more about this. we will be on the markets again in 30 minutes. "market makers" is next. ♪ >> ready, set, shop. the black friday rush is underway. you will hear from the ceo of target. year after the megahit it is not just disney cashing in. and it is no holiday for hollywood. it may turn out to be a crucial weekend for three big studios. good morning, everyone. i'm a arch oscar. stephanie ruhle is off today. let's begin this hour with a

bulletin. the top stories in business and finance. oil prices are plunging this morning about dropping below $70 a barrel for the first time in 4.5 years. while you are enjoying thanksgiving, opec met in vienna and decided not to cut production. years, we last four have had a very difficult price. that does not mean that we should rush and do something. we have to wait and see how the market reacts. i have said many times do you that we do not want to panic. >> several members including iran and venezuela wanted a production cut, hoping it would boost the price of crude. america's shale boom have dropped oil prices 30% since june. opec's decision will guarantee the collapse of the shale some.ry, according to

takata tos to order recall two million vehicles there after hearing the u.s. will demand a nationwide recall. u.s. regulators ordered takata to expand the recall by next week. they have only recalled vehicles in areas with high humidity, which is being blamed for causing those airbags to function. lawmakers today voted to have european regulators consider " unbundling search engines from other services." there is one problem, the boat was nonbinding. google remains under investigation in europe for antitrust violations. every year people hit the stores and shop online earlier and earlier to score deals. this year, some of the largest retailers are already second -- setting records. it is still early but we have

estimates that 25.6 million people were shopping either online or in stores yesterday, according to the national retail -- retail federation. would expect that with stores opening earlier and more people shopping online, many e-commerce companies picking up the ball on black friday and on this whole holiday period, offering more and more deals. we have had walmart and target say that these are big online shopping days for them. we talked to terry lundgren of macy's earlier who pointed out that macy's is now the eighth largest internet company after netflix, presumably in amount of sales. >> i don't know how he measures that. >> i don't know either, he did not specify. macy's has been held up as a retailing example of doing it right online. getting aike we are

lot of numbers on online. it is early for traffic numbers. i did see one comment on twitter, it's interesting, although retailers are terms ofng online, in what they have told us, and not talking about floor traffic, hard to see if that is telling at this early point or not. >> one company getting a boost from black friday is target. the ceo brian cornell announced that thanksgiving was their biggest day ever for online sales. he is with us now from the new york stock exchange. good morning to you. on blacky 10:04 friday, but given your stores were open at 6:00 last night, giving you give us a sense of how big the thanksgiving day weekend is likely to be this year versus what you did last year? >> is still very early in the day, only 10:00, but i saw some encouraging signs. amen on my standpoint, we had a

record day, up over 40%. we have seen strong online performance, talked about our third quarter results on mine up 30%. we made a significant investment in free shipping. the consumer has really recognized that. aline went to -- got off to good start yesterday. i personally saw very good foot traffic in our stores. we opened up at 6:00 p.m., all of our stores around the country had hundreds if not thousands of people ready to shop. it was encouraging to see families in our stores. certainly looking for some of the doorbuster items. we sold about 1800 tvs per minute. video games were popular, selling 2000 every minute when we opened up. but they also took their time to shop other categories. i was encouraged to see a paralyzed him's and other home items as be opened unless night. still really early but the

shopper was out there. retaild at competitive and it was very vibrant. very early but i'm encouraged by what we will see, but very anxious to see how the day continues to evolve. today is black friday, so we will be tracking those sales, will be back to see how the consumers are engaging. areiven the emphasis you putting on the online sales record for things giving, can you give us a sense of how important online is to target, what percentage of your revenue is generated by online sales? >> it's a very small percentage day, 3%, but is a fast-growing channel. the way we go about it over the holiday season is a combination of a great in-store experience. we want to offer convenience. you can shop from your desk, kitchen, and come back one hour later and pick up at one of our 1800 locations.

more and more we recognize online is important. that is why we have depth forward with free shipping. a win when the combination of great in-store experience, the convenience of shopping online, picking up in stores, and the ability to ship directly to homes all come together. we are focused on making sure all three of those elements work well during the holiday season. you are still relatively new at target and you have been tasked with turning around. thatchanges have you made you are most excited about and you expect to see, to be the most fruitful in the holiday season? and theig focus for me entire organization is making sure we follow the consumer. we have been very focused on what i call a signature categories. how do we elevate our game in style? apparel categories, home, beauty, where we have to be

famous in those categories. we want to make sure we are very focused on categories like babies and kids. during the holidays, kids are all about toys. you want to make sure we have the right assortment and great value. we also think we can play an important role in wellness. we are elevating those signature categories, want to make sure we provide a great in-store shopping experience, but we also recognize more and more, mobile is the front door to our brand. we have to be engaged from a digital standpoint. i feel great about the plans we have in place, we have a fabulous advertising campaign. today from 6:00 until noon, we have a unique offer. we are giving our guest 10% off of gift cards. i think that that is something they will be attracted to. that will lead them back to target over the holiday season. our pieces are coming together, we have our priorities in place, but it is still early and we have to make sure to execute

every day to win. >> how soon before you make changes to your senior management team to execute everything you are doing in the company? >> i have been here for four months. i discovered that target is still an iconic american brand. we still have a great relationship with our shoppers. one of the great things i admired about the company is it has been an academy company. it has great talent. i found a very talented leadership team. you should not expect to see any major changes. we have the playbook in place, clear priorities, working together as one team. we will make sure that we win, going forward. >> you mentioned target is still an iconic american retailer. it is tarnished to an extent by what happened the last season and a winning sales we have seen. you talked about advertising. how are you convincing the has not, who perhaps

migrated away from target, to come back? changes that big has taken place is the consumer recognizing that data security has been an industry issue. we had the big headline last year, but as you know, this has been an issue across retail, banking, food service. it's an issue across america. we are working everyday to make sure that we protect our data. place, wereat team in have great systems, and we are out there every day making sure we are focused on protecting that data security. we have a great team in place. as i talk to our shoppers, they have moved on. this is no longer a target issue. we will win them back over the holidays and we will do so by making sure we have great stores, a convenient way to shop with in-store pickup, and we deliver a great digital and online experience. on your third quarter conference call about

your plans to open up smaller stores in urban markets. when is that going to happen, how many stores do you intend to open up next year, and when were -- where will they be? >> it is starting right now and it goes back to our focus of following the consumer. we know consumers are moving back to urban centers. our brand needs to be there. we need to be in as urban setting to serve the guests. we had eight city targets open. we announced plans to expand into boston, brooklyn, looking for other locations. we have a new concept called target express, about 18,000 square feet. we launched in minneapolis. we are looking at expansion on the west coast. we think the combination of those two formats allows us to serve our guests in the growing urban centers. i am excited about that format. it allows us to run great stores , but also smaller formats that follow the consumer.

very excited about that. we will talk more in the first quarter about our expansion plans, but we will be following our smaller format to follow the traditional box. >> target has had a bad experience in canada thus far. you spoke recently about the time it will take for those doors to get up to the standards that you have set for target. how much time are you giving them? >> we are very focused on the holiday season right now. we got off to a difficult start. everyone knows that in canada. we have a team focused on getting the basics right, making improve in-store conditions, address the supply chain, make sure that we have relevant merchandise, and that we offer that canadian shopper a great in-store experience. every store in canada has to improve, all 133. we are watching those every day. we have a great promotional

campaign in place for the holidays. i am really interested in seeing how the canadian consumer response when we deliver target at its best. >> thank you for your time, brian cornell, ceo of target. enjoy your thanksgiving weekend. [inaudible] one vikram pandit says about the future of citigroup. and don't even think about going shopping without watching this. the hottest toys of the season. ♪

>> you are watching "market makers." took a this month we look into our crystal ball, gearhead summit in washington, where we are brought together business and policy leaders to

talk about the biggest issue they see in 2015. among them, vikram pant it, now chairman of the ttg group. the reality is the need for financial services is vast and wide, trillions of dollars of need. while banks did serve a number of clients and areas, we have always had white space, always segments of the economy that needed more financial services. what is happening is because of the cost structure of technology, what is known as the social, mobile, applications cloud data analysis. you can bring a lot of financial services to a lot of different some of thefrankly, things the banks are doing. it is that combination that is exciting. frankly, create more competition. good for the consumer and the world. arehat is it that banks

doing wrong, let's say, or perhaps not doing at all, that creates the opportunity the kinds of companies you are backing, like orchard or common bond -- in other words, every solution requires a problem. are --banks >> the unbank, underbank. >> a number of things going on. it is clear regulation has created some white space. areas that used to be served by the banks that are now better served by a different class of financial intermediaries. >> like what for example? >> you see this in small business loans. companies that analyze credit for small businesses and i can translate into lending as an example. you are seeing that in middle-market lending as well, helping smaller american

companies borrow money. early, but more importantly, the result of some of the whitespace coming out of regulation, but it is more than that. what technology has done is allowed you to get into niches that were too expensive to get into. companies like square come going after small merchants. companies like striped, going tripe,-- straight -- s going after payment services. technology and data has made it possible for new entrants to go out for segments that were and/orrved, not served, also go after a better way of serving clients. it is not whether or not the banks are doing something or not . it is a confluence of needs that can be served some by banks, and some by these new entrants. >> if technology is really the

enabling factor here, let's take financial services and liken it to the internet. the development of financial services relative to the development of the internet? andhat is a good interesting analogy. one of the things that is interesting about the new entrants is that they are an open architecture system. banks are closed architecture. their rails,s their data, their clients. everything in that closed loop circle. the new entrants are cloud-based , they use a lot of data that is publicly available. they use the internet. by the way, you go to virtual currencies, there is no central ledger where what you own is kept. it is out there somewhere. there is a different architecture. new it comes to these

entrants, digital providers of financial services, it is early. we are evolving fairly fast. some of that just comes down to your analogy which is the early days of the internet. you are too young to regret this, but the point is, they used to be mosaic, netscape, a bunch of other browsers. i think we are in the early stage of that. >> i remember mosaic. [laughter] >> he has aged really well. that was my interview with former citigroup ceo vikram pant it, now chairman of the tgg group. a year ago today most americans had not heard of the animated movie "frozen." now you cannot escape it. ♪

>> breaking news. it is the busiest shopping day of the year, unless you are shopping on the best buy website, which has crashed. julie hyman has the latest. i just tried to go and it refreshed saying, currently unavailable. reached out to best buy for comment through several different avenues, have not heard back as of yet. are grapplinghey with this issue on this incredibly important day. in cymer electronics is one of these items that you look at during the black friday weekend and being heavily discounted. it's really an area that is emphasized at various retailers. for best buy, their bread-and-butter, obviously, this is an issue for them. if you look at the stock reaction to this, we still see gains in best buy shares. they pulled back after headline

started to service about this problem with the website but then they rebounded to some extent. of course, trading is been today, that would be the caveat to that. nonetheless, this is something to keep an eye on him we will update you if we get commentary from best buy or if the website is up and running again. is a thin trading day but i was looking at the volume in best buy shares, they have traded 2.5 million shares, half the daily average. volume may be thin across the market but there is a fair amount of activity happening in best buy. to your point, this issue of the website being down does not seem to have affected any enthusiasm for the stock. are trading overall up today. not necessarily uncommon, a big day for them in terms of sales. we are seeing consumer discretionary stocks leading the gains overall in stocks today. the other side of all of that is that energy stocks are the worst performers because of what we have with oil prices, which then

it also is a positive for consumer discretionary company. to go to a commercial break. when we come back, "frozen" is still hot. the merchandise. disney is the only one raking it in. ♪

>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> i am erik schatzker. today.ie is off over a year ago, disney released "frozen." today, it is the biggest animated movie of all time with box office sales hitting one point two $7 billion -- $1.27 billion worldwide. merchandise is the top pick for girls this season. julie hyman has a look. seems like everybody is into this movie.

not just girls. matt miller is a big fan. i tried to look at just how much stuff has been spawned by this juggernaut. is have got the toys which the most obvious option. you have all the entertainment, the box office, music, etc. you have apparel and home goods. there are a number of different types of products in a number of companies benefiting from it. let's start in the most obvious area, the toys. the licensing is a little bit complicated. mattel has a license for the dolls, but hasbro will take it over in 2016. a company called jack specific makes the costumes, which has been huge year-round. there is a committee that makes plush products and kid designs like headphones and radios.

a spanish company makes microphones we can sing along to karaoke apps. in terms of the revenue-sharing and the licenses, it is quite in or miss. entertainment, as well, a more obvious one. you have box office and dvd sales, soundtracks. a lot is back to disney. this is stuff they profit from directly. there is also a disney publishing arm that partners with random house. not only do you have kid books linked to it, that you have novelizationsen that have been sold. there is disney on ice. the company -- there is a company that partners with them on that. so all of these companies are profiting from the "frozen" machine in various ways. and home goods as well as apparel.

it is very fascinating. i talked to target to find out who makes this stuff. there are a number of different little companies and you have never heard of making the t-shirts and pajamas and the throw blankets and sheets and the table and chairs. you get a little playset. oh, i am us forgot the wedding dresses that you can buy that are "frozen" as well. disney will be introducing a line of oral care. they're partnering with oral-b. -- fresh fruits fruits. they partner with a company is thesage, and there "frozen" branded fresh fruit. >> for frozen foods, that would make more sense. >> maybe a snow cone machine

like the old snoopy snow cone machine to die cannot believe i have thought of something that is not on the market. which toys areut hottest this season are nobody knows better than the publisher ," a website that reviews toys for consumers. good to see you. >> great to be back. mo this year.el it looks like it is "frozen" and more "frozen." >> elmo has not gone away, but you are right. "frozen" is a phenomenon. mattel has the 12-inch tall's. jack does the smaller dolls. this one speaks different phrases and her dress like that. and the best part -- ♪

>> the songs. she is wonderful. you are right. the headphones and so many great products. >> are they great products though? >> they are. goodat makes the toys other than that? >> this is a beautiful doll. she is wearing a beautiful dress, and you can play with her hair. it comes with her friend olaf. >> what about this sort of ginger crossing -- gender crossing ability for boys? >> they will like the olaf. will appeal much more to the girls, obviously. there are things for the boys. legos are hot. teenage mutant ninja turtles are hot. something that is appealing more to the girls, but

there are collectibles for boys, too. they have these tiny collectibles -- >> i cannot even see that big term here. it is not for your smallest kids. a soap looks like dispenser. >> yes, it is like what you find in supermarkets. these are fun and kids can get them with their allowance. soap you want the dispenser? >> i am lost. >> kids and technology -- kids love things that there parents have, like smart watches. two smart about the watches for kids. this is from leapfrog, and kids are doing activities, earning points. they have to move, run, jump, and follow the instructions to earn points to play games. that theypresses me

need a watch to run around. >> they are running around on their own, but this is fun for them. there parents are monitoring themselves, and they want to do the same thing. this item actually has a camera. it has a flat face. we have digital and analog clocks. in video games. technology is big for the kids. >> i have a question -- there is not a must-have toy this year the way there has been in the past? >> no, "frozen." but it is in between. you want to have that must-have toy to drive traffic. >> this is huge on my wrist as an adult, so i only imagine on a child. >> you can make this smaller.

parents are just giving their kids the technology that is made for adults? how many little kids are getting ipads? >> you are right. as a mom, i would give my kids tablets made for them, smart watches made for them, content for them. there are so many tablets that are safe for children with content for kids. they are engaging. much better than handing over your $400 piece of technology. is from a committee called jack and but for mattel and hasbro, the big ones, who is doing a better job of catering to the kids? >> these are two of the biggest toy manufacturers out there. sales overall have not been climbing that rapidly. >> over the past decade, it has not. it has been a $22 billion industry for the past decade. we're hoping this is the year we

will see a nice bump. the economy is getting better. and you have elsa and her sister. is delivering some amazing things this year. this is a hasbro items are they no kids are into the whole mak er movement. the problem with mattel is that barbie got a decline this year, but she is still a $1 billion brand. barbie has peaked. she is slowing down. will she peak again? she is part of the american fabric. she is not going anywhere. something like this comes along and it will take her off her throne or a little while. doll looks lamilie more like a real woman or girl.

i do not think they're selling that many. we will see. >> thank you very much for coming. thank you for bringing the "frozen" dress. >> it lights up. mendell. all idina >> during the commercial break, julia is going to squeeze into that. disney hopes the force is with you this weekend. big time for all those "star wars" fans. ♪

>> this is "market makers." can the holidays say hollywood? end studios are hoping to the year with a bang. let's get a look at some of the big releases. >> hollywood always wants to end the year with a bang. push.is the oscar typically, thanksgiving is the beginning. there are always big releases. look at past thanksgiving holidays pdc ivies like "hunger games" and "harry potter." if you want to be in the top five, you have to be 50 poor $.7

million -- $54.7 million. if you has not been a great year for movie spirit the two big movies this weekend are not expected to reach that top five. "hunger games" expecting to bring in about $54 million. it represents the sluggish year hollywood is having. even though that is probably one of the biggs movies in the year, we have to wait to see the final numbers, it did not do as well as expected for the opening weekend. it is not matching figures analysts accepted. >> and that is pretty much an nothing situation for lions gate. >> it is getting down to the wire with only one more movie left. the good news is that they are planning theme parks and a play, video games. they are diversifying in a way that we have seen disney do, and that is how these movie studios are saving themselves these days. >> what else this weekend?

madagascar," and dreamworks has been working on diversifying its revenue. they have been trying to sell more consumer products. i went to one of their holiday exhibits. they have been trying to sell themselves as well. it has not been working. i went to a holiday event and weeks ago where they had penguin toys and games. they are trying to push this on kids, trying to make a comeback. if you think about "shrek," that is still the big one. the characters are relevant. >> what other big releases are on the calendar between now and the end of the year? >> this is not until next you, but disney is releasing their "star wars" trailer. here it is. it is getting fans excited. they are doing it in an interesting way to only

releasing it in a couple theaters. they will have "star wars" experts on to talk about it. ype.t is all about h >> and all about making money. "star wars" can make them money every year. >> i am going to date myself -- i remember going to see the very first "star wars" film with my family. hooked?you cooked -- >> of course, i was quick for life? >> the most recent movies have been terrible. >> disney is supposed to be releasing a new one every year. if they do it right, it is probably worth it. >> thank you for the update on holiday movies. it is the biggest we can for lionsgate. coming up, something the bright idea -- the guy who wants to lead it digital light revolution

, one that involves your smart phone. ♪

>> ever wonder why you cannot sleep at night? look no further than the lamp decide your bed or the screen on your smart phone. the problem is lights, specifically the kind of light. an inventor says he has made a new kind of light bulb that removes the blue light which will help you sleep sounder. he is hoping to lead a digital

light revolution. >> first, there was light. with that came shadows. is underneath it? >> imagine a world without shadows. it is not an optical illusion. this is the future of light. computer algorithms can calculate where light is not and fill in the dark spaces. try that with one of edison's incandescent bulbs. fred is a physicist and philosopher who founded a company called lighting science spirit he believes light is the last frontier of the digital read -- digital revolution. >> every other technology has gone digital. different.dically it is movies and video on demand, it has completely changed.

lighting is the last structure to go. >> once you digitize it, like becomes more than a source of illumination. life can be many belated so resize lee that colors change before your eyes -- can be manipulated precisely. be done in surgery, retail, agriculture, and of all places, in your bedroom. he invented a lightbulb he claims can help you sleep. >> it is a wonderful, powerful drug actually. we're just learning to use light in that way. >> medical studies have established that light plays a crucial role in regulating a sleep cycle. there is a set of receptors deep inside the eyes sensitive to blue light, the kind from the , fluorescent bulbs, and smartphone screens. that keeps you awake and is suppressing melatonin production. find a way to remove it cheaply him and you have a product that could disrupt two multibillion

dollar industries, sleep therapy clinics and insomnia drugs. that is what lighting science is trying to do. >> the presence and absence of the blue light, the most important part-- is trying to be away. >> the thesis has been tested -- in for astronauts, being space is like working the night shift all day. without normal light, melatonin levels drop, circadian rhythms go haywire, and sleeplessness sets in. so lighting science outfitted the international space station. it restored the natural sleep cycle. has packaged that same ulb youogy in a bold -- b can buy a home depot. there is one catch -- each one cost $70.

>> it is not the light you turn on to see by. it is something that is biologically significant in your life. >> there is some big money betting he will succeed. pegasus capital, private equity firm, has invested 150 billion -- one have -- $150 million in the company. >> we can create a market not being used today. >> the challenge, changing the way people have been thinking about light for more than a century. >> when i think about what light will be, i think about it being built into building materials, built into windows, built in ways we have not considered, in ways that is customizable to the user based on their needs. stuff. approaching 56 minutes past the hour, time for "on the markets."

looking at airline stocks. below $70dropping today for the first time in four and half years. great news if you are running delta, american, jetblue, united, the list goes on. it is an enormous cost for airlines. the cheaper crude gets, the better prospects for profits. jetblue up almost 9%. "market makers" will be back in a couple minutes. we have not seen oil this cheap since 2010 at how big of a blow will this be to the shale oil industry in the united states? ♪

live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie world. >> opec rocked the energy markets and the shockwaves are being felt in north dakota it with the following oil prices means to the shale industry. digital marches coming back for more. they are giving you cash to explain the world of e-bates. mobile payment wars -- a guy willing to go head-to-head with apple pay. this is "market makers." erik schatzker stephanie ruhle is off. we start with the top stories in

business and finance it we cannot see oil bit slow in more than four your spirit give the credit or the blame to opec. wti fell below $70 a barrel after opec decided not to cut production after the cartel's meeting wound up in vienna. the opec secretary-general jokes with reporters -- >> [indiscernible] [laughter] why you are concerned? the prices come down here that will help you to fill your car. why'd you concerned? unless you are a trader. if you are a journalist, that is good for you. ask no laughing matter for iran and venezuela which pushed for opec to raise prices. success with respect to the ecb may have gotten the nudge it has been waiting for to expand the stimulus program. euro-area inflation slowed to

match a five-year low. president has already said he wants to raise inflation , wants it to accelerate as much as possible. shoppers got an early start on black friday. the number -- a number of big box stores opened for shopping last night could we heard from the ceo of macy's about the crowds at his flagship store in new york city. over 15,000 last year but well over that number just last night standing outside the store coming in. it was the diversity of the crowd that was here, from all walks of life. went to the store and visit other stores in québec at midnight and it was all millennial spirit we're getting different bites out of the apple. >> big trouble for best buy. the website has crashed and remains down. users trying to go to the site are being told that it is

currently unavailable. to housing crisis almost led the collapse of bank of america. now the man who presided over bofa during that time has a housing crisis of his own. can lewis' citation-style home in south carolina is under contract for three point finally dollars. he bought it for $3 million in 2002 here at he left bank of america in 2009 after the government bailout. oil prices plunging after opec refused to cut production. what does this mean for the shale revolution in united dates? philip served as the director of energy policy of the treasury during president carter's administration and now runs his own independent consulting firm. he is with us on the from -- phone from aspen, colorado. but take a different look at what we saw coming out of vienna yesterday while we were all enjoying the thanksgiving holiday here. a big decision by opec not to cut production.

what does that mean for u.s. shale oil production even that much of it is not at low cost? >> what it means is that we're going to see a fairly rapid ,eduction in drilling activity and the rate of increase in u.s. production which has been nothing short of spectacular, more than one million barrels a day each year, will probably drop next year to maybe 300,000 400,000 barrels a day. the year after that, it could even fall. >> really? >> any of these producers are hedged so that the slowdown will spread out over time. but if you look at the statistics on how these wells are financed, you find that a debtf the producers issued of roughly 17% of the high-yield

bonds, $1.7 trillion in high-yield onset merrill lynch tracks are issued by the producers going into the oil field, and i think that financing gets shut off monday morning. it is so that we will see some and very similar to what we saw in the mid--1980's, early 1980's, when prices began to fall him and midland, texas, went from being a boomtown to a ghost town. so the activity will slow rapidly. the rate of production will not decline. 2016say, not until probably. one of the ways to think about this is the housing crisis. we saw a seven collapse of housing construction. a lot of bankruptcies. people in foreclosures. but the homes remained, and the homes are occupied now.

what happened is we have seen all this drilling and increase in production and the activity will slow and may come to a halt to $50 or so,down which the saudi's expect, but the wells will be there. there are some relatively modest low-cost efforts that producers can make to keep the wealth they have already drilled flowing and pump up the floor rate. what we are going to see is a quick drop in the major levels of activity. is a great explanation of what we can expect. do you happen to know what percentage, roughly, of u.s. shale oil wells are uneconomic at $70 a barrel? >> one, i don't. two, i'm not sure anybody really has a good estimate, because a lot of the wells, a lot of the

-- arere sissy should associated with releasing the land. that money has already been spent. send thing as buying the land to build a subdivision. the incremental costs for drilling these wells may require $40 or $45 a barrel, maybe a little lower. i have not seen anybody do a calculation on that. but the real question is -- can the people drilling these wells get the money to do it? because a lot of it is done with borrowed money. few lenderse very willing to open up their wallets to fund this drilling monday morning. >> we talking specifically right now about many of the wells in north dakota, those that have been re-tapped in west texas. there is -- is there a potential

knock-on effect on the shell gas industry? because part of what has kept some of those wells economic during times of low natural gas prices is the oil credit you get. but if you are getting much some oil credit, i imagine of those wells do not look so good either. >> i think so. i looked at this yesterday -- i did not get thanksgiving off. the associated gas and well has become a much smaller impact according to the eia data. now it is mostly shale oil and shell gas. natural gas prices will be under pressure, too, though. we have seen all the pressure to export natural gas to europe and to asia. the buyers in europe and asia are not going to be very interested in our natural gas next year, because the gas they buy from other suppliers is tied to the price of oil. oil is now $50 rather than $100,

so they will see a 50% reduction in the price of natural gas beard suddenly, there are all plants push byt companies, and they will look like dogs. the europeans will say, thank you very much, your gas is too expensive. so we will have more gas and the price of gas goes down, so guest ruling will go down. with lower oil prices, we will not see as much interest in powering trucks and cars with natural gas. if gasoline is two dollars a gallon and diesel is $2.25, very few people will be willing to switch to natural gas. natural gas will come down. >> we're still a fair ways away from two dollar a gallon of wine. one last question before we have to let you go. coming into yesterday's opec meeting, evil are asking the question, does opec matter anymore?

you study cartels, and i afraid i am an old man, but the research shows that cartels are restricted commodity agreements that are successful and work well for three or four years and then fail and reform. i think we will see opec reform in two or three years. there will be one or two new members. russia will almost certainly join with them and find a way to cut production to bring prices back up. i would not be surprised if canadians also chip in. the members of opec do not have enough market share right now, and they are demonstrating that they can do it. i think two years from now, we will be looking at a new organization. that you really believe canada would join opec? and that the united states would tolerate it? canada'sif you look at

behavior -- i was teaching at the university of calgary and till about 2011 -- potash producer in saskatchewan was blocked by the canadians. the canadians talk a good game, but this is very serious for them. i think whether they would , they wouldth opec if it looked like they could get higher prices. if they do not get higher prices, alberta will have to work hard to keep its shale business open. >> thank you very much, owner of an independent consulting firm. oilhat does the drop in prices mean for alternative energy? we will hear from the ceo of solar city. plus, building consumer loyalty and e-commerce. we will tell you all about the e-bates. ♪

backw that oil prices are under $70 a barrel, you may wonder what it means for alternative energy. it was a conference in washington, and we put that question to the cofounder and ceo of solar city. >> when we deliver energy to a home, we provide it at a lower cost than a utility hear it but the oil price has almost zero bearing on that. natural gas pricing has little effect on that. even with all-time low natural gas prices, the cost of retail there is transmission

and distribution, a massive infrastructure you have to pay for. it is getting old and requires constant upgrades. >> so it is not so much the price of natural gas arriving at the generating plant or the cost of coal. those are factors. >> they do have some impact, but it is a minor impact. [indiscernible] all-time lows for natural gas. even with that and with the natural gas facilities, the cost of retail electricity has still gone up. >> how close then is solar to being a legitimate threat to the grid, the utility affect? >> there is no threat to the grid. it will create a greed infrastructure -- grid infrastructure, and it makes it safer. it makes a more stable gid.

-- grid. it does change the utility business model, so the utilities do not like it that much. they would prefer to keep the customer captive and make sure they have no other choice. if you can maintain a doubly, you can maintain pricing. >> -- if you can maintain a monopoly, you can maintain pricing. >> you can do with the telecommunications companies did when wireless came along and realize that if you cannot beat them, join them. >> they are working on that decision. there are small symptoms. ine energy companies getting quite heavily. these are not typically utility companies, energy companies getting into the space to the more energy committees a get into it, the better.

back to your point, is it feasible? most homeowners do not know this, but you can install a solar system for free. the equipment and installation is free. you just pay for the energy which costs less than energy from the utility. technology, thanks to your cousin elon musk, is evolving to the point where you can put a battery in the basement and just unplug, can't you? >> the grid will be around forever, at least for our lifetimes. with the deployment of distributed energy, it will make it a quite better grid and you combine storage, and now you can address every concern the utilities bring up. voltage control, demand load. you can really do a lot when you add storage. be on ad the storage distributed basis in basements or managed by the utility? >> it will be a combination.

our current plan is within four or five years, most of our systems will be deployed in markets with high-cost energy. where the energy is lower, it will take a little longer, seven to 10 years. within 10 years, all of them will have a device for storage attached to it. the storage device addresses all the issues about the solar system. theyou want it to balance load. otherwise, you have to combine the system with you storage device. with a grid, you can balance it. >> do you see wind and solar coexisting peacefully forever? or will it come a time where it is a zero-sum game? >> a lot of wind blows during the night.

you need cost-effective storage. you combine them, i think it makes a healthy blend. is primarily wholesale. large wind farms need transport to energy. solar is wholesale. you get big solar farms, but the massive growth is rooftop solar, residential. solarthe room enough in for everybody, for you guys, nrg, and other players? or will the time come where there is no choice but to compete with each other directly? >> depends on how little the market has been in a treated. after 30 years of the solar energy, we still have less than 1% penetration. so it will take a while. i do not think it will be that long. the industry has been growing

about 40% a year. if the industry maintains that 40% growth a year, within about 15 years, we could get about 30% of our energy needs from solar. it will happen like this. solarcitys the ceo of . rebates keepback, using that credit card, no one company helps ebates will drive more customers that retailers. ♪

approaching 26 minutes past the hour, time for "on the markets." we brought you the news that the best buy website was down. it took a while for the markets to wake up to that fact. stocks did not drop until best buy sent out a headline saying the website would not be back up for a few hours. a couple minutes later, the website was back up and running, and the stock, like most other retailers, up today, black friday, the single biggest shopping day of the year. and best buy is back in the green, 1.6%. a quick break and when we come back, keeping customers loyal -- it seems like giving them cash back appears to worker the ceo of ebates is going to be with us. ♪

>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> you are watching "market makers" here on bloomberg television. i'm erik schatzker. stephanie is off today. the doubt -- the discounts and loyalty rewards. it appears you need all of those in the marketplace. shoppersny is offering an additional incentive to spend money at their stores. the more you spend, the more you get back. here to explain, kevin johnson, the ceo with ebates, joining us

from san francisco this morning. kevin, explain what your company is, what it does, what your relationship is with retailers. >> sure. happy black friday. for consumers we are the world's best independent shopper loyalty program. all you need is an e-mail address to get started. mobile apps, from one of our e-mails, a website, go shopping, and there is cash back potentially on anything you buy. there is no limit on what you earn. we literally send you a check in the mail or to you via paypal. that is real money. this year consumers will earn $120 million by cashback. for retailers, we are just as as for therainer consumer. they earn a commission, and we are able to add up to real

dollars for them. about 3.2 billion dollars will be spent by consumers through our program, and if history is any guide, hopefully today they are spending somewhere between 3% and 5% of e-commerce with our retail partners. >> what is in the retailer just keep all of this to himself or herself or themselves? if it is target for apple -- i know how to get to apple for a website. i do not need to do it through ebates. why doesn't apple offer me the cashback? how to getu do know there, but many consumers actually google apple instead of typing in apple. if you are an online retailer, there is no more free lunch online. you are paying essentially for every click. as a source of traffic, the source of shoppers, we are making sure that we are cost

competitive with the other sources. we are working as a marketing partner for apple and other retailers to make sure they attract and retain the best shoppers. we give is cash back a cost-effective way of doing that. >> so another words, apple, the case -- whoever may be, is surrendering money to , and you are say trying to keep that money in the family. you keep some of it, the retailer gets the added revenue, and the consumer gets that's what percentage of what the retailer pays back to you? >> that is a good question. this time of year, today especially, we are sharing most of it. if you are shopping and major department stores you are earning 10% cash back. down throughout the year and varies on category,

but we shared generously. think of good way to it. google takes the ad revenue and keeps it. we share. that also gives them permission to spend more at this retail site. it essentially says to them, you are a smart shopper, and if there is a coupon, great, use that. if not, you are still going to get four or five or 10 or even more as a percentage. >> you expect to pay out $120 million in rebates to shoppers on sales for what? >> $3.3 billion. >> ok. if you succeed or surpass those numbers this year or next year, bring more people into your network, what you do with all of the data you collect? i'm not suggesting you will do anything wrong with it. can you further monetize that data? >> yet, we think we can.

we have never sold data. we feel like we can make smarter use of the data ourselves and on behalf of our retailers stop what we try to do is make sure the offers we give our consumers are ever more relevant to the consumer and ever better for the retailer. >> what else can you give the consumer besides cash? primary, but we can turn the cashback into a spending asset for the retailer, and either by instant credit or a gift card. one thing we can do with the retailers is make a targeted campaign, targeted promotion, reach out to customers who have lapsed. shopped at ahave retailer, but have not in the last few months. their average, or we can reach out to shoppers who spend money at their competitors but not at that specific retailer. we give them an incentive to try a new retailer. wasevin, your company

bought last september for $1 billion, which is quite an eye-popping figure. i suppose congratulations are in order. >> we were on our way to going public when we got the call and weg an alternative, were really exciting to join with them. it is evermore a competitive market, and we thought it would be good to partner with rakuten. there is still a lot of value to bring the consumers and the retailers. >> kevin, thank you. -- kevin, thank you. this has to be a good day for your company. a mane come back, meet whose pay system is taking on apple pay. ♪

>> apple pay, square, google

wallet, bitcoin. all part of a payment revolution. great for the consumer, not all great for the retailers who want to keep mastercard and visa out of your digital wallet. i spoke with a man who was sticking a finger in the eye of apple pay -- the ceo of the merchant customer exchange. take a look. >> our merchants came together to create solutions for our consumers that will bring more value to consumers. they focused and made a commitment that they would focus if first currency priority, and that is what they are doing. currency is about bringing value in the form of receipts, coupons, offers to consumers when they shop and when they pay. it is more than about payment. the system will require several successful players and our intent is to be one of those. >> but consumers are pretty happy, right?

they are happy paying with what be in a pocket. they are happy paying with cash if they choose cash, credit, or debit, for example. they are happy if they are iphone users and have turned on apple wallet. the list goes on. that it the case improves the experience of the consumer but the consumer is not really asking for a new experience, is he? >> you hit on an important issue. there is no problem for consumers with payments -- >> there is a problem for merchants, isn't there? >> there is a problem getting more value out of the shopping experience. if you have to fumble for loyalty cards, coupons, you do not know you're getting the value that merchants want to give you. theus, it is about bringing value together. it is more than a lot of payments. consumers want more value. and they want this on all sorts of phones.

not just one phone. our solution that we have available to virtually every american consumer -- over 2 million -- 2 billion consumers witll be able to use our product. 2015 -- we are ready to go nationwide in the middle of next year. >> ok, early is a relative term. a relative term. i'm sure competitors would like to know the exact they we launch, so i will not reveal the exact date. but by the early to middle of next year, it will be available. >> what you think of apple pay? world's is one of the most admired companies, but they are not the only ones that can innovate. i think if you look at what is happening in the global commerce

space -- i think starbucks has been the inspiration for many of us. it combines payment and loyalty at the point-of-sale. >> apple has made a success out of near field can occasion, comparing it with biometrics, and you guys really are going in with these qr codes, which people are familiar with with starbucks. >> sure. it has been two weeks since apple they launched. we will see how that -- since apple pay launched. we will see how that plays out. starbucks is been in the market for five years. with theg loyalty in payment. viable wayable -- to go to market. it is about consumer problems, not whether you turn on qr

cards. >> but if you turn on nfc, you can use apple pay as well? >> yes. >> explained the exclude the city provision to me -- explain ity provision to me. >> this is something that the merchants formed themselves, creating time and effort to create the ultimate consumer solution. it will be gone in months, if not years. >> what does that mean? the middle of next year when this goes nationwide? >> i think you are about right. so by the middle of next year merchants will be able to say whether they will turn on nfc? >> and i think we win in the

marketplace by having an affirmative value proposition. >> it is really six-month window. >> a short window, yes. >> what if a merchant decides to break ranks now? >> it is their choice. we will welcome them. the ceo of the consumer consortium, the organization trying to stop you, for the time being, from using apple pay. , security andack how biometrics are changing the game. ♪

--"market makers this is" this is "market makers." i am air shaft are. it is getting easier to pay, but if it they for?

-- i am erik schatzker. usingked at two companies biometrics. if you have done this, you are already part of a revolution in mobile technology. idle metrics. -- biometrics. passwords, pin numbers, infuriatingly hard to remember and downright dangerous. that is why innovative startups are popping up around the world, solving the security problem with biometrics. iverify discovered that the blood vessels in your eye are as unique as the whorl on the tips of your fingerss. >> it takes infrared light in an infrared camera, which most do not have. we need an ordinary phone. >> injure my name -- gosh, this is fast. -- inter-my name.

gosh, this is fast. done. toy are using their backing crack two markets were security is paramount. >> number one's enterprises. they want to protect their networks. there is a breach every day. the second, broadly mobile banking. 2018, 5.5 billion people will use biometric up vindication on wearable and mobile devices. recently, there was a test for 14,000 e-commerce transactions. and another toronto-based startup has delivered a wristband that harnesses what may be the most secure biometric of all -- your heartbeat. >> you see all of those peaks and valleys, that shape, that we form.- that wave

>> that is the beauty of persistent identity. imagine how seamless life would be if blogging on to e-mail or locking her car or checking into a flight was as easy as snapping on a wristband and verifying your ecg. the device does the rest. >> [indiscernible] >> that is going to do it for "market makers" today. have yourselves a great weekend. lovers,y -- chocolate the cocoa plant is threatened. someone took a hard look at this problem. not just anyone -- my brother. tell us aboute to it. stephanie will be here. in a few minutes, i will see you, with betty liu, for " street smart."

♪

>> it is 56 minutes past the hour. that means that bloomberg

television is on the markets. hyman.lie energy shares tumble after opec felt decision. we are touching another record high. joining me, a chief market strategist. this -- the ise having its biggest gain in two weeks. what is going on? >> you do not typically see that going into a weekend either, but i think you see a reaction on somepec news, and there is news from switzerland that people are not talking about very much, about what they are going to do in terms of a few qe type of program they may do for gold. gold is driving the market today as well and i think that is playing quite a bit to what we may see coming early next week will stop -- next week. ow, gold driving the market.

that is not something we have seen in recent weeks. >> not at all. >> are there not as many people in the market today? >> definitely, the markets are so thin. typically going into a week and you do not see such a spike like we have seen in the victim's, and it may be people positioning themselves ahead of what -- as we've seen in the and it may be people positioning themselves ahead of what they are going to see next week. us ad another thing giving big boost, the drop in oil prices. crude has not seen levels like this since september 2011, the lowest level in five years will stop what are the options -- were people boys, hedged against the idea that opec would do anything? >> i think the options market

got surprised by such a egg move, and you can -- such a big the, and you can look at u.s. traded fund. call/put ratio is three to one, but what is interesting, you see a lot of put buying going out to april. positions going out to april. i think we saw a bigger move them what was expected and the options market kind of saying, there is him further growth to the downside there. right, interesting. and you have to talk about halliburton. where do you come in on this debate, where oil stocks can go? >> i think we really have to see the dust settle. texas is getting hammered today, but if you look at the brick, it is a little bit. i think we get to the weekend,

we get the first trading days next week, this thing will settle in and consolidate well. this trade with halliburton i have is taking advantage of limited risk to the upside. and if volatility comes -- and volatility is off the charts right now -- it will be a great thing for my trade. i want to buy one of the calls and sell one. it does not cost me anything. basically i have zero downside risk whatsoever. above 47 andtrades a half, the reason i like it there, 47.5 was the major support area and now it is becoming a major resistance area. i do not see these oil service stocks, stocks and halliburton, popping to the upside too much.

i have no downside risk whatsoever. >> just to be clear -- the stock is trading at 42 right now. what is the sweet spot for this trade? >> actually 45.5 would be the best spot. i would make money anywhere up to 47.5. 47.5.2.5 to >> all right, breaking it down in options. " a special edition of "street smart with erik and that he is next. ♪

important to most hour of the session. smart," on "street crude oil prices staging their largest one-day drop in four years. we are going to reveal what all of this means for the shale oil industry. >> it is black friday. i don't know if you got your shopping done yet, erik. big this look at how resale they has gotten. >> stocks are headed to close out the week.