after the first quarter you can see an increase in these interest rates. andrea, thanks. we are on the market again in 30 minutes. "market makers" is up next. >> life from bloomberg headquarters in new york, this is -- live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> we will see if the rally has legs. will there be a sequel to this horror film? we will take a lesson -- a look at lessons learned from the cyber attack on tony -- sony. retailers have your number. they know you are looking for the ultimate shopping experience. -- we are starting the show. welcome to "market makers."

i am stephanie ruhle. friday is here. not just a bloomberg, everywhere. i hope you are paying attention , not the next two hours your christmas shopping. we will guide you through how and where to get the best stuff. the top business stories of the morning. u.s. stocks may be taking a timeout. they have been going back and forth between red and green for the first half hour of the trading session after an extraordinary trading session that added more than 4% to the s&p. , withp is up slightly numbers like that, it basically looks unchanged. it is a slight positive. stocks in europe have turned down after being up earlier in the day. and blackberry comes up short in the struggling -- comes up short. the struggling smartphone maker posts revenue that fell well short of estimates, generated positive flow earlier than

promised, but shares are down 9% . we will speak with blackberry's ceo john shannon at 11:30 a.m. eastern -- john chen at 11:30 a.m. eastern. this guy cannot get out of the headlines. he loves drama. according to a person familiar with the matter, charney is working with a private equity firm to make a bid for american apparel. they fired him earlier this week over allegations of misconduct. instagram has purged millions of accounts believed to be posting spam. the problem -- stars who lost tons of followers. millionieber lost 3 1/2 followers on the proto-sharing app. rapper akon lost more than half of his followers. instagram tries to prevent users from buying followers to see

more popular -- to seem more popular. we need to take a deep dive into the equity markets before we head into the weekend. the executive editor of bloomberg markets and the chief investment strategist at wells capital management, joining us now from -- what do you make of this rally? >> well, it's pretty strong. i will say that. i don't know if it's as much a rally as it is just volatility. we had three sort of somewhat significant selloffs now since the summer, when we first reached 2000. and every one of them have had these dramatic and very aggressive recoveries. i don't know if we are making a lot of progress. we are up about 3% from where we first broke 2000 in the summer, but it is certainly eye-catching , if you will, and i think it is being driven higher a lot of the times by active managers that are behind year to date.

and when the market takes off, they are caught in a bit of a short squeeze, trying to stay caught up with the market through year-end. >> if you are a fundamental strategist, should you be ignoring this rally, if it is simply guys trying to race so they don't underperform the indices? >> i would stay focused longer-term, i really would. i would take advantage of this maybe on one weakness to add to positions you are interested in on days when things are getting beat up, and maybe go quiet or selloff on some other things you were looking to sell on the strong things. i think i would be looking into next year, basing more of my strategy on that then what happens between now and year-end. >> what do you make of this? >> a lot of people have been trying to connect this to yellen and the fomc announcement. did you hear anything in the press conference that would explain this? i'm struggling to understand what would be the real connection there. >> i didn't. i really didn't.

but i never understand why falling oil prices were so not bad for the stock market. i really think that, at the end of the day, we are massively stimulating the global economy with lower energy prices and lower sovereign yields everywhere across the globe. and to me, that's a pretty bullish sign that the global economy, including the united eights, if anything -- united states, if anything, does better next year. i don't understand why you would sell stocks in the face of that. i don't understand the selloff, let alone the rally. >> there are so many people trying to play catch-up. 2015 -- what do you think it's really going to look like? >> i think it's going to be more of a struggle next year, stephanie. i have a kind of broad range in the market, but i think it's going to be volatile to roughly flat. i see the market facing three major challenges as we go into 2015, that we really haven't faced until now. one of them is, i would argue,

the sentiment today is the most calmest, confident it has been in the entire recovery. the premise of this market has .een climbing the wall of worry i don't think that's nearly as dramatic. people are more confident, noticing mainstreet is getting better. sentiment is a little strong. i think valuation is up a lot. we had a 50% increase in the price/earnings from about 12 times 18 times. we are now above average. that's a little stretched. the biggest thing in the room for next year is that we are going to start raising interest rates in this country. we are going to start to reconnect interest rates back to the economic cycle, both the fed and bond yields. and most of the times when that process begins, the stock market struggles. so, i suspect that we may go somewhere higher than we are today next year, but i think we might also have a 10% correction along the way before next year is over.

>> how about europe? you seem to let your more than the u.s. -- like europe more than the u.s. that's anything. two years ago, we wouldn't been saying that. >> there are some strong wall street things i would tilt against in portfolios. the u.s. is the only place to be . the u.s. has outpaced everyone in the last couple of years, making the rest of the world sheet -- cheap. the dollar is only going to go higher. i expect the dollar to go lower next year. everyone is suggesting that, because the fed is going to raise rates and europe is lowering them, that means the currency is on a one-way train, but i think it is going to be more important what the impact of those policies are. so, if europe is easing and to pan is easing -- and japan is easing and it works, i think that will bring a bid to the euro and the yen, rather than a sell. if the fed tightens only when people believe they are behind the curve and they are trying to play catch-up, i think that will

bring a sell to the dollar. one way to deal with a more volatile market in the u.s., one that is honorable with high valuations -- vulnerable with high valuations is to diversify with some of these -- >> russia is in the news a lot. when you ask people about risk and geopolitics often comes up, is that anything people should care about or make investment decisions on? should we worry about russia's effect on the stock market? >> that's one thing i agree with janet yellen on. i don't think it's that big a deal. almost everyone is already invested for geopolitical risk. it's called diversification. as long as you maintain some diversification, that's what you do that, for unpredictable geopolitical and other events. beyond that, i think you ought to ignore them and stay more focused on fundamentals outside

of unpredictable sort of events. in this case, i think russia is pretty small. of net benefit to the globe 50% drop in energy prices far outweighs a meltdown in russia. i think the surprise for next year, we go into next year with most people worrying about the deflationary spiral. i think we are going to get a bounce of growth everywhere across the globe. we are massively stimulating this thing with lower bond yields and lower energy prices. we are worried about whether the ecb is going to do quantitative easing. the impact has already been done. sovereign yields have fallen across the eurozone throughout this year. i think you will get a bounce in europe, japan, better growth out of the emerging world, and we are going to worry about overheated growth before 2015 is over, at least here in the united states. >> we have to leave it there. do you agree? >> i think there's a lot of sense in that.

>> all right. jim paulsen from wells capital management. when we return, lessons learned. what companies are doing to prevent a sony-style hack attack. plus, how to get you off the computer and into the shopping mall. great prices alone are simply not enough. that and a whole lot more. you are watching bloomberg television. ♪

>> welcome back to "market makers." i'm stephanie ruhle. sony's decision to cancel "the interview" could cost the company millions of dollars. there are lessons here for movie studios about preparing yourself for this kind of doomsday cyberattacks in real. talking toas been the experts, trying to gather some of those lessons. and peter singer is an expert on cybercrime and has consulted and activision. let's start with peter.

what can we learn from this? don't make a movie in north korea? >> and don't cave in utterly so that you can't even make lemonade out of lemons out of this. there are couple key lessons we can take from it. one is obviously, take cyber security seriously. in this situation, sony has been repeatedly hacked, going back to , byeast 2005, yet the way all reports, this group got in wasn't with incredibly advanced techniques. it was kind of the cyber equivalent of accrued pipe bomb -- of a crude pipe bomb. don't just think that your exterior line of defense is enough. it doesn't work for eggs. he doesn't work for major corporations. it is really shocking the way -- it doesn't work for major corporations. it is really shocking the way, once they got inside, it was as if they had the keys to the kingdom, the gossipy e-mails to financial information to legal

information. a lot of this stuff should have been kept separate and encrypted. third, it points to the way that you personally operate, both as a private citizen to a business executive. the way these people within the firm were e-mailing to each other, it was like they'd never been on e-mail before. they were badmouthing business partners, other people. teaches know, your mom you not to do this, but also everyone from enron to goldman sachs has paid a legal and financial price for the kind of things they put -- what they thought was in private e-mail. guess what? e-mail is not going to be private in these days, and you have to act responsibly in these ways. >> when i was speaking to analyst, they said -- analysts, they said you should identify your crown jewels. nice ring on your finger. you probably have a safe at home. you know what is important for you and where to hide them. why this sony not know where

their scripts, passwords, insurance plans are? they should have those in safe places online and in the physical world as well. they should have those places constantly changing, so that it's not in the same area every time. >> is this a case that we have gone online and become digital and no one is prepared? if you think about who works in i.t. departments at any sort of company, and i'm guessing a movie studio would be one, those people probably don't get paid very much. they probably don't get a lot of respect in the company. >> there is a lesson that applies whether it's in the physical world or the cyber world. if you can spare to lose something, -- cannot bear to lose something, prepare to lose it, whether it is your birth certificate for your electronic crown jewels. -- birth certificate or your electronic crown jewels. whether it is the nation and our

cyber security, your own cyber security, or fortune 500 cyber security, it's not just about defense, but resilient. -- resilience. what i'm getting at is, even if you have some of the best cyber security people working for you, if they are honest, they are going to tell you i can't promise you 100% security. at some point, the bad guy is going to get in. they may already be on the you -- on the inside. the u.s. military's biggest troubles have been insider attacks, manning or snowden. the key is not keeping yourself 100% secure, it is never going to happen. it is how do i get back up quickly when i am not down. -- knocked down. how do i not cave in, give the attackers everything they want and more, incentivizing every other attacker in the world to come after me? >> when you think about i.t. managers, they are not incentivized to have a good roi. they can't figure out which

system they want to buy and then make a case to their cto. if i buy this system, it is going to prevent $1 billion of trade sick as it -- of trade secrets from exiting our system. they can't make a good business case for it. ultimately, many of them have been saying why don't we wait until after the security breach happens and then deal with it then, rather than investing the money upfront and having to protect it, which isn't the right mindset. >> on companies like sony going to have to lose or spend so much money -- aren't companies like sony going to have to lose or spend so much money after the fact, when it was preventable before? >> ben franklin's saying about the -- about an ounce of prevention is worth a pound of cure applies in this space. one of the thing that matters is how we measure the cost of a cyber attack, which then shapes what we are willing to spend to prevent it. so far, businesses have typically -- when they think

about the potential cost of an attack, they think about how much time and i going to be theked off-line, and then cleanup costs, whether it is technical or legal. as we are seeing from the target breach, or, in this case, sony, there are all kinds of kick -- costs. impact to your brand, your customers being upset with you, your business partners. there was a survey taken of over 500 business executives. when they asked what's the cost of a cyber attack, only 39% of them wait impact on brand -- them weighed impact on brand, only 25% on lost an election property. that's the wrong way to go about thinking about it -- on lost intellectual property. that's the wrong way to go about thinking about it. reuters is reporting that united states is thinking about making the official statement that north korea is responsible for the cyberattacks. seeing the are making a statement like that, how should we react?

it's not just a bunch of hackers. this is official. peter? that, challenge here is in these incidents, everyone wants to focus on attribution, who did it to me. and the real problem is accountability. what am i going to do back to them so that they don't -- either to punish them/andor -- to punish them and/or to prevent them from doing this in the future? it takes it from being a cyber incident to the problem in north korea in general, which is -- they've done everything from nuclear test, nuclear proliferation -- nuclear tests, nuclear proliferation. they sank a close ally ship and killed 46 of their sale ears -- their sailors just a couple years ago. it's not like we want trying to sanction -- we were not trying to sanction their economy before. this is not an act of war.

we are not going to go to war over this. now we are looking for other tools. the problem is, when you are about north korea, we've been using most of the tools already. it's not a cyber problem now. it's the north korea problem in general. couldlysts have said this change the way companies behave. companies have to focus on the bottom line. shareholders to answer to. when i.t. professionals have been asking them to make the big spend, they simply can't. they say i have other fish to fry. now that it has become this serious, could we start to see a shift? analyst, a crisis manager, said he anticipates companies to spend more money and not on i.t. systems, but on isis management -- on crisis management. it is easier and less expensive to put her dollars on it afterwards rather than beforehand. you saw -- put your dollars on it afterwards rather than beforehand. you saw they are willing to take the reputational hit.

it is too expensive to take care and ensure you have all the right firewalls in place to prevent an attack that might happen. % chance it could happen. >> is a too expensive? if it happens, it could take you down. >> i would disagree with both parts of the premise. the first is the idea of it or any kind of low level. of the top 500 companies in the world, 97% of them have admitted they've been hacked at some point. the other 3% have been, too. they just haven't admitted it. all's true when you talk the way from large companies to small cupcakes. if you are online, you will deal with cyber threats. it is simply a reality. as we were talking about before, the nature of the cost -- it is a lot more effective to focus on preventing and being resilient to the attacks than focusing on

the cleanup afterwards. that's true again whether you are talking about anything from cyberattacks to the same argument could be said about fire or theft in general. again, if people think their way out of this is to hire crisis management or good pr, they are setting themselves up for a world of hurt. >> thank you so much for joining us. our own mia saini and cyber security expert peter singer. out.s a new book i've been saying since i was six, never write it down. if you have anything bad to say, don't write it down. "market makers" will be back. ♪

>> we will hear from the ceo of

td bank in toronto. and how to get a complete makeover in your own home. putting in a call to glam squad. ♪

>> welcome back to market makers i'm stephanie rule. we have got breaking news out of washington. the f.b.i. is now officially accusing north korea of being behind the sown ji hack attack. pete center >> this is something stephanie he had been reporting all this week about the government leaning this direction and now we are expecting to get official word according to u.s. law enforcement official that they will spell out why they think north korea is ultimately behind this cyberattack against sony. that is the big news today. we wait to see exactly what evidence they will put forward. the big question after that is

how will the united states respond? what are the options available to the government? we will hear president obama talk about this as well. >> what are some of the options? obviously this is a big wow and it's official, but what does it mean? >> well, the options are limited at this point, and again we have to wait and see what evidence they put forward and see whether it originated within north korea itself or if there were sur gas outside of the country, but it's very hard, for example, to target the north koreaen infrastructure because really there's only one real pathway out of north korea. would be easy for the north koreaens to see a u.s. cyberattack. and the aim to name shame the north koreans and

embarrass the north koreans as best we can and even if there were a response we wouldn't officially hear about it for some time. >> thank you, peter cook for breaking this down. and you will be able to watch the news conference at 1:30 p.m. eastern or streaming live at bloomberg.com/tv. moving on. we're moving up north. canada's biggest banks, they are taking a hit. the country's top banks face earning results falling 6% over the past three months. one of those banks, toronto dominion bank and t.d. bank. erik, my partner spoke with the c.e.o. earlier this week, and he said he is ready to adjust to banking's new era. >> it's adaptable. you should expect t.d. to adapt to the environment. we are not the type of company

that ideologuically looks like at the environment we find ourselves in. if nothing changes, you will see t.d. do the same thing because it has worked and been very successful but if it changes fundamentally, t.d. will adapt. >> is the environment changing? >> i think in some ways, because what you have now is what i call less market growth available. so i think banks not withstanding the financial crisis, have benefited from a good environment generally, especially in the model that we have with retail banking and all that, to where as now we go true an operating cycle where it's more -- and hence i see a fundamental shift coming there and successful banks like t.d. will adapt to that environment. >> what's happening now?

is it just oil? >> no. it's a combination of events. when you see some of cheesehead winds have been there for a while. the old analogy that you can compare as -- prepare as much as you want for a cold shower, but unless you're in the water -- we see the uncertainties in the deflation narrow pressures in europe and china certainly seems to have slowed to where it was before and after few years ago when people would say, well, it will slow down at some point. and with the u.s. dollar it's interesting to see the impact. because there's two ways to look at it. on the one hand low andy: prices, 70% of the u.s. economy is consumer driven. u would think it should be not such a challenge. >> what about exporting?

>> it might not feel as great as if you were on the other side of it. i think in short term canada will see some regional differences. there's in canada where oil prices will help consumer sentiment and there will be more dollars in consumers' pockets. but in alberta you will see some impact and depends on how long this us is stains, but there will be a mixed reaction in canada. >> how will $60 oil affect your earnings and the quality of your balance sheet? >> so, the direct impact on t.d. is quite minimal. we, you know, are lending our book exposed to the lower oil price with our customers and the like. it's relatively muted. >> which is to say -- either

you have very little exposure to the oil patch or you have hedged that exposure? >> well, where we lend money, especially forth more junior players in the industry, we lend on something where the availability of credit is dependibility on what our view of the market is and tv is generally conserve. so we think that's a more manageable situation for us. i think the part we worry about is indirect impact. when you have sustained low prices, what happens to the oil servicer is what happens to the rest of the economy and what happens to consumer sentiment in that part. >> what do you think is going to happen? >> well, this remains low for some time and obviously will have an impact. you've heard some companies thinkinging about cutting back on capital expenditures. i don't think the current production will be as much as perhaps new supplies coming on

stream. >> what about housing? the bank of canada says housing prices are as much as 30% overvalued. i was thinking to myself when that came identity on december 10, imagine if the fed said that about the american housing market. what does can za say? >> well, if you took three or four centers out of the equation, you would say oh, that doesn't seem as bad, and that's toronto, vancouver, calgary and the like. if this oil remains low, calgary may correct itself. there may be pockets out there. but in canada, i don't see a major disaster like what is experienced in the united states just before the financial crisis. >> i grew up watching a parade of c.e.o.'s. at the head of canadian banks

all pretty similar to each other. white men, oftentimes in their 50's of anglo sexson or european extraction. you're different. what does that say to the canadian economy and business community and the future of canadian banking? >> we are reflecting the margins in which we operate. to put it simplistic, we don't, as a big, we don't make cars. we don't make computers. we actually don't make anything. we are in the business of trust and meeting people's as operations if they want to buy a home or save money for their kids' educations. so people matter. >> they make something. they make money. perrott ma sonny with my partner erik schatzker. when we return, connecting with consumers. the stores that know us more than just price. it's all about experience. that's what is going to get you

in there, shopping, spending and injoying the holiday season. you are watching "market makers" right here on bloomberg television. ♪

>> welcome back to "market makers" i'm stephanie rule. holidays are the time when retailers are focused on deep discounts and door buster deals to attract shoppers, but they can no longer compete on price alone. the founder of "story" says the experience in the store is becoming more important than ever. rachel, what does that even mean? we're here on 58th and left and i see the gap 70% off and there's no experience just deals. >> well, i just think for years and years and years you could

always compete on price, quality and service and now the nice to have is a need to have. so i think about it a lot as what's the surprise and delight factory? a couple examples are blooming details. this year they did videos focusing on customer service and these hysterical funny videos about getting rid of your holiday angst and turned their windows into a fun, nainling game to where it was much more, and i think that was really important. >> do you think retailers are actually starting to think about that in a big way? retailers, big ones out there are wal-mart. none of that, girl. of ll, there's a glut any product that you can buy anywhere and everywhere. there's a store that has a starbucks and on black friday ant police stores gave away

gifts that were poppers that had gift certificates in it and different toys, so the future of retail in brick-and-mortar in my opinion is going to be about entertainment and community. because when you look at rent and how much people have to pay for space, you have to think broader experience per square help d what are ways to gs exploit that? one has a sushi counter. >> is that what's going to change? because unfortunately that the point i shopline. i go home and click and don't go into the stores. am i doing into the store when i know there's going to be a food truck and also get a sign for my kids? >> that's the only way physical retail is going to survive. there has to be a reason to go. i think community is important. the o day we had a

snowglobe-making workshop and nate berkus came and there was a making of the product that they sold of his in target. >> can retailers afford the experience? what about the people that come in and make the snowglobe and say, smell you later, i'm going to target. >> we are the same people that liveline as offline and the birch box funding. i'm pretty sure ewan any glow is not giving starbucks the space. i'm sure the coffee isn't being given away for free, so i think it's thinking about not just the front end experience for i sumers but how are you mon footage? e per square

>> is there a retailer that needs this re-invention? >> almost all. >> and why haven't they yet? are they simply too old school thinking discounting will get the customers in? >> i think with anything, it takes times. i could name startups that don't exist anymore. because when you're first movers often doing new things, it takes time on the consumer behavior and on the business model side of things. so i think the same thing is going to happen with the physical retail. me great examples of kind of trail blazers were build a bear workshops and american girl places and it's obvious because it's kids. but as consumers and adults, we want to -- a higher return on

investment for our time. so if i'm getting an experience in the store, give me something i cannot get on my couch or at my desk. >> so how did you become involved with target? because i wouldn't think of target as an experience. i thought i can buy a coffee maker and chose a hipster like you to change their snune >> were you ever a target shopper? >> i've always been a target shopper. the first time i shopped in target was high school then there was one 2350eu6 miles away when i went to college in colorado but we partner up with different brands to help them tell stories in this outside space like a living magazine so this year we went to target, found our favorite things, over 20 brands and merchandised them in our store with over products. >> what does the word

merchandise mean? >> what it has meant and what it will evolve to mean. i think we have always thought of merchandise as selling. but a huge trend that's only going to be bigger is merchandising as an advertising tool and don't. i mean, general electric had sneakers. so -- >> so it's bhk an active term? >> right. >> you're sticking with me. she did such a good job. i'm going to make her co-anchor with me while eric is out. she and i will sit down and talk glamour. speaking to the founder of glam squad. ♪

>> welcome back to "market makers." i'm stephanie rule. the cofounder took the $200 billion bite industry on and

launched the on demand industry glam squad that brings hair and style to your door. let's bring in alexandra. and i didn't let my friend rachel leave. she saw you were here. eric is out so you're working overtime. we'll keep you. >> alexandra, we all got to know you with the extraordinary endeavor. >> glam squad launched in january of this year. and three of the cofounders were working on something really exciting and innovate. i started to advise the company the minute i heard about it. i got sucked in as an entrepreneur and angel and adviser and this summer the team came and said we want you join us as a cofounder and lead this company into the next

fades. >> is this off the success of blow dry bars and the fact that they are open 6:00 a.m. to midnight? >> well, what we are finding at glam squad is the common denominator of all our clients. doesn't matter the profession or age, they just don't have the luxury of time. so we come to your home or office or hotel and within 45 minutes to an hour we can transform you and bring you self confidence and make you look and feel your very best self. >> rachel, do you think this is an extension of experience shopping? >> well, i think it's about experience shopping but if you also think about it, online platforms are about enabling people to be sellers and kick starting businesses on kick starter, and i think where the big trend is about

democratizing the physical world and that's exactly what it is. so i can discover a new makeup artist but also giving meac access to something. >> do you consider this -- >> our hair services are $50, so for someone who might be a little as operational but the ame client that's doing self cycle and starbucks. it's only $10 than your average blow dry bar. for other clients who are high-end luxury consumers, they are finding $50, that's a no brainer. i might get my hair blown out two or three times a week. >> u got beauty book, style steep. other ladies entering this party. how do you protect your franchise? >> well, i'm no stranger to competition. when we law firmed there was a lot of competition early on, and i honestly like it. it invig rates me and it forces

our team to get keep innovate. we got $7 million in october so that's enabling us to really be strategic, hire an awesome team and think about what we're prioritizing for 2017. new markets and verticals and there's so much to do whether it be product lines and -- >> do you man you will now have your artists become sales people? when they are done doing my makeup, they will sell it to me? >> right now we're in the phase of building the brand in new york, l.a. and miami. we want customers in those three cities to have an incredible experience, and as we're building our brand, i think we will have the confidence from our client base that will want products for what we believe in. a lot of it is this time-starved customer who wants to multitask and needs things

to be effective but also quick. >> all right. i've used glam squad. do we have it? there's glam squad and you got two customers that night. my husband and me and we used it for halloween. we have that? there you go. that's probably not your proudest moment. you probably -- rachel, have you ever used glam squad? >> not yet. >> would you? >> i actually have someone who comes out to my house to bow out my hair. what happened is i went to a popular chain and a woman i loved so i said i can't always get over here or the times don't work and she said all right. here's my fone number so i kind of hacked together my own beauty squad but it's much more expense i have than glam squad and i would much prefer -- >> new york, l.a., mime. are you going to have a new year's eve special? >> no. because we are expecting tremendous -- >> think it will be the biggest

night of your career? >> yes. if you're interested, you've got to book now. >> ♪ ♪

>> will blackberry bounce back? we'll be speaking with blackberry's c.e.o. >> just what melissa mire doesn't need. a gossipping piece about her rocky tenure at yahoo. >> and if you have one of these, no one will get in your way on your morning commute. battle-tested humvees welcome back to market marnlt i'm stephanie rule. >> and i'm matt miller in for erik schatzker tie. >> matt wasn't going to join me

but all of a sudden humvees are in the news and he came running, racing to the set saying humvees tested by the u.s. government? >> yes. i'm going to bid often one. let's start with the bulletin top global business stories of the morning. seems like stocks are taking a time-out after the last couple of days of major rallies. the index is barely in the green. you can see there are still green arrows after the two biggest rallies in three years. the dow at 17,800. yesterday the dow was up 400 and change. it is now official the u.s. is pointing the finger at n.c. f.c. the -- at north korea. the u.s. will release a report blaming the sony hack astack on north korea. we will bring that press conference to you live when that happens. > in russia the ruble gained

34% against the dollar. the ruble is still down almost 50% from a year ago. all that underscores the roblem vladimir putin has. >> he is a guy who was born on third base and thought he hit a trip. 67 but standing here on third base here he was $110 for a barrel of oil and suddenly it's $50, he doesn't look like a genius anymore. my view putin is a guy, a leader who at one in the same time is taking on the market and mother nature and -- >> you can watch that interview with tomas friedman on "charlie rose" right here on bloomberg television or as i like to two, you can listen to it on bloomberg radio. >> more legal problems for uber where in taiwan the government

says it is breaking the law. it says it will appeal. nu delhi and other places have banned uber. >> and it's a wrap for the mock conservative co-host? last night colbert said farewell to the colbert report on comedy central. >> another bush governor is running for the white house. >> we are sending troops into iraq when this show began i promised you ooh revolution. and i have delivered because technically one revolution is 360 degrees right back to where we were. >> and then dozens of celebrities came out to sing goodbye. everyone from willy nelson, brian cransen, james franco,

kareem abdul-jabbar and even as you just saw there. big bird. of course the list goes on and on and on. yes. cyst jan only on pore. >> alan alda. >> wow. bill clinton. a lot of serious celebs there. >> who is your number one there? for me it would be willy nelson. >> i like franco. a lot. >> he is a super freak. >> i love him. great. pineapple express. all right blackberries turnaround plan hitting a roadblock. dropping 34% from a year ago, that overshadowed one piece of good news. the company was cash flow positive earlier than c.e.o. john schenn had promised. john butler covers the company and is here now. so john, what do you think about this earnings report? initially we thought oh, this looks pretty good.

and >> any company can gain earnings share report? >> in fairness to blackberry, this is a company in transition. it's a tech company in transition no less, so they are really reliant on new products to get that line growing again. john schenn who has turned companies around before is now at the helm of blackberry, and he has managed expectations saying revenue growth is coming next year. it never was supposed to be a this-year thing. i will say i expected -- >> is it a company in transition or a company in distress? >> i think it's in transition, but that could change if they don't turn things around in the next couple of quarters. but what i mean by that is i think they have made all the right moves here.

they have really right sized the expense structure and came out with products that look very good to me. most recently this week they unveiled the classic based on the iconic design. i picked one up so i've got the blackberry one here. i'm an iphone guy but -- >> how's it gone so far? >> well, i literally just turned it on like 10 minutes ago. >> have you used it at all? >> not. >> but obviously they have had a rough time in the smartphone markets. i think market share dropped is% globally. but xn -- qnx is now the technology used by almost everybody in the auto industry and they are also trying to roll out a software on services business. >> yes. there's assets here.

he's tried to move this company away from being per-seed as just a device company to a company that has a huge portfolio of wireless patents and terrific enterprise mobile management software sweep. so when we communicate with the bloomberg system through a smartphone, we're actually talking through one of those software gement systems. and that's in transition as well they are changing the licensing model there and it's made the recent revenue a bit volatile, but at the end of the day i think they need a couple of quarters to get licensed revenue coming in from the enters -- enterprise side and then i think they have a chance at a turnaround. >> how much do you believe in john schenn? >> a lot.

i think he is the right coach for the right team at the right time. >> that was a great endorse mean. e're looking at a $10 shock. what do you think about the shares here? >> you know, i don't cover the stock per se, but i will say this. tock price movements reflect optimism. the turnaround is you're betting on management so in the case of blackberry, it would be a bet on john shannon and he really exudes a lot of confidence. he has come in and met a lot of promises and then some and really i think has set the right strategy to get this ship back on a straight course. >> well, you know i'm a blackberry enthusiast. john butler of bloomberg intelligence. and stick around. 18 minutes our on emily chan

will be speaking to john chen at 11:30 a.m. eastern. >> all right president obama will enter a news conference before he applies off with his s -- for the who would for the holds. peter cook is with us from washington phil, how does the white house feel as it heads here into the new year? >> like they have got momentum. they will acknowledge that 2014 was rough and every time they thought they were taking a step in the right direction, there was a foreign policy that would flare up that often beat down what they were trying to do. obviously the midterm elections were pretty devastating for the entire party, however, what they have done in terms of reaching a climate deal and then immigration action, the cuba announcement earlier this week. they feel like they are moving

into this new year even though there will be a lame duck with this momentum that should try and help them solidify a legacy. >> peter, obviously phil normally is in washington, d.c. with you. he is visiting you mean here with you in new york this week but what do you think his own party thinks about president obama? because he is trying to make moves that will ruffle some democrats. >> but he is also energizing democrats mentioning the immigration act alone. certainly something democrats have been pushing for this president to do and eye lou home the flex their muscles if you will but this is a president who heading into his nal year has to keep democrats -- whether it's trade, taxes, one of the areas where they might be able to find common ground, there may

not be any common ground in which the president would have to look to democrats and valley the base and nonetheless he wants his legacy that a democrat proceeds him in the white house. >> and immigration got a little more help but not much. >> so it's going took interesting when you talk to white housal officials, the idea that they have figured out a way to anger both parties ith that $1.1 spending while also upsetting the republicans on the immigration issue i think their view is they are not trying to apiece one constituency or another but lock in a legacy for some of the promises made in 2008. i think you're going to see a lot of executive action through the e.p.a. but to peter's point, i do think you will see the president on corporate tax

reform and trade to move republicans on that. -- don't expect >> peter, is the key here that he is taking 1345u8er bites? because he hasn't angered anybody in obama care like one and tax reform is something everyone wants to do. trade is something everyone wants to do, right? >> well, the reality is cuba is no small bite and the climate deal with china is no small bite there either, matt. so there's there are some big-ticket items where the president can be not a lame duck. and he is pushing his f.c.c. chairman to do something republicans in congress adamantly oppose. so there are some smaller items on the business front that could make a difference. tax reform it would be a huge

item but this president still has small areas where he can make a difference. but i would not put those major items off the radar screen congress is to be controlled. >> no matter how difficult they are. net neutralty seems like a non-starter. >> it's a non-starter. >> look, there's bipartisan, top-level bipartisanship on tax reform and issues like trade. but they have never moved forward. i think some things have is to shift. some dynamics have to shift. there's some optimism on the hill as peter said, but there has to be a change right now, and nobody is sure if that change exists. >> thank you for being here in new york. peter, when are you going to come visit us here? >> come and we'll go ice

skating. >> we'll talk cars. >> thanks very much. you will be able to watch the president's news conference at 1:30 p.m. eastern time here on bloomberg. we also have it streaming on our website on bloomberg.com. chances are norm llitch, the president would be about a half-hour to 40 minutes late but i feel like since he is about to go on a sweet vacation in hawaii, he might make it on time today. >> surprising revelations about . lissa myers rocky tenure and a media executive who graduated in 1960. probably has to be corrected the name of the high school but that's all the producers are telling us and frankly they just wrote it down. our guest. ♪

>> tongues are wagging and i'm not talking object set of "market makers" request matt miller i'm talking about silicon valley about a piece coming out this weekend that reveals new details of marissa mayer's tenure at yahoo. it talks about the fight to save i can't hamilton let's bring in our own tech contributing editor david killpatrick for his reaction. david, dogging often marissa just before santa arrives? what do you think about this? >> hi, stephanie. i was sorry to read the piece because i've known marissa for a long time and have a lot of respect for her. but nick who is a fantastic journalist and i'm really eager

to read the rest of the book revealed. it said she focused too much on the media stuff that she didn't understand and not enough on what is truly her true gift which is tech products and code and programming. and you could argue that maybe she was not the right person to be the c.e.o. of yahoo, lthough i've thought she was good but she might have done as well as anybody could have done. but it's heading towards a relatively unhappy resolution, it would appear based on nick's reporting. >> so fine. let's put it aside and say maybe she shouldn't they shouldn't focus so much on awkwardness but spending $6 million on someone who wasn't vetted? >> $9 million. in the end they paid him $109 million for less than a year and a half. >> how bad could the guy be to

blow that much money and force him out the door? one would think he's got to be pretty good. >> how bad could she be the do that? >> she didn't bother to find out his colleagues at google called him most interesting man in the world because they thought he seemed so much like the guy in the ads which is not a flattering portrayal. >> really? >> yes. i think the guy was clearly a gigantic mistake. i don't think it was really digested how big of a mistake it was but when revealed, marissa's unilateral decision making that led to him being hired and really that she didn't have any infiltration from experts or do any research about it. the contrast between that and mark zuckerberg's hiring of cheryl sandberg where he spent about 60 hours of her and interviewed her and she turned

out to be the greatest possible hire. >> couldn't they point her misunderstanding of human nature and/or low e.i.q.? >> i and i know stephanie rule you have such a high e.i.q. >> what is that? does anyone know what that ask? >> my husband is a tiger dog high i.q. low e.i.q. have a high i. -- e.i.q. but wouldn't you say that's an important thing to have if you're running a company? is >> as tech exist go who are coders which is really what she is has a higher e.q. than many. but i think being a c.e.o. is a way different job than running a bunch of products at google however brilliantly she did

that. and i do think she has done some really smart things at i can't hamilton you look at the yahoo weather app, these are key things she set out to do and did do. but as the article painfully points out she spent all this money on people like katie couric and david poe and focused heavily on the media side which she really didn't understand where the ads just haven't been coming in to justify it and didn't put nough emphasize on code base product and tried to get it to compete more with media companies as less with tech companies, that seems to have been a big mistake. >> can i get in here? do you mind? >> i'm sorry. >> i mean one question, you're owning it for sure. but the stock is on fire, right? i mean they are a worth more than microsoft. >> that's --

>> 227%. tripled. i'm just saying one guy writes a gossipy book about how bad she is doing and clearly paying someone $109 for a year of work, but as far as investors are concerned, she is doing great. >> but that's because she invested the alibaba investment and -- >> i know who is not going to be happy is marissa when she gets this book under her tree. >> i'm going to read it. >> thanks david great to have you on. we'll be right back with more just me and matt coming up. turning around a once iconic brand of -- ♪

>> it's friday. you know what that means. it's 26 past the hour.

so it's coughing. but 26 past the hour on a friday. let's break the yearbook game down. he is a media executive graduated from brooklyn in 1960. tweet us, who is it?

>> welcome back to market marnlt i'm stephanie rule. >> and i'm matt miller in for erik schatzker today. and blackberry's not hitting the right keys with the investors. the smartphone maker reported a disappointing revenue even though it was reported better earlier. shares are down hard. not as hard as they were this morning but let's go to san francisco with a report on the turnaround with c.e.o. john chen. >> c.e.o. of blackberry joining

us now post earrings. so first of all, john, positive cash flow and positive e.p.s. but the question is when will we see revenue growth again? is >> hi, emily. i've been very consistent about it. we have to turn positive cash flow before we get to revenue growth and launch a lot of products and revenue growth will come some time next year. >> we've announced the passport that you've been selling. tell us who is buying these devices? how many of these people are new customers and upgrading and how many are using blackberry as an additional or second device? >> i think you see a lot of people using new devices. i have a software product coming out around a june timeframe. that will i hope convince

eople to go to one device, obviously, the blackberry device. we will see more of an uptick or ose who used the 900 older classic product. i think most will resonate with that. on the passport it's mixed. there are some new users. there are some winback the people who have left us and come back and so there's a mixture on the passport. the classic is a little more secured to current users upgrading. >> we saw hardware sales down and software sales up. how do you expect that balance to play out over the next several quarters? >> oh, i'm hoping both of them goes up. and the one thing people need

to understand and need to go to, i understand the impatience with the rev but it was important for us to clear out old inventory. and year over year 90% of our inventory was cleared out and so i'm actually pleased with where we are positioned. the channel had very little inventory. i can't even produce the old phones anymore. so let's clear the way to get to the new phones, and i'm not concerned about it. but i'm sure as you or matt pointed out. the investors have a different feeling about it at this point. >> we know you sold through your initial inventory of 200,000 passport phones. how many passport phones have you sold so far? where are your strongest regions? >> we said that we had delivered over 200,000 phones

in a quarter. unfortunately, that's a little back end loaded later because of the manufacturing process. we have now reduced the lead time of our passport phone somewhere between four to six weeks if you order one or make one. we can deliver sooner than that now. so some of the backorderers, because we sold out so many tiles, some of the backorderers was actually fulfilled in the end of november all the way up to september 12th, so it's all about q three numbers. we only take the revenue when the phones got lit up and used. so not the whole couple hundred,000 units are recorded as revenue in the q three. so there's a lot of different reasons why the revenue came out like that. >> i.b.m. just showed off their

enterprise ask geared towards the ipad. what do you think? how much of a threat are they? >> well, it's always something that we have to take seriously. we are all aiming at the same space. the enterprise space. those are work flow products. it's not really very deep. but the one thing about their clap rations are very much on a pro pry tori system which is the iphone and the ipad. and nothing to i go ignore. i'm not the first one to tell you that. but our solutions, we have equipment solutions that are more open oriented and could be running on devices and the partnership we strike are broader than the sales force so i think we continue to stay open. >> you just closed a deal. john.

what ix chances we see another acquisition in the next six months or so? and what areas of the technology and company do you think? >> so acquisition is certainly something of interest to us now that we have the ability to generate cash operation. but i shouldn't comment on the acquisition by itself. in there is one that will be done in the future, i'm very interested in the i.o.t. world, the internet of things. you will see we have a lot of partnership sites in the case of hand held in the medical world and many others. so you will see us more interested in more progressive in those things. >> i know we have talked about this at length your interest in the internet. we know you're going to be

speaking it -- speaking about it. what are the chances we see a connected hub for the home device or something like that? >> not a connected hub of the home deviced but something we're strongly interested in and safe to say we're working on it. we are very strong in cars. if you come, you see one of those models. i believe it's going to be the maserati. one year we show the jaguar and one year we show a mercedes and a jeep. so this time you're going to see a maserati. ey are using our q and x software. so you might see something there. i can't make any promises right now, but you will see the road map for sure. >> when we spoke six months ago, you gave yourself a better than 80/20 chance of turning

things around. what would you give yourself today? what are the chances? >> i hope looking at the results we are going to be here to stay. i don't want to say 100% because every time i say 100% you jinx it. so i will say 99%. how about that? >> that's pretty confident. how about this? you also said you different know whether blackberry would be iconic again that that was a question you still had to chew on. what's your answer now? can blackberry be iconic again? >> chances are better. i'm working on it. and i feel good about our product. and our road map. and our focus on security, our focus on the i.o.t. i think there's a big space waiting for us, a big white space, and i feel good about

opportunities. so when -- one will never know until we execute, but there is a path i can see to execute. rivals when it comes to will blackberry always be a niche device? >> well, we made money in hardware in the last couple quarters. that might sound simple to some. it was a hard task. but we are very proud of the accomplishment. so therefore we believe that we could turn out good, iconic, high-end devices and they are very focused on productivity nd negativety. devices who saw our had a good review. so we have a lot of space to

work with. i wouldn't use the word niche as negative. i could use the focus word. it would be a lot more positive. there are a lot of demand in that space. >> all right. john chen. c.e.o. of blackberry, always great to have you on our show. thank you for joining us. matt, did you like it? >> i am initially impressed by the hoeft of it, the materials, the build and the software on it. but i haven't gotten to really spend a lot of time on it. >> it is a heartbreaker. this guy is is a tried and true apple user. you know i love the blackberry. >> and i know. >> so i got the new one. yes. >> here's something both of you would love. a connected moss rotty? i mean, come on. >> collectively we would like that. >> emily change. thank you so much for giving us the latest from blackberry

c.e.o. john chen. when we come back we're going to talk about another topic matt is interested in. when matt does this show, it's all about matt when we return. we're talking humvees. let's keep it tight. hum screes, the vehicles. >> keep it tight. >> back with "market makers" in a second telling you how to bid on one of these babies. ♪ .

>> for the first time ever offroad enthusiasts got the to buy a hummer. the military auctioned off a variety of humvees. surprise, surprise, matt miller took part in the auction. >> i have to give credit to truck yeah.com. this is a website i frequent. >> that's amazing. used to know an all-women

hockey team called the mother puckers but -- >> truck yeah. there's a kid on there, andrew collins who is a fanatic for scouts and he started to bid for a humvee, so i was following along to see how he did and i found this a fascinating story. here you see one of them. a lot of these were used in battle. in fact the government is going to auction off about 4,000 of these bad boys and started the auction at $10,000 a piece. so the first round of auctions happened over the last couple of days. they auctioned off 25 of them and the average sale price was $30,000. >> look at the size of these tires. can these trucks even drive on the highway? >> well, you could possibly ive them on the highway if you could get a license plate. >> wait, if you're going

to-by-them without the right to use them on the road where are you going to use them? >> a lot of men or women would uy -- pay $30,000 for an offroading vehicle so why not spend $30,000 on an absolutely bad -- humvee. they are going on ebay for $60,000 which some of the caveats include there are no more guns. unfortunately, they have taken the weapons off of these. i was thinking they could partner with the e. -- >> they even took the armor plating off that was on some of these. so they really stripped them down but have very specific mechanical checks on them. they even do met alearningical oil checks on them so you can

see what shape they are in, and the government is going to, if they continue this average, raise $120 million and got me thinking what else can they sell? >> you side the original ask or auction starting bid is $10,000 nd they were going for $30,000-$35,000? how much did it originally cost them to make these suckers? >> i'm sure those figures are public. but very expensive, and i guess if the government is paying, hey are twice expensive. >> are you going to bid on one? >> no. because for me it's very difficult to imagine going there. you have to pay within flee days then pick it up and you have to tow it back and so i'm not the kind of baller this kid is but the next bidding starts january 7th. >> you know what? hopefully have that happen in my house.

ok. pretty cool story. you meaners you can have one too. it's friday. time to play the yearbook game. here's your last chance. he is a media executive graduated from high school in 1960. that's all our producers are telling us. tweet us your guesses. ♪

>> all right, let's go, yearbook game. media executive graduateded in brooklyn back in 1960. here's our winner from the twitter sfeer. @martin chronicle tweets -- i thought it was a little bit hard today but our winning tweet said i'm always in the guessing mood around geffen. time, #david

almost failed out. >> that's passing. >> i thought 70 was passing. > he was the first person to message me. >> market makers back in two. good job. joe.

>> breaking news out of washington. the f.b.i. is officially accusing north korea of the sony hack attack, and it is revealing some of the evidence

it's got to back it up. peter cook has more. peter? >> all right. we do have the official word, a written statement from the f.b.i. that we received here and it says explicitly that the f.b.i. now has enough information to conclude that the north korean government is responsible for specifically the hack on sony pictures. they site three reasons why they believe it. one is technical analysis reveals links to other mall aware north korean developers have developed and there's significant overlap between the frastructure and two links and they have similarities to south korea by north korea and the f.b.i. has

en a wide variety of cyberintrusions and it is set apart. north korea's actions were intended to inflict significant harm on an american business and such acts fall outside the bounds of acceptable state behavior, and the f.b.i. says it stands ready to assist not only sony pictures but any other business out there that find themselves open to these attacks. one question surrounding this. not only the u.s. response to north korea itself but will the be an insta- gator for private and government to work closely together. this could be a kick starter for that effort. >> all right. peter cook thank you so much for giving us the latest. the president will address this at his 1:30 p.m. news conference. you can watch it here on

tv. berg or at bloomberg markets?s on the >> we are approaching 56 past the hour. taking you on the markets is mia but before i will say goodbye to you, matt, and i will see you all on monday when minor y'all roubini will be my guest. >> dr. doom. >> you think things get crazy when matt is here? just wait until dr. doom is here. >> have a great weekend. thank you. merry christmas. thank you. >> and stephanie rule have a great weekend and happy holidays. stocks, if you're watching the board, essentially we're seeing a pullback in the last couple of minutes. the dow hit -- we'll call it a flat session for now off a quarter of a percent following the fed announcement where they pledged patience in raising

interest rates as well as the bank of japan. if you were watching that overnight they maintained unprecedented sim will you explain. joining me is mr. o'medicaly from market.com jim ramelli. i know you have an interesting trade. let's get straight to that. it's walgreens, right? >> yes. we have seen bearish performances in the last five quarters. what really had has me bearish is that the stock is going to close this week lower after a huge move higher in the broader market so it's thought there will be sellers. i'm looking to buy the walgreens deep 26 deep 70 1/2 foot spread for 70 cents i can if the stock trades below -- >> as we come out with earnings

? >> it's going to be a pretty quiet next week, especially since we have the shortened week so it's something options traders would want to keep in mind with a day 1/2 taken out of the week. >> we are seeing stocks pretty much sidelined for the past 30 minutes or so as we look to close it it. my thanks to you jim. stay right there because membership membership is up next. "money clip" is up next. ♪

. ," welcome to "money clip where we tied together the best stories, interviews, and videos. blame of thes the sony attacks on north korea. media, a star-studded sendoff. stephen colbert leaves comedy central to take over for david letterman. blackberry is back, cash flow positive, that sells growth looks like it is still a long way off. in motors, warren buffet's private jet company lands and mainland china appeared we will talk about the plans in the far st