>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." to our viewers in the united states and those of you joining us from around the world welcome. have full coverage of the stocks and stories making headlines on this tuesday. shall be holiday reports on the push for u.s. companies to share data breach information with the federal government. peter cook at the white house as

congressional leaders meet with president obama to set the 2015 legislative agenda. we begin with the major turnaround in the equity markets. let's get to the breaking news desk. scarlet, good afternoon. >> the high water mark for u.s. equities came at 10:00 a.m. ever since then, it has been downhill. on pace for a third straight day of declines for the s&p 500 and the dow. within the different industry groups, cyclical sectors material stocks come energy stocks come industrials and financials are leading the way down. this comes with the drop in commodity prices. seeing this shift into safe havens, treasuries or the yen. in 20 month level of 1.862%. the japanese yen at its

strongest level versus the u.s. dollar this session. crude oil continues to decline. we heard those from goldman sachs about how crude oil could fall to less low as $40 a barrel. >> scarlet fu think so much. -- thank you so much. washington politics -- president obama met with congressional leaders at the white house to set priorities for the new year. peter cook is at the white house and he joins us with the details and the drama. good afternoon. >> good afternoon, mark. this was the first meeting between the president and congressional leadership since republicans took over the house and the senate. there were some smiles for the cameras to be sure as reporters were led in just briefly to hear the opening comments. there was disagreement as well. the president not budging from his fico thread over the keystone pipeline legislation. -- veto threat.

there was some talk of cooperation on particular issues, trade, taxes and cyber security. >> i think we agree this is an area where we can work hard together to get some legislation done and make sure that we are much more effective in protecting the american people from these kinds of cyberattacks. >> that issue has moved up on the radar screen since the sony hack incident. sending legislation to congress today that the president believes there can be bipartisan agreement on or greater sharing between the private sector and the government to oversee cyber threats. told members in that meeting he will be setting up a new authorization for the use of military force to deal with the fight against islamic state. something republicans have been pushing him to do for weeks. >> where will we see the next confrontation? >> we will see it play out on

the house of representatives tomorrow. it came up during the course of the conversation today. as funding for the department of home and security. -- homeland security. that bill will be on the floor tomorrow. publicans will try to roll back the president executive orders on immigration. they will push those back and go even further and try to knock down the president's previous actions with regard to immigration. this will be a flashpoint between this white house and the republicans in congress. the funding for the department on the security caught in the crossfire. >> peter cook joining us from the white house. thank you. the chief political strategist at potomac resource group in washington joins me now. welcome back. thank you for your time today. >> good to see you, mark. >> it seems like we are going

back to the future here. the table set for several veto fights, including keystone. a provision to change work hours to qualify for obamacare, tougher sections on iran and the plan that would stop fully funding the social security disability fund. is there any way both sides can reach a compromise on any of these issues? >> no time soon. we will have ranks mentioned on all of these issues for a while. there are not only fights between democrats and republicans, there are fights between republicans and republicans. john boehner will have his hands full over the next few weeks. >> the business community is keeping a close eye on proposals that includes tax reform infrastructure spending a free-trade deals. which of these three is likely to gain the most traction on the help? >> all three have a chance. the free-trade deal is something that a lot of liberals don't like.

there's a bipartisan consensus on that. i think there is a consensus on infrastructure spending. maybe it will get a band-aid. maybe it will be more extensive, a bill. on tax reform, that is a tough one. paul ryan will have undivided attention to tax reform. he could get a bill through his committee. given the corporate tax reform bill in that still well below a 50% chance. >> did the president's november decision to take executive action on immigration poison the well? >> it was already pretty much poisoned. it was well telegraphed. people were upset about it. he issued a veto threat on keystone before the bill had been brought up this year. a lot of republicans were insulted by that. they thought it was a sign that white house -- the white house has no intention of c

compromising. >> the veto threat we spoke about and early count suggests there is not enough threats -- will it embolden republicans who want his job? >> it could strengthen him a bit. 67 votes will be tough. on most of these issues, the republicans will fail. which raises the possibility that they set expectations too high during the holidays that they could undo the obama agenda. they really can't. >> the republican field for 2016 is starting to shape up. who has an initial fundraising advantage? >> both jeb bush and mitt romney are fabulous at raising money. mitt romney raised almost $1 billion last time.

jeb bush has tremendous support on wall street. both of them will raise a lot and that raises a big issue. could somebody sneak in? a rand paul or ted cruz or marco rubio as people get disgusted by these two establishment republicans raising some of money. hillary will benefit if this is a protracted and nasty fight and it is starting to look like it might be. >> are you surprised that mitt romney has come back up? >> a little surprised. the presidential bug is a button nobody recovers from. whether howard dean or analyzed evenson -- once someone feels they have a chance to be president, they never recover from that bug. >> president obama will deliver his state of the union one week from today. what does wall street want to hear and how will mainstream --

main street be affected? >> this president has to move away from the left on an issue or two. maybe this issue of cyber security he might take a more moderate stance on information sharing. maybe he will look more moderate on free trade. as he embraces some of the democrats ideas like a transaction tax on wall street, that would not be well received at all. for mainstreet the economy is getting better mother are no big surprises coming. -- getting better, there are no big surprises coming. >> always a pleasure to have you on. thanks. we're standing by for chris christie to deliver his state of the state address before the democratic led legislature. looking at a live shot from the statehouse. we will get insight on his 2015

agenda and his possible bid for the white house. ♪

>> you are looking at a live shot from the statehouse in new jersey. chris christie is entering the statehouse to deliver his annual state of new jersey address. there has been some speculation what tone this address will take. more local, more state issues or more encompassing of a national perspective. there has been speculation that governor christie may seek the presidential nomination in 2016. let's get insight from mike helprin. and in washington, al hunt. welcome to "bottom line." governor christie's office released excerpts of the speech.

he's excited to call for a new jersey renewal and american renewal. excerpts have said the governor will say -- save washington divisiveness that has seeped into the neighborhoods. >> it is extraordinarily open from his staff and excerpts. he will talk a lot about new jersey but there are lines straight from a presidential state of the union address. >> new jersey's economy is in trouble. the state is struggling to get back on its feet retirement costs are on the rise. new jersey has an a1 rating. how forcefully might governor christie's challengers seize on this record? >> you just laid it all out. i think wrist he will run but --

christie will run but he will be squeezed out by bush ann romney. -- bush and romney. >> he has different sk ills. christie could burn out as well but i think his aggressiveness and stature and fundraising capacity gives him a chance to be one of three heavyweights in this contest. >> who are the other two? >> romney and bush. >> are you surprised mitt romney is considering running again? >> i'm not. once you run for president it's like having sex, you don't do it once and then never do it again. romney sees an opening. he is the most likely person. odds like that for somebody who

wants to be president -- >> his take no prisoners style approach i'm not sure how that will travel. he is not an iowa type candidate. mitt romney is better -- i hope mitt romney is better at sex that he was last time. >> it's a metaphor. >> al hunt just spoke about iowa. you have iowa and new hampshire. how does chris christie play there? they were talking about bridge gate. there are reports that federal prosecutors have been speaking to the government because there's questions about what happened. does the electorate care about that? >> it will be up to the prosecutor, who gets indicted and what they say. theirre are people who

may be indicted. it would be a shadow. i think it governor christie is a good campaigner and personable guy. he may have to calibrate things. he's a strong and frequent presence. he has been at a disadvantage. he is a sitting governor. >> talk to me about chris christie's strategy specifically -- we all saw the videotape of him being in the luxury suite at the dallas cowboys game. is this about football or the electoral votes in the state of texas? >> no politician has ever helped themselves by being -- i don't think people will be thinking

about that from one year from now. he is tough and resourceful. we talked about bush, romney and christie. this opens up the antiestablishment groups. >> you recently spoke with marco rubio. is it a conclusion that he will also seek a nomination? >> people to easily assume that because jeb bush -- he will run rubio. i think if you can raise sufficient funds -- it is hard for people in the party to find 72 matchup with hillary clinton and go to a guy who is young. -- find somebody to match up with hillary clinton. i may not be the favorite, but

he gives me a chance to be on the ticket and a chance to be part of the national debate. >> mike helprin, al hunt, think he so much. -- thank you so much. chris christie is delivering his annual state of the state address. the president of the united states will speak on cyber security. will private industry cooperate with the government on datasharing? that and more when bloomberg television continues in just a moment. ♪

>> cyber security in the spotlight this week as president obama unveils new proposals ahead of his state of the union address. the president is expected to announce new measures aiming to encourage companies to share information about attacks. will his plan actually work? what are they saying about these measures? >> everyone agrees this is a good thing that cyber security is in the spotlight. it's great that it's a priority. they're glad that obama will focus on think like giving businesses greater immunity and law enforcement greater power to

go after these cyber criminals. the proposals he is coming out with art going to work unless businesses are willing to share information. there are plenty of barriers that prevent and deter businesses from coming forward when there are attacks. the international conference on cyber security -- i spoke to a lot of people and they said it's not about implementing new rules , you need to meet businesses the middle and make them feel comfortable with coming forward. >> we need to have more incentives for corporate america to share with the government. it's a very stick driven environment. you see signs and lawsuits but no incentives. you see the government wanting to share information but it's often classified. they can't get to the right person at the right time. >> it's not just about adding new rules.

although many would say the new ones are needed. it's about making the businesses feel comfortable to share information. >> what incentives did they say they need? >> that's what i asked and i was surprised to hear -- one big thing companies want is the right to be anonymous third obama said companies should notify customers within 30 days of a data breach but not all attacks are data breaches. if a publisher is hacked and the book is leaked online, they don't want to be forced to alert the public because that might encourage more illegal downloads of this book. they want to remain anonymous and work with the government behind the scenes. the other is the legal protection. companies have attorneys that are very risk-averse. one proposal from mike mccall was certified cyber defenses for companies.

they can go to the government and say we had this structure in place. we need you to help us with this attack. >> it's a two-sided coin. privacy rights activists are racing concerns. -- raising concerns. >> they are worried that with the information sharing incentives it will open the door for too much information sharing. if uber is collecting your locations, they're worried if there is an attack, that information will be shared with the government and your credit card information or private social security number will be shared with the government. this legislation is about walking a fine line between privacy and security. it's a common theme. >> the president of the united

states will be speaking next hour about this issue. valeant pharmaceuticals international -- i will speak to the ceo about his acquisition strategy and what is ahead in 2015. ♪

>> welcome back to the second half-hour of "bottom line." thinks forcing with us. -- thanks for staying with us. health care reit sending its run from 2014. -- read extending its run from 2014. >> 200 34 billion dollars in deals helped lift the sector to a gain of 23%. those stocks are building on the gains this year as investors appreciate their exciting dividends and tape-characteristics.

within the health care space up 9% with a 3% yield versus 1.9% from the 10 year. the five-year -- the expectation is that there is more dealmaking to come even after treasury tightened the role on taxi version deals -- taxi version in version deals. show growth through acquisition. a lot of people are saying the jpmorgan health care conference could be the crucible for a lot of the discussions that lay the groundwork for dealmaking this year. >> scarlet fu thank you. mike pearson is the chairman and the ceo of valeant pharmaceuticals international. he made a presentation at that conference this morning and join us from our san francisco newsroom. welcome to "bottom line. what did you tell your

colleagues this morning? >> we talked about the terrific organic growth we expect for 2015. our pipeline from an r&d standpoint -- we have a strong balance sheet that will allow us to the play in terms of acquisitions as well. >> you have said valiant will focus on -- valeant will focus on small to medium-sized acquisitions. did allergan change your strategy? >> not really. we do not view it as unsuccessful. we were disciplined and we did not overpay for an asset. in auctions, we are not going to succeed, so we should focus on transactions. >> what was the biggest lesson learned from that allergan activist deal? >> it was to avoid situations

where there is likely to be an option. the calculus we had, we did not think anyone else would come in and we were wrong about that. we remained disciplined because we have high return requirements for our shareholders. >> does that discipline mean valiant -- valeant might be less aggressive going forward? >> i don't think so be it will continue to operate as we have since i took this position six years ago. >> you seal dealmaking possibilities in asia and the middle east. what is it about those markets that leads you to believe you could be successful there and are the middle-class populations of those markets your target consumer? >> we think both regions and latin america as well. we are making the macroeconomic play. we are looking to buy products that are sold to the middle-class and we believe in long-term growth and income

growth in these markets. >> how do you respond to criticism that valeant's growth is the result of acquisitions and not the velvet of your own products? -- development of your own products? >> the last big deal was bausch & lomb. you will see in 2015 that we have strong organic growth. above 10% for all of 2015, which is well above the industry. >> i'm speaking to mike pearson the ceo of valeant pharmaceuticals international. you don't believe in selling stock to finance deals. why not? >> we treasure our stock. we believe we are undervalued right now. the most expensive currency we could use. given the market today and our leverage position, we will focus on cash deals. >> pricing pushback has been in

the news as of late. what do you think of specialty pharma drug pricing now? >> specialty pharma is a broad term and different people define it. managed care has moved their attention to some of the large biologic drugs. some of those are the most expensive in the world in terms of total spent. we do not play in those categories. >> you seem to be fairly optimistic about the year ahead going forward. do your colleagues at this conference in san francisco share your optimism? >> honestly, i have been so busy talking to investors that i have not had much of a chance to -- i will find out later this week. >> any sense on how the health care sector might play out given what we are seeing on capitol hill with the new republican congress? there have been calls to roll back parts of the affordable

care act. would that affect your strategy? >> limited to no effect on our strategy. >> you have signed a new five-year permanent employment contract. it eliminates your base salary. your compensation will be based on achieving annual growth targets of more than 10%. by did you would take this approach -- why did you take this approach? >> it is not to do similar from the contracts we at sign previously. we try to align the compensation of executives with those of shareholders or owners. if we deliver shareholder value for our owners, we feel we should be rewarded. if we don't, i'm ok taking zero salary. >> mike pearson joining us from san francisco. it has been a pleasure to have you on the broadcast. thank you for your time. coming up, a growing trend among universities.

tipping the scales in favor of rich kids. the stories and more when "bottom line" continues in just a moment. ♪

>> let's head to the breaking news desk. scarlet fu with some information about go pro and apple. >> go pro shares falling by the most since august, down as much as 15%. apple was granted a patent for a remote-controlled camera system. apple may choose a product similar to those go pro cameras. go pro shares went public last year at $24 apiece. the roast was high as $94, now trading at around $50 a share. a lockup of insider shares for go pro lift on a very 15. half of the outstanding shares will become available. -- on february 15.

>> scarlet fu, thank you. it is time for today's latin america report. venezuela's credit rating lowered b 29 levels below investment grade. cutting to see aa three -- lowered by nine levels below investment grade. cutting to caa3. bondholders or later -- more and more u.s. colleges are offering early admissions programs. that may be good news for those families who like to plan ahead. such programs favor the rich. janet laurent joins means to deal with more. how do these early admissions programs work? >> if students had their testing

done and got the recommendations done and have written their essays by november 1 and know which colleges they want to attend, they send in their applications and get a letter back in mid-december. some of those programs are binding, so you commit to going if you get in. some are not binding. >> why are colleges doing this? >> colleges want to know who want to come there. some marketing 30,000 applications and kids are applying to as many as 10-15 schools. it sends a school to them that this is my number one. >> it strikes me that this could possibly be a new trend. >> 10 years ago schools like northwestern and duke were taking about a quarter of their students by early decision. this year, up to about half. >> are those numbers surprising? >> yes.

pendant took 54% -- penn took 54%. >> what does it take? >> you have to be motivated to get your testing done and write your essays. if you send in one of these early decision applications, it does not give you that chance to compare financial aid packages later. >> who benefits from the early admissions program ? >> wealthier students who don't have to apply for financial aid. they can compare the state school -- >> that is not surprising, is it? >> if you don't have to consider finances and you can lock up your decision, it certainly helps. colleges are favoring kids because they are wealthier -- it's because these wealthier students are applying to these programs earlier in larger numbers. >> how does this affect

diversity on campus? >> if you have wealthier applicants getting in the admissions dean at duke says these programs tend to have kids that are wealthier. what really matters is the class that comes in in august. northwestern they have their most diverse class ever last year, 25% either african-american or latino. they're taking a larger percent of the kids early but whoever shows up in august is what they are measuring. >> janet laurent joining me in studio. think is a much. chris christie's challenges. -- think is so much -- thank you so much. "bottom line" continues just a moment. ♪ >> this culture of divisiveness

and distrust e-cig into archimedes and neighborhoods -- has seeped into our communities and neighborhoods. it is bipartisan in nature. ♪

>> >> you are looking at a live shot from the statehouse in new jersey. governor chris christie giving his annual state of the state address. he says in jersey is better off. he is still speaking before the lawmakers. let's listen in. >> when we stand here in one year -- i will be standing here in one year. [laughter] [applause]

for some reason my see less applause on the side of the room. i don't understand. i will be here in one year. [applause] our today will be better than our yesterdays. our tomorrow will be filled with real opportunity for new jersey families. we may argue from time to time over the best means to get things done. that is the nature of public debate and i will always be willing to engage in it with you. our goal together, should be to make sure that new jersey remains a place where better life is possible, for us for

our children and for their children. through determination and hard work. >> chris christie delivering his annual state of the state address before a joint session of the legislature. trish regan joins me now with more. he said i will be here a year from today. >> sending a bit of a message to the democrats. >> what message did he really just send? does he mean i'm not going to start my campaign for president? or i'm going to be here until -- >> that is a good question. you want to know that your leader is in place. you don't want a lame-duck scenario. he will serve his state of matter what. one of the things he does have going for him is frankly, likability. a lot of americans feel like

they can relate to him on -- i liked hearing more ebbs and flows. i heard him speak in tampa a few years ago and it was 110% chris christie yelling at the crowd. he pulled back and had a bit of humor. it's going to be a tough field with the likes of deb bush and mitt romney. -- jeb bush and mitt romney. >> how does the field of shakeout now? it seems former governor bush ann romney are -- governor bush and governor romney. they are prolific fundraisers. >> things might have been different had it not been for the bridge scandal. there were a lot of people who would have liked to have seen him put his hat in the ring.

he would have seen more support for 16 had he not had this issue. it's an executive issue. >> you are coming up. >> we will talk about cyber security. a big, big deal these days in light of all happening -- all that is happening. we will talk to the former head of homeland security. looking at all of these cyber incidents. we will be getting his thoughts on the recent shooting in paris. >> another former federal prosecutor from new jersey. coming up at the top of the hour. scarlet fu will have another check on the market movers on the other side of the break. "bottom line" continues just a moment. ♪

>> at the latest headlines on the top of the hour on bloomberg radio and streaming on your tablet and on bloomberg.com. that doesn't for this edition of "bottom line." i'm mark crumpton reporting from new york. on the markets with scarlet fu is next. i will see you on wednesday. >> it is 56 past the hour.

bloomberg television is on the markets. the dow is paring its loss. it had fallen as much as 142 points after it rose as much as 282 points. it's about a 420 point swing -- oil prices sunk to $44.20 a barrel. treasuries matched their low when it comes to the 10 year yield of may 2013. we continue to see this slight across the financial markets. traders are talking about how headlines out of washington may have prompted the move south and stocks. the president made some comments that he would seek authorization from the military -- for military force on islamic state. the tech sector was among the top performers in 2014. it has gotten off to a sluggish start this year.

is the opportunity to be buying -- managing director and analyst at sbr capital. cloud, begin a -- big data sever security. extensions of what we saw in 2014. what will be different in 2015? >> more pronounced in terms of the spending trends. these are areas growing 30%. >> 2-3% for i.t. spending and in some areas seen growth of 30%? >> that is the game changer. more i.t. budgets going to begin a and cyber security -- big data and cyber security. you have to play these next generation trans. putting 14, you saw a lot of guys their toe in the water. 15, you will see more pronounced trends. >> is tech a cyclical sector or can it be a safe haven? >> it can be a safe haven if you

invest in the trans where you are seen the i.t. budgets. look at a barbell approach from microsoft next generation trans in the mid-caps. you have have safe areas. if you follow where the spending is, those of the areas we can focus on for 2015 as it could be dicey going into one q. >> follow the spending. what about four big cap names like apple -- what about for big cap names like apple? >> cash is becoming -- you want to see the boards start to deploy cash. whether it's buybacks or acquisitions. it has started to become an overhang. it speaks to acquisitions --

>> another key. i want to get your comment on apple and go pro. gopro shares plunging today. could this be the death knell of go pro? >> these are knee-jerk reactions. a lot of these knee-jerk reactions proved to be near term bumps in the road. it doesn't speak to you -- a lot of names crowded int tech. >> thank you so much. "street smart" is up next. ♪

>> welcome, everyone to the most important hour of the session. 16 minutes to go until the close. we have been all over the place today with this market. i am trish regan. this is "street smart." energy and material shares losses a rally we see intact. oil in can -- continuing its decline.