we may be can't save everybody, but we could save some. don't prevent all traffic accidents, but we take steps to try to reduce traffic accident. said, if reagan once mandatory background checks could save more lives, it would be well worth making it the law of the land. the bill before congress three years ago met that test. unfortunately, too many senators failed there's t --h -- theirs. [applause] president obama: we know that background checks make a difference. connecticut passed a law requiring background checks and gun safety courses and gun deaths decreased by 40%. [applause]

meanwhile,bama: since missouri repealed a law requiring gun -- comprehensive background checks, gun deaths that increased to 50% higher than the national average. one study found, unsurprisingly, that criminals in missouri now have easier access to guns. the evidence tells us that in states that require background checks, law-abiding americans don't find it any harder to purchase guns whatsoever. their guns of not been confiscated, their rights have not been infringed. that is just the information we have access to. with more research, we can further improve gun safety, just as with more research, we have reduced traffic fatalities enormously over the last 30 years. , food,esearch when cars medicine, even toys harm people,

so that we make them safer. research, science, those are good things, they work. [laughter] [applause] they do. obama: but think about this. when it comes to an inherently deadly weapon -- nobody argues that guns are potentially deadly -- weapons that kill tens of thousands of americans every year, congress voted to make it harder for public health experts to conduct research into gun violence. made it harder to collect data and facts. and develop strategies to reduce gun violence. even after san bernardino, they refused to make it harder for terror suspects, who cannot get

on a plane, to buy a semi automatic weapon. that is not right. [laughter] that can't bea: right. the gun lobby may be holding congress hostage right now, but they cannot hold america hostage. [applause] president obama: we do not have to accept that carnage is the price of read him -- freedom. [applause] [applause] president obama: i want to be clear.

congress still needs to act. will not in this room rest until congress does. [cheers and applause] because oncema: congress gets on board with common sense gun safety measures , we can reduce gun violence a whole lot more. but we also cannot wait. congress that is in line with the majority of americans, there actions within my legal authority that we can take to help reduce gun violence and save more lives. actions that protect our rights and our kids. , joe and i hook worked together with our teams and we put forward a whole

series of executive actions to try to tighten up the existing rules with what we have in place. to take it a step further. let me outline what we are going to be doing. , anybody in the business of selling firearms must get a license and conduct background checks or be subject to criminal prosecutions. [applause] president obama: it does not matter whether you are doing it over the internet or the gun show -- it is not where you do it, but what you are doing. we are also expanding background checks to cover violent criminals, who try to buy the most dangerous firearms by

hiding behind trusts and corporations and various cutouts. we are also taking steps to make the background check system more efficient. fbir the guidance of the atf,ur deputy director at folks going to hire more to process applications faster and we are going to bring an outdated background check system into the 21st century. [applause] president obama: these steps will actually lead to a smoother process for law-abiding gun owners, a smoother process for responsible gun dealers, a stronger process for protecting the public from dangerous people. that is number one. number two, we are going to do everything we can to ensure the

smart and effective enforcement of gun safety laws that are already on the books. we are going to add 200 more atf agents and investigators. we are going to require firearms dealers to report more lost or stolen guns on a timely basis. we are working with advocates to protect victims of domestic abuse from gun violence. [cheers and applause] where, toobama: often, people are not getting the protection that they need. number three, we are going to do more to help those suffering from mental illness get the help they need. [applause] high profilema: mass shootings tends to shine a light on those few mentally unstable people who inflict harm on others, but the truth is that nearly two in three gun deaths are from suicides. to preventr work is

people from hurting themselves. thatis why we made sure the affordable care act, also known as obamacare -- [laughter] [applause] president obama: under that law, treatment forhat mental health was covered the same as treatment for any other illness. that is why we are going to invest $500 million to expand treatment across the country. [applause] president obama: it is also why we are going to ensure that federal mental health records are submitted to the background barrierstem and remove that prevent states from reporting relevant information. if we can continue 2-d stigmatize mental health issues and get folks proper care and fill gaps in the background check system, we can spare more families that pain of losing a loved one to suicide.

for those in congress who so often rush to blame mental loomis for mass shootings, as a way of avoiding action on guns, here is your chance to support these efforts. put your money where your mouth is. [applause] president obama: number four, we are going to boost gun safety technology. today, many gun injuries and deaths are the result of legal guns that were stolen, misused, or discharged accidentally. in 2013, more than 500 people lost their lives to gun accidents including 30 children younger than five years old. greatest, most technologically advanced nation honors. there is no reason for this. we need to develop new technologies to make guns safer. if we can set it up so you cannot unlock your phone unless you've got the right fingerprint

, why can't we do the same for our guns? [applause] if there is an: app that can help us find a missing tablet which happens to run off -- the older i get -- [laughter] if we can do it for your ipad, there is no reason why we cannot do it with a stolen gun. if a child can't open a bottle of aspirin, we should make sure that they can't pull a trigger on a gun. all right? [applause] president obama: we are going to advance research, we are going to work with the private sector to update firearms technology.

are alreadyailers stepping up by refusing to finalize a purchase without a complete background check or by refraining to sell semi automatic weapons are high-capacity magazines. i hope that more retailers and more manufacturers join. they should care as much as anybody about a product that now kills almost as many americans as car accidents. because noneoint of us can do this alone. i think mark made that point earlier. all of us should be able to work ,ogether to find a balance which declares the rest of our rights are also important. second amendment rights are important. but there are other rights that we care about, as well. we have to be able to balance them. because our right to worship

-- is thatsafely right was denied to christians in charleston, south carolina and that was denied jews in kansas city, and that was denied muslims in chapel hill , and sikhs in oak creek. they had rights, too. [applause] our right toma: peaceful assembly, that right was lost for moviegoers and aurora and lafayette. our inalienable right to life and liberty and the pursuit of happiness, those rights were stripped from college kids in santa barbara and blacksburg and from highschooler's in columbine. and from first-graders in newtown.

first-graders. and from every family who never imagined that their loved one would be taken from our lives by . bullet every time i think about those kids, it gets me mad. , it happens on the streets of chicago every day. [applause] so, all of usa: need to demand a congress brave enough to stand up to the gun

lobby's lies. all of us need to stand up and protect the citizens. all of us need to demand governors and legislators and businesses do their part to make our community safer. need the wide majority of responsible gun owners who grieve with us every time this happens and feel like your views are not being properly represented to join with us to demand something better. [applause] president obama: we need voters who want safer gun laws and who are disappointed in leaders who stand in their way to remember come election time. [applause] president obama: i mean, some of

this is simple math. yes, the gun lobby is loud and it is organized in defense of making it effortless for guns to be available for anybody anytime. well, you know what, the rest of us -- we have to be just as passionate. we have to be just as organized in defense of our kids. this is not that complicated. the reason congress brought -- blocked laws is because they want to win elections. hard for theme it to win an election if they block those laws, they will change course, i promise you. [applause] president obama: and yes, it

will be hard. and it won't happen overnight. it will happen during this congress. it won't happen during this congress. it won't happen during my presidency. but a lot of things don't happen overnight. a woman's right to vote did not happen overnight. liberation of african americans did not happen overnight. rights, that was decades worth of work. , that isuse it is hard no excuse not to try. to whyhave any doubt as you should feel that fierce

urgency of now, think about what happened three weeks ago. lavian dobson was a sophomore at fulton high school in tennessee. he played football, beloved by his classmates and teachers. his own mayor called him one of the city's success stories. , heweek before christmas headed to a friends house to play video games. he was not in the wrong place at the wrong time or made a bad decision. he was exactly where any other kid would be. your kid. my kids. gunmen started firing. zavio, who was in high school, had not even gotten started in life, dove on top of three girls to shield them from the bullets and he was shot in

the head. and the girls were spared. he gave his life to save theirs. heroism a lot bigger than anything we should never expect from a 15-year-old. greater love hath no man than this than a man lay down his life for his friends. we are not asked to do what he did. to haveot asked shoulders that big, a heart that strong, reactions that quick. haveot asking people to that same level of courage or sacrifice or love. kids and care our about their prospects, if we love this country and care about

its future, then we can find the , we can find the courage to mobilize and organize. we can find the courage to cut through all the noise and do what a civil country would do. that is what we are doing today and tomorrow, we should do more, and we should do more the day after that. if we do, we will leave behind a nation that is stronger than the one we inherited and worthy of the sacrifice of a young man like that one. [applause] verydent obama: thank you much, everybody. thank you. the president of the united states speaking from the east room of the white house about measures he will take, executive actions on guns. the president said that every

year 30,000 americans lose their lives to gun violence. he continued, many have buried .heir own children the united states of america is not the only country on earth with violent or dangerous people, but we are the only country that sees this violence happen with this type of frequent the. we have more from washington. toluse: we did see the president tear up a little bit where he mentioned all of the places that have had mass shootings during their present -- his presidency. he talked about newtown, where 21st-graders were shot and killed. -- 20 first-graders were shot and killed. not getting any support in congress from this, he is saying he is going to act on his own. the measures are admittedly somewhat limited. there is only somewhat the executive can do on his own without congress. the president has said he is going to go forward and do what he can to try to close the

loophole on background checks and expand them to more and more people and try to get more -- keep more guns out of the hands of criminals. that is what you heard the president saying today, saying he is going to act without congress and try to get the american people to support him, even though he believes congress is being held hostage by the nra and the gun lobby. mark c.: thank you. again, some of the key points the president made. number one, anyone who sells guns must conduct background checks or be subject to prosecution. number two, insure the smart and effective enforcement of gun control laws already on the books. number three, help those suffering from mental illness. number four, boost gun safety technology. the president outlining some of his executive actions today. the president said it will be hard and it won't happen overnight, it won't happen

during this congress or during my president he, but he concluded, just because it is hard is no excuse not to try. you have been watching bloomberg television's live coverage of president obama's live remarks. you are watching bloomberg markets. >> we want to head over to the markets desk. we want to check on how gun companies are reacting. julie: the remarks were fairly well broadcast. we knew he would be introducing increased regulations of guns. when there has been either the promise or the actual increase of gun regulation -- the stocks go up. smith & wesson raised its forecast for third-quarter earnings. they say there has been higher sellthrough and distributors.

there has been higher sales, so lower inventories. that is good news for smith & wesson. the shares are up 9.5%. gun makeru.s. traded is also rising today, by nearly 7%. we have seen these stocks perform relatively well. in the case of smith & wesson, very well. the stock is trading as a record because there have a lot of talks about increased gun regulation. we have seen increased gun sales. in the spending on guns united states going back to 1999. it has just gone up and up and up and up. the current number, $82 million. we have seen this increase over time. there was a little bit of debt in 2009 and 2010. way,is benefited, by the in terms of the stock reaction,

not only the makers of guns, but also retailers. take a look at how they are performing in today's session. cabela's is rising. dick's sporting goods is rising. is the biggest retailer of guns in terms of the number of stores selling guns. all of these stocks rising in terms of increased regulations. when you see these new laws put on the books, gun sales go up. scarlet: you get that knee-jerk reaction. there were headlines that broke on apple. julie: this is from the japanese news service reporting that apple may cut iphone production by 30% between january and march. we sell the shares, which were already lower, take another leg lower. we are trying to figure out the exact significance of this. apple does tend to wind down

production of one phone as it is ramping up production of the next. coming on the heels of a lot of , a lot ofmmentary channel checks have been done with the ample supply chain in asia. a lot of analyst's talking about this. this is causing a little bit more pessimism reflected in the stock. i do want to check on the broader markets. the s&p 500, in particular. apple is affecting the overall markets. only down a quarter of 1%. we have seen a little bit of bouncing around into today across session. to your point, apple is points offing 1.5

the s&p and 14 points off the doubt. not insignificant when you see that decline. scarlet: thank you so much. coming up, china steps in to prop up its markets. with chinese shares starting off with the worst footing in 20 years, what ripple effect will the measures have? ♪

welcome back to "bloomberg markets." scarlet: let's start with the headlines.

mark crumpton has those. mark: thank you so much. live onvent televised bloomberg television, president obama said it is time for the american people to demand andressional action on guns for elected officials to stand up to the gun lobby. in an emotional appearance at the white house, he unveiled an array of measures and that targeting the controlled enforcement of firearms. >> we are the only advanced country honors that sees this kind of mass violence -- on earth that sees this kind of mass violence with this kind of frequency. it does not happen in other advanced countries. it is not even close. as i have said before, somehow we have become numb to it and we start thinking that this is

normal. accused ofresident the gun lobby of taking congress hostage and insisted that it is possible to uphold the second amendment while curbing the number of mass shootings in the country. one u.s. shoulder -- soldier was killed and two others were wounded in afghanistan. the battle took place in a southern province. the u.s. troops were bolstering afghan forces as they suffered setbacks against militants. a helicopterid sent to evacuate casualties landed with a helicopter problem. usnie sanders will join today on bloomberg television to talk about his stepped-up attack on wall street. he is promising to break up the too big to fail banks if he is elected. we will talk to him about that

and much more on "with all due respect." in northern california, communities hit hard by brushfires last fall have another problem. storms may dump up to 15 inches of rain in the next two weeks. a flash flood watch is in effect. two feet of snow is expected in the sierra nevada's. global news 24 hours per day powered by our 2400 journalists around the world. began 2016 in firefighting mode after stocks plunged 7% yesterday. the government stepped in to avoid a repeat. beijing propped up share prices and the government injected the most cash into the system since september. scarlet: the intervention worked. mainland stocks closed slightly higher. president onurasia

"bloomberg ." >> i'm absolutely bullish on china this year. they have a greater ability to continue to stimulate an economy. --alix: is he right? let's get some perspective from automata larry and. -- mohammed all area and al erian. what is your take? one has to do with the canned the chinese government soft land the economy without a big disaster. the answer is yes. what to do with financial bubbles in the chinese economy? there are pockets of excessive risk-taking. that is harder. the stock market as part of it.

they have fallen into the same trap we fell into, which is to encourage an activity, in our case it is home buying, which has social benefits, and it goes too far. they encourage share buying, but they are going to have a lot more problems soft landing their financial market. what does it look like when they are geared toward consumption? great point. it looks like an economy that grows at 5.5% to 6%. thatoks like an economy reorients its growth engine. it is one that is going to be less smooth than the past.

they do have the tools to deliver on it. what does it mean for the currency? we have seen a slight recovery on shore, but offshore, we are still seeing a declining currency. what is the ripple effect? tug-of-warthe big between the domestic objectives it wants to weaken its currency. that is a way of assisting growth and making the transition less traumatic. in terms of global responsibility, the more the currency weakens, the more it steals growth from the rest of the world. it is torn between the two. it tries to weaken the currency. it reaches a tipping point that causes -- causes global disruptions. then it will start weakening again. you will see this tug-of-war

play out for most of 2016. illustrate that, you can see what is happening to the yuan. the hiring goes, the weaker the yuan is. you see the yellow line over here. scarlet: china has banned some foreign banks from capitalizing on that rising gap. you have my -- talked about how they have been benefiting from the rest of the world. the currency is on a path to more weakness, what does that for the rest of the trading partners? >> the rest of asia is trying to adapt to a china that grows less rapidly and has a depreciating

currency. when that really speaks to is global. the biggest problem is that the world is yet to find sustainable engines of higher growth. because of that, we struggle. because of that, we cannot fully validate financial asset prices that have borrowed growth from the future. is not just having to adapt economically. we are looking at a year with a lot greater financial volatility until we get the comprehensive response on the policy front. alix: the other topic here in the u.s. has to do with the investment grade corporate bond market. you come inside the bloomberg see that it you can

has blown out. at what point do you start to be concerned that we will see a selloff in credit and equities? >> had you shown the high-yield market, you would see an unhinged market. not the case for investment grade. investment grade has the same issue that other markets have. they are stretching for a yield. when you were going to see is the process of normalization. the hope is that fundamentals improve quickly enough. they want to limit the widening in the risk spreads. there is a risk that that becomes a destabilized market. a lot of people have stretched enormously hoping that central banks had their backs covered. now, central banks are much more

divergent than the last several years. >> let's go back to the three unhinged markets. those, which has the greatest potential to spill and affect the u.s. economy. it is always important to remember that unhinged markets come with risk, but opportunities. all three cause volatility to go up. -- aility causes that reduction in risk appetite. we should also remember that unhinged markets mean that prices overshoot and opportunities get created. you see it in the energy sector, the mining sector. among certain high yields, you see it this is an opportunity for people who have patient capital, who can stomach a lot of volatility, and who are

really good at name selection. we should not lose sight of the opportunities that are being created. these opportunities are for significant median returns. buytelling you -- do not the sector as a whole. the sector as a whole still has a very bumpy road. this is the time to start looking at single asset mining come they have been devastated. they are very concentrated. they are having problems with cash burdens. there are certain companies. look at petrobras. there are companies that have been hit really hard. there are selective opportunities, but this is not the time to buy the whole asset class.

metaphor extend that to your new york jets. scarlet: my condolences for what happened over the weekend. >> if you want to see me cry, just continue on this. of the other jets fans devastated, but we remain loyal. we know it it is like, but it is devastating. scarlet: it was devastating. being taken down by rex ryan, their formal coach. thank you so much. alix: we will be right back. on the other side, much more "markets." ♪

alix: welcome back. let's get to abigail doolittle.

she is looking at micron. abigail: we are seeing a bit of a role reversal shift. this was the worst performing stock in the now stocks top 100 last year and today it is one of the top stocks. investors are starting to digest the works of some of the banks late last year. seem to agreets that the company's week february quarter guys may have marked the bottom for micron. there could only -- there could even be upside. this could be a turnaround stock for 2016. turning to two other stocks trading higher, as well, first solar and solar edge -- both stocks are higher after goldman upgraded them come even as they downgraded the overall solar space. first solar to a buy from a neutral. suggesting about 30% upside could be ahead. , as well.was added

some of the select solar names, may do as well. scarlet: thank you so much. from theoolittle nasdaq. shares of apple getting hit hard lately after reports by a japanese news service that the company could cut the iphone 6 and 6s production by 30%. alix: let's head out to adam, who joins us now from sanford is go. -- san francisco. what are the reports? says thatreport orders going to apple suppliers have declined by as much as 30%. this follows a fair number of analyst reports that have hinted at this, as well. there have been reports by morgan stanley, credit squeeze, jpmorgan pointing to declining iphone sales in the quarters ahead. apple is incredibly dependent on the iphone for the bulk of its

business. channel isin that watched incredibly closely by investors. scarlet: what can we learn from the last time apple limited iphone production back in 2013? this is not the first time they have scaled back. adam: this kind of goes in cycles. this is the bump up iphone. it is the 6s. it looks very similar to the previous model. when the iphone 6 came out, it was the first one with the bigger screen. inre was unbelievable demand sales for those. apple will be coming out with another phone, as they always do. you have to keep this in perspective. alix: thanks so much. good perspective.

as for netflix, it is paying big, hoping for a big payoff later on. it plans to spend about $5 million on programming this year -- more than double the budget of hbo. alix: for a company that has not made large profits, is this a smart decision? the streaming landscape well and joins us now. how fast do they have to raise prices to make up for the cost they are spending? paul: when you talk to reid hoffman, they talk about the growth of the business. ory talk about a circle cycle. they say, we need to spend money to drive subscriber growth, which then generates revenue and cash flow to fund even more investment in programming. this is a story that is really driven by subscriber growth. that is what drives the entire netflix story and one that has

been working for years. it was the best-performing stock in the s&p last year. billionramp up over $5 in programming liabilities long-term, a lot of investors are saying, that really assumes a lot of continued subscriber growth and some pricing increases along the way to pay the bill. scarlet: what kind of outcome are investors pricing in? the stock adjusted 130%. stock isin, this really pricing and continued subscriber growth. not so much in the u.s. the growth is more mature and it is slowing. we are continuing to see stronger growth in international markets. they have had a tremendous success story starting with the u.k. and canada. they have now conquered most of europe and they are now going into asia and latin america. those are the markets that are going to drive subscriber growth.

rolluestion is -- as you out internationally, it is a lost business for them. they lose money for the first 18 months before they turn a profit. to lose money, they will start to turn a profit next year, and then they will grow profits after that. scarlet: good thing "house of cards" is a hit. alix: amazon prime is getting in on that too. i'm totally hooked on "man in the high castle." scarlet: oil. the short squeeze that wasn't. why are you laughing? middle eastern geopolitical risks. ♪

welcome back to "bloomberg markets." scarlet: geopolitical volatility has usually been a positive for oil prices, but not this time. in light of growing tensions between saudi arabia and iran, oil is holding on to its biggest

loss in years. mike, you can see how short the market is. right for ais like short squeeze. mike: on the bullish side, we got a short case of knee-jerk reaction. ,ven the tensions of escalated i have not read, heard, or seen about a war starting. then we come to the bearish side where those are hoping for some betweencooperation saudi arabia, iran, iraq, and russia. if you are hoping for that, this kind of diminishes the chances of that in a big way.

seems to other issue be the 17 million barrels of oil transmitting throughout the day right between iran and the united arab emirates. saudi arabia is also right there. that seems to be the chokepoint for oil across the world. what would it take for iran to close that? mike: it would be a very serious step. they are only a few weeks away from sanctions. inhink they would have to be a shooting war with saudi arabia for that to happen. that would be a dramatic escalation. it would not last. it is relatively easy to shut down. but most of the studies i have geopolitical and military analysis, it is hard to keep it closed for more than a couple of weeks. scarlet: the price of oil is supplied driven -- what would it take to get oil to jump and get the short squeeze that we have all been waiting for? mike: very simple.

it is the same factor we have been looking at for the past year. we need to see serious declines starting to take place in u.s. crude production driven by shale. u.s. crude production has been coming down very slowly since april and may, but the emphasis is on very slowly. that is what it is going to take to rebalance the market. we think it will happen later this year, but people are very impatient. and impatient market, that is where $35 crude is. the: we just got data for first nine months of the year and we saw an increase in north dakota production because they have all these wells that are coming online now depending on the region. it is not falling as much as you would have thought a few months ago. mike: and also, some of the onshore declines driven by shaler being offset by increases in the gulf of mexico and that is going to happen again this year. the gulf of mexico was up three

of the last four months. alix: come inside the bloomberg terminal. they have been strengthening. it tends to show some tightening in the market. what is this showing us? mike: it is two things. it is a bit tighter, particularly if you look at the spreads. the u.s. is running hard. in the rest of the world, the demand is not quite as healthy. you have had downward pressure on the longer data part of the as the market continues to factor in the rest of the world. scarlet: lower for longer, everyone has been patient. by july?you see oil where do you see it by the end of the year? is hard to see a lot of

upside by july. again, the mention earlier, the market is waiting for iran. when did they start to come back? how quickly do they come back? scarlet: it is a when, not and if? mike: the signals are very strong now. there were hearings in washington and officials are talking about it coming back in a few weeks. it is hard to see a lot of upside by midyear to be honest. in the latter part of the year, maybe we will be $10 higher than where we were roughly in the first half. alix: good to see you. thank you so much. mike witner. one of the main guys that i read. scarlet: we will be back with much more. ♪

scarlet: welcome to bloomberg markets. ♪ ♪

bloomberg world had is in new york, welcome to bloomberg markets. will go to san francisco in the top economic minds are meeting. scarlet: trouble ahead for vw, a new roadblock for the carmaker and that bid for canadian oil sands. ♪ scarlet: we want to go over to the markets desk and julie hyman. has been restored across the financial market it julie: not as much action today as term -- in terms of movement but we are seeing declines but they are not as steep as yesterday. stocks are falling around the lows of the session. something we have been looking at after the selloff yesterday's

weather it's a predictor of future performance. other times when the first trading day of the year has been negative. and then the rest of january because while the first day of the year is not a predictor, january tends to be. the yellow lines of the first day of getting. with then see, even first days that saw a loss of 1% or more, january managed to be positive a vast majority of the time. folks jittery after yesterday, history shows that maybe they don't need to be. look at the imap. we've got a mixed picture as we see overall a decline in energy and consumer discretion and technology. health care and consumer staples are helping support with games there are only have to come back to apple did apple shares are falling after the nikkei index reported the company might cut production on iphones as much as

30% january and march on the heels of a lot of analyst commentary talking about potential demand the phone. we are seeing the shares fall upon that it alix: what is that doing with suppliers? julie: they have been week and we have seen this happen as well. on commentary has been looking at suppliers what kind of demand they are seeing. all of the suppliers are trading lower. is the supply chain for applet looks at the company's most reliant. what's remarkable is i sorted these the one-month price change these are at suppliers you to the left side. they're all red over the last month. if you scroll down, more and more red among the suppliers so apple has been done -- down over the last month. you can see something that has written. apple has been down and it was down last year and it has been

dragging down these suppliers with it. alix: that's great perspective, thank you. scarlet: we should check in on the bloomberg first word news. you, president obama says the status quo is no longer acceptable to comes to guns in states.ed in an emotional up yesterday at the white house, the president unveiled his plans to tighten control and enforcement of firearms. he said the unwillingness of congress to take meaningful steps to curb gun violence served as the catalyst for his executive actions. >> the constant excuses for in it, nono longer do longer suffice. that's why we are here today to not to debate the last mass shootings what to do something to try to prevent the next one. [applause] at the centerpiece of his plan is a more sweeping definition of gun dealers, one

the administration hopes will expand the number of sales subject to background checks. iran has expressed its regrets over the attack on the saudi arabia embassy in tehran. they told the united nations it wants to arrest those responsible. the iranian president says the saudi's cannot cover up crimes like cutting diplomatic relations with iran. the saudi embassy was attacked after the saudi's executed a well-known shiite cleric. federal authorities are keeping their distance from an armed antigovernment group that took over a wildlife refuge in oregon. the ultimate goal is to cover the property to local governments of people can use the land that federal oversight. the fbi says it is working to bring about a peaceful resolution. deliberate acts cause more airline debts and accidental classes last year. that's the finding of an aviation industry company. the eight accidental crashes lester killed 100 621 people which is the lowest total in

nearly 70 years. 374 people died in two crashes the firm called preventable. the german wings plane flown into a mountain by its copilot last march and the russian airliner that went down in egypt last october. global news 24 hours per day powered by her 2400 journalists and more than 150 news bureaus around the world. alix: thank you so much. scarlet: we've got a lot coming up. we will tell you why the road ahead will get even bumpier for volkswagen. alix: we will take you to the will take you to the annual gathering of economists in san francisco. the suncor ceo talks to bloomberg tv can about his $3 billion offer for canadian oil sands. ♪

alix: welcome back. scarlet: with the u.s. setting the stage for new phase of monetary policy and global markets spooked by chinese growth, there is concern about global growth overall top economic minds are gathering at the american economic association annual meeting and secret --in san francisco it brendan greeley is on site and is standing by with someone who has a birds eye view of the issues. catherine mann is with the organization for economic operation and development and spent 13 years of the federal reserve board as the senior economist. you have the world's

hardest job trying to figure out how to help countries create growth in an environment where there is not a whole lot. yesterday in eighth and tatian, which isoking at china the market story of the week when you look at equities. your concern was not about the equities but about trade flows, this underlying dynamic. what is it that worries you about global trade flows? >> they have collapsed and have been collapsing in china and in the emerging markets. when chuck a growth is slow, it's a problem for global growth it's an important impetus to grow particularly in emerging markets. when we see this deterioration in trade, we are about global growth in general. there have only been five times last 50 years of global trade growth has been slower than

global gdp growth if it's a harbinger of a bad 2016 or not, this is what we are worried about. brendan: there are so many other numbers when you back out the commodities. do i still say collapse? >> the commodities slump as part of it. those countries have less income so they are not buying as much through imports and not exporting as much. there is more than that. it is centered on china. whole story.e it's centered on the global value chain. we are seeing vulnerability for countries and firms that have been deeply engaged in the global trade cycle. now they seem to be in trouble. brendan: you brought up something yesterday in your china ision about how making it if they are going to make this transformation from being a manufacturing society or economy to a consumer driven economy, they need to do be doing up the things they are not doing.

do you see their actions getting them through this transition? >> it's a challenge for china that the transition from investment led growth and expert led growth to consumption, they have been wanting to do it for a while. every time they get to the bumps in the road, they tend to revert to a standard set of policies that focus on more investment and real estate rather than focusing on policies that would support consumption, for example policies associated with an improved social safety net, important health availability. these things would bolster consumption because it would mean consumers would not have to save themselves. they would be some governments up for them so that we would like to see in terms of the transition but that's not a centerpiece of the program they put into place so far. as if they sounds are stuck in the same way the federal reserve is that you can

expand credit if that's a tool available but there are better tools to create growth. there is a set of tools and the idea that the tools have to be deployed in a coherent fashion. with regard to the federal reserve and mariota draghi, that's not enough. structural tools. these have to do with the degree of market competition, something that china has to work on but it's important in europe, the degree of labor market flexibility isn't good for europe. also, how the banks work. are there nonperforming loans? the big problem in europe is not been a problem in the u.s. it's a big parliament china as well. another component of structural 's intellectual property. how much is that affecting the availability -- the ability of

firms to react. these structural reforms, each country has a different set of things they need to do but that's a lot to think about. brendan: how do you get them to do this? andare sitting on this data there is a study prescription of structural reform. how do you get people to do it? >> it's a challenging you have to go to policymakers. you have to think about monetary, fiscal and structural policy. put did whenbe to we go to policymakers come talk about all of those. what is have the most traction recently is to tell countries policymakers that if you do not to them anings environment for investment and improve the environment for employment in the economy and improve productivity growth, your economy will not be growing

fast enough to make good on the promise as you have made your citizens. you have promised the young people they want a better life. you have promised the pictures they will get paid. you have promised investors they will get a good rate of return. if you don't take these actions now, you're not going to make a those promises. man,an: that's cap in chief economist saying with so many people have said at this conference which is what you want to do, politicians. now it's your turn to alix: thank you so much. we have a lot more for you from the aea conference in 30 minutes. scarlet: brendan will interview robert schiller thr. ♪

alix: this is your global business with. thelet: the debate rages in you came what effect will the latest puzzle have on the referendum. and: the justice department u.s. is soupy volkswagen the details and how much it may cost the carmaker coming up. u.k. retailer turns indiscipline excels figures and what to this mean for the holiday sales as a whole? first, let's start where the brexit debate rages on. for greatampaigning britain either staying or leaving the european union. >> my intention is at the conclusion of the renegotiation, the government should reach a clear recommendation and then the referendum will be held. it is in the nature of the referendum that it is the, not the politicians, decide. as i indicated before christmas, there will be a clear government

position but it will be open to individual ministers to take a different decision while remaining of the government. scarlet: volkswagen places finds that could reach $80 billion in the justice department is suing them for using software in diesel powered cars to trick pollution testing equipment on top of the hundreds of private lawsuits in the u.s.. they say they're working with government investigators. in china, volatility has returned with these the government is stepping in to pop up share prices and jack liquidity into the mental system. enter the financial system. investors are to focus on the daily market gyrations. >> investors should care about the chinese economy and less about the chinese stock market. when they start putting shenanigans, it erodes confidence in her future growth is the most in question for investors this year. hard landing?e a if they do, it's a different world than if they gropw. discussions and france

have no defined outcome in an agreement would reduce the number of wireless carrier does carriers in france. i tell us have such a great christmas after all. missed analyst estimates by a wild -- by wide margin. it says another reason for the shortfall is increasing online competition for its e-commerce unit did . for our bloomberg to by context on issues of interest. today's topic is the tipping drones. over the past year, they have gone from being just a military tool into a commercial and consumer product. its estimated 700,000 drones were sold and the 15 and that creates a danger to pilots, privacy, and security. the faa said drone sightings by commercial pellets surged to 100

month from a handful the year before. the faa thefiscate task of integrating commercial drone flights into the nation's skies. here are some of the innovation initiatives. all but the smallest drones now need to be registered with the government. for commercial drones, there is a proposed traffic control system to avoid collisions with manned planes. the faa said it expects to require that small commercial drones stay within sight of a human operator and fly only an unpopulated areas. not everyone likes the oversight. groups like the aclu have privacy concerns. there are questions on the reliability of robotic devices and who can control them and their risk of midair collision. some other countries like france decided to take a more aggressive approach. itt's today's quick take

scarlet: this has been your global business report more stories are on bloomberg.com. is facing axt, vw new lawsuit and we will tell you about the tough road ahead for the german automaker. ♪

scarlet: welcome back. go up to our markets desk where julie hyman as a check on individual company movers. tulie: let's talk a bit f --ir sharply,is declining 13% and it's coming out with a new watch called the blaze. it's not the company's first smart watch. one that pays more

attention to design. fairly positive review to the device but there is a lot of competition. there is not a positive reaction to the introduction of this even though some of the analyst commentary was also fairly positive. also getting a poor reception -- is the ideaea that may raise its character limit. the twitter idea that they may raise its character limit. this has been met with much derision by twitter users. investors don't seem happy about it you the shares are selling off by 2.8%. netflix and dreamworks, we were talking to pulse the earlier about netflix. these two have come to a new

partnership and are expanding a multiyear deal that they already have an netflix is the global home excluding china of a number of regional series from dreamworks. it covers the streaming rights to dreamworks. by tworks is higher point 5% and netflix is lower perhaps on the idea there is trepidation about how much netflix will have to pay for content. i'm an amazon amp person and we are very fickle. favorite netflix show? julie: "house of cards." alix: the ongoing volkswagen scandal is not their only win in the u.s. they fell over 9% last month as competitors like fiat and forward deliver record sales did scarlet: now that the u.s. government is suing volkswagen, the road could get more grim.

we have an covering the story and we look at more. this is a civil lawsuit that was filed monday the what is inside of this? >> it outlines 4 counts of violations the company has of the clean air act. texass similar to eight litigation that the department of justice did what bp oil. civil lawsuits are not criminal but can be expensive. what we outlined in the story as $80 billione facing but it's not entirely realistic. the fines are expected to be very heavy in this case but that is just a technical number. we are not expecting anything close to that. scarlet: how did they get to that number? >> you add up at each violation and you come up with that number. volkswagen has a number of other outstanding issues as they resolve some of the issues where they can fix the admissions

problem in germany and other regulators. they have hundreds of civil lawsuits which are plaintiff lawsuit. those could be very expensive for the company to resolve. in addition, the department of justice has an ongoing criminal investigation. the company could face additional fines and penalties if they are charged with her plea guilty to criminal actions. alix: you mentioned bp. part of that case was how they had to pay out the financing and to home and it had a murky area. i'm as in with volkswagen is a bit different. >> you have consumers and you have the government you have to deal with. have hundreds of thousands of parties in the bp oil spill and there was visible damage.

this case is different because although it's basically been theigated -- said that company damaged the environment, we cannot see them so it's hard to see who exactly was harmed. scarlet: thank you so much. over sitll i had come down with nobel prize-winning ,conomist robert shiller cocreator of the case schiller index and we will be live from the aea conference in san francisco. ♪

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so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. alix: from bloomberg world headquarters in new york, welcome back to bloomberg markets. scarlet: let's start with the

headlines in mark: president obama says it is time for the american people to demand congressional action on guns. and for elected officials to stand up to the gun lobby. he unveiled a series of measures aimed at tightening control and enforcement firearms. he paused to remember the many victims of gun violence and wiped away tears as he remembered the 20 children killed at sandy hook elementary school in newtown, connecticut in 2012. toour unalienable right life, liberty, and the pursuit of happiness, those rights were stripped from college kids in blacksburg in santa barbara and from first-graders in newtown. every time i think about those kids, it gets me mad. president's critics

are weighing in and mitch mcconnell says the president is more focused on undercutting second amendment rights than fighting terrorism. texas senator and republican presidential candidate ted cruz is promising a repeal of his executive actions. defense officials say a number of u.s. special operations troops have been killed or wounded in fighting in southern afghanistan. the fighting against the taliban was in an area ofhelmund province of the taliban made recent gains could surmise colin parris to remember the 17 people charliehebdong the attacks when you're ago. the french president unveiled ask around the city to honor the victims. it is also releasing a special anniversary issue with obscene and controversial cartoons. the surviving step never said they are expressing their feed him -- their freedom to lampoon everyone.

for hours per you day, powered by her 24 hundred journalists in more than 150 news bureaus around the world. thank you so much. many of the nation's top economists are in san francisco for the american economic association i will meeting and a key topic is growth and behavioral economics. scarlet: brendan greeley is live at the event with that the 16th president, robert schiller. with the 2016 president, robert schiller. thank you. dr. schiller, one of the themes of this year's conference -- there are hundreds of sessions but it seems to be a question about growth and how with updated and are the old models working? he just sat in on a session with robert griffin of northwestern was trying to figure out how to our growth that are the model broken and delete think different about growth? >> times have changed.

p we have been through a high growtheriod. robert gordon said the special century was 1870-1970. it has been slowing down since then. we have to reconsider what is happening. brendan: one of the things he has said for years is that technological progress is not all it's cracked up to be and the great innovations for indoor plumbing and not computer networking. with the benefit of three years since he started talking about that, is that the way to look at it? is technology failing us? called the this book rise and fall of american growth and it's a wonderful book. don't know if i climb onto his conclusions. he says all the important things have already happened like life

expectancy is on its way up, housing is better, food and everything has gotten -- he seems to say a satiationpoint. what else can we get? i'm not sure that's right. see howeresting to growth has happened to a number of specific inventions. we don't know what the next ones will be. brendan: i went to a panel two days ago with joseph stiglitz talkingin feldstein about exactly this witches how we did the growth. which is how we create the growth. they talked about carbon tax and structural reforms i don't economists disagree as much as politicians would have is believe. -- would have us believe. itn you win a nobel prize,

becomes your job to tell politicians what to do. how do you convince politicians that that things that need to be done get done? it's not convincing the politicians, it's convincing the voters. how does society move forward through misinformation. candidatesitical talking about trivial things like hillary clinton's e-mails and they should be talking about what you say. i think democracy works far better than it would seem. theseonderful we have debates at the aea meetings and i hope people would pay more attention. ultimately, our leaders to pay some attention. this is a very successful

country and i think it will probably continue. brendan: the other thing that seems to have happened this year's there were two major addresses and you introduced both of them. john campbell of harvard coming around to behavioral economics and realizing that people are irrational. the other one was the presidential address. it was said that it is over. we know these things to be true yearwas this the behavioral economics became the mainstream way of looking at the world? it's a little bit like the obama presidency. the first minority president. i think there is still a tendency among professions to rely on models that represent being rational. the theory as such elegance. a rational traditional,

economic. when you bring in behavioral and psychological evidence, it models the pay. psychology is not elegant economic theory is beautiful if you can push all the other thoughts out of your mind. unfortunately, does not work. we have had the financial crisis and the slow down we have to think more about humans underlying the economy brendan: you are also famous for showing that finances elegant you are known for your course at yell that says we have used elegant. ". how does behavioral economics changed your understanding of finance? >> you bring up my online course. cover is not behavioral finance. it's their traditional stuff. theory thatonderful has to be modified.

the idea that markets are efficient is a half-truth. i teach market efficiency and i say but don't carry that too far. the conclusion that some people reach is you can just forget arts at a newspaper and pick your investments randomly. it's something like that. it's not true. i think you have to attention and you have to reflect that the market is not always right. it's not always rational. what you won is your nobel prize, talking away about -- about the way markets are not totally efficient has the asset management vehicle looking at behavioral output. can you create behavioral alpha? >> i think so but that's the

outperformance relative to market. it might not be as big an advantage as you imagine. it is still a somewhat competitive market. even if you take into account, it will not make you rich overnight. he might actually put from badly for a while. that's the frustrating thing about investing. you may have the right there is but the market may turn against you for years. people think of going into asset management. let them reflect on that. brendan: he almost threw down the gauntlet to you. he looked at the case shiller housing index and saw how dramatically it had outstripped a basic multiple of rent. is it possible to look at measures like that and say we know the hindsight was wrong? can we use that in a predictive way? >> karl case and i developed a

home is index. when we did that, there is no high-quality home price index available that was 30 years ago. . getou look at the data, you some suggestions that things are odd as of 2005. one thing the american economic association represents is looking at the data and collecting data and not racing it on some abstract principles. in fact, we live in a complicated economy which sometimes goes wrong for reasons we can understand. schiller of yell and nobel laureate, urging humility when looking at markets. back to you. alix: thank you so much, great interview. scarlet: coming up next two

minutes, canadian oil sands says thanks but no settings to suncor energy a billion-dollar bid and we will to you why they will not spin the deal alix: why aren't lower prices at the helping to car sales? scarlet: where has all the productivity gone we will ask the google chief economist. ♪

scarlet: welcome back. alix: let's go over to the markets desk and the julie hyman. you're looking at gun stocks? julie: it's worth talking about in the wake of the president obama announcement about tightening of regulations on gun sales.

as we have seen in the past, when these regulations tighten, we see an increase in gun sales and an increase in gun makers stock. smith & wesson shares are now higher. they are up to 5% and the stocks tend to rally in advance of announcements like this. smith & wesson is raising its forecast after the close of trading yesterday saying it has always seen increasing gun sales. rueger is the other publicly to goodwin of both of these stocks have done well over the past year with a lot of talk about potential gun regulation. there have been more mass shootings in the u.s., get a discussion of increased gun regulation in the wake of that smith & wesson is up nearly 180% uger is up as well.

this is an index of gun sales in the united states. i said earlier that it had gone is the2 billion which amount of gun sales in the united states. it has been nearly a straight line upward. this has benefited those who sell guns at least for today. not true the stocks of going up by the same magnitude. walmart is one of the larger sellers of guns by number of up 2% buts shares are this is not been a consistent benefit. walmart has been a laggard but it is helping the stock in today's session it seems to alix: thank you so much. onrlet: take it or leave it the one billion-dollar offer for canadian oilsands.

williams is making your final pitch of an offer set to expire friday. alix: joining us now is pamela ritchey. used suncor earlier today. >> when he came in to the studio and sat down, he said it's time. this has been going on for some time. of $1 billion per canadian oilsands has been on the table since the beginning of october. they have been discussions and back in march of last year. that has been going on 10 months. this friday he said it meets to come to an and that he is looking for city 7% of shareholders of canadian oil sands tendering their shares to suncor. that is the magic number they need. he says that if this does not withand if he is left walking away, suncor has an awful lot of other opportunities. said our plannd for the whole process has been to get the canadian oilsands

shareholders and we think they have the data and the contrast is stark. the stock willy, come off probably 40% to about five dollars did >> would you make a lower offer? >> we have no plans to come back in. say never. it's possible but our plans are we have other things we're interested in. 10 months is a lot of time to spend on this potential deal. most of the shareholders of canadian oilsands are retail. about 70% give-and-take. suncor has been speaking to many of the institutional investors which is roughly 30%. positional --the from the institutional investors, they will do the deal

but the other shareholders are retail scott spoke with one of the larger retail shareholders yesterday he said he would like to hold on to the shares and he thinks if he doesn't do that, maybe warrants could be offered to speed in the deal. the suncor ceo says that's not likely to happen so friday is make or break it scarlet: great conversation, thank you. alix: coming up, auto sales had a great year last year. it's the longest stretch of rising sales since world war ii. can it continue? ♪

alix: welcome back. with gasoline prices around two dollars per gallon, auto sales should have gotten a boost. all the major u.s. automakers

missed their december sales estimates. -- markrk or a field wakefield and matt miller join us. matt: the estimates were fairly high with looking for growth of 19%. we still got strong numbers. is thatwhat happened wall street expected these carmakers to discount much more than they did to offer more bonuses and incentives to buyers than they did in the automakers would prefer to take a pirate -- a higher profit margin. scarlet: is that the case? increase their discounts from november but they increased them from the year before but not as much as people

expected. the other thing is with more incentives into november. it extended the holiday sales time and to mid-november more so than we did the yearbook, perhaps pulling some sales ahead. still hadou think we a record year, 17.5 million in sales making it the best year for car sales ever? absolutely, that beats the 2000 mark of 1735 it's the best year ever and we see it getting better next year. having a plateau in fall off, this is the peak year of the scarlet: are we in the fifth inning or the eighth inning to ? >> i think we are in the eighth inning. matt: i notice carmakers are extending loans for seven years

and the number of subprime isrowers for used cars getting into 30%. leasing is a massive person of new car sales. it seems that any hiccup in the economy could throw us for a loop. >> unfortunately, any hack up in the economy throws the automobile industry into a loop because it is such a big purchase. people can delay it but we don't see too many problems for 2016. some things could come out of the work that we thought low interest rates and people getting jobs. when you get a new job, you typically buy a new car. we see those as positives. the big problem that starts to come in later in 2016 is used cars. the supply of used cars starts getting to normal levels. people might shift from new into used in the automakers would have to compete with incentives to both people back in.

carmakers are best positioned to deal with 2016? generally, there's been a shift could trucks and suvs. makers that have a good portfolio those will get the benefit now of people seeing the and believeower they will stay lower for longer and choosing to buy a bigger car. people with those folios will benefit the most. cars are sohe big much more fuel-efficient now . the new york fed did a study showing increased interest rates hit dealer shapes on both ends. interest ratesy to hold more on the lots and the customers or would-be consumers have to pay higher interest

rates on loans. is that detrimental if we see four or five hikes next year from the fed? it could be detrimental but it won't be at the beginning. a 1% rate increase would equate to about $1000 of purchasing power coming out of a car. oem's would make that up first but that comes out of people's pockets. it eventually works its way into lower sales. $1000 up tos worth 3% increase would be about $2500. those are generally where it starts to get impactful.

at $2500, that is almost the same amount that's in incentives from automakers. now you're talking about real money that people are not necessarily going to make up with incentives. scarlet: thank you so much. it's my pleasure. i was stay late for the two of you anytime. alix: coming up next, how do you measure productivity in silicon valley? we will ask the chief economist at google did ♪

david: it is 2:00 p.m. in new york, 7:00 p.m. in london and 3:00 a.m. in hong kong. welcome to bloomberg markets.

from bloomberg world headquarters in new york, good afternoon. so much for a happy new year. stocks struggling for the second straight day. if last year was bad for retailers, this year could be even worse. why many merchants will default on their debt. and -- president obama: that is why we are here today. not to debate the last mass shooting, but to talk about how to prevent the next one. david: how effective could expanded background checks be? julie hyman has a check on the markets. julie: stocks trading at a tight range after the drop we saw yesterday. the major averages have been going between positive and negative throughout the day. just turning positive for the s&p again.