago, but now we are on the other side of the equation, a quick 10% to 15% rise from the year-end level on its own valuation. that is not happening. quite the contrary, we are creating opportunity in the market, now.

the four thing would be growth under one percent or less, threatening the outlook of corporate rockets, or alternatively gross -- growth over three and a half percent, which would bring the fed into play. but the kennedy steel computation, most their markets are induced by recessions. the case for a recession does not seem to be a credible case. >> mr. cooperman, what are you buying question and --? >> generating a fair amount of excess capital, nine times the earning, we think it grows in line with the market with book value in the 60's. we think that they will do the job we think they can do on book value with market rice crossing. the stock is now 46, 47, discount to book value. correction trading under a times, eight percent grower,

sallie mae buying back stock, yielding three percent, splitting up into two companies shortly, which we think will could great value as it be a prime takeover candidate. paying a times earnings, again, on half the market. we like some of the energy companies. we have been high on sandwich energy. people are waiting around for high style people -- for hostile people to show up for these companies. are these investors to come who do not value the asset they sits where we consume catalysts for change. >> sandwiches and name where we have seen the investors getting involved. >> that is my point. did a lot of analysis on sand ridge the analysis is posted on their website. that that is posted between seven and 12. we think that they owned the stock before they showed up. the assets were about 10.

the stock was trading around six. we see that they won their proxy fight and changed to new management, which is shareholder friendly, doing the right things , cutting costs, hydrating drilling activity. they have a big meeting on march 4 they will lay out their story. >> in general, as a matter of principle, is it a good idea to anticipate in some cases or perhaps follow activists? think about carl icahn with ebay or apple. to you like the positions that he takes? do you want to be there with carl? i am one of his losers this year. he got involved in transocean. we have both been wrong. he is a very bright man. we do our independent work. we listen to what he has to say.

we have our own view. on ebay, actually, before he filed, we agreed with him, that they should create a much lower cost around capital for the higher growth vehicles in the company. but i take the activists. we have acquired activists. we tell companies what we think, we advocate our positions in our views. let it he compensated to do the heavy lifting and profit from good work. we do not buy into withperforming companies the idea of banging on them. we are not patsies. we are well known for expressing our views intelligently. they are not going to listen, we will basically move on. >> you can watch the full interview on our website, bloomberg.com/tv. you can find it on our tablet. the app is free. talking about

trucks. ford, toyota, tesla. whoa, a tesla truck? we will address those rumors. and what is next for the top shop company billionaire owner? check out how the boone county elementary school. >> ♪ school is closed school is closed ♪ school is canceled school is canceled ♪ snuggy ♪e grab a ♪

>> motors? what a feeling. ford is final in the quarter from last year. there's a japanese carmaker hoping to hit ¥1.9 trillion, toyota.

one of the top executives talked about global growth yesterday in tokyo. >> we see the global auto industry market on a modern recovery trend, but we need to carefully watch how much the recent volatility in the market would impact the real economy in the world. we are still determined to focus on our midterm to long-term growth strategy. >> what about the ex 150? the world's number one pick up? it.e have seen pieces of >> survey showed something, and motor trend did a front page cover story on the plastic model of a car that they showed in detroit that they are never going to make. toyota shows a stuff that they are never going to make. they do not have the cone base to bring it out, so

to speak. >> here is why, the ceo, it is his name on the car. he can do what he wants. he loves to race. a 600 thousand dollar car? he said he wanted to make more interesting cars. what is the point of building something boring all the time. >> is a pickup truck that interesting? i do not get the appeal. you met matt miller? >> how could they make these bunkers trucks? monster with a 6.2 liter engine, but they sell them out? they cannot keep them on the lot? there are 10 other guys out there who find it amazingly attractive. people go of every 10 to the desert, nine out of 10 go to the grocery store, but they look awesome. >> there you go. >> i was in this random place in

texas driving the truck and they thought it was a concept car. it is the same reaction i got driving around the streets in a lamborghini. about to also think whether tesla might introduce a truck. >> we were quoting him in an article, he said something like his sales guy went to detroit and said that they were not building a truck, where did you get that crazy idea? it came from elon musk. crazye said he just says stuff sometimes. >> that is funny, i was in california over the holiday, and they said that he was known for saying random things. >> he just gave the forecast? >> that is what makes them awesome. >> admitted. >> do not tell anyone, but he is kind of cool. >> ok, elon musk is cool, but so is the competition. here's a man with a look at the other electric cars coming to market.

♪ about sexy,think eco-friendly transportation, you probably think about the tesla. why not? it is a gorgeous car. but it costs about $100,000. we have alternatives that go for about half that price. fiat costs oneis third the price of a tesla and comes with an absolutely gorgeous driver. the bmw here, the seats are dyed with olive leaves and it is 95% recyclable. is a technology that toyota is betting will mock the tesla electric car is out of the water that -- water is all that this

thing produces. it is a hydrogen fuel-cell vehicle. the only emissions are water. this entire car is expected to come in at $50,000. that is the amount of money that tesla spends on the battery packs alone. this plug-in hybrid only takes two and a half hours to charge. with superchargers. if none of those is good enough for you in the price tag is not the problem, we have another option. the bmw i8. 100 31 horsepower electric motor, getting 95 miles per gallon in foreign a half seconds. it is more aggressive in the design stance. >> look at these doors. needs aight, who

combustion engine? we have washington. fight overent in the obamacare. madison square garden getting a makeover. we get an exclusive look inside. that is later. ♪ >> is 26 minutes after the hour, bloomberg tv is on the markets. stocks stand right now on a bouncy session. the dow jones is higher by just eight points, the s&p and the nasdaq remain in them -- in the red. mixed economic data this morning on the downside, private payroll reports coming in weaker than estimated. on the other hand, we had the isn service report coming in better than estimated. surging afterrch, the purchasing of crescendo bioscience.

this is subject to regulatory approval and set to close by july. the company reported second- quarter earnings that the analyst estimates and raised their forecast. we will have more on the markets in 30 minutes. ♪

♪ this is "lunch money," on bloomberg television. we are also streaming live on your tablet and your smart phone. i am adam johnson. moving pictures, the video is the story. the schools are closed, planes are grounded in the northeast. a second storm in as many days slams into the region. guess what? there is more to come this weekend. another storm is forecast for sunday. ireland? heavy rain is the problem. the river lee, large portions went intolowed as it

stores. look at that, shop owners and residents are bracing for another storm this week. hotbassist for the red chili peppers admits that their instruments were not plugged in during the halftime appearance. the nfl was reportedly worried asked thed issues and band to pre-record everything. the vocals were sung live. came out with its latest report on the new health care law known as obamacare. unfortunately for democrats, it is not pretty. the report says that the new health care law will cause americans to work fewer hours, enough to be the equivalent of 2 million fewer jobs in 2017, also impacting gdp. ofour more detailed analysis the effects of the affordable care act on the incentive of being in the labor force, working hours, it reduces our over the second

half of the 10 year window. large number of factors that have led to our downward revision on gdp. >> republicans wasted no time touting big government and small employment. >> you are saying that because of government policies, as the welfare state expands, the incentive to work the kleins? >> no matter how you calculate this number or how the administration tries to explain about 2.5 times as big as the anticipated number was when this was look at the first time. >> i wonder what the cost- benefit ratio is to all of this disruption for the providers of health care and consumers of health care when, at the end of the day, the best you could be is we haveimate reduced the number of unemployed

from 45 million to 3 million, but at what cost? who shotl the media across the headlines this idea that somehow the affordable care act was going to hurt jobs? be very clear that the director of the congressional budget office says that for this year and the next couple of years, it will help to reduce unemployment. >> curious. in theory, obamacare will allow people to choose to work less because they can get health insurance regardless. >> i have no doubt that, if for example, we got rid of social security and medicare, many 95- year-olds would choose to work more to avoid, potentially, starving or to give themselves an opportunity to get health care. i do not think that anyone would say that that was a compelling argument to eliminate social security and medicare.

>> our senior economist europe bloomberg government says that it is not just about incentives, but how the subsidy is structured. >> there is a huge drop-off at 250% of the poverty level. at that point, the health care subsidy drops dramatically. people are much more on the hook for what they have to pay in health care coverage. because there is this is continuity in the health care structure of the subsidy, you see a bit of a perversion or distortion in the amount of labor supply. all subsidiesf that are structured this way, food stamps or medicare. >> should we not be surprised by this number? this is all part of the point, really. >> it is not surprising. our health-care analyst makes this important note, that this was something that came out of the original legislation. the original legislation called

for a much graduated subsidy decrease as income rises but there was a republican pushback that compelled the legislation to make the drop-off much more severe at the threshold. in some ways, this is part of the republican influence on obamacare. but there is a second thing, stephanie, that came out of the report. cbo said that there was no compelling evidence that there has been an increase in part- time jobs. this is part, again, of the republican opposition to obamacare, that companies would be incentivized to create more part-time jobs than full-time jobs. right now that does not look like it is happening. >> donruss is not just arguing about obamacare, but the nation's debt limit is again going to expire on friday. talks are ongoing. expect to see more chop shops in the u.s., what about the expansion? coming up. why is this designer anti-logo? coming up.

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today in fashion? we will look at brands that are expanding. like top shop, coming to fifth avenue. >> when we put our flag down in the middle of fifth avenue, there is no leaving. it is a commitment. we are going to get it right. all of our flagship stores, we have tried to do something unique. this will probably be slightly more difficult, there are certain things you are not allowed to do. move the lightbulb, they want to come and see you. >> and yet the flagship for him brick and mortar is where you want to be? >> i believe that you need flagship's and it will build our online business as well. >> a showcase. >> half the businesses tourists,

half is local. fifth avenue, i assume, we have four plates, for lots of 10,000 square feet. so, listen, just half the size of this building. >> which is huge. >> if you go to most of the major cities in the world, there are odd streets where you want to be on that hundred meters. it takes time. >> this is why it took you over two years to find the perfect spot? >> every time we go to negotiation to find, we have different words we use. the two countries, divided by a common language. we are in the room of a different location with a landlord who says that you are just inflexible. i say -- no i am not. [laughter] that is what it is like to find a shop in new york. bonobos launched the women's

year line yesterday. here is how they plan to go after the ladies. >> the idea is all year round. it is for essential pieces that you can wear. value over versatility. the genes with phenomenal 30% stretch. we are hearing amazing things from the woman wearing it. related to our pocket sweaters, it is one of those essential pieces in your wardrobe. >> the one challenging thing, and i will tell you this, about genes, is that you need to try them on. you might try on 50 pairs before you find the one that really works, that really fits. how does a woman shopping for jeans with you manage that? >> our whole company is built on a radical idea, which is that you can build trust and fit with online accord. when we started bonobos, people said that there was no way.

teamilt a customer service -- >> what is ninja? >> a great, energetic, and emphatic service if you call or write that in. moreover, we have these great to turn policies that convince people they can take a chance on this. we are fighting the world has changed, with you mark -- you marketing moving from the margins to the core. >> whether it is trish buying a more air brand or meet going to myobos, and i am not sure of size, you will send me three or four to try on and an easy way to return it? >> you got it. and we have now of course extended off-line. we have eight of these shops, basically they are personalized fitting rooms where you can try things on and they will ship it to you. something like that could be coming, but we want to earn the right to the brand.

here is a question. does expansion risk the loss the brand identity? here is stephen allen of steven allen. >> it is always about doing it as good as you possibly can. anything we do, it is only to get better. we have a whole design team, we are able to do so much more, and frankly i think a lot better. >> one thing is interesting about tom's question, you have chosen to forgo a logo. why is that? >> i would never want to wear that. when i was a kid i would cut off the alligators. i liked the idea of it. the idea of refinement. biting the best, having the best, but a lot of times the sentiment was not that the quality was as good. we make our shirts right here in new york.

everything that we can make here, we try to make here. >> how long does a look last? do you start looking ahead by five years? do you say that i am in now, but i -- but i may not be then? >> i think in general we do men's and women's equally. we try not to make anything that we feel is of the moment because it is trendy or whatever. we try to make things that you are going to buy or where tomorrow. just go for not fashion. the metropolitan opera wants to give the next generation to listen. that is something. down?les madison square garden, also trying to attract people. we will go behind the scenes on the $1 billion makeover. we will be right back. ♪

>> in pop, the industry trying to hit a high note. the renée fleming super bowl performance might actually help. the man at the helm of the new york metropolitan opera told trish reagan how he is trying to win over the next generation. >> we have to make it compelling, first of all. and we do not expect every young person to jump on their bicycle and ride over to the opera house, but the fact of the matter is that if people give opera a chance and we do our job properly, presenting these brave singers without amplification or microphones in front of an ,udience of 3800 people hundreds of thousands of more, is anns with radio, it incredibly exciting artform when it comes together. it has everything. music, theater, scenery. we are bringing the most dynamic people in the world to the stage. the problem with that, the challenge, is that it is long.

foreign languages. if we can succeed the way that a great foreign films succeeds, we have to have an audience that is willing to invest a bit intellectually. but there are great rewards. >> he has competition about 30 blocks away, madison square garden undergoing a transformation. the ceo gave us an exclusive look. this cost $1 billion. >> the rolling stones, elton john, sinatra, fraser, rangers, next, they all have one thing in -- the world's most famous arena. madison square garden has been the place for entertainers since 1879. >> the garden is courageous. the garden is forever. it is a different level of quality, service, and finish. itbuilt in 1968, today

stands as a new york icon with a rich history. with new, splashy venues being built around the country, it it was in dire need of a renovation . or transformation, as the ceo describes it. >> the biggest challenge was getting it done while we still played. everywhere else, you move somewhere, you close the building down. we had three summers worth of being shut down. we worked until 3 p.m. every single day. the logistics of making that happen, of getting done on for -- getting done on time? phenomenal. >> you notice the difference as soon as you walk in. an open entrance way, nearly twice the size. to 600 foot screens on the ceiling. wi-fi throughout. two sky bridges suspended over the court. a massive multimedia scoreboard. 2.6 milliontook

hours of labor to complete the transformation and cost $1 billion. ratner is banking on more than just -- more than just ticket sales to recoup the costs. ofit is not just a matter raising prices. we created an asset where we had a marketing partner who found it desirable. this is inventory that did not exist before. inventory that did not exist before. we were able to work collaboratively with our fans to give people what they want. garden isit that the able to pack the people into these games, even when you do not win? that always amazes me. >> it is an overall experience, as we walk around, you see the billion-dollar investment. you see what it is like. we can stop here, you look at the garden, you look at the food offerings, you look at the ramps

-- it is an experience, an adventure to come to the garden. that is what we try to do. it is a legendary icon. when people come here, they need to feel that they have experienced madison square garden. >> the building completed its transformation in october. the company is still running up the score. >> next on their schedule? the westminster dog show starts on monday. mystery meat today, what happens when you combine a coke can with a 2003 wallet? look at this.

the hour,tes past bloomberg television is on the markets. let's take a look at where stocks are standing midway through the session. a mixed picture on the one hand, a private report from payroll coming in worse than estimated,

beating estimates from the economist. right now the dow jones is slightly lower. makers,ning on market larry fink weighed in on the recent selloff in stocks. >> this is an old-fashioned correction. we went so far -- if i asked you and everyone else in january of 2013 how much the equity markets would rally, we would have been happy with 10%. it went up almost 30. we have come a long ways. we just need to recalibrate ourselves. cooperman agreed that the selloff was to be expected and that it was probably healthy for the market. >> on the plus side for the market, will markets do not i've from old age, they die from excessive recession. there is no recession in the cards of 2014, best as we can see. i should remind you that the wall street consensus ended

around 1965, so certainly as of now that forecast that we are going to see is for the full year. talking about u.s. stocks around the world, it has been such an influence on trading in the u.s., recently. the emerging market index has fallen more than eight percent this year, making it the worst start since 2010. one example here, taiwan, moving the most in 10 months, trade resuming following the new year's holiday. for more on what is going on in the emerging markets, adam johnson joins me with insight and action. >> the fed has spoken, emerging markets do not like it. let me show you what we have heard over the past 24 hours. two fed presidents, two words. high hurdle. probably a high hurdle to deviate from the tape or pace. from jeffrey lacker, the hurdles ought to remain high.

in other words, we are going to keep going. we are tapering, we are going to keep tapering. there is a very high hurdle to stop us from tapering. now you know the deal. venezuela, they had to suspend the currency auction and in greece it is extended from 30 years to 50 years. they had to borrow more money for longer. puerto rico, as we know, downgraded. now they are pulling back in the emerging markets. whom, there is your evidence. what do you do? simple. keep it. the dollar index, look at what the dollar index has started to do for the past couple of months. it is going up. the basket of emerging market currencies continues to go down. real simple. thes adam talked about fallout from the fed around the globe, this morning in the interview that i mentioned on

market makers, larry fink also weighed in on the fed's influence on the market. we cannot rely on central- bank behavior. we had the benefit of the last , coordinated central- bank behavior that stabilize the market and give you ample room to invest over a long. of time. central-bank behavior is changing. the next round of rose is going to be coming from governmental policies. -- the next round of growth is going to be coming from governmental policies. >> "bloomberg west" starts next. ♪

>> live from san francisco welcome to "bloomberg west" where we cover the companies reshaping our world. our focus is on invasion, technology and the future of business. will 3-d printers not be one of technologies? the answer more unclear. we're talking about the future of the printers that can make everything from airplane pts