this is "bottom line," the intersection of business and economics with the main street perspective. to our viewers in the united states and to those of you joining us from around the world, welcome, we have full coverage of the stories and stocks making headlines this monday. bloomberg's chief washington correspondent looks at the spending bill deadline and negotiations to avoid another u.s. government shutdown. su keenan follows it down to five lows. shelby holliday tells us about

one retailer that plans to sit out the holiday price wars. those stories are coming up, but first let's get you to the top stories at this hour. john stump says the u.s. economy will grow faster next year than economist estimated to. his comments this morning run counter to a bloomberg survey of economists who believe that growth in 2015 will be in the 3% range. >> since we are so involved in the real economy we have been hearing from customers about more hiring. our small business survey shows more optimism by them now than any time since 2008. while we do not expect next year , we arebreakout year planning to upper end of the expectations for next year. >> mr. stump says that automobiles, agriculture, and commercial real estate are among the industries doing well. fannie mae and freddie mac will be letting borrowers put down as little as 3% of the homes cost

to get mortgages. starting on the 13th, fannie mae will allow the lower down payments for first-time homebuyers, allowing borrowers refinancing to reduce their equity to 3% to cover closing costs. freddie mac will begin a more limited program in march. more investors on the main bill capitalnd fund at janus , they received about $770 million in new money in november, bringing the total assets of the fund to over $1 billion. the bond returned 4/10 of 1% over the past month. a 1909 baseball card featuring honus wagner has sold for about $403,000. the card was sold by a private collector and was bought by an undisclosed bidder in an online auction. the card is one of about 60 such cards in existence. in april of 2013 the card sold ar $2.1 million, a record for

baseball card sold at a public auction. that is a look at the top stories we are following at this hour. the u.s. congress faces of thursday. -- there's a deadline to finance a massive spending bill to avoid another government shutdown. the outcome could hinge on government policy changes that they are trying to tuck into the bill. peter cook joins us with the latest. republican leaders sound confident the showdown can be avoided. >> they do sound confident at this point that they have enough but weo get this over won't know if there are potential potholes until it is made public later on today. we know that the bills will fund 11 of 12 federal agencies for one year, the department of homeland security getting special treatment because of punishment for president obama from republicans for his immigration executive actions.

of the house republicans involved to predict bipartisan support in the end. so there, the agreements have been made, it is bipartisan because remember the democrats control the senate. we still have to get this through a democratic senate and, eventually, get a democratic president to sign it. >> he sounds confident and is usually a good prognosticator, but this deal is not yet done. this bill is still a work in progress. >> what were some of the potholes that you are talking about? well, the biggest risk factor here are the pet policy provisions that could get added in the final negotiations. there were seven of these riders on the table over the last few days as they did the negotiations, including really interesting things, making it easier for financially strapped school districts to meet healthier school lunch requirements, preventing them from putting sage grass on the endangered list, making it so the d.c. cannot legalize

recreational marijuana, barring the department of transportation from imposing new sleepy trucker rules. it is a long list be on and nancy pelosi warns republicans that some of the riders are nonstarters. >> it is important that the republicans not be frivolous once again about shutting down the government. know that in order to have a bill passed it has to have all the votes. if they want ours, we cannot support what they're doing on the bill. >> nancy pelosi has more leverage than normal in these negotiations because she knows that some republicans will not go for this legislation because they think it does not do enough to challenge the president. if she does not back the bill, thursday's vote could get dicier in the house. >> peter cook, thank you. time for the commodities report, the price of coup -- crude oil slipping to a five-year low.

sue, good afternoon. >> we are seeing big moves lower in oil. nymex crude futures were down more than 4% and there was a big debate on which way oil goes from here. on one thing,ment it will be a bumpy ride. oil is on track to close close to $63. the market continues to search for a bottom, but we are just not there yet. you don't want to catch a falling knife, but there is a view that the market is oversold and some cds price levels as a bargain. there is a concern that hedge funds will stop buying and resume selling. last week bullish bets were on the rise. a lot of people are trying to pick the bottom of the price futures group. bill clinton calls it very risky and he is not alone. check out this deal on the tricky question of corrections.

>> we think of the house oil bottoms in the second quarter of next year as supply coming online that is already in place, but as you start to reduce projects with lower oil it gets bullish. i think of the market sees through that. you can show that the stocks are working for the earnings provision bottom and it is a bit of a gamble when you hear that oil is going to be higher in six to 12 months. >> a bit of a gamble indeed. off their lows of the session, but not by much. 63:30 off the bottom. >> that is not the only story we are following. we have some big swings in precious metal prices. >> gold and silver have been on a wild ride as well, due to the swings in oil and the dollar. for precious metals there is a group of volatility not tying in my roughly a year and in terms of price options we're looking at the highest levels in three .onths

many investors betting on stimulus in europe and asia with hedge fund speculators raising their speculation by 20%. longer-term, one commodities analyst in toronto says that there is very little prospect of a significant gold upside unless barclays enters another financial crisis. right now she says there are plenty of alternatives. su keenan, thank you. coming up, merck agrees to buy cuba for a billion dollars. -- cubist for $3 billion. ♪

♪

>> welcome back to "bottom line." merck has agreed to purchase cubist pharmaceuticals. market reaction has been dramatic. cubist shares have been up 25% -- 25%. cubist joins me on the phone from lexington, massachusetts. you for yourk time. >> thank you. >> how did this deal go down? who reached out to who? >> merck reached out to cubist and expressed a strong interest. the board at cubist sort of

validated merck as a buyer, got some clarity on how much value they saw in the company and what kind of conditions they would put in place for the close. that point decided we should check with other potential buyers and ultimately they decided to accept the offer. >> were there other bids? >> there were. >> is or anything you can go into detail about? >> not at this time. >> did you build the company with an eye to sell? or did it come as a surprise even to you? >> we have long built the company as a stand-alone entity. workve always said that we for the shareholders, so while our strategy was to build an independent company, for the 13 years i have been here we have been very clear that if taste tj buyer or financial buyer decided that they could deliver better risk-adjusted returns to our

shareholders that we could, we would have to take that seriously. i think that that is what has transpired here. >> what does cubist have in the pipeline did you think is most valuable to merck? >> they are clearly very interested in the whole portfolio, but of particular interest i think we have a product that is due to have an fda action -- we hope approval -- in two weeks from today, which creates a variety of hospital -- there are some really bad hospital infections often caused by multidrug .esistant bacteria i think that this is an ip only antibiotic and i think that that drove much of merck's interest. >> why have there been so few working on antibiotics? are there too many hurdles?

>> i think that fundamentally file innovation in this space is challenging, fundamentally the problem is an economic problem in that antibiotics cure generally with few exceptions, with seven to 15 days of therapy. problems with infectious bacteria occur in hospitals. in the developed world hospitals, as true in the u.s. or across the developed world, hospitals are reimbursed at a fixed rate. paying for the innovation, the discovery and development a newary to register antibiotic, is very difficult in the hospital environment. i think that that is why so many companies have gotten out of fundamental research and development. resistance is killing at least 23 midnight -- 23,000 americans per year. given that statistic and given in westa outbreak

africa, the pharmaceutical companies have enough funds allocated for general development? >> as a general matter we need to have more money flowing into bacterial development and discovery. i think it will take policymaking at the international level to provide so thatt environment the purveyors of capital will direct it in this direction. i don't think we have enough antibiotic discovery and development capacity around the world. it has been dismantled over the last 30 years, but the books keep evolving and i think we have to figure out how to attract more investment in innovation. >> you literally go to the ends of the earth looking for new ingredients for drugs. can you give us some examples of where you look at what you're looking for? >> the vast majority of antibiotics developed over the from70 years have come

what we call natural sources. bacteria in the soil who under the right circumstances will produce something to kill the bacteria around them. like the to places bottoms of caves, traveling with academics who are spelunkers. we just see if we can find new sources of new antibiotic matter. we are trying to harness nature's way of protecting from the bacterial. thank you so much for your time. we appreciate it. >> thank you. on theng up, the latest

bernie madoff fraud case. a senate report on the cia use of torture could be made public this week. --e rogers weighs in on what whether the report should be released. ♪

>> welcome back, streaming on your tablet and phone and bloomberg.com, bernie madoff has been sentenced to 10 years in prison. was the first of five colleagues to be sentenced for the ponzi scheme. sheila cole handcart joins me now with more. you have been covering this story from the beginning. talk to me about who these

colleagues were. >> these were the people who did all of the bernie madoff dirty business. they sent out account statements to investors that were fraudulent. they sent out findings to regulators filled with misrepresentations. they basically did all the kind of dirty paperwork that you need to do to run a ponzi scheme that ends up defrauding investors of $17.5 billion. it was quite a significant amount of work. >> why are such lengthy sentences being considered? >> there was controversy, they had been asking for 20 years, but they sentenced 10 years. the prosecutors did not get quite the length that they wanted, but these are very long sentences for white-collar criminals and it is undeniable that the sensationalism of the trial is a factor, but there are people that say does not leave you much room when you have a mass murderer.

if everyone gets 20 years, what does that leave you for someone who commits a violent crime? >> has the been talk of this being an overreaction? whack certainly their defense lawyers would say that. yes, there is no denying that prosecutors pay attention to the new coverage. you could argue that that has enforced some of the sentences. >> what about the decision to try them together? what can you tell us about that? >> this happens often and the criminal justice system, it allows for finding synergies. however, it did lead to one of the longest white-collar trials there had been many months of bickering between all the lawyers over when they will get sentenced. even if it leads to is complicated process where everything gets dragged out. it take so long to get to this point?

the madoff ponzi scheme was what, six years ago? >> a good question. he pled guilty, so did his brother, they went straight to jail and did not name names. a survey than they had the prosecutors start the detectives of piecing together what actually happened. this trial was significant, it was the first trial of anyone tied to the case, but none of them cooperated. they fought tooth and nail. one of them lied on the stand during the proceedings. left more legwork for the prosecutors. >> speaking of prosecutors and officials, a lot of changes have been made since the whole ponzi scheme came to light. those changes happened in large measure because the sec was humiliated. a lot of people on capitol hill said that the sec is basically a watchdog with no bite.

have those changes been sufficient to deter fraud on wall street? >> everyone agrees that the sec has gotten stronger and much more organized. this was a reckoning for them, they were really hated. it turns out that they were not even sharing between the departments. the enforcement decision was kind of crazy. >> sure enough she made her bones going after criminals aggressively. >> that's right. the have really improved to what -- improved the way that they divvy up cases and create these specialized units. i think that that has all really improved the enforcement capabilities. there are those who believe that there is still a lot but they are not doing. of course people like to bring up these financial mortgage fraud cases. there are those who feel that it was not necessarily aggressive enough. >> all right, sheila. the made-up story, you have been following this since you were a child. >> more than i would care to

remember. >> sheila, thank you so much. 26 minutes past the hour, we are "on the market." >> hello, mark. trading declines here, accelerating as the day goes on. energy stocks are dragging. technology is down to, apple having real declines when it comes to technologies. the airlines are rising more than 2% today, around 2%. in the opposite direction we have shares of national lunging by almost 10% as this developer of electronic weapons and wearable cameras moves from neutral to buy. for thealuation downgrade, shares are up more explainingis year,

that valuation call. more on the markets and ready minutes. ♪

>> welcome back to the second half-hour of "bottom line." thank you for staying with us. the long-awaited senate report critical of the central intelligence -- central intelligence agency's torture techniques could be made public tomorrow. the white house says that they support the release, but there are fears that it could trigger violence overseas and anger americans. peter cook spoke with the retiring house intelligence committee, mike rogers, earlier report.out the >> when you have foreign leaders expressing concern that they believe it will incite violence, you have foreign liaison partners in the intelligence community all over the world saying that we think this could incite violence, cause huge cooperationn stop moving forward with united states, and our own intelligence community assessing that it could incite violence, that is a pretty good indicator that maybe we should not release the report. all of the things we are worried about with interrogations have

been debated and solved. there is a department of justice investigation into this. there has not been a use of torture as defined by this report in over 10 years. and if we know what the consequences are -- remember, what they did with terrorist groups, they used the propaganda, the cartoons in the newspaper, the burning of the koran, why would we do it today? >> senator feinstein wants to release this report and says the reason to do it is because you want this out there so that americans know what happened so that it will not happen again. >> well, it is not going to happen again. we passed a law that says it will not happen again. we passed that law. this is not a matter of it happening again. it is a matter of the graphic nature of the description of these things, exposing some of who cooperated in the interest of a tense adrenaline filled time.

it is definitely going to create some problems. >> this past weekend special operators tried to a rescue american hostages in yemen. it did not go as planned. both the hostages were killed. we understand it could have been ours from release. was this rescue mission a mistake? >> i don't believe so. obviously the tragedy of the loss of the lives of the hostages was a tragedy. the rightthat it was thing to do. the intelligence community had credible information that one of the hostages was going to be killed and they had information about the location. they had success in the past. that theywe believe are infallible, but all of these operations don't always go exactly as planned. they are successful because they are so good, our special operators. in this particular case, you know, one small thing, sometimes

the crying of a child or the barking of a dog or the tripping of a can can mean the difference between success and an outcome where the hostages were killed. i think that that is what happened here. >> you have spent a good part of your time in congress tried to warn about the threat of cyber security in the united states. the problems out there in the private sector and the government as well. hack thatpictures just happened got a lot of interest from the is this community. do we yet know who was responsible for -- responsible for this? >> i am not willing -- i'm not at liberty to discuss the origins, other than to say we have a in a growing nationstate problem. china's, russia's, we have this huge nationstate problem with those who are he -- those who are engaged in these types of activities. sony is one small example and a very large pool of cyber

attacks. some for disruptive purposes, some for criminal purposes, some for espionage purposes. problemhuge and growing that our private sector is having a hard time keeping up with. we need a solution to this very soon or we are really going to charge this cost to the next generation of americans. >> so, the hack to sony was small potatoes? let's not to them, but certainly it highlights what can happen when there is a breach of this nature. don'tsmall potatoes, i mean to diminish what it did to sony, it was real, serious, and damaging, but imagine that happening every single day across america and every innovative economy. guess what? it is. some just do not get reported the way that sony did. but it is still damaging and it still costs the economy and we have to do something about it.

>> you are getting set to retire from congress. are you going to leave without the deal for cyber security legislation you have been working on? >> i am in a terminal optimist and am not quitting. i do feel it is slipping through our fingers and it think it would be a serious mistake not to get something done. even if we could kickstart it this year and have the legislation come back next year. if we wait we have to restart the clock all over again. it has passed twice in the house over to successful congresses in a bipartisan way. the only hindrance right now is the senate. hopefully they will sit down and work out there differences this week. if it starts over in january you won't get a bill for 8, 9, 11 more months. how many more sony's or goldman sachs are we willing to accept before we get something done that helps them to protect themselves. >> you are retiring from congress and headed, as i

understand it, into a career on radio. are you making that decision because you think your voice can be heard more clearly on these issues from that platform as opposed to being a sitting member of congress? somoza can be narrow. sometimes it can get patty. i worry that the problems facing the united states and the world may be bigger than the petty arguments that you can get into in the house and the senate. this gives me a platform to broaden that horizon and engage in a better place where we can look forward to american leadership in the world and what it means about the prosperity of america and what it means to engage unfettered and commerce here, at home, and what it means to the peace and prosperity of this country. american exceptionalism is not dead, we just need someone talking about it. >> we look forward to you talking about it. thank you so much.

>> peter cook joins me from washington with more on his interview. let's get back to this senate report on the cia. the white house is welcoming the release despite the concerns of those like chairman rogers. >> that is right. at the white house briefing we heard from josh earnest that the white house does embrace the release of this report, which we understand will happen tomorrow basically out of concern for transparency, a push for transparency. they also seem to feel confident that they have taken steps around the world to protect facilities in the event that there is some sort of a retaliation. some reprisal for the release of this information. >> the chairman's the partner from congress takes away a pretty strong voice on national security issues. are republicans going to miss that next year? >> he has been very vocal on these issues. standing and is a former fbi agent with the

trust and confidence of the intelligence community here in washington. it will be missed on the republican side, but he is also someone who has been willing to work with democrats on the intelligence committee. they work on the cyber security legislation together and to some extent he faced criticism from fellow republicans for being too willing to work with fellow -- with democrats on these issues. that may be where his absence is noticed the most of all. >> peter cook, pulling double duty today. thank you so much. coming up we will have the latest on the release of six prisoners from guantánamo bay. ♪

>> for its eighth anniversary, "bloomberg businessweek" looks at the most disruptive ideas of the past 85 years. a story and the lifestyle,

taking coffee out of the kitchen and putting it onto virtually every corner in america. >> you are? >> when i came here for the first time, it was 1979. i have never been in a starbucks before. we have changed nothing, by the way, this is the original store. they handed me a cup of coffee made this way. this is a cup of sumatra, indonesia and coffee. this is how i tasted my first sip of coffee and i knew from that moment on that i was home. flex one year after i joined the company i went to italy for the first time.

first of all, you can't walk through any major city or town in italy without running into a coffee bar. seeing the sense of community, the romance and the theater made mespresso, it just realize that starbucks, perhaps, was not in the right part of the coffee business. that the real business opportunity was the integration of the beverage in creating a destination and sense of community within the store. at that point i did not have an understanding that coffee would one day become part of the culture, the zeitgeist in ways that i could not possibly understand. think we realized that everything had to prove itself in the cop. the ability to source and roast the highest quality of beans from around the world gave us the platform to do things that would do fine and build an industry.

-- define and build an industry. >> the special will air tuesday, december 9. we will look at innovators two ideas have changed the world. time for today's latin america report. six suspected terrorists held at guantanamo bay, cuba, have been released and are now reselling and uruguay, the largest transfer of detainees since 2009, the first to south america, released as part of a push by the president to close the facility. delegates from 190 countries were treated to the annual united nation talks on climate change. the delegates are working to draft a global deal on cutting carbon emissions to prevent global warming. a final agreement is not expected to be signed until next year at the earliest. that is your latin america report for this monday. coming up, the maker of thousand

dollar parkas says they are not playing by the holiday price war rules. despite their high-end pricing, their items are flying off the racks. ♪

>>'tis the season retailers go to war with weapons like cyber sales. canada goose, the makers of those pricey down jackets is not playing by the rules. instead the retailers pushing its high-end parkas deeper into the u.s., europe, and asia, with no plans to discount products. shelby holliday sat down with their ceo. day for canada goose, it is very cold in new york. ago, lastne year december, the company sold a majority stake to bain capital, opening a lot of doors for them

to expand globally. they have doubled production with the warehouse in toronto and opened offices in places like london and new york. number three, they have been sponsoring entertainment events like film festivals around the world. i spoke to the ceo and asked him -- the cold weather cannot hurt either. his response was surprising. take a listen. >> in north america it has been cold early. that wheneople know they first start to appear in the stores in june and july, they have to get them early because usually by the time of this time of year it is impossible to find what you want. >> a sellout in july? >> it is crazy. >> it is. but it is a supply and demand thing. >> i don't know who buys coats but the demand has affected 30% with luxury sales

growth slowing. they have pretty ambitious plans for the year ahead. >> talk to me about what he thinks about the weather, the cold. >> the weather is not going to hurt this brand. market for a key them and they are pushing into markets that don't get that cold . here is what he had to say about that. >> the cold is relative, right? it rarely goes below zero, get when it goes to zero or even five degrees, the people that live there feel cold. without landpeople rovers that they are never going to the arctic. >> they don't actually need it. >> right, but they want it. they want to know they have that kind of protection, that they have the best. i figure that is the reason we do well in markets like japan and tokyo. >> talk to us about the currency

effect. what does that look like? >> he mentioned tokyo and he talked about japan a lot in his interview. even though the country has slipped into a recession and the commonly is contracting, japan remains a bright spot for luxury retailers, many of whom have raised their forecast because as the yen falls, tourism skyrockets. the tourists are mostly from china. they go on vacation to spend money and find that when they go to japan, because the goods are priced at the local currency, they are cheaper in the end. luxury brands around the board are raising their forecast for japan. quickly, where his demand the greatest? >> the u.s., which is why they are making a big push in the u.s.. we see them everywhere in new york, but they are hoping to expand across the northern part of the u.s.. as he said, asia is also a big opportunity. >> shelby holliday, with a look

at canada goose on this cold day. stay with us. another check on the market is on the other side of the break. ♪

>> here are the latest headlines at the top of the hour. that does it for this edition of "bottom line." thank you for joining us. "on the markets" is next. i will see you on tuesday. ♪ >> it is 56 minutes past the hour, let's get a check on stocks. about one hour to go until the closing bell, we are still seeing declines across the board with energy stocks, materials, technology, leading the kleins. let's take a look at what is going on in the treasury today. in terms of where we are seeing

the yield go, they are also lower today. we have seen the longer term trend, without much verizon deals. many forecasters expect things to rise next year. some interesting veterans, though, have history on the side. joining me to explain why a 30 year bond yield below 3% might be more in line with daniel kruger. your story suggests that for the people thinking that they might just be too young? you really do talk to people who have been in the industry for a long time. >> an interesting thing about the u.s. and financial market history is that low bond yields are really a part of american history. low have just always been since the time they were high in the 70's boston 80. other than that it was because of oil embargoes and price spikes. now it is the reverse. >> it seems like many of the are thenvolved now

people who came out during that time of elevated yield. is that correct? >> the treasury market tends to you older in terms of the people on the trading desk. a lot of people are trading and investing in the market who got their careers started in the late 1970's, early 1980's. people tend to get a sense that things should be like they were when they first started in a market. that has something to do with why a lot of people think that yields should be going up. >> they expected mean revision, but your story suggests that it is not what they think it is. talk to us about the longer-term history. >> in the u.s. inflation has gone up and down.

with low inflation, bond yields are high. when you look at the things happening in the world, from the decline in oil prices to other commodities and the situation in europe and japan, where there is a lot of inflation and disinflation, those are things that are flowing into the u.s. economy and making it hard for bond yields. >> it does see that yields will go up, but the path the dominance is what you are talking about. an old normal, not a new normal interest rate. >> it depends on who you talk to . i think that people in general think that yields should rise because the economy is getting better and the fed is going to raise interest rates and field tend to historically rise when they raise interest rates, but the things happening around the world in europe with oil are probably waiting on the trigger yields, pushing them down more than other factors would push them up. >> if you look at the long

forecast, what are we talking about in terms of the forecast? >> people expect the 30 year bond to be up to 3.8% by the end of next >> so people expect the 30-year about 3.8% by to the end of next year. > and dan krueger, thanks for talking us through the low bond yields sort of that they've been low historically. thank you so much. "street smart" is next. spk spk >> welcome to the most important of the session. 06 minutes to go before the close. smarts.""street energy shares leading the declines across the board here today with oil dropping to the level since 2009. coming up, we're going focus on markets with my guest host for the hour. investing bill janew