jobs report tomorrow. michael kors is a billionaire. all that from amanda python tote with the brass tag hanging from it. 2009 hundred 95 dollars. that said, betty liu. good morning, everyone. this is bloomberg "surveillance." we're live from bloomberg world headquarters in new york. it is tuesday -- thursday, february 6. joining me is betty liu. amanda python bag, does that work? >> the way you described it, i am going to go out and get one. >> i am going to stop talking. you have the morning brief. >> a lot of economic data. jobs numbers. that will be a preview to the jobs report friday. at 9:45 a.m. the bloomberg consumer comfort index. is the bank of england rate

decision. more importantly, the ecb, they will be issuing their statement a.m.ecision at 7:45 a.m 7:45 this morning. cut expect druggie to rate. draghi to cut rates. >> we will have michelle meyer with us as we see this decision and press conference. >> anything goes even what we have seen overseas with the markets. in the meantime, back here in the u.s., the parade of earnings continues before the bell. aetna, gm, 20th century fox, and aol. we will pay close attention to aol, because the ceo of the company, tim armstrong, will be on later with us. after the bell, news corporation, linkedin.

the olympic guys begin today in sochi. one guy is trading three lightbulbs for a doorknob in his room. data check. equities, bonds, currencies and commodities. one screen today. futures are up nine points. the yield is back up, a good sign. calming the market at 2.67. your wreck -- euro goes nowhere. here is what i am looking at ahead of tomorrow's jobs report, dollar-yen. weaker yen over the recent months. a little bit of a rollover here to 100 one this morning. a busy day. the twitter news last night was something. we scour the pages of the web. >> this is certainly one of the top stories, but we want to start with disney. profit climbed 33%, beating analyst estimates. credit goes to " frozen" that

every little girl and apparently tom knows pretty well. let her go ♪ go, g >> he has been spotted singing on the sidewalks of new york. actually got i together to watch the movie. and i are actually going to get together and watch the movie. jon erlichman spoke with the ceo of disney about the franchise. >> i do not want to rule anything out about the future of en."zeon. we have been as specific as we can be about other plans, probably even more specific than we typically are at this point, but we are very excited about it, and there is great demand for it. not just across our businesses, but marketplaces around the

world. and we talk about franchises, we talk about something that is successful across as mrs. and territories over long periods of time and i think this checks all those boxes. >> expect a sequel, part three and part four. disney, i amo sure. green mountain coffee roasters in the premarket, up about 31%. coca cola buying a 10% stake in the company. they will help the coffee maker introduce a new cold beverage system. that has the competition like sodastream international but worried. so stream shares longed. shares plunged. >> it was hot a few months ago but now you do not hear much about it. except for the advertisement with scarlet johansson that is about it really. >> i managed to get an espresso on madison avenue.

you cannot. it is jammed. >> apparently they have these great flavors. cinnabon coffee. sounds really good. our last front-page story on the other extreme, twitter. shares are down almost 18% in the premarket now after reporting the first earnings report as a publicly traded him sunny. revenue beat estimates,, but still losing money. twice as big as expected. the growth in users is what everyone is talking about. slowdown from the previous quarter. the stock tumbling and the previous quarter. -- in the previous quarter. >> we will talk about the distribution of the conference call and a little bit. right now, let's talk about results. we bring in david kirkpatrick, author of " the facebook effect." joining us is robert burke chief chairman and

executive of burke associates. berg very leading the way. urberry leading the way. analysts not surprised. the stock is simply overpriced. do you agree? > >> it is growing nicely. it is investing what it got in the ipo to improve the product, simplify the product, but the stock got way ahead of its us -- way ahead of itself. it has a higher valuation in terms of multiples, to the point is insane in my opinion. the stock is crazy. >> do you in your book talking about the arrogance, and i mean that in a constructive way, facebook. it seemed for me to be a very humble management yesterday on the conference call. is this a twitter with a starkly

different call then facebook? think facebook is humble? zuckerberg is relentlessly focused on the getsterm, so he maybe cocky seeming sometimes. >> the end of the call talking about he needs to talk to his mother more. are focusing on simplifying the user experience and is really smart. thatnd analyst says twitter faces the identity crisis. he told bloomberg news that twitter needs to answer the question about whether it can ever become a mass-market product or whether it is for destined to be a niche for news junkies. is a serious question they have to answer. >> i do not agree. i think it is mainstream. >> i think it is way too hard to use for the average user. >> the question is, why do i need to use twitter?

>> have your mother try to use it. they are like what, @/ ? i think they can get rid of some of the icons. >> i just flat out disagree. where you see this and where the potential growth is is in fashion. robert burke with us. you see what berg very did. -- burberry did. where will fashion be five years from now with twitter? it is the distribution platform, isn't it? embracingon it as social media and connecting to the customer. when you talk about fashion week, it was an industry event, but now it is a consumer even. a runway show in london in a week, and sx series -- accessories you can buy directly online. >> social media so instantaneous yet fashion week highlights

fashions we will see nine months from now. >> there are businesses that have been created, a website where you can go on and order a day after the short he -- the show. you pre-order and get the merchandise. >> is social media still in the same rhythm? >> now they are trying to you can getuct that immediately. the customer is not content waiting six months. >> here is the future. this company makes bags. >> is that a hint? >> they are on instagram, moving robert burke's world. where will this be in five years? businessk the pace of is accelerating generally. fashion has always been for the long-term view. they announce something now and start selling an eight or nine months. i have to believe that will change over time. atthey are looking

categories, too. if you look at handbags and accessories. you can customize a trench bag -- trenchcoat right after the fashion show. certainly having an impact. instagram has taken over in an enormous way because it is so visually driven. say, it ising to beautiful pictures. who does not love that? men and women. >> pinterest also. it is big in this arena. >> david and robert, stay with us. company news. >> credit suisse legal costs taking a big bite out of the bottom line. missing profits after setting aside 570 million in legal provisions. they are facing litigation related to mortgage securities and faces an investigation into whether it helps american clients evade taxes. a shocker from sony. forecasting a one billion dollar annual loss. three months ago predicting a

profit. sony says sales of mobile profits have been weak and sales from communication unit will be below jobs -- will be below estimates. 5000 jobs will be happening in the next round of cuts. bear stearns winning dismissal over a lawsuit related to mortgage backed securities. morelobal claim that lost than $2 million by relying on statements from bear stearns about securities. a judge ruled that bear stearns failed to prove the claim and took too long to file the suit company i should say. >> coming up, a lot more on twitter and fashion week in new york. also, the black sea. sochi olympics begin today. the opening ceremonies tomorrow. from new york city, it is bloomberg "surveillance." good morning. ♪

>> good morning, everyone. bloomberg "surveillance." coming up, nigel travis. the chinese year of the donut. nigel travis from dunkin' donuts. 3:00 on " street smart." >> do they make a sugar-free donut? i am serious. i think they might. in which case, i might have to. i am on a sugar-free diet. >> holistic and natural. us this morning. we will look at sony i believe. earnings, a surprising forecast of a lost. >> heading into the results, it is a matter of bad or terrible. headed for a 10th straight year

of losses. it has been bad for a long time. it forecast a surprise loss of one point $1 billion. 1.1 billion for the full year versus an earlier profit forecast. you really have to scratch your head there. the company cutting 5000 jobs on top of the 10,000 jobs it had are ready cut. the ceo not really getting the job done. he said they will sell the pc business and splits up the television division. the question is whether this goes far enough to appease dan loeb, who has been pushing for a spinoff of the entertainment business. he says sony needs to restructure its tv and pc businesses overall. like everyone else, sony looking to focus on mobile devices and games. >> it is a train wreck. joining us is david kirkpatrick, on facebook. sony, to me, it is this distant corporation that is always behind. came along,e apple

more or less. i was listening to the report just now. he comes out of the game business, but not an internet business. it's sony is going to thrive, somehow they have to thrive in the era of instant and the era of the internet generally. however good playstation is that he created and built into a multibillion-dollar franchise, it does not really have a connection to the internet cannot give him the kind of savvy i think he needs. is the commentme from an analyst at jefferies who pointed out the insurance profit is higher than the group operating profit. we do not even know about the insurance business, because it is very domestically focused. where is the value in the company's consumer electronics business? he says it is worth zero. to be foundld have by real innovation we have not

seen yet. i do not feel that there is a lot of value in it right now. tvs are a commodity. howre going to be cool, but many people are going to feel they can do that when the prices plummet anyway gekko >y? the tv going to sell business and going to team up with window vote for the rest of the tv business. i want to get your thoughts on lenovo. -- teaming up with lenovo. >> i think the strategy is to become a premier chinese brand. it already moved in the direction when about the ibm keypads way back and the continues to be a big business. they have a wonderful perspective in technology. i think buying motorola for cell phones is a great thing for them. they will sell in china and will legitimize them and parts of the world where people may not want

to buy a chinese brand. so i think they are making a really lot -- making a lot of smart moves. tospeaking of brands, i want talk about the asian consumer. you hear about the companies like sony that are lacking or falling behind in innovation, by much of that is affected the fact that the consumers in these countries are by a foreign brands? they are much more a name or do with apples or burberry's? >> the asian customer is very global. you see them traveling more and more to france and paris. london. hawaii. they are now having exposure. the attraction to a global brand is extremely high. in fact, probably disproportionate to any kind of local brand, and that is something that has happened in the past 5-7 years. >> that is something we will

--e to couldn't can you continue evaluating. that brings us to the question of the day, what is tomorrow's bcr or walkman? tomorrow's obsolete technology product. this is bloomberg "surveillance." we are streaming on your tablet, smartphone and bloomberg.com. ♪

>> good morning, everyone. bloomberg "surveillance." i am tom keene. scarlet fu returns to us today. with us also is betty liu. that he has betty and scarlet here. i knew you were going to go

there. a warning from the u.s. airlines flying to russia. homeland security has told carriers to be on the lookout tubeso case -- toothpaste that could carry and gradients to make a bomb. this was issued yesterday two days before the start of the winter olympics anin sochi. an broadcast was delayed for hour while he pushed to have a woman interviewer included. but eventually the state-run broadcaster relented and the female reporter participated in the interview. thursday night football, cbs prime time for ball just got stronger. they won the bidding to televise eight thursday -- eight games on thursday night now. it had been broadcast exclusively on the nfl network in recent years. no financial terms would -- were

disclosed by guggenheim securities estimates get paid as much as $300 billion for the rights. football is a precious commodity. >> nfl will still be airing the games and cbs. >> cbs promoting sunday. a huge promotion platform. >> it is all about the power of the live sporting events and how much everyone wants it. and the power of football, yes. a we need the power of morning must reads. scarlet fu has morning news. >> it is only early february, but i think i have found the market metaphor for what we have seen so far. global fixed-income strategies at jefferies says the spirit of jeffrey -- lindsay lohan has taken over the mild mannered marketplace. what had been a simple stroll in the park to start 2014 has morphed into lohan meltdown

inside the betty ford clinic. she looks ok there. >> she looks ok. robert burke with us. he looks ok. fashion week in new york. do celebrities still matter? > matter.rities still they sell close. look at the red carpet in grammys, and they influence without a doubt. for am not watching lindsay what she wears. she is just one hot mess. >> i would not know her -- >> yes, you would. ." she was in "parent trap this is my morning must reads. a big deal. happened last night with twitter. the death of a close conference call. twitter investor relations. we believe divine -- combined changes over the course of the year will start to change the slope of the user growth curve.

david kirkpatrick with us. i was thunderstruck by the openness, transparency of the blogs in the conference call. i suggest in there that twitter is setting a model for what it should be like when companies disclose results. twitter understands how to use twitter if nothing else. you have to give >> that much to them. >>michael kors will give -- use twitter for the next conference call. -- you have to give that much to them. >> coming up, fashion week and michael kors. ♪

>> bloomberg "surveillance." the memories, the thoughts. seeof the two gorgeous to

girls of switzerland. they are on the river as a goes down to the lake. a gorgeous day where i cannot afford a single thing in zürich. he is there, manus cranny. joins us right now from zürich. you were there on business with an important earnings release from credit suisse. i am indeed. a big week. brady dugan. they missed. they missed because they are taking provisions. you know the irs? the tax man in your country, trying to sort out issues with the sec and department of justice. those are two big agenda issues. that is what is feeding into the overall numbers. half a billion swiss. whator the u.s. viewers, is the major distinction between ubs and credit suisse? banks goingy, two

and very different directions. credit suisse has 50% of the revenue coming from investment banking. fixed income did not do well. ubs is valued as a wealth manager. valued more in the market then credit suisse. it is a wealth management company, with about 30% of the revenue coming from investment banking. if you really want to look at the differences, it is about capital. credit suisse has about 10% for capital. almost 13%. get the payout of nearly 50% of the income. >> thank you so much. i will see you at the bar tonight at 6:00. really wonderful american p&l player playing in zürich, player.and -- piano

>> very stylish. i wonder who he is wearing. the reason i ask, because michael cores of officially became a billionaire this week. the company posted a profit that impressed analyst. rose the most in two years. he owns about two percent of the company valued at 390 million dollars and has collected more than 700 million selling stocks since the ipo. not bad. montclairut rimo, ski jackets cap go there was a point where they beg for attention at you nor -- new york fashion week. there was a time where they begged for a cup of coffee. robert burke used to run a cash depository called bergdorf goodman. goosebumps in new york and frankly, all across america when a new york fashion guy makes good. a great story. how did he do it? >> michael cores has been in the business 20 plus years.

he was invested in by a very smart group of people. has been in the business 20 plus years. he has surrounded himself with a great team of people. very strategic about how they built the business. kind of a perfect storm with project onrunway getting the name out there. they had a strong accessory business and ready to wear business and was underdeveloped from freestanding stores. they have had tremendous success. what you are seeing now is they are opening retail stores in the u.s., brazil, and they have a long road ahead. interesting,hat is if you want to be a billionaire these days, you either go into tech, property, or fashion. those are the three industries where they are minting billionaires by the dozen. why fashion? what is it about the business that is creating so many of the

billionaires? the think we're focusing on really successful ones obviously. what has happened is it has become a global business. before it used to be a business based in the u.s. or europe. today you have the influence --i was in kazakhstan last week and there are plan on live streaming the new york fashion show to the customers and saks fifth avenue stores. today you do not just draw from a few countries, you draw globally. the strength of fashion is enormous. fashionork has two weeks per year. as some point it gets to be too much, doesn't it? >> there are a lot we do not talk about, berlin, i'll stroll you. -- australia. >> are they as influential as they once were given at the speed at which social media myths and the speed at which people expect change? if not are as important

more important than ever. if you look at history, it was always an industry event. you had a small group of editors and writers, and now today it is a consumer event. of stuffned the split that is outrageous. i think of alexander mcqueen as an example, versus i need to wear it to work on wednesday. tory burch. people making the money. scarlet, i can see you in this. these shows armor getting. in a lot of ways, that is not what you are going to wear on wednesday. a message.nd each brand has a particular reason of why they show what they show. it is a global platform. men's not a dedicated fashion week? we are surrounded by metrosexuals.

they wear makeup. by a lot of close. why not cater to this segment? -- buy a lot of clothes. that is a good question continues to get looked at. for the most part, it is not the kind of venue to promote men's fashion. it is never really -- when he think of the big names like ralph lauren who has done a few presentations and a few runway shows but very -- >> product placement on tom's show. >> in my world in david's world, forget about the fancy fashion stuff, it is a black t-shirt. men's fashion -- >> black turtleneck. ask robert a question? angela ahrens of foburberry went to apple, does that make it more fashionable? >> i think

it makes perfect sense. what she did was make it more relevant through social media, online, a huge investment in their online sales. so she really connect and the online world to a brand. i think apple has not really been so social. >> apple has not been so social. she really gets it. maybe that is a way she can help apple in a way that has not been discussed as much. >> outside of apple, she really refreshed the burberry line. it was for older women. she came in and helped make the brand younger, right? isn't that part of what she did? it andger and elevated made it more accessible. it grew an enormous amount during her tenure. >> is apple going to get more fashionable? it is already pretty fashionable. >> apple is a prestige brand and

fashion brand. i love that thinking. we talk about wearable technology. some of the technology out there makes you look cool. i look around the newsroom and everyone is wearing -- >> like google glass. >> it is a fashion statement, some of the technology coming out. >> it is. apple is a sexy product. the iphone and ipad. i think it relates to fashion. >> i am sending a movie out right now. >> this is tom's. that is my fashion movie just went out. i have robert burke with the dogpatch filter. worked out perfect. >> he will tweet that out. >> seriously, so far from meryl streep and " devil wears prada." thank you. >> we want to bring your

attention to the new cover of " businessweek." this is bloomberg "surveillance." streaming on your tablet, television, and bloomberg.com. do you bake? >> no, i don't. ♪

>> it is peaceful. it is gorgeous. ofhad snow in the month january and now into february. new york city on a crisp, gorgeous thursday morning. possibly we will get another store in this week. boycott we have had a lot of snow. this is bloomberg "surveillance." had a lot of snow. >> i have practically broken all my shovels with the snow coming. the clusters in the ukraine were on the move with our march toward parliament. in thesters on the move ukraine. they repeated demands for presidential elections or changes to the constitution. the olympic torch has finally arrived in sochi. the torch traveled 39,000 miles to reach the olympic the nest -- destination, the longest relay in the history of the olympic

games. it was transported by cars, trains, and reindeer sleigh and stopped at the international space station. call it a protest beer. just in time for the olympics. a scottish burberry -- brewry a beer ofuced vladimir putin wearing makeup. he says he is protesting russia's anti-gay law. how that went down the? top headlines. >> you really wonder with the reporting we have seen so far where sochi, you wonder we will be in three or four or five days with the media and doing what the media does. >> watch out for toothpaste tubes. >> see our interview on bloomberg tv plus with ian bremmer yesterday. sharp lyrical comments on so she -- sochi.

>> since the start of the year, the s&p 500 has fallen almost six percent. correction has become the watchword in markets right now. according to dan greenhouse, corrections are not normal. we do not get a lot of them. no 10% corrections during the last rally, 2003-two thousand seven. if you go all the way back to 1960, only a couple of instances where the market falls more than 10%. from 1990-19 97, no 10% corrections either. 990-1997, no 10% corrections either. they are not frequent. >> we have the ecb this morning and then the press conference and then janet yellen's first comments to congress. you wonder where the level of distortion will be and how it plays into the markets a week or two from now.

>> there may not be a lot of corrections in the u.s. stock market, but we see a lot more of them in the emerging markets, whether it is china and japan, given the volatility -- >> the usual metric is 10% is a correction on the dow and s&p. 18% is a little controversial, but 18% would be a bear market. we are really not there right now. we got some great photographs today. betty liu came in at 2:00 to sort through. what do you have? >> let's lighten things up a little bit. rockets. central station, a new preview of the show. >> this is what they do when it is not the holidays. >> i guess. lex my reaction was, they still exist? -->> my reaction was, they still exist? >> i do an exercise class with a

rockette. you never want to stand with her. >> putin visits a leopard breeding center at the national park in sochi. the leopard is one of the official mascots of the winter games. that guy is just always looking for a good photograph. defense, what guy like him isn't? they are all looking for photo ops. >> the way he is with his shirt off writing a worse. now posing next to a leopard. it is a little much. >> leopards have doorknobs on their cages. we took this really cool picture from space showing the aftermath of an asteroid smashing into mars. the crater at uc is up 100 feet in diameter, a fourth of the .steroid that caused it

it sent debris as much as nine miles away. mars is called the red planet. becauseer appears blue the impact removes the reddish color. got the picture. so fascinating some of the pictures we're getting from space. all right, that is reality. reality. >> sandra bullock looks especially good in " gravity." have a great fashion week. what is the one brand you are looking for quickly? for am looking at jason wu hugo boss. he is the new creative director and is launching a women's line. showing in new york for the first time ever. he has been fantastic. michelle obama. wu.ery cool, jason my next bowtie. >> thank you.

coming back, we will talk about the jobs report coming out friday. what are we expecting ahead of it on friday? that is coming up next on bloomberg "surveillance." ♪

>> good morning, everyone. bloomberg "surveillance." thosecus tomorrow will be that keep the statistics for the jobs report. we will have. on bloomberg news, radio, and television. we will go underneath the headline data. i am scheduled to speak to tomorrowross at 8:30 morning. joining us is michelle meyers. senior economist at bank of america merrill lynch. how does the weather, how does the cold of this january play into what you and ethan harris do? complicates forecasting. i think in general it dampens economic activity. people are not out spending as much. manufacturers have supply chain issues. clearly construction will be hit by cold weather. here is what is complicated about forecasting jobs. you have to look at the survey week. the survey week for january was

the one week of the month that was a little bit warmer than normal. amative to the december week a witch was cold, we expect to get a little bit of a stronger number friday. we are at 185 am close to consensus. >> there is a real mystery to all of this. >> there is a mystery to interpreting the data once it comes out. if you get an upward surprise, and that a weather refund or tell us something more fundamental about the economy? >> what about ism? pointto be the one everyone focuses on. is that the right way to measure how we are doing globally one country versus another? >> it is a good comparison. that is why i think it is the same index that has measured in every single country. a nice way of looking at global comparisons. in general, manufacturing is something that is easier to

measure than services, for example. it is harder to measure in real time. the other challenge is it tends to lag a little bit more. manufacturing is more cyclical. a quick question. i am a tech guy. do you think we are looking at the right data at? we have what we call a programmable world. there are more and more things we can measure. many of us feel that the fed is not taking advantage of the resources available to get a more real-time view of the economy? of theink that is one challenges in general. in real time to measure the true underlying strength of the economy. they are constantly doing benchmark provisions -- revisions and trying to incorporate the change in technology. benchmarkdp revision, they incorporated more technology. i think they are trying to

adapt. >> would we get to a more real-time, not waiting to announce a once per quarter end of announcement or get to her real-time measurements because it is certainly possible based amthe data out there? >> i sure it will continue to evolve. more ande will get more indicators. i think this is just one of the challenges of trying to get a comprehensive measure of the economy. it takes time. you need to have smoothing fx, and need to have something to account for the weather effects. you need to know what to look for. for moreare looking accurate forms of data, we are also looking at the data we have now, and saying maybe they are not as accurate as we once thought. the jobs report that comes out friday, mohamed el-erian writing that it is becoming less and less important. employment will become a widely

followed releases, but unless analyst at the forecast really wrong, we should expect it to a diminishing role as a mover of prices and policies. >> i think the markets pay attention to it. the unemployment rate has a diminished importance. it has been falling much faster than expected. in terms of gauging the economy in real time, i think looking at non-foreign payrolls is one of the best indicators. us.ichelle meyer's with i will talk to her about housing in the next hour. >> speaking of the fed, they threw a going away party for been burning goal -- ben bernanke. the theme was baseball. they made up these ben bernanke baseball cards. dressed in a nationals uniform.

on the back are his stats. chaired 86 fomc meetings. " 60 minutes"n twice. >> that is cool. i love that. actually kind of fitting because today is the first day of spring training. >> i wrote my first article today on baseball for 2014. i am pleased to report the yankees infield looks shaky. >> after hearing about curt schilling? >> curt schilling of course a true hall of famer. type ofot say what cancer and no details on prognosis. but did say he has cancer. >> not everyone knows -- everyone knows curt schilling will do the best ever to fight cancer. here is the report.

dollar-yen, that shows calm. euro-yen 137. argentine peso does better for the first day in ages. we will have more. it is bloomberg "surveillance." ♪

>> this is bloomberg

"surveillance." twitter shares plunge. little u.s. growth of users. more online america. in this hour, betty liu has a conversation with timothy armstrong of a oh well. puerto rico downgraded to junk. you have to take advantage of tax-free bonds, but should you avoid san juan? good morning, everyone. this is bloomberg is thursday,." it february 6. i am tom keene. joining me is scarlet fu and betty liu. guest host for the hour, michelle meyer, senior u.s. economist for bank of america merrill lynch. getting right to the morning brief. here is betty liu. >> we have lots of economic data this morning. trade balance and initial jobless claims will be out at 8:30. our own bloomberg consumer comfort index will be out. breaking news coming out from the bank of england.

they will hold their interest rate at 0.5%. that was widely expected. no surprise there. we are watching the ecb as well. their decision comes out at 7:45 this morning. economists expect him to cut rates. >> this is a big deal. it could really move markets. we are now from boring to actually a big deal. ecb press conferences are never boring. the parade of earnings continues before the bell. edna, gm, 20th century fox and ao well reporting. we will be speaking to tim armstrong, ceo of ao well. the olympics begin today in so cheap. the opening ceremony is tomorrow. the torch, as we mentioned, has arrived. arrived?tin he is in sochi, correct? he is

an earth guy. a sensitive company news this morning. scarlet fu has that. to start with aol. revenue of 13%, 670 $9 million, beating estimates. adjusted earnings per share of $.64 per share. 13%, $679e up million. >> a lot of critics around tim armstrong. >> there are. a lot of them centered around the cash part of the company. butould not say disasters, startling. he started the company and sold it to aol. they have offloaded it to an investment firm. there will be a lot of questions about what went wrong and where do they go from there. the mobile part of the business just did not work.

the other part will be how will they drive core display advertisement growth? how will they do that through google and facebook? >> that interview in just a little bit. companyng to the other news. a shocker from sony, forecasting a $1 billion annual loss. three months ago predicting a profit. sony said sales of the mobile product have been weak and revenue of the communications unit will be below forecast. also, 5000 jobs will be cut in another round of cost-cutting. they are ready announced 10,000 job cuts. shares of green mountain coffee roasters storing more than 40% in the premarket on news that coco: is buying a 10% stake in the company. they will help green mountain introduce a new cold beverage system. look for that. "frozen" -- disney's helping the company top profits last quarter.

they have taken an $865 million worldwide. $865 million worldwide. ♪ ♪ let iher go >> we spoke with bob geiger about the potential for mobile. i love mobile technology. particularly in television on the when you think about it, if you wanted to watch tv before, you had to watch it on a fixed screen, typically attached to a wall or on a of some sort in the home. you could not watch tv all square. you now have the ability to do that, and that is only going to grow. if your ability to access products grows, then your consumption will increase. that is a great thing for creators and distributors. recordey reported attendance of the three theme parks. have you gone to disneyland or

disney world yet? >> i went to disney world in florida a few years ago. i survived. i used the app that tells you where the lines are the shortest, and that helped a lot. >> when they open up the "froze n" parts of the theme park, you can go there. >> traditionalists. >> getting to the news. twitter came out with earnings. we talked earlier about the conference call. let's talk about why the stock is down. things are slow there. user growth plunging in the premarket. a are a social media giants as they look to build a mass market presence. david kirkpatrick with us. his book " the facebook effect" which i feel is a must read. michelle meyer with us with bank of america merrill lynch. if you wrote the twitter effect, what would you write? >> i think you have to think

about the company and stock in separate universes. the stock is crazy. the company is a very good brand, a good company with a great strategy and nice -- good ceo. using the revenue run the ipo to improve its business aggressively tom up but it is nowhere near worth what the market did it up to in my opinion. it is not a company in my opinion that deserves the comparisons that are so frequently made to companies like facebook and google. it is a relatively small business that is a very important mutations company but a massive-- but not global powerhouse. it is an incredible brand, and the media uses it to let leslie and obsessively. essly andit relentl excessively. i love twitter. >> do they need an instagram purchase? what kind of acquisition?

kind of funny, the thing facebook is trying to do, they will probably try to do like buying snapchat. if they had 5 billion or whatever they want, they would probably be well advised to do that. facebook has an interesting strategy of building a portfolio that is not just facebook products but they have instagram, messenger, and a groups product. those are almost like a conglomerate of internet companies. twitter needs to go that way probably, because the core product is very hard to use. effect on then real economy? our attention span, information flow? think it would make us more productive to a certain extent on the one hand, because you have a share of information. consumers, you know what the most efficient way to and spends -- way to spend and invest in.

but you have to ask, it is a distraction from our day to day jobs go it depends on how it is used. i think in general social media technology is productivity boosting. >> i totally believe that by the way. >> do you use twitter? we are not allowed. >> the lawyers are saying you cannot use it. here, the idea of microsoft, you have some strong opinions. >> i am trying to write something today about it. i was able to sit down with him in november. i was so impressed. i have lunch with him the day his name first appeared on the shortlist. it was not something he could really talk about, but the centrality of the cloud business to everything they do and how --y will develop the inner's the cloud apps.

the one interesting thing he said is they no longer have singular developers. the backwards engineer a product they can sell to other people. >> when you look at the effect at microsoft, will he go on to microsoft or deballmer the company? >> i am not sure what that would imply. he is a much friendlier face than they have ever had. genius,es is a incredible visionary, but pretty rough character to deal with. he was was so intense not very friendly. this guy is super nice, super smart. i think he will prevent over -- presents a wonderful face to the company. he is an indian national. a truly global company. he is in american now, but born in india. a different kind of personality.

i am a huge fan of what he is capable of. >> is he well liked in the company? >> loved. the one not necessarily they thought would get it inside the company. bullish onrkpatrick microsoft. >> i just got a tweet that i am songnging the "frozen" correctly. this is a shattering moment. meyer, guest host for the hour will be staying with us. coming up, we will talk about puerto rico on the brink. $70 billion in debt. we will dig into the island economy coming up on bloomberg "surveillance." on television and radio. ♪

>> good morning, everyone. bloomberg "surveillance." i am tom keene. this matters now to the guest host. michelle meyers was way out front on last years housing recovery, writing about supply and demand dynamics that would lead to double-digit gains in price. 2014 looks to be a different beast, to say the least. is it about supply or lack thereof or the lack of demand? >> a little bit of both.

in general what we have seen is inventory remained very low. part of that is supply was slow to come onto the market. construction has been very slow. there is a big lag from start to completion. we have not seen much of completed homes into the market. that slows turnover and sales. we are still in a low inventory environment. >> we talk about distortions. we have the ecb coming out in this hour. distortions in central bank and this and that. is the housing market still distorted by so-called distressed properties or is that old news? asit is not as distorted last year or the year before that. we are far from the normal market still. there is plenty of areas. florida for example. new york has a high level of distress inventory that is still

word -- waiting to work its way through the system. we are not in a normal mortgage condition either. we are still adapting to the regulatory framework and the future of fannie and freddie. in the interim, we are in a network of tight credit. view of single digit market, but what is the exact number? >> five percent home price appreciation. not all thatly, bad. we will take it and say thank you. >> yes, i think it is perfectly reasonable home pricing. cliché is wages. where are the wages? has beenrowth extremely lackluster. that is a factor that is why hang on primary home by yang. the big source of appreciation in 2013 was from clearing out distressed properties through investor buying, all cash by yang. second-home purchases.

the incremental demand. the challenge going forward for the housing market is to get the first time homebuyer back into the market. that is where we struggle. from bank ofeyer america merrill lynch. she will be with us through the hour. this is really important for each and every one of you taking advantage of tax-free bond. talking about train wreck puerto rico. we will do that on this busy thursday morning. this is bloomberg "surveillance." good morning. ♪

>> good morning, everyone. bloomberg "surveillance." i am tom keene. with me this morning is scarlet fu and betty liu. our guest host is michelle meyer. lex protesters and the ukraine were on the move with the march towards parliament. -->> protesters in the ukraine were on the move with the march towards parliament. they repeated demands for

presidential elections or changes to the constitution. one month into this. hundreds of thousands of people that -- jammed downtown seattle for the parade honoring the seahawks in the super bowl win this weekend. layers and coaches traveled at two mile route. police estimated the crowd at 700,000, which if accurate, is more than the city's population. an australian woman has won the up the stairs of the new york empire state building. she climbed to 86 flights of stairs and 11 minutes. the winner of the race long the time of 10 minutes. they would take me probably a day. take me probably a day. >> nice work. i took two steps at a time. >> that sounds about right. betty liu, thank you very

much. very cool. you and i should do that. we could hold hands. two weeks into it. this is serious. this came up the other day front and center. puerto rico is simply on the brink. 70 billion in debt. eight-year-long recession. interesting politics with the united states him at the relationship somewhat affiliated with what we know of guam. of the into the economy island, michael mckee. what is the number one thing i do not get about puerto rico? >> most people do not realize how indebted they are and how much that could influence the overall muni market and mom and pop because they have a lot of investments they do not know about. some people say this could be the next greece. it is possible. they have 70 billion in debt him

as you mentioned, and they cannot pay it at this point. the island has been in recession for eight years. the question is, can they continue to borrow to fill the whole? which is what they have been doing. they keep borrowing and expanding the amount they owe. 650 million dollars is the deficit this year. >> you and i got to scathing e-mails saying the market is wrong on this. scathing e-mails saying the market is wrong on this. >> you have to read between the lines. they can continue to pay the debt. you look at the yield and trading at emerging-market levels, about 400 at the basis point spread to normal aaa ratedmunis. -- aaa rated munis. so many bond funds, three quarters of all bond funds own

puerto rico debt. a lot of people do not know it is in there. so if they -- the hedge funds can take advantage of it, but the average fund will not be able to. they could face the possibility of having a lot of the portfolio default. what could policymakers do? obviously one comparison is it cannot be valued at currency. what are the other options? a realto rico has problem. there are not a lot of options, except to pray for time and take steps. they have raised taxes significantly. they are also trying to stimulate growth and cut spending as much as they possibly can, which of course is always politically difficult. bringing down the deficit and, while at the same time hoping the market tanked in for them. >> is congress therir imf?/ a in theory you could ask for

bailout. detroit went bankrupt and they did not do anything for them. how would you do that politically? >> wasn't there a backdoor bailout a couple of years ago? wereacturing facilities being taxed. the goal was to raise money. the multinationals were able to claim the taxes against federal companies. considered foreign income. so the irs has been letting it go as a credit against the taxes they owe in the united states. while they have raised taxes and puerto rico, it has offset for many of the companies in the u.s. we obama administration says are not doing anything for them publicly, but at some point this is a little bit of a backdoor help for them. hostile bull scenario could puerto rico be like scenario couldat

puerto rico be like greece? >> a company headquartered in virginia, 31% of the portfolio is puerto rico bonds. if those default, everyone defaults and the portfolios will start to default. youe we anywhere near -- and i have been talking about this for at least five years. are we near, mom and pop watching the show who have a national portfolio need to start to worry about this? >> yes, we do need to start to worry about it, but whether or not we are really close to it is a real subject of debate. we talk to someone on the show a week ago who said we are very close. we will talk to john carmel later who says no, there are opportunities to make money off of this and hang in there long enough. after the s&p downgrades, there are real questions.

>> michael mckee on puerto rico all through the day on bloomberg television. lex we are keeping our eye on aol. delivers the strongest revenue growth in a decade. tim armstrong joining us in just a moment. ♪

>> this is bloomberg "surveillance." i am scarlet fu. we are seeing live shots of sochi, russia, where the games begin today. shaun white is somewhere in there. lex olivia sterns will be there.

i think in the building on the left. -->> olivia sterns will be there. >> she will be watching hockey. >> she is going. she is very brave. to warnremmer tried her. a big debate, should you go to sochi? >> quiet right now. >> would you go? >> i would not go. >> i do not know. i have not thought about it. >> going to company news. a legal win for bear stearns. winning a dismissal over a lawsuit. lowball lamed it lost more than $2 billion for lying on a statement about securities. a judge ruled it took too long to file the suit. meantime, legal costs taking a bite out of credit suisse bottom line. missing profit estimates after setting aside $570 million in

legal provisions. they are facing litigation related to mortgage securities and faces an investigation into whether it helped american clients evade taxes. and, subway will remove the chemical from its bread after health activists criticized the chain. apparently it is used for the same reason in some breads as a dough edition are. subway says it is in the process of removing the chemical. that is today's company news. i would not want to go there. >> iowa state there was something weird about their bread. thought there was something weird about their bread. >> revenue is a little bit light. 45 billion versus the estimates of 49 billion. on is a significant miss first blush. operations continue

losing money. north america making 1.8 billion dollars before interest and taxes. >> you have to believe it is a kitchen sink quarter. they want to clear things out. the first earnings report as ceo. dealing with investors as well on the conference call. >> certainly the clock starts now. she is under pressure to continue to grow general motors. yesterday, speaking of under pressure, sam delk, the billionaire investor feels the one percent are under pressure. -- sam dell. about into a conversation the income inequality debate, and i asked him whether he agreed with tom perkins of kleiner perkins, venture capital investor who made waves last feels the onee percent are being demonized. persecuted like jews. by the way,jewish

agrees completely with tom perkins. this is part of what he said to me. one percent are being pummeled, because it is politically convenient to do so. the problem is the world in this country should not talk about and be of the one percent. it should talk about emulating the one percent. the one percent work harder. the one percent are much bigger factors in all forms of life. >> it was the last part that really angered people. the one percent work harder. that you should emulate the one percent. what are you trying to say is what people are getting at? >> michelle meyer with us with bank of america merrill lynch. the pew research trust goes to seven percent. with all the work that you do and the wonderful perspective

you have, how much are the haves and have-nots? and this is a great deal easily number there has been a widening and income inequality. you see it in the data and in terms of household balance sheets. the large gain in financial assets we experienced last year is highly concentrated in the upper income individuals. so i think this is a challenge for our society and something we have to consider. >> something that sam said that we should pay attention to, he said regulations are making it harder for people to start businesses. it is making it harder for small businesses to grow, so she -- so we should look to the government to try to close the income gap. is that something you agree with? >> i think in general, yes. another approach is how about education reform? trying to create opportunities for people

to get higher education, and perhaps have the higher income. continue the conversation. a data check. >> futures on the move. s&p futures. jobless claims. it comes in front of the jobs report for january. >> good morning, everyone. bloomberg "surveillance." on bloomberg television and bloomberg radio. all of our interviews on bloomberg tv plus. on apple tv as well. i am tom keene. with mia scarlet fu and betty liu. joining us this hour is michelle meyer of bank of america merrill lynch. earningsme out with half an hour ago. beating earnings and revenue estimates. revenue growth was the strongest in the last quarter in a decade. shares are up to do six percent so far in the past year. >> they are higher in the premarket as well. 56% so far inup

the past year. we are joined by the aol chairman and ceo, tim armstrong. good morning. you must be feeling pretty good about this quarter. the question that analysts and investors have for you, and have always had for you, how do you continue to keep growing the advertising revenue, particularly display revenue, which is a big part of your business? >> first, congratulations on your book. the theme of your book is the way i think we will continue to grow, which is leadership. the focus of the company has been to choose very large spaces we can compete income display advertising being one. when you look at the result, we have record results for the past decade, and a lot of it is driven by advertising. that is coming from video, reallymatic, mobile, and the absolute tailwind from consumer usage on digital

services, not just our properties but 40's -- 40,000 publishers we put content and advertisements on. >> people say part of how you will keep out -- adding users and growing the revenue is by bumping up your premium content, which i know you have been doing consistently over the past several years. what premium content do you want that you do not have right now? >> sure. overall is to be the leading media technology company in the world. within that, we have focused on three big areas. one is rebuilding aol service. the second is content. third are platforms that scale not just through aol but across the web. in the content rand pocket we have focused on things that are long-term human need. weontent brand bucket, have focused on things that are long-term human need.

the third one is women. women we think are underserved on the internet. you have been involved with this with the makers project. we have the first conference next week in l.a. i am a big believer in brands and would love to have more content brands and more platforms to serve, not just the ones we own but across the internet. brands, i know you sold a majority stake in patch, a local news service essentially. was it hard? it was a pet project of yours. >> i think it is the right outcome for aol, because it is 150 billion dollars space. we have almost won a million consumers in that space. the product had to be restructured. i think it will be restructured more successfully than it would on our own. and wehang with hail, are big owners of the property

still in will work with them. one thing we have been able to do with hail, and the rest of the content partners, we just purchased content brands that will get more personal. >> what will hail do that aol could not do? >> they are focused on the community platform. reducing aat editors lot of content, but really, the focus on the technology stack for what they will bring to the table, i think they will bring a faster way to restructured the product. few more seconds. a lot of rumors about a possible tie up with yahoo! at some point. is this possible? >> we are are ready tied up with them. >> a further merger perhaps? >> that is above my pay grade.

we are focused on turning aol around. that is what i am focused on right now. >> great to talk to you as always. tim armstrong, chairman and ceo of aol. we will be right back on bloomberg "surveillance." ♪

>> good morning, everyone. i am tom keene with scarlet fu and betty liu. gm right now. starting with garlic you on twitter. >> twitter shares are down big time. down as much as 21% earlier after the company reported a first earnings report as a publicly traded company. still losing money, 500 $11 million loss. twice as big as expected. the big story is growth in users. slow down to a 30% increase. hitstock is taking a big this morning. >> it makes you wonder how many will join twitter. green mountain coffee roasters up over 40% in the premarket on news that coca cola, the soft drink giant, will by a 10% stake in the company for $1.25 billion. will help them get into colder drinks.

coca-cola will help. >> a big boost. gm. earnings crossed about 10 minutes ago. a big profit missed, but if you act out one-time items, still a big decline. $.67. >> i would suggest a real mess. is duegm cfo says it to restructuring costs and higher taxes. at china headline. non-china losses across-the-board deterioration. revenue light. 39 billion versus expected 41 billion. >> with michelle meyer here, this goes what to madame lagarde was talking about of the imf. a dampening about brazil under three percent. how does that dovetail into the american economy? clearly an opening economy. manufacturing in particular will get hit the hardest.

theare seeing that in automakers. european business is obviously still a very weak spot for manufacturers. looking to take market share and china, and that has been a big supporter. >> you guys lead on gloom, and then we got better. are you going to revert back to ethan harris' gloom?:; we're still optimistic. we think the fundamentals are supportive for growth. we are sticking with the forecast for three percent growth. the household balance sheet is a lot healthier. if you look at the head winds out of washington, much reduced relative to last year. sticking with a much more optimistic call. >> the driver of automotive manufacturing will not be a good headwinds for the economy anymore. inventory is so high now. >> right now we do have high inventories, and that will have to be worked down. that could be a bit of a drag,

but i do think the trajectory for auto sales and manufacturing is still high. >> here is the headline from the cfo of gm. it is the they say pickup trucks. do you have a pickup truck? >> i don't. it would be great for the snow right now. >> it would be great for the snow right now. do not forget, the ecb coming up in her right now. mario draghi's press conference in the 8:00 hour. from new york, it is bloomberg "surveillance." good morning. ♪

>> good morning, everyone. bloomberg "surveillance." futures up five. gold advances as well. are.cb stays where they they do not change. this is what was widely expected. >> why with a neurosurgeon it the ecb did nothing? >> people cover. up it goes. expecting a rate cut for mario draghi? >> a distinct possibility. withchelle meyer with us bank of america merrill lynch. you are on the u.s. watch. i do not want you to speak for york european team, but mario draghi most -- arguably the most

important central banker on the planet? >> he is one of. i will not say he is more important than our new fed chair, janet yellen. the challenges are still quite severe. the biggest challenge i think they have is disinflation. i think that is why the market was setting up for easing. same fearsve the here, disinflation means a lack of appetite? is that a u.s. worry as well? >> it is, but not to the same extent as they are in europe i would argue. we are further along -- further along in the recovery. certainly inflation remains quite low. we are running well below the fed target. >> what i find amazing is mario draghi said a lot, but never had to spend money. the you foresee in any time in the future where he would actually have to put the money behind his words? -- do you

foresee any time in the future where he would actually have to put the money behind his words? >> that was quite amazing. a magic trick. so far the market has been reassured by his words. hopefully the global economy will begin to recover and the words are enough. goodu just reaffirms economic growth, three percent. if we have three percent optimistic growth from you with lack of inflation, that is not the same as a normal economy, is it? >> it is certainly not. we still see the residual impact of the very large output gap waiting on inflation. i think what that means is we're healing, growth is accelerating, but in a low inflationary environment, we should not expect the fed to start hiking rates. we are in the camp it will be early 2016. >> mario draghi's press conference in the 8:00 hour.

right now company news. >> the euro is paring its losses as well. we will continue to keep an eye on that as well. talking about ibm increasing the bets on africa. the company will spend $100 million to bring the watson technology to the continent. it will be introduced to african government agencies, universities, and scientists and establish a research center in africa. softbank and sprint will decide soon on whether to move ahead for a bid or t-mobile. the decision could come over the next few weeks. softbank, which remember, owns a controlling stake in sprint trying to convince regulators that the combination would be good for competition. apple removing the block chain app.- blockchain it had been available for two years. they have declined to comment for why it was dropped. that is today's company news from the files of bloomberg "west."

>> ok, who is a soccer fan? david beckham just scored another goal. he will be owning his own team. he will become the first major league soccer player to own a part of a team. he is bringing a franchise to miami. the contract with the la galaxy allowed him to buy an expansion team with the discount price of 20 $5 million. it is unclear when the team will take the field. >> it is hard to put a time on it, but we want the team in the league when it is the right time for the team. when it is the right time for the city. >> that is david beckham. he also needs to find a place where the team can play. are you a beckham fan? >> i am. froml walk for pictures miami. hanging out with their four kids. the daughter was the final one. >> that is how they keep the

brand alive. a similarityn bequeathing -- between david beckham and david lundquist. there is a theme going on here. >> nice pickup. time to make observations in the addenda where we take a look at the story shaping the day. what are you focused on? this afternoon. twitter in the challenges of twitter. you have facebook. linkedin will come out today. they have delivered real results. betty and i are influencers on linkedin. a fun program to do. we will see that this afternoon. something very important to see about the stability that people yearn. we are influencing. i have to write one like -- eye on theping an olympics, because the events, the games and competition began

today. the opening ceremony is tomorrow, but what has been so amusing are the pictures that everyone is treating -- tweetint are the hotel rooms under construction and the brown and yellow water coming out of the hotel rooms and how you are not supposed to wash your face with it. it is something you do not want to see. you are watch -- walking into a construction zone. there are rooms with single twin beds. in shaunore interested white backing away from further injuries on the snowboard run. >> it is the slope style course that they made modifications to. it ends in a couple of big jumps. apparently one athlete broke his collarbone. another one suffered a concussion. john white took a good look at it and said not me, i am pulling out. -- shaun white. it was funny, nbc was worried

now that lindsey vonn pulled out that people would not be as interested in the olympics, but there is a lot of interest going on. >> people wondering what will go wrong next. started. not even speaking of not terrible or trying to not make it a terrible transition as it was the last time around, jay leno is on my agenda. tonight he finally says goodbye. he will be taking over from -- jimmy fallon will be taking over. recall recall, you would when johnny carson left the stage and jay leno took over. it was not -- >> leno coming out of boston. >> conan o'brien took over, that was one of the most terrible transitions. temporaryurned out, a one. >> amazing how this moment indoors -- endures.

is, with all of the disruption and all of that, that 11:30 slot still endures. >> and still a very popular slot for people to turn into. carson?ou watch johnny i am curious. >> the answer is yes. >> the answer is yes, and joan rivers was great. it was literally waterville -- vaudeville. we make mistakes. we do not try to hide it. >> throwback, on throwback thursday. throwbackack tom on thursday. speaking of throwback thursdays, time to answer the twitter question of the day. we asked everyone, what is tomorrow's vcr or walkman,

obsolete technology item? how about these answers -- michelle meyer still uses a blackberry. tomkat disc is getting obsolete by the date. how about this one on the food, it will all be protein and vitamin. >> i love that. >> that would solve a lot of problems. socially it will never replace going out and having dinner. >> as we look at tomorrow morning, what is the number one thing you will look for? >> obviously headline jobs will be important, and you want to look at trying to determine the weather affect. construction and manufacturing are particularly weak, perhaps there is a weather factor. >> wage growth. that is a huge deal. to see if the american paycheck is -- >> unemployment as well. >> do not forget betty liu's interview with tim armstrong. look for that on bloomberg tv

plus. you today.re for jobless claims. michael mckee and puerto rico all day across bloomberg television. he and i will continue on bloomberg radio here in a moment. good morning. ♪

>> live, this is "in the loop." i am stephanie ruhle. >> and i am matt miller.

general motors is not lucky. that company missed its fourth-quarter profit estimates by a long shot. >> don't tell me it is because the weather is cold. >> definitely not. to their credit, they did not use that as the next use. they posted a profit of $.67. analysts surveyed were looking for $.87. that is a huge miss. it is a lot better than the $.48 profit they have last year. outside of china, they are having issues in asia. they lost $300 million outside of china. that is the weak spot for them. in china, they have always had a real strength. it is a huge company in china. >> a huge challenge to get started. they miss. it hits the podium. >> everyone in detroit