>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> americans, keep on trucking. simmers are snapping up trucks and big cars thanks to the falling gas prices. >> the lone star state races for the impact of plunging oil prices. >> tying the knot for wedding websites, trying to disrupt the digital market lace. -- marketplace.

good morning, everybody. i am erik schatzker. >> i ruhle. happy new year. >> i will wager mine was cooler than yours. >> it was definitely warm and beautiful and lovely where i was. but it is warm and beautiful next to my partner, erik schatzker. news, the top business stories of the morning. the euro has not been this low in almost nine years. the currency fell below 119 earlier this morning. there is concern elections increase this month could result in the greeks abandoning the euro, or as my partner, eric likes to say -- plus, the ecb is debating whether to expand economic stimulus. do you like that? your favorite. oil resumed its slump today.

below $55 a barrel for the first time in almost six years. west texas in -- west texas intermediate is below $51. boost exports to a record later this month. oil production now at the highest level since the breakup of the soviet union. the president of iran says the economy cannot grow if the country is isolated. in a speech president was on call for an increase in foreign investment. >> if foreign investors comes iran and iranian investors go there, our national security will be strengthened. the time where we used to say foreign investors ran independent if they come here is past. it is the opposite today. >> iran's economy has been devastated by sanctions weakened currency, and 40% inflation. a big number. the founder of giovanni greek yogurt has the and replay -- has

been replaced as ceo. the guy started the company. he may also lose his post as chairman. he is blamed for a devastating product recall in 2013. private equity firm tpg is calling the shots. tbg can because they loan chip on a $750 million. mark zuckerberg is putting the book in facebook. the social network ceo and founder says his old this year is to read a book every other week. spoken like a guy who has no children. mark zuckerberg is inviting facebook users to read along with him. he has created a page called "a year in books." wouldn't you like to read a book every other week? >> absolutely. i try. >> who has got that kind of time? >> if you stopped watching new jersey housewives every night you could read a book.

>> we will move on. let's talk about auto sales. they have not been this strong in 18 years. crisler, gm, ford, nissan, honda, aldrich orting big gains this morning. you can thank at least in part those low interest rates, as you just saw. matt miller will help us dig the per into the numbers. and kelsey is with us from chicago. matt, let's begin with you. what stands out? >> first of all, it is good to see the two of you back together on set, seriously. >> do you read a book every other week? >> i do not have time because i watch so much television and play videogames and drive cars. i regard magazines, every single one, as soon as they come out. it is a nice and warm and cozy way to start the year with superhigh forecasts, a great end to december.

you saw general motors sales were up almost 20% in car sales in general, 16.5 million at the end of 2014. almost 17.5 million in predictions for 2015. everything seems to be accelerating nicely. hopefully not coming to a peak. >> gm, for example, how much do incentives play into this? i do watch tv and listen to the radio and there are tons of advertisements offering incentives. i wonder how much that plays into this. >> incentives, december is obviously the biggest month. they have all these promotions centered around the holidays and clear their inventory and lots. incentives are big in december and in a year, they are down. gm is the most. the average incentive last year was about $2800 and gm's incentives were averaging about $3600. >> what kind of a role do you see consensus weighing in

consumer demand right now? >> incentives are up a little bit but the overall average transaction prices are just as important. as we're seeing, as you mentioned, gas prices are down about $1.10 based on what they were a year ago. consumers are by more suvs and pickup trucks. even though incentives might be the same a little bit in certain areas, average transaction prices are going higher and that is improving in -- improving profitability. >> if you scroll down the list of the selling vehicles every month, you are used to seeing a toyota camry work role at the top, honda accord and ford focus, whatever, but this year everything a month, the top sellers have been trucks, suv's, and crossovers. every single month all year. >> is that because gas prices have been down? >> not for the first six months. oil was trading at $95 well into

july. >> gas prices have fallen since summer. the thing consumers really take from gas prices is not necessarily the rate, but the volatility. the last time we saw gas prices as low, they were volatile and bouncing all over the place. we have seen a steady slide since last summer in gas prices and consumers are taking that and going with the two dealerships in buying suv's and trucks. >> cheap credit has made it easier for car buyers to go ahead and pull the trigger. will that continue? i heard reports the lower oil prices are affecting the bank's ability to offer cheap that it. >> i think credit will continue to be ok near term. i do not know what it will be going forward later next year or 2000 16. it is hard to say. >> the conventional wisdom is cheap gas prices will cap demand for electric cars or hybrids there will do you think?

>> we are seeing a little bit of that right now. he a lot of popular hybrids and electric cars enter into december in a sales nosedive. some of those automakers wrapped up on cars like the nissan leaf and a toyota prius, going through december. these automakers really have what a stake in the game as far as product development. i do not think the cars are going away anytime soon. >> what about consumers? are they so shortsighted a look at the price of gas and decide to buy a truck on that basis? >> yes. of course they are. i am a consumer and am incredibly shortsighted as one. if i think about the bigger picture for the business, a ford is a good story to tell. they just came out with a new f1 50. everyone knows they made it a lot lighter to improve fuel consumption and efficiency. they are worried at fort that

the lower gas prices will hurt the sales of the new truck. people will not be driven. i have an old f1 50 and i get 13 miles a gallon if i am on cruise control at 60 the whole time. will i go out and buy a new one, not with gas at two dollars. >> it raises an important question for you. what about used cars? to matt's point if i'm in a market for an f1 50 and am looking at a brand-new one, even though it has the fuel economy, maybe i will be inclined to buy an old one, because used-car prices are dropping. >> you want the two liter v8 v-8, which you cannot get anymore on the f 50. >> a lot of automakers are downsizing right now. if you want a big engine in your pickup truck, chances are, it will not be a brand-new truck right now.

capability in terms of towing capacity those are continuing to improve and you are seeing improved statistics despite the fact there are smaller engines in a lot of them. to your point used car prices are settling down more. used car prices, as auto might -- automakers try to right size their incentives, it may not be as attractive but over time that should pay dividends in retail value for some of these new cars coming off the lot. >> used cars maybe will flood the market. true car is predicting 55 million unit sales this year total and morgan stanley is same used car prices will fall 25% over the next three years, which may be a record and may lead you to buy an old one over a new one. >> absolutely. consumers are taking these cars longer and longer. >> we thank you very much. kelsey is the consumer affairs

editor at cars.com and here in our -- in new york city, our own matt miller. >> a blue flame. >> a red pickup truck question mark the answer would be not read. >> there you go. coming up, another republican signals he may run for president. this time, it is the former arkansas governor, mike huckabee. >> lust time in texas. the collapse of oil prices could mean tough choices. >> may be sober? -- maybe silver? ♪

>> republicans are off to the races. some top 2016 contenders are touring -- putting their hats in the ring. jeb bush says he is exploring the race and stepped down from all of his corporate board positions. runner-up, mike huckabee announced he is ending his show on the fox news now so he can

focus on whether to run or perhaps not. for a closer look, whispering in bloomberg's manager -- managing editor. press happy new year. >> who is mike huckabee trying to fool? >> what you mean? >> deciding whether or not to run. >> i think he has got to figure out his biggest challenge in every time he thought about running. he ran in 2008 and decided not to run in 2012. he looked at his is the. he thought in 2012, he needed to raise a decent amount of money to be competitive. that is the biggest question for him going forward. they think he needs to raise $60 million to be competitive and the question is whether he could actually do that. people on wall street and a lot

of republican donor >> do not like him very much. >> are his chances better this time around? >> if he could get himself to the place where he could fund a run, he wasn't stored nearly successful in iowa in 2008. he has a huge base of the evangelical wing of the party. he did as well in iowa in 2008 than any republican has done in the caucus so he would be a strong candidate, conceivably. he's a very talented performer. he is as good as anyone in the republican party in terms of -- a lot of people do not like him economic conservatives foreign-policy hawks, so he would have a lot of pushback. he would not have a super clear path to the nomination, but even make trouble for other candidates. everyone else trying to compete for the cultural conservative votes, someone like ted cruz whose only pathway to the white house was -- or through the public a nomination, runs through having a big win in iowa, guy like rick perry would need to win in iowa. people who rely on getting a lot of evangelical votes will have a

lot of problems competing with mike huckabee. >> who has got better fundraising capabilities? >> all of them are not tested monitors. huckabee is tested in a certain -- in a certain sense. he did very well in iowa and in his bid fell apart. he knows that is a huge problem. there is chance he will in fact explore the bid and find there is just not the financial backing to do it. in his case, unlike jeb bush, and i think it is clear he will actually run, i think my huckabee will take a hard look at it and might be back on the air at fox news vine next summer. >> for who else will money be the deciding factor? >> everybody who runs needs to think about being in a big competitive field. it is a long list. there are different views in the part about how much you would need to be competitive. people will get more free media

attention and some of get less. a guy like ted cruz and rand paul, those guys, like scott walker and bobby jindal, not really big nationally known commodities, if those guys do not have the money to run, they do not have ran name recognition. they need the money to get any kind of attention through advertising and other avenues. >> whom gets the free media? jeb bush? question bush will get a lot of attention. he is the most famous person to run. this christie is a camera magnet . he makes news almost every time he opens his mouth. he will get a lot of free media attention and whether that is love or something other than that is the question. mike huckabee realizes he needs to raise a substantial amount of money to be plausible. he can live off the land in a way a lot of other people cannot. he has a lot of natural charisma, a built-in base. in 2012, when he decided not to run, if you talk to anybody in

the obama white house and 2011 they were more worried about mike huckabee than mitt romney. in 2012 come when he decided not to run. they were looking and thinking, who might run against us and be a problem or barack obama they thought my huckabee has the kind of natural politicians words, he kenexa people, he is great on television, he has a populist ability to talk to working-class voters in a way someone like mitt romney or jed bush could not. they thought they could beat him and they could see a way to beat him but mike huckabee, do not underestimate that guy. >> who will have the strongest bank account going into the race of these likely contenders? >> we do not know who is in the field yet. does chris christie run or not? i think it is foolish for anyone to think they could raise any more money than jeb bush does. a lot of established republicans, people on wall

street like him. he is up in connecticut this week and will raise money starting the day after tomorrow. i think chris christie has always counted on the donor >> to be behind him but there is a question now with bush out there early, whether some of those people on wall street, whom you guys talk to all the time whether those guys of the." wanted chris christie, now they're not as enthusiastic. >> he is not going to cowboys games and sitting in the owners talks. chris christie is clearly supporting the rich guys. >> there is no doubt. if you think about the establishment racket of the republican party, the guys who will compete for big dollars in the that -- in that >>, jeb bush and chris christie are the guys who will be the fundraising titans if chris christie decides to run. they will go head to head for a lot of the same donors. >> then it is rubio and rand paul?

>> look at this chart here. you have got bush way ahead. what do you think of this? let's jeb bush is a nationally known commodity. the rest of these guys, if you go out to america land and talk to average voters, almost none of them know who any of these people are. everybody knows who jeb bush is. his last name is wash. american clinical royalty. because of his pedigree, it gives him a boost right out of the gate because he has a high name recognition. he will be if not the front runner, a front runner if he decides to run. >> thank you and good to see you this morning. >> thank you. happy new year. the rules in the state of new jersey, she knows. >> she is one smart cookie. >> that is true. he clearly watches bloomberg. we know he will fill in for eric now. thank you so much. >> i do not want to buy a red

truck. >> if you owned a ford f1 50, what color would you want it to be? >> lack, always lacked with the cars. >> i went with red and i was wrong. >> you are a fire engine red girl. >> watch a miss 5:00 p.m. this afternoon. coming up, low gas basis attorney into a disaster for states including texas and north dakota. ♪

>> it is time for bloomberg's on the markets. something we did not see happen, stephanie, for all of 2014.

if the s&p 500 closes lower, and it looks like it well, that will be the first four-day drop in stock prices in more than a year. >> i think it is premature to say. >> it looks like it's well just it looks like it will. -- >> it looks like it will. >> our energy prices continue to go down. it is really dragging everything with it. chevron and exxon both. it is like you cannot find anything in the foreseeable future that will push the names higher. >> oil, it is unbelievable what is happening to oil. oil is trading with a 50 and front of it and it is dropped below $51 per barrel. earlier today, it is at 50 55. >> when we return, on the verge of recession, that is what one economist says could happen in texas. we are again focusing on the oil crisis. >> plus, your one-stop shopping spot for weddings.

♪

>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> welcome back. i am erik schatzker. >> i am stephanie ruhle. >> let's talk about houston. it has got a problem. west texas intermediate crude oil is trading today, just under $5,100. terrible for states that have thrived in the past decades. texas could be headed the likes of which it has not seen since the mid-1980's. the chief u.s. economist at jpmorgan ran the numbers. what do things look like for texas if oil -- stays anywhere

near worth trading right now? under $65? >> right, one thing i want to get out front is i think falling crude oil prices are good for the nation as a whole. how hard will it hit texas? we do not know for sure. we know in the past as we mentioned in the early mid 80's, when crude oil fell by a similar amount, it has had rough times. i do not think -- on the one hand, we do not want to be alarmist. on the other hand, what is worse is inflation. a similar set of circumstances to what we saw in the mid 80's, there is no rational reason. we have to be cautious. >> it is interesting you should say so.

>> a couple of months ago, i was in texas before oil prices tanked, following that decision by saudi arabia. i do not know if you have been there, but it is striking how, while midland has been striking there have been so many relics from almost 30 years ago. we are showing everybody some footage and you can see these buildings with shattered glass all over the place and inches of dust on the unused escalators. >> and we have seen further declines since then. even within texas, you have seen some changes in areas where the activity has been the strongest. one thing i found interesting the more i dug into this is i think there is a perception that perhaps texas is less energy intensive than it was in the 80's. that is not necessarily

the case. in some measures, it is like texas is about as equal in energy intensive now as it was. you have a lot of high tech and esa have a lot of energy which is still very import and for that state. >> laquon texas due to defend itself because oil prices seem to be going in one direction at this point. >> at this stage of the ball dan, it is hard to inc. of an -- to think of an easy policy measure for us to take. there's nothing texas on its own could do. i think a lot of the economic think -- economics fall in tough times. >> where is it likely to hit hardest? in the shell producing regions like the midlands, but there are still a very large energy companies headquartered in

houston. >> that is right. as i said earlier, you click places like north dakota and i think in terms of the concentration of economic challenges, they may be greater there, even though as i said, it is a small state. >> could we see a repeat of 1986? >> well, i think there is a risk of that. we have seen energy prices fall by a similar amount. i think the question is given the energy crisis, is the structure of the economy different? it is different a little bit but similar in quite a few ways. i do not think we can become license and say, everything will be fine because this time is different. there are a lot of similarities. it is prudent to be cautious

about the regional outlook out there. >> lie is there debate? why do people make the argument that the texas economy is diversified, health care jobs technology jobs? >> part of it is how you measure these things. there are some breaks in the product manager. then i think there is a big debate as to what sort of spill over the energy sector has created, in other words, jobs created, how many of those jobs in the energy sector are supporting jobs in health care and so on? the multiplier issue is important and subject to a lot of debate. >> you think other states could face an economic downturn as much as texas has? ? to cut is obvious and i think other places are. new mexico wyoming. to a lesser degree, perhaps alaska.

those are some states i think will face some challenges here. >> michael, thank you. great to see you. michael on a gloomy outlook for texas. >> coming up, the calm before the corporate debt storm. pushing off their problems into the future. ♪

>> let's bring you up-to-date on what is happening in financial markets. stocks are way down and you can see the dow jones industrial here near session lows down 215 points. good for a drop of about one and a quarter percent of volumes according to my bloomberg data here up 25 percent. a 30 day average. >> that is to be expected. friday was the first official trading day and people were really not in their seats.

they are back today. it is not unique to 2015. >> true, but volumes of 12%, 13% almost on the one day average. >> says because u.s. bloomberg tv. no one else can get that kind of real-time data. volumes are up and the market is down. we will continue the markets throughout the day but we have got to move on. we are talking corporate default rate. near historic lows. 2.3% near november. low interest rates mean companies can easily refinance their debt pushing obligations into the future, making it the next ceo's his problems. eventually those those will come due, and assuming interest rates jump over the next few years, we can see the default rate jump with them. the co-precedent -- copresident

who specializes in restructuring. do you have anything to do right now? 2.3%? what are you doing? hanging? >> there is always something to do. many sectors in the economy are separate from structural issues. oil services companies, shipping companies, public issuers, they are all people who have to deal with structural problems in respect of interest rates in the financing. >> where is it right now, oil? is significant distress in oil and gas companies and related industries. expected to build over this year to a significant level of restructuring. the capital markets are so sophisticated, and there is so much capital available to solve problems that most railroad companies will get ahead of those issues as -- and restructure with capital before default. >> late on friday, for example are the $500 million deal with

blackstone. we will see investors like blackstone and others jump in before it ever gets to court protection. >> yesterday will see increasingly companies that will go in will do so almost because of two factors. there are holdouts from creditors who do not want to go along with people are trying to hold up the company and we need a judge to figure it out. we're seeing another interesting thing occurred, or many things -- many companies will have to do with the consequences of credit default swaps and other derivatives transactions which gives the balance sheet incentives. >> doesn't that make the blackstone deal suspect? >> that is just one transaction. >> is that more of an issue now than it was in 2008? >> far more of an issue because

there are many more issues of credit default swaps where investors will actually offer other investors credit default insurance, and they are betting either for or against default here they tend to control a position. they may want to cause the company a default because they want a profit from the default. >> do you think we should be shut down because of that? these are diverse and in this area >> no, they should be allowed to do it, but it does make my job more complicated because we have to now do with the fact that people hold that you may not actually be the ones that have economic consent -- incentive. >> isn't that the definition of financial engineering then? >> to what degree does the situation and the use of credit default swaps and the power it gives and hedge funds and creditors and the incentives you talk about, lead to let's

call it, irrational solutions in other words, you take a company and it is got a problem the judge helps to oversee the process, you restructure the company and it comes out with a cleanse balance sheet and some kind of a future, is that not happening any longer because of this situation? >> many companies highly leveraged are not eligible for credit default churns -- it sure is because is too risky. so it does not happen. this kind of scenario will exist in certain situations particularly in companies viewed as good credit but because of the collapse in oil prices those credit default swaps are valuable. >> hold on. in the credits file universe high yield names trade all the time. what names are not eligible? >> wrister -- risk year in -- much riskier companies. it will not occur in every

situation but one of the interesting implications of credit default insurance wants and not see the company going to bankruptcy. it made her to be an interesting source for the companies against default. >> as people look into the future, they say the fed hikes rate a quarter basis point. that will not change broad written -- broadly speaking and my understanding is that it probably will not. are there other factors like what is going on in energy that it may have that could lead to acceleration into default rate over and above months ago? >> it is not higher interest rates, but looming maturities. >> any ability to refinance? is correct. there are no significant companies this year in 2000 returning. >> you do not see default rates

spiking it any way. >> we will see an uptick toward the end of the year that will not be manifested in a default rate because that fire someone to not pay. the capture is voluntary restructuring like on friday. a very smart transaction, by the way. smart for both, otherwise they would not have done it 30 will see more companies this year proactively going to see capital . a maturities for most companies do not start be a problem until next year. it will become a very significant problem for many companies because it will not be as easy to refinance for lower rates as they have done since 2008. classic could change, if economic growth picks up as we now see and that is clearly what we're hoping for. >> what if it goes in reverse?

this is obviously not conventional route -- conventional wisdom right now. china slows down and europe continues to stay mired all of that, we might find not just the european central bank and the bank of japan, but perhaps the fed again pumping more liquidity into the market here at anything is possible and accidents happen all the time. one thing people do do not give enough weight to is many u.s. companies that have done very well as x orders over the last few years. that will clearly have a significant effect and may be more serious than the decline of oil prices. oil prices hurt companies in the oil sector. they are a benefit to everyone else in the economy but many u.s. pennies are export driven. if the dollar is rising, what are the possibilities? >> i guess you will have a busy year. forget the question i had earlier very thank you so much

for joining us this morning. the copresident and managing director. >> when we come back, the ties that bind. we will talk to the ceo of a company wants to dominate the economy. ♪

>> welcome back to "market makers." helping to aspire -- inspire more than 25 million weddings since 1996. now, the nation possibly being resource wants to do more than help inspire weddings. they want to plan them. really, a digital marketplace, the ceo which also runs -- welcome. i will say, i used the not way back in 2002. an extraordinary wedding resource there it i do not think you will find a bride or groom that will disagree.

if you want to start directing brides, doesn't that put you in a tricky position? you are a sales saying, i will sell you an event, i will sell you a product. >> the history has been very much -- when we went public, it was not imaginable that when you push a button at your phone, a car would show up to pick you up on the corner. we are now constructing our company and products to go the extra mile for our expecting parents. not only will we give you all of the content to inspire the big day, but we can also connect you to the vendors and services that help you pull off your dream wedding. >> what about the risk and if i live in new york am i want to say i'm looking for options in a place where have the wedding and

you are pushing me toward the grand prospect hall in staten island because they are paying you? >> it is the opposite. when you are an advertising company, which we have been for the majority of our existing that is how you generate the revenue. you pay us to be on our website. less than 35 vendors available on our website. now we're becoming a marketplace come over 250,000 vendors on our website because it is ours on stability to connect you to the perfect solution for the perfect moments come the planning of your wedding and the execution of your successful legacy. >> a conflict of interest, it is with stephanie was saying. if i'm using your services and digesting your content and coming to conclusions about what you might like and i am looking for x kitchen fulfillment, whatever you want to call it, to get to the place, you are, by definition, excluding any thing not part of your marketplace. that might be the perfect option

for me. >> our principle is we always put our couples, our users, first. if you came to our app today and you want to look at wedding dresses or pictures of ink cakes, you will find literally all of the wedding dresses available for sale in the united aids and you can scroll through the app forever. we have become a marketplace where the magic happens when you find the right dress, you wicked and we connect you to the boutique in your market who can sell you that dress. we give you a button to push to connect with the vendor. >> how do you get paid? if the vendor? -- with the vendor? >> some get payouts for commercial interactions. we can sell you goods and service is around the wedding and you successfully are connected to what you need. we include all the vendors. we have a premium model and we can connect you to whatever is the perfect solution for your wedding. >> let's say i find a dress or baby product i want.

how do i find the least expensive option? >> our users provide us with a lot of information about themselves so we can help to curate and customize the experience, and we can recommend to them the products. the entire meta-verse of goods and services, so we're helping you pull off on your budget your tastes, your location, and so on. >> the majority of employees who work for you, engineers? >> what if i were to read a story in the new york times about smartphones, and the story in the new york times listed apple and it listed nokia, and a list of blackberry, and he did not list google, and it gave me a click through to be able to purchase an apple phone or a note -- nokia phone, or a

blackberry, i would be asking myself, where is google? where is the android phone? >> that would be a huge mistake. we include every vendor in our ecosystem, not only the vendors who pay us. we connect our user to whoever is the most appropriate vendor. when we happen to connect them with those who pass, that is when we make money. our job is to make all of our couples happy. 25 million weddings, 65 million brides know the knot before they know the guy they're willing to marry. they have our users first. >> i'm glad he did not say it is because women are crazy. that is the answer. they know the not before they know the guy who they will marry. >> of course. if the dreaming of this the day their whole lives. you guys are both married and you remember the experience. it is like all the stuff we have to do, to do list, all the stuff

you have to do. >> that you go. we will be back with more. stay with us. you're watching "market makers." ♪

>> live from bloomberg headquarters in new york. this is "market makers." >> euro trashed. the currency hit a nine-year low . even the debt crisis did not hammer it this badly. >> bill ackman is the top performing hedge fund manager of 2014. few of his rivals play the game like he did. >> the republicans' to do list. welcome back to "market makers." i'm stephanie ruhle. >> i'm erik schatzker. it is an

extra ordinary story. >> morgan stanley has fired an employee who allegedly stole client data. olivia sterns is in the newsroom . this is crazy. one in chloe is one employee stealing client data. >> the banks are spending more and more money to protect themselves from cyberattacks. this does not look like a cyber hack. according to a statement, an employee stole data and published 10% of its wealth management clients. the bank alerted law enforcement. there was no evidence that there was economic loss to these clients. what was published was account names. it did not include passwords or social security numbers. according to the statement, that a card data was also not compromised. as for potential motive the statement suggests that this employee was perhaps trying to sell this data.

morgan stanley said it has fired an employee for stealing data such as account numbers for as many as 10% of its wealth management clients. this comes after the giant jpmorgan hack of nearly 76 million customers' data. >> they fire the employee, but the damage is done. >> the point they're trying to make is that there was not much damage done if any. this is reputational damage. the idea that your trusted service provider in this case morgan stanley, but it could be a jpmorgan or merrill lynch. your high net worth client takes your data, and they have a lot of it, and dumps it on the internet like julian assange. >> the issue if you are a morgan stanley client it is not like there is a safe harbor you could go to.

everybody -- >> everybody is getting hacked. this was an inside job. we have to take morgan stanley's word here. it was an employee who took the information of 10% -- >> that is a huge amount. >> morgan stanley has to be a believably upset -- unbelievably upset. >> i would love to know what the ramifications for this employee would be. >> there's rick latorre action, potential legal action, all of the above -- there is regulatory action, potential legal action all of the above. declines we have been reporting to you over the course of the morning appeared to have more or less stabilized. the dow is down 230 points. similar to clients for the s&p 500. oil is another moving factor today. new york crude down in excess of

4%. oil with a $50 price tag. unbelievable. >> it does not seem to be turning around. especially -- it seems that it is only going in one direction. >> we saw stocks dropping. safety trade appears -- stocks are going down. people are moving into treasuries. 10 year treasuries are trading at about 205 yield. we have seen this play out before. >> guess what else we have talked about in years past the euro and a possible breakup. the euro seems to be in freefall. it is trading at an even level at the same level we saw during the debt crisis in 2010. if you think about where we were in 2010, it is all we are focused on. now it is creeping up. i want to bring in a ceo of

greylock capital. what gives? >> i think the difference between what happened in the debt crisis in now is that a lot of people are trying to position themselves via the euro on the debt crisis side. there are a lot of big short positions. i do not think there are many now. it started happening at the same time oil was coming down. you do not have the technical buffer. there is something going on here where you have draghi looking to turn on the taps and get involved in the markets and start doing bond buying. >> how much power does he really have? >> he has to negotiate with the germans. he would have more latitude if you do not have the paranoia of the germans. i think -- >> german inflation. >> austerity does not seem to be the way to go at this juncture in europe. i think the euro depreciating is

not against germany's interests if they're concerned about exports. it is more in the interest of europe now to have a weaker euro than it was back then. >> how much of a factor is greece? >> greece is big. i do not think anybody need to be worried about what is going on with the private sector bonds. they are 15% of the debt stock. they will get serviced. the confrontation between teresa and the eu is going to be severe. the debt stock of greece is primarily an official sector. i think it is going to -- >> the sovereign bonds? >> you're going to look at spain, italy. if you look at the macro numbers of greece, they are not bad. their numbers have been improving.

the lowest amount of private sector debt in terms of household debt of any place in europe. overall, the sovereign debt profiles of italy and spain look not so good compared to greece. the overall number for greece is higher, but the cost of servicing his lower. >> what happens to all these investors who up and sitting in that seat saying europe is where the great opportunity is? we are buying into big portfolios. are they going to be underwater? >> i think it is going to be ok, but the headlines will be scary. the people who are starting to come out and talk about greece are talking about greg's it again. they are also talking about how exiting the euro would make sense. >> i feel it we were standing at the end of the ledge talking until our lungs fill out and then it was like, of course not.

>> as long as the germans allow the ecb to do whatever it takes. i think the germans are going to be in the hot seat. they're negotiating leverage going in the grease of elections is going to be tough. you notice some german rhetoric came out and they backpedaled. >> officially speaking, they are backpedaling. what everyone was paying attention to this weekend was the report in der spiegel. it is hard to tell. is this the good german government tried to telegraph something -- is this the german government trying to telegraph something? >>the idea that a greek exit from the eurozone is "manageable." >> i think that back in the debt crisis, there were a lot of articles coming out in der spiegel. to some extent , for domestic

consumption. i think it is also a way of heightening the rhetoric on their side in anticipation of negotiation with the greeks. this is going to be tough. we're going into a general election. this is going to be the interesting to watch. >> what is going to be the interesting thing to watch? >> house or issa interacts with the eu in public. >> you own greek debt, but not the public-sector debt? >> that is tough to buy. you have to go to the imf and say, can i i your greek loans? >>it is trading like a stock now. greek private sector bonds are trading at the athens equities. >> would you at this point by protection on portugal? >> it is getting more expensive

and may not be the worst trade out there. >> is there enough liquidity? >> i do not like the cds markets -- >> what do not like the cds markets? >> we do not like derivatives markets. liquidity is much thinner. i hate to say this, but the cds market is easier -- >> to rig? >> i was going to say manipulate. [laughter] >> i think the best thing to do right now is wait and watch. we're going to be tracking oil equity markets. traders took the last two weeks of last month off because we were all sick of the whole thing. we are picking up where we left off or it seems that way. the market will start forming a

trend -- we have to let people get comfortable in their seats and the we may see direction. i would not mind going back to vermont and hanging out. >> there you go. thank you so much for joining us hans. he is the ceo of greylock capital. >> we will to you how bill ackman made it to the top of the list for the best performing hedge funds managers of 2014. >> what do warren buffett and others have that you just don't? ♪

>> when bloomberg markets magazine puts out its list of the top hedge fund managers of the year. these of the funds that saw the best performance in the first 10 months of 2014. the big winner, bill ackman. his fund returned nearly 33%

next to winning bets on canadian pacific railroad. overall, the best strategy of the year was fixed income trading. kathy burton helped put the list together and she is here with our country beating editor and for their -- and obvious of valley. across the board, when you look at the top 100 funds, what did their performance look like this year compared to others? >> this year, compared to last year, their funds did better. surprising given the average return was 2% in the first 10 months which is not that great. the funds that did best were fixed income with a lot of mortgage people doing well. it was the computer beating the man. >> i think kathy has hit on something interesting which is the role of the human being in

these things. it has been a lot of debt. a lot of debt traded well. the traditional macro funds, the first one comes up somewhere along 20th place. you're seeing a lot of quantitatively driven funds where they have taken the human emotions out of it. a lot of people made a lot of money -- >> these are just out go funds --algofunds? >> i think what you have seen is the damages to the fixed income markets and people have made a lot of money picking up there. also, the damage to the psyche of the big players the tutors and some of the large macro funds. >> you think paul tudor's psyche has been damaged? >> i feel badly for him.

something is odd when you look at the list with the amount of -- the performance of the ctas and the ahl's all of the different statistical /quantitative funds which take the human element out of it have crushed the human being. >> do you think we could see a paul tudor jones, a lowest joe desha lewis bacon and say my performance is not what it used to be, i will manage my own money? >> they could go that route. >> bacon has been giving money back. >> the more likely scenario is -- central banks in their interference is something that the models have been able to adjust for in a way that it seems to me the human beings have been having a heck of a time playing that nonstandard guard. i think that is been the big factor. >> people might jump to the

conclusion that this was the year of the activist. it was not really. bill stands out from the crowd. you have to go down to 51 and two you find the next activist on the list. >> there's larry robbins -- >> because i activist. -- a quasi activist. though we stands out as much as larry robbins does. >> one of the other things you see is depth of knowledge. in any room that you are in there is not a lot of people that will know more about what they hold medullary robins or bill ackman. you might not like him, but they know what they hold and they are not afraid to hold a small number. in 2008, larry robbins lost half is money -- lost half his money.

the guys at quant edge, the openly tell you we are targeting 30% volatility. if you cannot handle down 40% do not come and play. >> you have to have an iron got. ut. >> once you get past the top 10 managers the performance is not that great if you bench it against the indices. what does that say about the fact that hedge funds continue to get money poured into them when their performance is not that great? >> my take on that is, the a lipid marathon. -- the olympic marathon. more and more what you are seeing is that the top managers continue to do well, but the index is going to capture the average return of the pack. if you open up the a lipid marathon to anyone who want to run, the average time is to 15.

that time will go to three hours or four hours. gold, silver, and brothels to go to the same three people area and the top -- gold, silver, and bronze will go to the same three people. if you are talented you're still going to get gold silver and bronze. >> from all the managers you spoke to, was there an overall sentiment, did seem like this year was harder? >> people say that, but they almost always say that. >> where is the money going right now? macro has had a terrible two years. a terrible five years. >> money is coming out of macro. you talked to some people who say it has been bad for so long

-- >> maybe now is the time to go back in. it going into multi-strap forms -- multi-strat firms. >> those people are getting a lot. >> someone to a larry or a bill you can ask stan about -- >> he is a suggested list. >> if you talk to and is he englander about positions millennium has, the conversation with izzy's light and data what you have with dan who knows every single position. -- night and day to what you have with dan who knows every position. >> there are like eight people on earth who understands these things. what he does is troll along these cdo's that were made up --

it is such inside baseball it is not worth discussing. they are issued by small tear banks -- >> doesn't it make you nuts when guys go, i understand the stuff -- i buy the stuff no one else understands? >> if you're going to earn your two and 20, that is how you do it. >> i buy what no one else understands. thank you for joining us. >> it is the gop calling the shots. republicans take over congress this week. we will see what they intend to do with all that power. ♪

>> bloomberg television is on

the markets. stocks in europe. you can see european equities got hammered today. the dax down by 2.8%. athens closed by more than 5.6% today. we have seen a selloff in oil. brent fell below 55 dollars per -- $55 per barrel. the bigger reason is that we are once again talking about the prospect of the potential of greece leaving the european union. the euro traded at a nine year low. at one point it fell as low as 11861 -- one point 1861. german inflation came in at 1/10 of 1%.

that is the weakest reading since 2009. if you take all this together, it is a lot more pressure on reo draghi to do something to stoke growth. we'll be on the market again in 30. more market makers after the break. ♪

>> live from bloomberg headquarters in new york. this is "market makers." >> welcome to "market makers yuriko i'm stephanie ruhle. >> i'm erik schatzker. >> stocks are nearing session lows. the s&p is down more than 1.5%. we are looking at the first four day slump in u.s. stocks as 2014. i want to bring in a marcolina and, the president of -- i want to bring in mark lehman. >> i think everyone had a nice

new year's and they came back today and they are assessing things. they see oil hitting multi-year lows. people are trying to figure things out. >> it seems odd because i feel like all of december everyone we spoke to was boasting about how strong the economy is, this great recovery. why suddenly has oil prices have us all spooked? >> we had a similar spooking when oil hit their first cracks back in the fall and early winter. everyone got their bearings and in the end they decided this is going to be good for consumers and the overall economy. it took a while, at first people were not convinced. i think this is going to be an instance of that. you'll see holiday sales, when they start to report be very positive. i think you will see things come out of ces that will be positive.

you have a large health care conference in san francisco next week which i think you'll find a lot of positive news. the ipo window will reopen and people get back to realizing we are still the best economy in the world. we have a lot of innovation going on and they are going to want to be invested in the market for 2015. >> the market has not dropped 5%, but we are down something like 3.2% off the recent high. you think this is going to play out just like the selloff we saw last january, february? the market is going to put in a bottom and rise to higher highs? >> far be it from me to predict the next -- the rest of 2015. i think the fundamental underpinnings of our market are intact. you have an economy that is

growing, job creation. wages are starting to rise. you see inklings of lending going on at the banks. all of those things are positive backdrops three of everyone cues pointing to the tenure and saying it has to rise. it is going to go higher. i see a tenure that is 2.1. although that is historically a low level, look at what germany cost tenure is at and you tell me this thing has to go higher anytime soon. i do not agree. >> wti briefly traded below 50 but now it is back up. for those were managing their own money, what is the trade to do today? >> i am by no means a dummy ti expert. what i would say is -- a wti expert. i think if you are an investor you what to focus on the long-term. we are going to see an expansion

of the markets in the next year. i think the small caps will continue to do better than the large caps. we have seen better performance by some of these large caps and i think this small cap index will do better than the overall market. i think 2016 will be a good year for equities. >> thank you for joining us. >> when we come back, a new sheriff in the senate. mitch mcconnell and the republicans are in charge. what are they going to do? ♪

>> the new republican-controlled congress get sworn in tomorrow. mitch mcconnell and john boehner had been waiting for this for eight years, so you know there is lots they want to do. some of it may actually get done. the chief political status -- strategist.

greg, let's begin with something that might get done. there is some agreement on both sides of the aisle, corporate tax reform. >> i think paul ryan and the house will start with a bill that could move through the house this year. >> what chances would you give an acukman? >>'s support for investors to watch. -- it is important for investors to watch. >> you are saying there is a better chance of progress than in enactment? >> the committee will pass it. i think that the house might. for me to predict that we will get tour protects reform -- corporate tax reform that is an uphill fight. >> infrastructure spending, no one can agree on how to pay for it. >> the key date is may 31.

the highway trust fund runs out of money and they have to do something. i am hearing from a lot of people it might be more than a band-aid. it might be a meaningful bill. >> you get the chance of that happening, what? >> 65%. >> better than corporate tax reform. how about sequestration? >> i think the mood for fiscal restraint will decrease with the republicans. they will kill the sequester for defense. the pentagon needs more money. they're going to pass tax cuts that will not be paid for. in a strange way, i think there will be more spending and not paying for stuff with the republicans, including killing the sequester. >> would it be so strange to suggest sequestration was political maneuvering? >> just a little bit, don't you

think? in all seriousness, it led to a climate that produced a drop in the deficit. i think receipts will look good but the deficit will not fall by as much as it did in the last two or three years. >> how about immigration? >> my sense is the republicans need inoculation. they need to say to a spanish -- two hispanics, we did something. i think the republicans may pass a bill. it will focus on border security or visas but i think the republican immigration bill is not out of the question. >> quantify may. there is an ex percent chance of this happening. >> i would save there is a 60% to 65% chance. the question is, what the white house take a modest bill that focuses on border security or

with the white house say, you guys have to deal with the path toward citizenship. >> the issue that seems to get people hot and bothered not that the others have not -- >> don't all of those issues? >> keystone? >> it is not going to happen. each day, the rhetoric got more and more heated. we're going to solve all the problems and work together. the first thing they are going to do is keystone and it is going to fail. it will get enough votes to make it to the senate, the president will veto it and have enough votes to sustain a veto on this. >> the chances of a bill giving signed into law are effectively zero? >> may 20 5% or 30% at the most. the chances of it making it through both houses are good but this is one of the areas where the president possibly tell is going to prevail -- the

president's theveto is going to prevail. >> we will show you how most self-made billionaires are not like mark zuckerberg. ♪

>> looking back to "market makers." here is something we all want to know. what does it take to become a billionaire? the path to entrepreneurial success is littered with myths. john and mitch decided to bust them. they studied over 100 of them for their book and they are here now to share their findings. john, let's give you a shot. billionaires, how do they do it? >> will be looked at these billionaires, the most right thing was that four out of five

of them made their fortunes in contested markets like coffee or clothing, not necessarily in high-tech. they brought together five attributes, timing, empathy, execution, risk-taking and the ability to partner for leadership. >> is there one example of the hundred billionaires you met that would say, here is the model? >> if you take a look at someone like sara blakely very straightforward problem. >>she have the ability to empathize with what people wanted, had the indebtedness to get it done, percent -- had the invented this to get it done. he mentioned the product and he said, i will manufacture that. and that is how she got started. >> what is empathetic about carl icahn? >> i think carl -- i cannot

speak for his investment strategy, but overall when he looks at companies that are undervalued, i would imagine he looks at the same attributes we are. are they exploiting markets the way they need to? re: advancing the witty need to -- are they advancing the way they need to? >> when you speak to carl, his approach is, he does it from his own place of common sense. it is not like he is jamming it through some model. he says this does not make sense . breakup this union if you want a casino to operate in a sea. -- in ac. >> patrica we saw the cut to nearly everyone we saw. >> to the have great management skills?

many of these people do not seem like leaders of men and women. >> you see some folks are able to build and manage a company. you have other people who are able to build and sell the company. someone like a mark cuban. when a ceo or investor is looking, they need to look at both of those. some people who can build the cell, and those who can build to run -- some who can build to sell and some who can build to run. >> they understood where they lack certain management skills and needed to bring those skills in to support them to achieve what they needed to. we talk about this relationship between producers and performers . they knew where they needed performers to help them execute. >> does it surprise you that they are self-aware? while the issues people face when they become super successful, everyone around them says yes. they have the whitney houston affect where they are surrounded by people who just say yes. >> they really try to get people

who say no to them as well. one of the things we noticed in our interviews -- in a different interviews ran anywhere from two hours to up to eight hours, they were completely present. in none of the interviews were week interrupted. -- were we interrupted. >> you're told often these days that failure is ok. it is important -- people who are hiring want to see kids who tried stuff and failed and then have gone back for another bite at the apple. how often do these guys fail -- and women for that matter? >> these people have failed more than the norm. one in four of these people have been fired in some previous job. default out of school had unsuccessful businesses. they are the opinion of people who failed they do not let it to find them -- they are the a pity me who have failed and they do not let it defined them.

our experience has been when you look at people running companies, there is not a lot of failure sitting around the room. i think it is one of those things as you begin the new year that ceos can take in terms of finding -- defining a culture and really ask themselves, are we focused on those people who may have been challenged and could be successful in something different? >> why are so many more men? >> the simple that we looked at was the same in terms of the sample we took and what the population is. about 8% of them are women globally in terms of self-made billionaires. we're not sure why it is so low. >> why do you think? >> i get follows the trends we have seen in other aspects of business. it is another example where there are opportunities the companies have to unleash the kind of talent that they may not be looking hard enough at their overall population, women

included. >> what everybody wants to know is, you have identified these characteristics that self-made billionaires seem to share. is there a secret to being a self-made billionaire? >> we have talked a lot about that. the most important thing is your attitude toward risk. >> that makes sense. >> a lot of people have a belief that these are unbelievable risktakers. when they see an opportunity they have to act but they are not deterred if they do not make that work. you look at some of you like steve jobs. if you look at the arc of his career, he started apple, then gets fired. it is the ability to act on that intuition. if you're at the cocktail party and someone said i had that idea five years ago come at they have to ask themselves, why didn't they act? >> who was your favorite

interview? >> state kate -- steve case. >> co-authors of "the self-made alien errors affect -- billionaires affect." ♪

>> that is it for our first day back in 2015. how did you feel? >> i felt good.

me by my lonesome, from 10:00 to 11:00, was tough was out you -- was tough without you. >> i try very hard to watch when i was not here. i was fishing with my children. today is our first they back. i'm sorry that the market is not in the green, but i'm boldulled on being back here with eric. tomorrow, we are all about cars. the matter what your price point is we will be speaking with the ceos of two automakers, ford and rolls-royce. >> we will see you then. >> is 56 past the hour and today it is essential to take you on the markets because they are moving. our car in diseased as well as markets guy, matt

miller, has more. >> stocks suffering their biggest -- the s&p 500 is poised for its first four-day slump in more than a year because of brent crude. besides slid below $55 per barrel since 2009. joining me for today's -- how much is the selling related to the greece and the possible euro exit? >> image in crude and concerns about greece. you will get the cpi reading on wednesday of this week that could be the first negatives since 2009 on headlines. more to come with crude

declining sharply as it has over recent months. is it greece, is accrued -- is it crude? >> what is the consensus for that? what you expect the ecb to do on january 22? >> is expected that they will launch qe. short of that, the 3% or so decline that we saw in euro stocks today could be significantly pressured even beyond that we have seen. >> they took a big warping in europe. germany taking the brunt of it. you're taking -- paying attention to a german etf? >> surprising beginning of 2015. as far as cyclical volatility in the u.s., we think it will have -- had lower over the coming weeks.

into this week today, we want to lean on the long side. what we want to do in germany is go out to april. the next ecb meeting after january 22 will be in march. we want to start buying awg calls, 20 h wright calls the cost about $.50. options can be viewed as risk management tools in this environment. creating the same or similar economic position as you would buy buying. >> you have a trade on yelp as well. what is it and why? >> we want to go out to february expiration -- expiration. nice long directional exposure without putting that many chips on the table. >> what do you expect to hear from yelp as far as earnings? >> we covered yelp the rob sanderson. he thinks the stock is misunderstood.

they have been ramping their existing market, investing a lot in new markets and monetization there has been impressive. the market questioning the growth of local businesses they signed up the last couple of quarters. we see revenue growth and margin expansion in the near future and that will continue for years. positive story in our view, not in the markets' view. >> thank you for joining us. we are on the market again in 30 minutes. "money clip" is next. ♪

>> we tied together the best stories, interviews and video in business news. here is a rundown. 2014 cap's the best year for car sales since 19 -- 1996. there may be pumps on the roads ahead for carmakers. ian bremmer says the weaponization of finance is actually working. in politics, it is back to business in washington d.c. and everybody is preparing for battle. hollywood's 2015 reboots. can disney save the