>> morgan stanley earnings come up short. you have heard the reason before. a drop again in fixed income trading. >> call him the decider, orrin hatch will have a say. we'll have an exclusive interview with him. >> by medical science can keep you from getting the flu. this year, it's worse than usual. >> welcome to "market makers." >> we are in today for eric and stephanie who are slumming it in the swiss out and eric has been interviewing the leader of the world economic forum. if you are a key -- interesting.

stephanie's photo bombing. >> let's start with the bulletin. the top business stories of this tuesday morning. morgan stanley posted fourth-quarter earnings that missed estimates. a drop in revenue from fixed income trading. they take in about half as much from bond trading as it did in 2006. delta is flying high on lower fuel costs and rising demand. the airline posted better than expected earnings for the fourth quarter. oil prices fell 40% during that. the gains will be limited because of expensive you'll hedging contracts. the international monetary fund has made the biggest cut to its growth outlet -- outlook. the world economy will grow 3.5% this year. that is down from a 3.8% prediction.

>> many economies and many emerging markets are revising their prospects now. they are decreasing investment today. we think this is stronger than the price of oil. >> the exception is the united states. the fund upgraded the forecast for u.s. growth to 3.6%. box office flops may lead to 350 jobs cuts at dreamworks. it's been hurt by losers such as mr. peabody and sherman and turbo. jeffrey katzenberg has been actively seeking a buyer for the studio. it's the most expensive home sale ever in new york city. $100 million. that's when an unknown buyer

paid for the duplex penthouse on the 89th and 90th floors of the tower in manhattan. it is roughly 11,000 square feet and it has some amazing views. >> i know you have worked here for long time. i did not know. >> thank you very much. >> you can't take the man out of new jersey. more on the organ stanley mess. allison williams covers the banks. it looks like everybody's feeling the freeze in the slowdown of fixed income. what stands out for you? >> it was worse than expectations. if you adjust for some one-time items, they are down 14%. that's better than the aggregate piers.

it's a little bit better. the equity business is much more important. a little bit of underperformance if you look at the year-over-year growth. it's tough and make judgments based on one quarter and year-over-year. does one have a tough comparison or an easy comparison to bark it's important to look over the long-term. >> why does fixed income trading , other internal factors? is this a geopolitical thing going on? >> what we saw was no volatility. we have seen a pick up in volatility over the last couple of quarters. the best thing for trading is volatility with rising prices. we had the falling price of oil. that was not as important as widening credit. that is what hurts investment. >> everybody was saying we can't make any money, there is no volatility.

to what extent is it the rising volatility overall? to what extent is it new regulation? >> in terms of volatility, i think volatility with rising prices is good. volatility spikes are bad. we've gotten a few of those in the last quarter. we had a hiccup in u.s. treasuries. we had a spikes that are bad. it freezes stock activities. it can cause profits. >> our new regulations the problem there is a slowdown in fixed income trading? >> i think that's part of it. places where dodd-frank has had an impact one of the things we are seeing is higher capital ratios. it hurts the profitability of the business. banks must hold a higher liquidity. they have different ratios which count all risks equally.

it gets more penalized for lower risk businesses. it makes certain businesses less profitable. >> does the strategy then change because of politics in washington? you have republicans in congress. a lot of them have had problems with dodd-frank because they believe the regulatory burden was too high and that it was tying the hands of some of these firms. >> there has been some talk and we have looked at this in terms of whether the changes to dodd-frank? will certain things get rolled back? there is the potential for certain aspects or parts of the rules to change, the broader context of having banks hold more capital and in general look at the banks and improve the funding structure and try to make it safer for the system, i

do think that gets rolled back. >> who did the best? >> it's hard to look at a quarterly view. goldman sachs is always going to be most volatile because their earnings relate to fixed income trading is this. morgan stanley has a bigger piece of wealth management. that tends to be more stable. if you look at overall trading results, you are backing out the one-timers. jpmorgan has done a order to water -- quarter to quarter. they are off the charts the -- compared to everybody else. >> as far as the commodities turbulence, is this permanent? >> most management is going to be hasn't to say that things are going to be volatile forever. people believe in cycles.

things are better. things are worse. jamie dimon made the comment that yes, we are having a big swing. we have seen this before. >> wells fargo is a different story. this is a different business model. it looks like they had a stronger set of results because they had more exposure on the consumer side. >> it is more focused on the traditional banking business. people are looking at the net interest margin. it was better than some people have hoped for. the big story for wells fargo is not just what was reported during earnings but the environment. we have had mortgage rates at a level we haven't seen in a very long time. that's going to begin for whorls -- wells fargo's banking business. i think people are looking for the future and thinking some of the moves we had in the last

week. >> thank you so much. allison williams is of bloomberg intelligence. >> the senator in charge of tax policy is the chairman of the finance committee. orrin hatch joins us for an exclusive interview. >> you can start by looking at china. we will explain why the new gdp figures are signaling a rebound. ♪

>> it has been a tough start to the year for commodities. the index is in the red again. it's at its lowest level in 12 years. the main culprit is china. we are joined from london. thank you so much for joining us, and david. that is the lowest in 1990. how does a 7.4% rate square with the dramatic selloff we have seen in commodities? >> if you look at some of the reads from the end of last year if we look at what was happening in the copper section in china there is a divergence. this does not tally with what

you are seeing. there does seem to be a divergence. we will see that continue. a lot of these are more consumer market focused. they are slightly more heavily influenced by infrastructure and so forth. >> you talked about the macro environment. talk about the headwinds you are seeing. >> this is when the big headwinds in dollar strength. we are expecting to dollar to strengthen. that will be a headwind. there are concerns about china. we think some of the base metals another headwind is the supply side. it's going to be disappointing as it was last year. a lot of the expectations were from mine supply growth of 6%.

now it looks like 3%. a lot of the same analysts are talking about high levels of growth this year. we have seen some significant guidance reductions. there is lot of mine supply negotiations this year. given the lower price environment you would think those negotiations could be difficult. if the mine supply side is on the outside, there will be more supplies and the downside. >> you think the selloff will be a trigger. will we see a lot more m&a? >> that is more difficult to say. lower prices do make assets cheaper. the question is, who is able to buy assets at the moment? it's really difficult to tell right now.

obviously last year there was a lot of talk about glencore that is off the table. it much depends on whether we have low-price environments for metals or if we see a reasonable rebound. >> where only into the third week of 2015, gold prices are surging. tell us about the near-term upside. >> the big move was last week with the switch national bank markets are taking that as a precursor that the ecb is going to start qe. we have seen a lot of investors buying gold as a euro hedge. it's interesting looking at gold. we begin to see it change the

fourth quarter of last year. i am looking at the relationship between the u.s. dollar in gold. the driving relationship behind gold changes frugally. we are in a. of a lot of investors being slightly less risk appetite. in those time periods, you can see gold price rally with a stronger dollar. we are in an environment now. people are worried about europe and the impact qa means for the euro. they are worried about china. there are risk issues that support gold. >> this is a line from gwyneth paltrow, you talk about the conscious uncoupling of risk divergence. what is the significance of this for pricing?

the point that piece was to say everybody is looking at oil and iron ore and assuming there is a read across other commodities. we were trying to say no, this is related to the differing fundamentals. oil has gone into serious oversupply because of shale oriole growth in the united states. -- shale oil rose in the united states. iron ore, there is a huge oversupply because of real. this may cause chinese producers to cut, and that hasn't happened. we have not seen a supply surge at all in copper. that market was in the deficit last year. we are saying look, they are d connecting. the markets are going to be a different trading in the short

to medium term. those are different across different commodities. hold onto your hat. >> david, thank you so much. that is david wilson. >> copper futures are down nearly 2%. how did you sneak gwyneth paltrow in there? betting on a burger, shake shack hopes investors will do just that. we have details of the ipo next. ♪

>> shake shack is cashing in on a burger boom.

they want to raise $80 million and plan to sell shares between $14 and $16. leslie picker has been following the story. we have been talking about burgers for the last few minutes. >> it doesn't get better to do with that. the company wants to pay dividends to its inside backers. we are talking about union square hospitality group. most of those proceeds will go to the insiders. >> what we talking about valuation wise? >> we are talking about $568 million. we did a story saying they could fetch a $1 billion valuation. what i have heard is part of the strategy could be they priced it at this range and that gives them flexibility to raise it. if you recall the markets have been choppy.

it's not the best environment for doing a deal. they want to come out as quickly as possible since they disclose their filing. they have a 21 day window. they hit that one on the head. >> there are a lot of restaurant change going public. there was potbellied. these have been successful ipos. >> almost across the board these ipos have surged on the first day of trading. we have seen 100% johnson the first day. that is a function of where they are pricing. these businesses are easy to understand. there's no tech involved. there's no e-commerce or odd dynamics to understand. if you have peers you can look at it against, it goes from there. they have trickled down a little

bit, which is common for ipos. it does accord them some flexibility. >> always lurking in the background is the timing of these things. is the timing right now? >> the atmosphere has been very quiet this year. we have seen very few except for these companies that are very determined to get out when they want to get out. box is another one that we expect. they delayed their ipo for 10 months or when they first filed. now it's now or never for that company to go out. >> what are the risk associated with shake shack? >> one of the things if you look deep in his perspective, the sales are slumping. everywhere except for manhattan. those lines that you see, those are not arise. they contribute to the sales at their stores.

the transaction volume taking place is slumping. that eats into the income. >> before you go, this is part in postal -- and parcel, they want to open 10 new stores each year. they want to have 450 in the long term. that's very ambitious. >> one thing they can do is be relatable overbroad. people associate burgers with american food. global growth isn't the best picture ever except here in the. we will see to see where in the united states they can expand. they went up shack in chicago and the ec. want to get toward the west coast, you have competition from internet burger. it will be interesting. >> people really do line eyes

the quality of american burgers. >> leslie picker covers ipos for us. thank you so much. >> what the republicans think of the new tax proposal? we have an exclusive interview with orrin hatch. ♪

>> welcome back here it >> we are in today for eric and

stephanie who are on a field trip in the swiss alps. >> a very big field trip. if president obama wants to make progress on big issues, he will have to go through orrin hatch. he is the chairman of the finance committee. he has jurisdiction over taxes and trade. what does he think of the new tax plan? what are his own priorities? peter cook is on capitol hill with the chairman for this interview. >> thanks very much. we are pleased to be joined by senator hatch. i want to walk through your agenda. let's get your reaction to what the president proposed over the weekend? his latest tax proposal to help middle-class. >> 80% of all businesses are run

by individuals. they will get hit the hardest. a lot of corporations will continue to leave the united states if we keep maintaining the highest corporate tax rates in the world. it sounds to me like robbing others so that he can play political games. why does he need that? we have a lot of ineffectual programs. we have a lot of areas we can cut and pay for the things he would like to do. he is just playing politics. >> this is done on arrival? is there anything you look at? >> i haven't seen the package. i have just heard what reporters said. i will look at it and see if there is anything we can support. we will not support more taxes on the american people. it's a tax on those 80% that are small businesses.

businesses that can make into a businesses if they are not taxed to death. it's more and more of the same. robbing peter to pay paul instead of helping both peter and paul survived and help this country be on its way from a physical standpoint. >> the you see this as a setback to the notion of tax reform? >> it's going to be hard to work with him no matter what. he wants more taxes so he can spend more. i guess he still buys the democrat theory that they can rob others to pay for the middle class when they are wrecking the middle class or it we have lost jobs during this administration. people don't even apply for jobs today because of they have run things.

it's more and more the liberal agenda. we will rob peter to pay paul when both of them need to have every incentive to go out and create this robust free enterprise system. >> let's see if we can find something where you agree. you talked about this. business tax reform where there has been more common down we can republicans and the president, where can you make progress? >> the is talking about corporate reduction in taxes. that is 20% of the businesses in this country. his program doesn't seem to take care of those. they are 50% of the money. they are not inconsequential. it's the old democrat approach that we are going to keep spending and hope for the best

when we are in real trouble. >> he's talked about lowering the rate for corporations and business tax reform. where not sure about what that means. do you see any prospect for common ground on that subset? >> i suggested to the president. let's see if we can work together to come up with something. i prefer comprehensive tax reform because there are a lot of things wrong with the tax code. when it's 70,000 pages, no two tax preparers are going to prepare things the same way. that's wrong. we should have a tech system where people understand it and it's relatively simple. those who don't make a lot of money can follow one page. they will muck around in the

process. >> others have tried to do this. what makes you think you will be successful? >> it's uphill. the democrats know that if they work with me, we can work things together. we have put a lot of monumental hills together over the years. i am looking for some partners on their side. these are all liberals who are no longer with us. it's tough to put things together when we have done bills. our conservative bills where we don't rob peter to pay paul. we make the system work. >> let's talk about trade. you and other top republicans want it.

how quickly we move on trade promotion authority? is there common ground? >> it's taken six years for him to be able to take on this side. there are democrats you don't believe in the free trade agenda. a lot of that comes from the unions. if we can create more jobs to treat -- free trade, that creates more opportunities for unions to unionize. they are against it. a lot of democrats are afraid to go against what the unions wants. i think there are enough democrats we can work with. i have to say that the president does have a good trade representative. he's very good. >> could we see a senate floor vote? >> probably not that soon. we are going to do that. in order to do trade work, we have to call the trade promotion

authority. no country in the world is going to have a trade agreement with us if they believe it's going to be subject to amendment's on the house and senate floor. they come up with a trade agreement, we can bring it up and it's on amendable. it's a vote up and down. that's what other countries are looking for. we've got to do tpa in order to get this done. we need to do the transpacific partnership in the orient. they are all coming together. to get those through, we've got to have a trade authority. if the president comes out strongly for it, we will get it. >> you are going to have to deal

with the debt ceiling at some point. can you give any confidence to investors out there that there's not going to be a crisis again this year? >> i think we've covered that for most of the year. as long as it's a problem, there is no spending under control. >> the deficit is down. >> that's one reason why they made the changes. >> hopefully we can make some headway. >> will the president find a willing partner? >> if he does these things right, he will find a very willing partner. some the positions he's taken our political and not really serious. >> we appreciate the time.

we will send it back to you in new york. >> have the doctors gotten it wrong? ♪

>> if you got the flu shot but still got the flu, you are far from alone. the vaccine is only 23% effective. a doctor joins us from chicago. welcome to market makers. what went wrong? >> nothing went wrong. we gather in advance. we will gather in march for next

year. we look at the strains circulating now. we look at serum that is raised against the current vaccine we are using. we will see if we have a good match. it's guesswork. we are guessing in march what is going to happen with this very smart virus. we guess right a fair amount of time. we guess wrong this year. the vaccine has four components. we don't know which will be the main circulating virus this year. there is so much we don't know. we do a pretty good job trying to anticipate with the virus is going to do. today it wasn't on the mark.

>> did you learn anything that you can apply next year to guarantee you will have better than a 23% hit rate? >> i wish i could say yes to that. i can't. the flu virus is very smart. it has changes. it makes changes. we don't know a lot about how to predict those changes. i wish we did. we will try to guess this year what's going to happen next year. it's a guessing game. most of the time we are right. >> as you pointed out, the hit rate was 23%. with that suggest that if you only have a quarter of to get right, people should not get a flu shot? >> no. i think people should get a flu shot.

flu is a bad disease. i do know how many people who are watching or talking on this show know about it, it's not just a cold. it fits like a freight train. it lays adults down and elderly people and people with other diseases, it can kill them. i think the vaccine is our best way to prevent flu. i am disappointed with the effectiveness we achieved this year. >> i did get a flu shot last year. i did not get the flu. this year i saw the headlines and i did not that one. you have been talking about this as a smart iris. for our viewers, how would you explain to a seven-year-old why it's difficult to come up with the vaccine for flu? why can't there be a broader spectrum of vaccination? >> most things stay constant.

the vaccination we give today against the pathogen we see tomorrow and nothing changes. the pathogen is the same next year. flu changes. flu is different. there is no way to reject now what's going to happen next year. we just make the vaccine as well as we can. if you have gotten the flu in the past you don't want it. i would take my chances with the vaccine. we don't usually get this low. >> are you saying that even with your best efforts and the best science available, we are always going to be one step kind of flu? >> always is a strong word. i hope we learn to make a better vaccine that can be effective no matter what the virus does. we haven't learned that yet.

right now, we are left with this guessing game. to answer your question, yes we are always guessing. my hope is in the future we will make a better vaccine not guess so much. >> the role of drug manufacturers, do they have enough time? can you hear me? did we lose them? >> we may have lost them. 23%, that is low average. it is their best effort against a very sneaky virus that can knock you for a loop. >> fast casual dining from the farm is all at the dig in. ♪

>> dig inn is a casual restaurant in new york. great to have you on. let's start with how this happened. how did you make the transition area you were in finance. >> we thought there was an opportunity. we are seeing these macro trends around people eating better. they want to know where the food is coming from. we have a chef gildan -- driven culture. we thought we could deliver high quality food. we thought that was an idea that we could make work or it >> what was the genesis of this?

what prompted you to say we can take this leap. >> at the time, it was some ignorance. i was young. i had always wanted operating experience. eating well and living a healthy lifestyle was something important to me. >> i thought you were going to say 2:00 a.m. subway sandwiches and >> there was an opportunity. that became a long-term opportunity. i have been at it for a while. >> it sounds great. this is a competitively field. i can call fresh and coat. i can go to the jews shop. -- juice shop. >> it starts at how we think

about our farms. it's not a trivial exercise delivering high-quality vegetables and meat for around $10 price point. we think about what's in season and what's available. >> how important was the price point? when you hear the word organic people think expensive. you are trying to keep it affordable. how hard is that? >> is challenging. we don't draw a line in the sand. we are trying to offer a transparent supply chain. we are doing the work to find the best value. we believe we can have a nice and local business, it will serve new york, we see the food

system being broken. >> why you say that? >> obesity is a major problem. that is been a topical debate. >> the first lady has tried to address that. she got a lot of pushback. >> a lot of people are saying i should be able to eat what i want. >> i think that's where we come in. when you go to starbucks and you get a chai latte and poundcake that can run you 10 bucks also. this has to do with availability. if we are only in new york we are trying to increase access. when we talk about scale, that becomes accessible to all.

are you profitable yet? we were profitable last year. >> we are going to invest the cash. the majority of the capital going to brick-and-mortar locations. we are a restaurant chain first and foremost. we are still thinking about the next market. d.c. and boston are very good options. >> where you see fast casual in the next couple of years? >> chipotle started all. they have had a tremendous amount of success. the intersection of affordability and accessibility, i can sit down. i don't leave a tip. we are all faster and faster paced. technology enables what we do and that model is more relevant. >> we wish you luck. thank you so much.

this is a healthy food startup. wheelie back in just a moment. ♪

>> what to watch for tonight. the president of united states will unveil a new tax plan in his state of the union address but republicans say it is dead on arrival. >> amazons new slogan, the world's largest online retailer will start making movies. >> he has been running this party for more than 40 years, we will hear from the founder of the world economic forum in davos. welcome back to the second hour of "market makers." we are in for erik and stephanie

who are slumming it in davos. now the top business story. morgan stanley posting fourth-quarter estimates that missed estimates. a drop in revenue from fixed income trading. it takes an half as much from bond trading as it did in 2006. shake shack wants to raise $80 million in its ipo. it plans to share -- sell shares from $14 to $16 a piece. the chain has more than 60 outlets around the world. its profits have fallen because of the higher cost to open new restaurants. a new study says facebook has created 4.5 million jobs. it added $227 billion to the world economy. the study was conducted by deloitte and commissioned by facebook. it said facebook's track marketers, software developers

and other businesses that make money off facebook. according to las vegas oddsmakers, the favorites to win the world series are the washington nationals. they just added a site young award winner to their already stacked pitching staff. he agreed to a seven-year contract worth $210 million. >> he is rich. it is the state of union night in washington. the president will give his address after positive economic data and new polls showing his approval rating at a -- its highest level in a year and a half. phil mattingly joins me with more on what he's hearing. what is the one thing the president wants voters to know? >> that he cares about middle class economics. that will be the focus of the speech. you heard white house officials laid out a tax proposal that would go after high income earners. try to raise the capital gains

rate to 28% for couples making over $500,000 a year. apply the capital gains rate to inherited wealth. what would he be doing with that money -- raising about $320 billion. he would try to add income tax breaks to middle and lower income couples primarily on education for couples with children. i think that will be the key point. try to jump off some of the momentum may have had over the last months. lay in a big message, even if they know republicans will not do anything. >> peter cook interviewed orrin hatch, the chairman of the senate committee on finance. senator hatch was specific, he said that the republicans could work with president obama if the president did the right thing. is this what we will see for the next 2 years, republicans who will not get behind what the

president proposals? >> there a frustration with republicans with wet the president will lay out. what orrin hatch and paul ryan are saying, it is we could do comprehensive tax reform particularly if you include corporate and individual. by going after specific tenants of individual tax return, you are undercutting their ability. from the white house perspective, it is important to note, they are not putting this out there with the assumption that the republicans will throw away their ideology and get on board. they do want to set this down as a marker, politically and for negotiations going forward. that is the point. the frustration the republicans are feeling, maybe will push them toward the table. >> i want to bring in mark halperin, he will be hosting a special tonight starting at 8 p.m. talk to me about the momentum

going into this. we have heard our president obama is doing a striptease. showing bits and pieces of his agenda. how has that changed the momentum? >> he has more than you think a guy that got beaten in the midterms would have. his executive actions and putting out the state of union which tactically was a brilliant idea. it gives him a chance, with the higher numbers, to give them the case -- the american people are more open to his arguments. he has to find a moment and path to copper mice with the republicans, who art inclined to do that. every day that goes by they think, let's wait for a republican president. >> retired democratic senator kent conrad is in washington as well. joining us today. senator, thank you for your time. you heard what mark halperin was

just saying about what might be going on with some of the nuts and bolts. was it a brilliant stroke for the president to start releasing some of this stuff now so people get a sense of where he is coming from? >> i think it was very smart of the president. it is also smart of him to remind people where we have been and where we are going. when he came in we were on the brink of a depression. since that time, unemployment is down sharply from 7.8% to 5.6%. economic growth is completely turned around. the economy was shrinking when he came in at a rate of 6% or 7% now it is growing at a rate of 3% and the deficit that was over 9% of gdp is down to 3%. our dependence on foreign energy has been cut in half. the president has a very good story to tell.

he has to tell it. he will say to the american people, we have to focus like a laser on economic opportunity and give some lift to the middle class. >> how does the president take tonight proposal and make that into a legislative compromise? >> i think is very hard. the republicans are not in favor of asking those of us who have been fortunate to pay a little bit more. that is what the president is asking. his capital gains rate is the same capital gains rate that was in place when ronald reagan was in -- was president. it is not a revolutionary proposal. his proposal, with respect to large financial institution, those with more than $50 billion of assets to pay additional fees that is not completely out of line with what dave camp, the chairman of the ways and means

committee proposed last year. >> you say that the president is asking those who are fortunate to give more, but when chairman hatch was on with peter cook he used the terms rob. he said the democrats want to take money from wealthy americans. as you know, one of the concerns amongst americans is that the government will take more money and will waste it. how do you assuage those concerns? and say if those moneys -- that the money will go to the right things? >> you ask a good question. what the president is proposing is on families earning over $500,000 a year. for us to pay a capital gains tax rate that is the same as when ronald reagan was president. and impose a fee on institutions that have more than $50 billion of assets.

to take that money and give it to middle-class tax relief. if there is anything i find across the country, when i was serving, is people are united in the fact that the middle class is under pressure. they need relief. that is what the president is describing peavy it will be hard for republicans to oppose that. >> the idea of targeting the wealthy -- as we heard immediately orrin hatch said this was robbing peter to pay paul. how does the president have to message this to sell it to the public? >> facts matter. the fact is, the president economic policy has taken us from the brink of depression to a remarkable recovery. when there was the financial

crisis, typically it takes 10 years to recover. we are six years into this recovery and the american economy is doing better than any other economy in the industrialized world. the president has done something right. the american people have done a lot right. they deserve to have some help to the struggling middle class. that is what the president is proposing. lexmark, does the state of the union matter? if he has already announced a lot of it. we have the statistics that show 30 million people will watch tonight, but sounds like a lot but is half the number that watched under president clinton. >> it is his biggest audience of the year. it can say this is the moment we want to face the economic choices that will be debated. this window between now and when

the presidential campaign takes over. this campaign about raising taxes to corporations and wealthy to produce tax cuts for the middle cuts. that is the debate the president wants to have. the state of the union is the device he will force that debate on the country and republicans. >> phil, talk to us about the president's social media strategy. what does the investigation -- what is the demonstration trying to accomplish? >> the white house is aware of those numbers. what we see over the last couple of years, they are trying to figure out better ways to engage the audience. not much different than what media companies are trying to do. what they have done with the striptease of proposal, how they have rolled them out. put blog posts on medium. put the president on youtube. twitter and instagram. the president is sitting down for an interview with three youtube creators.

i would love to have that interview as a member of the white house press corps. it is great for the white house to have three individuals that will not be asking tough questions. what they are trying to do, is recognized that old media still has a place. new media that is how you reach those 25 million people who are no longer watching this on network tv. >> that has to be annoying to the white house press corps. we know this is a president who is social media savvy. we saw him go on to ferns. perhaps it is not that surprising. what do you make of his use of social media mark? >> speaker boehner is trying to do it too. this white house is smart about it. they have got the product to do it. the president is in the new

media age -- no one in politics matches the president in terms of a brand that appeals to people who use social media. that is a big advantage. with all due respect to john boehner, he is not seen as a friendly as candidate. >> i would like to see that galvan i guess -- >> we have a minute left. let me ask, you mentioned a string of a compliments you believe the president should beget incredible. the question is, why is this white house having so much trouble getting this message out if there are successes, why does main street either not understand this message or believes that this message is not true? >> i think it has to do with this president he tends to tell

the story once but not repeat it . in this new age, you have to repeat. you cannot get tired of hearing yourself say the same thing. the economic statistics under this president, look at the stock market, which is more than doubled. you look at unemployment am a down sharply. the deficit, down sharply. economic growth, up sharply. those are facts. he deserves credit. >> kent conrad joining us from our washington bureau. also phil mattingly and mark halperin joining us in the studio. mark, tonight's state of the union. what does wall street want to hear tonight? >> not tax increases. they want gridlock to break. they want to president to propose something that could make washington work. they want certainty. a lot of firms have agendas.

they know nothing big can move unless the president can get these first -- trade, tax reform done. then other things can move. they want to see movement. >> if there is one area we can get compromise it is tax reform? >> tax is more likely. >> we came in talking about the nationals, this is where we can get compromise, the baseball team. >> most people in washington have their hometown teams. >> comprehensive coverage starts tonight at eight -- at 8:00 tonight with a special edition of all due respect. >> amazon takes aim at the silver screen and will start making films with a twist. >> he is not just rebuilding a basketball team, he is renovating the city of detroit. we will hear from quicken loans chairman. he sat down with betty liu. ♪

>> amazon's ambition has reached new heights. the hollywood sign the company announced it is getting to the movie business. they will release original films in theaters and then stream them. netflix has announced similar plans. cory johnson is in san francisco for us. why this the everything store need to make movies? >> they have been after original content for a couple years. they had great success in the golden globes, winning big awards. shining a light on this business they have been trying to grow. when you think about the big companies in technology, whether it is google or microsoft or

amazon, their plan is nearly identical. netflix posts on amazon's servers. amazon understand what netflix is doing. they have the customers. they know what their customers want. how their customers consume. this prime business is growing for amazon. the release of movies in the theater before they show up any prime service, gives those films a different kind of cachet than netflix. >> brendan greeley and i were struck by the fact that amazon is protecting that window. they will still put it in movie theaters and weight 4 to eight weeks before streaming it on prime. what do you make of that? >> that is making the theater owners want to run the film. if they do not have a promise of

a window of exquisite it, they will not spend the money to market it. you have to give the theater a bonus. that timeframe is greatly compressed in this deal. furthermore, that same timeframe of the release time to home video has been shrinking dramatically over the course of the last decade. this is the shortest time out there. it opens up amazon if they are good, to awards season. if they are not in the theater, they are not eligible for oscars. >> wise amazon doing this now? >> amazon has a culture of experience in. they try a lot of stuff. they experiment a lot. you can see jeff bezos encouraging the same thing across the company, whether it is the way they sell things. the cloud service, which is a

back of the envelope idea which is doing about $5 billion in annual revenue. you can also see it outside the box. this morning, they announced they are building a wind farm in indiana. so they can power a datacenter. amazon is trying lots of different things. they are getting into the power generation business. they have a greener datacenter. they are willing to try things that do not look like walmart or barnes & noble. they are thinking like a business that can be reinvented based on the connection the company has with its customer. >> i do not know what you are talking about. i think wind farms in indiana is an amazon -- is a fit for amazon. the story has always been that jeff bezos is making so much money that they are giving him a pass, letting him spend whatever they want.

shareholders are putting his feet to the fire now right? >> to some degree. the stock is still insanely valued. it has a tremendous value, but the company runs along the edge. they spent all their cash flow and reinvest it. they are famously cheap. this is where a falling stock price could hurt amazon. it means the employees -- it could hurt them town lies. >> thank you so much. our bloomberg west editor at large. >> "market makers" will be back. ♪

>> coming up, he is betting on a motor city -- we will hear from

dan gilbert on why he is putting up money to help renovate motor city. >> the future of digital medicine, what if your smart watch could warn you that you are about to have a heart attack. ♪

>> welcome back to "market makers." we are in today for erik and stephanie who are on their way to the world economic forum. they will be here tomorrow morning. european markets have joined their trading day. scarlet fu has a wrap. >> it is a waiting game. the path of least resistance is to move higher of the announcement on thursday morning. the stocks rising for an eighth day in 10. the dax is at a record high.

it has gained 4.6%. since the swiss national bank ended. the ecb will almost certainly the value of its currency. the euro is at 11565, right about an 11 year low. i want to bring you into the bloomberg terminal to show you what is going on with the swiss market index. it rose for a second day but look at how much damage was done last week in the wake of the as in these decision. the index at about a 7.5 year high. the plunge over three days. it wiped out 1400 -- 1300 points , 14% of market value for the smi. a recovery, but it is minor in comparison. one of the big names that had declined was swatch. it relies on demand from overseas and a stronger swiss

franc is not bode well. it said it will raise prices. >> i remember what we heard from the ceo of swatch moments after they remove the cap, he called it a soon me for swiss exporter. he said he had no words to describe his shot. >> 2 hours before president obama delivers his address, rick snyder will launch his second term agenda with a state of the state speech. one of many governors across the country giving speeches on creating jobs and boosting growth. he has one thing many others don't, a businessman who is risking one point $6 billion of his own money to restore detroit's glory. then gilbert -- earning dan gilbert the status of superhero. we talk to them on how he feels

about being detroit's savior. >> you try not to pay attention to that stuff. as soon as you pay attention there will be negative. you try to focus on the mission. you cannot control what people say, good, bad, or ugly. for the first time my new year's resolution was not to read the clips. i do not want to be jaded either way. you can think, you are better than you really are. you can think you are the worst person around. depending on what you read. sometimes a friend of mine will e-mail me. did you see this? >> if i could give you three reasons why you did what you are doing in detroit, what is true to you?

because of your childhood? because you like this idea of one man leading the city? or purely profit driven? >> all of the above. >> there was no all of the above. >> it is deathly not one man -- it is definitely not one man. you have to have so many levels and layers. even the interns -- a couple of women who just graduated sitting outside my office now. unfathomable that somebody at the top of their class did come to downtown detroit a couple of years ago. we have that happening now. those are the types of people that are involved. >> how does that make you feel?

>> really good. to see their excitement and to see them engaged. >> before they would turn their nose on the trait -- detroit. >> people want to impact things. they want their opportunity to impact things. >> dan gilbert. betty liu joins us now. i have interviewed the head of the detroit chamber of commerce. they are optimistic about detroit's future. is it widespread? >> you felt like parts of detroit are coming back. when you talk to folks restructuring experts, they say they are not out of the woods. they have done all the right things. are they completely out of the woods no.

they still have issues, including their pension obligations. they have not gotten rid of all of those. the abandoned homes during the financial crisis. up to 78,000 of them. detroit is still dependent on one industry, and that is the auto industry. what happens if another auto malaise hits the country? >> we hear about these pockets of success. there are bits and pieces things turning around. overall, the light is an anchor weighing on the city. >> dan is on the task force and will remove these abandoned homes. because it a cancer. -- he calls it a cancer. you can remove part of it, but it can grow back. >> it is a magnet for crime.

>> that is why it is so hard to get rid of it. he says you have to get rid of it all at once. completely get rid of them -- bulldoze them at the same time. that is hard to do and very costly. >> what does his model for downtown detroit look like? >> he has a model in his office of what the buildings he bought -- he labeled them in orange -- and what is left. i joked with him, the dan gilbert village. he envisions one where retailers, luxury retailers are come and establish themselves. woodward avenue. a retailer will be establishing a store on woodward avenue. two more luxury retailers in the next 2 months. he sees it as a tourist that

connect -- destination. he says lebron is here to stay. have you clean up a reputation? there is still a lot of naysayers who say the city has not gotten rid of not only its financial problems, but the corruption. that has not been taken care of. >> is quality to patrick barred from running? >> you never know in america. >> you can always get a come back. still to come -- a hot topic. one of the big issues in davos. we will bring you an excerpt next. ♪

>> our bloomberg team isn't that those switzerland for the economic formurm. erik conducted an interview. he started by asking about one hot topic -- whether governments are imposing too many rules and regulations on the banks. >> we are living in a global system. of course, we need global rules. do not forget we are living in a world where we have lost. you have 2 kinds of roles. a deal on the basis of common values of trust. if this has disappeared, you have to replace the values by

regulations. we are now in a world where we go into the election of regulations. we have to show, through our behavior, that we regain the trust of the people. >> how could these banks -- what could they do to regain trust? >> it is very simple. ethical moral, impeccable behavior. riddick ability honesty -- predictability, honesty. most of them have recognized it. you always have black sheep. >> we are going to have huge guest tomorrow with erik and stephanie. including the opec secretary-general. harvard professor and the head

of the centers for disease control and prevention. you do not want to miss it. we will be there live all day. >> a new era in medicine. we will talk to a doctor who says it is time for patients to get into digital medicine. ♪

>> it may be time to say goodbye to doctor visits and to take our health into our own handheld devices. at least that's what one of the country's most outspoken advocate for digital medicine says. he is a cardiologist whose latest book is the patient will see you now. he joins us from california. thank you so much for your time. is now the time for this? do patients need to be in charge of their own medical care? >> we are getting there. we will never get away from visit. what is exciting is we have the opportunity to democratize

medicine. the smartphone will be the hub. whether it is your sensors, labs , summoning a doctor, getting the cost for your care. it will be quite extraordinary. >> when you say take care of your self, does this mean the doctor plays a secondary role to the patient's needs? >> not exactly. other than doctors having to get so much into the diagnosis and the monitoring of conditions the focus can be for doctors to be on treatment. the routine diagnostics can be done by patients themselves through their devices. that is what the future holds. >> to play devil's advocate should we be trusting people to diagnose themselves? when i try to self diagnose on web m.d., i go from zero to terminal cancer pretty quickly.

>> you are bringing up the past. the future is about, not looking up data about the world, it is about getting your own data. today, you can have a child and get a diagnosis from your phone. you can get your cardiogram analyzed. you can get a computer reading that is highly accurate. you can get a skin rash diagnosed. that is the beginning. with machines, we can diagnose these well. >> you should really get that last checked out -- rash checked out. >> if you have your medical data on your phone, and you lose your phone, someone may have access as opposed to that information being at a doctor's office or at a medical clinic.

had he stopped concerns about that -- how do you stop concerns about that? >> this is a critical point. if we do not at this squared away, the ability to sell people data without their knowledge and control. this has to get fixed. >> we were talking about this and mark brought up the example. you think we will be able to have a smart watch that will tell you that you are hurtling toward a heart attack? >> that is a ways off. they could tell you your blood pressure with every heartbeat while you are asleep, in traffic, under stress. that awaits fda approval. being able to get all your vital signs. your routine blood test and through most of your physical exam through your smartphone is a next ordinary shift of the

model of how health care is rendered today. >> how far away is this? >> a lot of it is here. in the coming year or two, a whole lot more is coming. it favors the consumer. the of power meant of information. -- the empowerment of information. this will change the world for medicine. >> i am wondering, will there be any push back, from pharmaceuticals or from big hospitals, which are now corporations -- will they push back? >> that is a great point. hospital rooms will not be necessary. the biggest resistance is within the medical community. it challenges autonomy. all this control has been around for mill -- millenniums.

>> dr., thank you so much. "market makers" will be back. ♪

>> we have a huge lineup of guests from switzerland tomorrow. the opec secretary-general.

he will be speaking to them. so will harvard university president. the head of the centers for disease control and prevention. and carlisle ceo david rubenstein. >> this has been fun. this is the first time we have worked together. let's do this again and soon. >> i am olivia sterns and for stephanie ruhle. they are in the swiss out and will be back live tomorrow. it is to do six minutes past the hour, which means we are on the markets. >> last week has been replaced with a waiting game. waiting for the european central bank's policy decision on thursday. housing data as well as earnings . the s&p 500 drifting lower, the dollar drifting to more strength , and oil prices have found a bottom between $46 and $48 a barrel. joining us is kevin kelly.

if we look at the bigs at $21 pretty muted. the trades are being put right now being set up for a lot of volatility in the latter part of this week and the month? >> what is good to look at is the vix. lastly, we saw 400 point swings on the dow. it is at a five-year high. sitting around 110. we have not seen this level -- we did not see this back in october. over the next 30 days, we are seeing a lot of volatility comeback in the marketplace, up or down. >> there are a lot of calendar events peavy ecb on thursday, greek elections over the weekend. that volatility could strike during any of these? >> you are seeing a lot of volatility.

except the one year treasuries at 15 basis points. there are a lot of conflicts. no one knows what the ecb will do. one of the $500 billion, less or more? there is a lot happening in the marketplace. everybody is exciting volatility to come back. >> it is a waiting game. we are looking at shares of express down 16% in the market right now. sycamore partners, they were looking to increase the stake and take it over. it owns 10%. it has ended talks. what are you seeing as far as options activity? >> options volatility is high but that will go into a lot of other names that are in play. retailers -- retail is really tough. there was the caesars restructuring that happen.

that is playing into the credit market. this deal was taken off the table because of financing. there is a lot happening. creditors are getting antsy. >> interesting that financing did not come together, giving -- given how low interest rates are. let's get to your trade for the day. on the russell 2000 value etf. what is our strategy? >> we talked about volatility this is a great way to hedge your overall market exposure. small and mid caps did not do well last year, but they are trading at a 19 times earned/ . in order to hedge your book, you want to put on a put spread out to march to capture all that volatility. the 116, 106 put spread, it will cost you $2.50.

>> the put call ratio is below one, what does that mean? >> we are talking -- at the put call ratio of about one, it is showing that people are positioning for it to go extreme in one way -- the puts will go down or the calls will go up. people are saying, the market is not going to stay here. it will not stagnate. >> it is drifting lower as we wait for the ecb. thank you so much. we are back on the markets in 30 minutes. ♪

>> welcome to money clip. i am matt miller. here's the rundown. that time of year when the president speaks for a long time. there is a lot of applause and the opposition party throws down. today's wild card, dan gilbert the founder of quicken loans is waging a war on blight in downtown detroit. it is a labor crisis. how maternity leave is not working out for working women. in media, and african soap opera about sex backed