America Freezes, Shuts Down: Surveillance (01/07)

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Jan. 07 (Bloomberg) -- Full episode of "Bloomberg Surveillance." Guests: Henley Smith, Allen Adamson, Mark Newman, Ian Bremmer, Thomas Giles, and Ken Dryden. (Source: Bloomberg)

This is "bloomberg surveillance." chicago sees a cold of 1884. the temperature plunge in new york city has not been seen since 1921. chairman janet yellen considers a better american economy.

She also considers the unemployed.

The tech world gathers and 43 degrees las vegas.

Is this blackberry's final show?

Good morning, this is "bloomberg surveillance." we are live from our world headquarters this tuesday, january 7, i'm tom keene.

Betty liu has come back for more agony.

Cristina alesci with this.

Where is scarlet?

She is stuck.

Scarlet if you're watching this morning, we hate you.

Overnight, everybody has their eyes on samsung because it posted its first profit decline since 2011. we will talk a lot more about that.

On the economic front, in the u.s., trade balance today at 8:30 a.m.. tom is completely kicked out in every wearable technology device there is out there.

We're talking about the consumer electronics show in las vegas.

Then we are also keeping ni on ex-sac capital manager.

Jury selection?

It starts today.

Prosecutors started out thinking they were going to flip this guy, and here we are in the first day of trial.

Quite markets.

Delayed labor report this month.

We will have the jobs report on friday.

Futures up 7. they rebound nicely.

Tenure is cut in the last number of days to 2.96. euro just nothing.

Nymex, 93.84. this is the unemployment rate.

You've got to get back to 5%. what a great trend.

A lot of jobs formed here, but that is the chart for the week.

That will be the chart that chairman yellen is decidedly focused on.

Were you warm last night?

It was cold.

It is the real deal.

All you need is the right equipment to get through it.

Basically, you don't need to go outside.

We scour the front pages this morning.

Let's continue this cold theme.

In the midwest and the northeast, likely to be another day of record-breaking temperatures.

Chicago at -16 yesterday.

The frozen city.

This may be the coldest day across the united states in a must 20 years.

More than 4000 flights were canceled on monday, several thousand more have already been scrubbed.

Jetblue canceled all of their flight yesterday.

International falls as a kid was the place to look to.

26 below zero.

They're all of these videos out on youtube of people who have taken boiling water and the minute they put it outside, it turns to snow.

It is incredible.

They are used to it.

If you grow up in a cold place.

But this is a serious situation.

That is an exclusive.

Tom calling the weather.

Seriously, pay attention to the pros.

What else do we have?

The senate has confirmed janet yellen to be the first female chairman and a history of the federal reserve.

She will take over when ben bernanke's term expires at the end of the month.

She has been the fed vice chairman since 20 10. her confirmation at a record low number of votes versus what ben bernanke got.

Still, a big deal.

Shows the political divide among congress.

Officials at jpmorgan will not be penalized as part of the $2 billion settlement in the bernie made off ponzi scheme.

This is according to "the wall street journal." the justice department is expected to announce the deal this week.

Jpmorgan likely to announce a did not have the proper system in place to detect the fraud.

No duh.

Everybody got a couple of days ago they would get fine.

Let's talk to our two guests hosts to join us talking about ces and brands, author of "the edge." hindley smith with us as well.

Chief investment officer, helping high net worth people, particularly with their bonds.

We're going to go bonds, bonds, bonds and alan, brand, brand, brand.


I watch it with no sound.

It is a must better with no sound than sound.


You can watch it with the sound off because he is all about the visuals.

Just a huge production.

The girls are evil in it.

Are they?

Is that a general statement?

I get it, you win it all the time on "surveillance." michael day can't wing it.

This is how he started off ces in las vegas try to pump up this new samsung ultra hdtv.

I try to take people on an emotional ride.

The curve question mark how do you think it will impact our experience or movies?

Excuse me, i'm sorry.

I'm sorry.

Excuse me, i'll be back.

That was ugly.

Look, he should stick to his day job.

He said he was really embarrassed.

They kept going up and down.

Allen adamson here.

You don't want to do that.

And simmers are more sophisticated.

They can smell someone who is not authentically behind a brand.

Blackberry did alicia keys.

That did not help.

Today is more about the product unless about the fluff.

Ces since 1967, i am sort of ces 'd out.

The consumer is dramatically more informed.

They can smell of authenticity from a mile away.

If someone gets up and read some lines -- it is hilarious because the samsung back was the host after he left, he was like, let's give it up for michael bay.

The audience was like, ok.

I think it is time to gaddafi teleprompter.

In this instant world of information, i think people can since passion and people want passion.

I talked about the twitter vigilantes in 2013, but there has always been bond vigilantes.

This whole process we went through from qe1 till now, now everyone knows exactly what it is because of a youtube video.

A much more informed public.

When you can say something like qe3 and they know what you're talking about.

I have an idea.

At least they have an idea of what you're talking about.

Hindley smith and i are the only two people that watched the youtube video.

I had to learn somehow.

Grouping he would say qe4. jetblue plans to resume flights in new york and boston at ports at 10:00 this morning.

The airline shutdown the service late yesterday to try to cope with delays sparked by the weather rather than try to wrangle with it.

Airlines have already canceled more than 1400 flights today due to the cold and snow according to research firm flightaware.

Workers at gm, ford, and chrysler likely to seek record profit-sharing checks.

Ford workers could see a $600 boost.

The increase in profit-sharing comes as all three automakers are forecasting higher north american earnings.

We are back with auto sales.

It is back to the keyboard for all you fast finger folks.

Like very ceo telling bloombergtv the company is going to go back to offering keyboards rather than the touch screen on most of its funds.

Like very refocusing on the corporate and government customers that fueled its early success.

You have to wonder why they ever got rid of them in the first place.

People loved those keyboards.

That was the key to their branding.

People over 40 cannot type long e-mails on an iphone.

It took me three days to get used to the iphone.

I wouldn't go back.

Coming up, samsung electronics -- well, it was not a great quarter, to say the least.

We will dive into that with samsung and the competition for the profit monster that is apple.

We have a twitter question today as well.

It is the coldest day in decades.

Mittens or gloves and why?

This is a piercing question.

Stay warm.

? good morning.

Stay warm.

Senator ron johnson, republican from 42 degrees below zero, that would be once -- wisconsin, live at 8:00 a.m. this morning.

"in the loop" with betty johnson this morning.

Remember, he is suing the government over obamacare, says it is illegal.

This is "bloomberg surveillance." scarlet fu is off somewhere time to get back to new york.

As soon unless you joining us.

-- cristina alesci joining us.

Samsung, first profited -- first profit declined since 2011. it was no doubt a bloodbath for samsung.

Operating profit was $7.8 billion, down from april four dollars billion.

Slowing sales of its smartphone to both apple and the lower cost manufacturers.

Like i said before, we had seen a dramatic drop in the share price over the last two weeks, about a 10% fall.

Here to discuss samsung profit decline senior research analyst mark newman.

You said this is the only company that has been able to make honey off of the low-end part of the market.

How long can that last?

I don't see any reason why that should last because if you look at the editors on the low end, it is all the chinese any fractures -- manufacturers.

The scale is genetically smaller.

Samsung market share is about 33%. these guys are around 4% each, so about 10 times in terms of unit.

Their cost structure is significantly lower.

It is all getting brand premium on the low end.

They have a defense -- decent margin.

One of the great distinctions i see is the operating income line, samsung does about $.14 on the dollar.

Apple does about $.28 on the dollar.

Please, explain to me why i to own samsung versus owning apple.

The main reason is that you wish and.

Samsung trading about six times earnings.

Take out the cash, about four times earnings.

It is extremely cheap if you compare to apple or pretty much any other tech stock.

Another thing i want to add, or the introductory comments, what is very misleading is quarter on quarter, if you talk about samsung profit falling and may be losing shares to apple in q4 versus q3 may be correct, but let's look at the product cycle.

Samsung's biggest product cycle was in q2 and q3. you need to look at the year.

On the year, 2013, profit was up significantly more than 30% and gain share on apple 2013 versus 2012. let's stick to that product cycle question.

I'm looking at operating profits and consumer electronics will stop we assume the company's chairman call for -- we have seen the company's chairman call for innovation.

Where is the bright spot for samsung, and the software they're developing and rolling out?

You know, i think the main bright spot right now we see is memory semiconductors.

I cover that globally.

Memory-chip prices are very, very strong, especially -- nanflash is also big market.

Samsung is the global leader.

If you look at the micron stock, the plaster.

-- up last year.

I think memory is driving the majority of samsung's operating profit growth next year.

That is an exciting area.

You are in asia.

What about the big dog in the market, which is china and the battle there between samsung and apple?

In china, on the smartphone side, samsung is way ahead there.

They have over 20% market share in china.

Apple is significantly behind there.

And the main reason is because the diversification of products they have, they always lee still not just high-end like apple, but also mid, low end, low price point phones so they can serve a much redder portion of the population.

-- a much greater portion of the population.

The main competitors in china are the local chinese such as lenovo, etc.

Thank you, mark, we appreciate you talking to us on samsung.

That's bring in our guest host for the hour, allen adamson.

You are an expert on branding.

What does samson need to do in terms of its brand.

It doesn't have the innovative mantra that apple has.

It is struggling.

The wall street journal is to one of their commercials as one of the worst of the year from a marketing point of view.

Also from a product point of view.

There so many products trying to do the everything to everybody.

Very hard position to the end.

To your point, didn't have that big event in your so ago where they were announcing the galaxy phone and they try to be apple-like.

They just don't have the personality behind these products to fuel this.

. if you're such a bread playing on skill, it is hard to stand out.

They have less finesse than apple does.

Henley smith is also with us.

We will talk about chairman yellen.

She is not chairman yet.

Not yet.

Quick there is the swearing-in and anointing and all that.

Coming up with the next hour, we will speak -- this is a lot of fun.

We will speak to somebody and hockey every one knows, ken dryden.

We will look at the olympics and also ken dryden on the united states, the exiting of fights and hockey.

Good morning, it is "bloomberg surveillance." ? good frigid morning, "bloomberg surveillance." we hope you are warm.

Scarlet fu literally cannot get back to us.

Have you talk to her?


she is somewhere that is 85 degrees.

My heart goes out to her.

I don't know, it is a secret where she goes.

Many of my friends are stranded at airports.

One is in l.a. getting a nice tanned.

If you're in a nice, warm place, not a problem.

If you're at the airport, it is a big issue.

We have got interesting talk at lines.

Temperatures in the east and south are plunging as the mass of cold air sweeps across the u.s. in new york, the highs forecast to be in a day after the temperature in central park it 50 degrees fahrenheit.

Even atlanta is bracing for the cold.

Temperatures there forecast of to be below 10 degrees.

The u.s. department forecast rise just 3% this year according to the research firm.

The modest gain will come as a number of new construction products continues to rise.

More than 41,000 apartment units were completed in the fourth quarter, the highest level since late 2003. in sports, florida state scored in the final minute to beat auburn before-31 in the college football title game.

-- 34-31 in college football title game.

Those are your top headlines this morning.

Las vegas 44 degrees, will drop to the 30s before they get started on ces.

We have a morning must read.

One thing i don't understand is all of the hype around wearables.

It seems like a dorky extension of your iphone.

We have chris affirmance on the prospect of apple actually breaking through on wearables saying companies are much more interested -- actually, let's take it from apple.

Apple has been consistently good at solving design conundrums that defeated its rivals.

Should the company manage another hit, it will mean the true don of wearable computing.

In other words, if anyone can do it, apple can.

But i'm still quite skeptical on this idea that we're going to be using -- a scarf that changes with the mood.

I'm like, ok.


I still don't get the data.

I'm trying to get my hands around that.

Is wearable the real deal?

I guess i'm a dork because i havean up band this point.

No, it shows the bands are very popular but the watches have not caught on.

It is simple and single functionality versus china do everything on your wrist.

I hope it is not dorky because i just bought my daughter one for christmas.

How does the product fail?

If it doesn't do one thing great.

If it tries to do everything and is mediocre -- described the surface.

The surface or perhaps the samsung watch does a lot of things but it doesn't tell time better, doesn't work like a phone better.

It does many things, but it doesn't -- we will be back with alan adamson and henley smith.

Henley smith on the chairman in a bit.

If you are in business, what you want most of janet yellen?

You can catch the interviews on bloomberg and apple tv and this is "bloomberg surveillance." our twitter question of the day, mittens or gloves?

? good morning, "bloomberg surveillance." betty liu and cristina alesci.

Let's do a data check.

Equities, bonds, currencies, stocks.

It looks better.

Oil, insurance year, hope you got oil or gas to the house this moment.

Keep those pipes warm as well.

Just give up on the pipes.

The losers today are people with pikes outside the house.

That is an ugly thing.

There is some big movers today.

Pandora, up 14 points.

Begin selling ads but only those that automobiles will here.

State farm sign on as one of the first advertisers.

All of these companies have to figure out how they're going to make money.

Big loser, twitter.

Morgan stanley was flashing a burning yesterday on a lot of companies, a lot of stocks, twitter one of them, fell as much as a 10% after morgan stanley cutting its rating on the stock sank the girl blogging service to site might win online ad revenue to larger rivals like facebook will stop they cut it to underweight.

It was only a matter of time.

Now people step back and say, how are they -- one of the major underwriters on the stock.

Very good point.

Let's switch gears and talk about the senate.

56-26 to confirm janet yellen as the federal reserve chairman.

It was a vote for continuity.

Yellen has pledged to continue stimulant until achieving a strong economy.

Tom, i know you have a morning must read.

Ask it is part of a strong economy.

That would be investment.

Not only to the crisis, but before the crisis, economists were focused on a lack of business investment.

Henley smith is with us from commonwealth asset.

It looks at -- outline our need for investment.

Jobs come from investment.


Jobs, jobs, jobs.

A role continued to be jobs and i think that will be the theme in 2014, how can we 38 quality jobs?

Jason furman said the same thing.

Here's my morning must read.

Today it is something really smart.

This is where henley smith lives.

This is mervyn king 101. we are at a fictional level for retirees.

Great study on that this week.

How do we get comfortably back to a normal rate?

We have had a data-dependent said and that will continue to be the theme.

We will look at numbers as they come out.

The fecd -- fed will react.

That is the real risk here is the new fed chair will have to step away from this policy and will be a challenge.

I want to know what it means for our viewers who don't have phd's in economics, they own bonds and cds.

If their price adjusts, yields up price down, again, retirees get crushed on the way to normality.


When people look at their statements at the end of the year, they will be surprised, here is my bond portfolio, safe, liquid, and it is supposed to be giving me a return that i can live on a little bit, but the price fight russians will be different.

I think that will be a real shock.

Are people going to be going to cash?

We have been talking about that.

Going to cash.

A lot of this cache has been going into the stock market.

I think we will start to see a more net is in the short duration bonds as people protect danceable and look for the market to adjust back to normalcy.

Is there going -- is there really going to be this sort of huge adjustment for even those retirees given that yellen is expected to pretty much stay the course throughout the year, right?

The consensuses she will be ben bernanke 2.0. we've never been in this position before.

From zero interest rates up to 3% to four nine percent, is a huge move.

My experience was -- 4%, it is a huge move.

M spirits was from 3% to 69% in 18 months, there was a lot of blood on the street in that one.

Here we are with no cushion.

At that time the economy was not where it is that right now, which is that we are still struggling, still at 2%. coming out of a recession in the early 1990 plus and we hope for the same thing, but we have no cushion.

As a bond guy, would you express dividend stocks as a yield equivalent?

People are buying dividend and dividend growth like there -- bill gross used to clip coupons in the mail room at timko when he could barely shave.

-- at pimco when he could barely shave.

Seriously, they are not a yield, are they?

A riskier asset, relatively, but i think the pension over the last couple of years is the bond substitute dividend paying stocks has been a good place to be.

I think the valuations are probably a little bit too high.

I think there is -- where are you right now?

We are rotating in a shorter duration.

We're going to let the year pan out.

Again, it has been a rotation and a shorter duration.

Exclusive, henley smith, to the beach.

In all seriousness, we had the central bank policy pretty much aligned across various nations for quite some time.

This year may be the year that there are some divergence, that the ecb maybe continues its policy of easing while the u.s. continues tape or in.

What do you think the investment play is there?

Again, i think the emerging markets have had some difficulty.

If the fed continues to step back, that market will have trouble.

These markets will continue to put capital in there.

I think europe is on the mend.

You're seeing people started to move back to those markets.

After they moved 30%. europe had a great year.

What do you perceive consensus is on the street in this january 2014? steady as she goes.

I think early in the year.

We had a great year in stock/are.

There's no reason it can't be followed up by a good year.

I think the real key in the bond market is not some much the level of rates, but the magnitude and the velocity of change.

You don't agree with kit that they have to get the level up?

I do think they have to get the level at -- level up, but if it moves too quickly -- how do you respond to the suggestion they should do a rates increase immediately just to begin to close the gap?

I agree with that as well.

You're going through this tape or an tapering is not a tightening, but it really is.

Can we get rid of the word taper in 2014? your job is to come up with a new word.

We need a new word.

Get the brand gurus together.

I have been trying to use negative easing, but nobody is buying that.

Short-term duration.

What does your retiree do with $100,000 right now?

There are some good relatively yields in thanks.

Cds as well.

It sounds boring, but it will give you the protection to be up to make a bigger move once we get through this.

It sounds really boring.

What about alternative assets?

Absolutely -- high net worth individuals.

You are starting to see much more alternative space.

Liquid alternatives -- for those retirees that have $100,000. they're being pitched products in the alternative space.

To be careful, yes.

You want to be an accredited investor when you get to those spaces.

The accredited investor, family office space, high net worth and the visuals are starting to move into more direct investment deals.

Property and things like that?

What is in accredited investor?

I think one million net worth or up.

89% of our audience is accredited investor.

Thank you for getting us started . our twitter question of the day, betty liu and christina had a fistfight earlier this morning.

Mittens or gloves?

You go with a combo thing?

I do.

I like the ones without the fingers at the top.

Yes, for your smart phone.

We will be back.

Stay warm.

"bloomberg surveillance." ? good morning, "bloomberg surveillance." i am tom keene with betty liu and cristina alesci.

We have been talking a lot about the cold, so let's talk about something else.

Spending on health care in the u.s. remains at the lowest rate since 1960. spending grew 3.79%. spending on doctors, drugs, hospitals, nursing homes and found spending remained weak to the economy in a tight jobs market.

Forecast to rise just 3% according to the research firm.

The modest gain will come as the number of new construction projects and genies to rise.

More than 41,000 apartment units were completed the fourth quarter, the highest level since late 2003. the end of the line for the dc- 9. the last of the jetliners has been retired by delta.

The jet was the oldest hasn't your plane in the fleet of the big u.s. airline that debuted in 1965, when tom was just a little teenager.

I never got used to the engine being on the wing.

Those are your top headlines.

They were in the back.

It gives them different stability.

You can see the engines on the back of that delta pulling away.

Notice no engines on the wings.

It makes it less stable?

Pilots told me it is more stable because the wings are closer to the center of the body.

One of the great moments of my life was i was 17 and kitty would give a lecture in aerospace engineer.

He was the one that figured out wings could go back.

Were were you?


Aerospace engineering.

Like the wright brothers, that far back.

The wings go back like that.

Anyways, the dc-9. who knew tom knew this much about aeronautical engineering.

Single best chart right now.

Adjusting chart.

We have been talking about twitter and facebook and how twitter is this stupendous growth in users and how they're trying to make money.

Well, we have broken it down where we have taken a look at their revenue per user, monthly active user.

You can see twitter, which is the yellow line, it is seeing growth, but in terms of numbers, facebook is still far outpacing twitter in terms of how much they make per user.

They are killing it.

Twitter, yes, it is this startling growth company, but it is still tiny when you look at facebook.


Yes, and it is about headlines and facebook is about a bigger story.

For advertisers and marketers, it is better opportunity if you can get involved, more engagement.

This goes down to the question of whether you can advertise effectively on twitter devin the ephemeral nature of a tweet.

It is a soundbite, headline.

Not a lot of room for advertising.

Facebook, a whole page, browsing, much more like a newspaper.

Frankly, people have not figured it out in terms of twitter?

Isn't twitter about telling the story through engagement?

It is telling quick stories, passing information and sharing.

It does a lot of great things.

But for an advertiser, it is 20 -- it is tricky to break it at a venue.

It is about what i want to talk about.

86%, how much your investment in blackberry would have lost if you invested in the company five years ago.

Can the company salvage its brand?

Where is it going?

That conversation is next.

This is "bloomberg surveillance." ? good morning, "bloomberg surveillance." busy tuesday.

We go to the jobs report.

Bloomberg radio, bloomberg television, worldwide, look for that on friday.

It is tuesday.

Company news this morning.

Macro socket says sales of its xbox one topped 3 million units last year.

It was introduced in the november, a week later than sony's new playstation.

The xbox one is $100 more than the new playstation.

China has lifted its ban on the sale of those foreign game consoles.

The to bury suspension hate the way for microsoft, sony, nintendo to enter the country's $14 billion aiming market.

No word on how long the ban will be lifted for.

Netflix and sony are teaming up.

Netflix will begin offering "house of cards" and other programming and high-definition format.

It is known as 4-d with 4000 pixels promising resolution four times that of existing tv.

That is today's company news.

One of the ways they're going to try to beat out the ipad.

I've never seen a stock chart like netflix, the recovery after total crater like netflix is fascinating.

Library -- blackberry tumbled more than 80% since their peak in 2008. its new integer hopes to survive by focusing on businesses, not the fickle consumers.

Our senior west coast respondent spoke with the ceo on blackberry shift to enterprise and was saying, look -- a spirited discussion.

He said they're going to bring back the physical keyboard.

Allen, we were talking about this earlier.

This is when a brand has lost its way and trying to go back to its roots.

Is it too late?

Not if they execute and stay focused.

The right strategy for most brands in trouble is to go back to their roots.

Find out what the authenticity is, where it came from.

Blackberry came from traders and goldman who are wearing it on their belt and used it for business.

Do they have to do it differently now that they want to focus on enterprise and is the consumer really part of the game plan?

How does that affect your advertising at the end of the day?

You don't need as much enterprise -- advertising if you're going enterprise.

It has to be functionally better and they have to win that war.

They have lost that war.

It is not the perfect time because you have microsoft going after the consumer, apple with the consumer, samsung.

Who is going after the enterprise?

You need to zig when everyone else is zagging.

Another brand seeming to struggle is microsoft.

What can you tell us about its brand and its position compared to other tech companies out there?

They are changing.

They are getting back to what is the end benefit.

How do you bundle things?

They're bringing software and hardware together, which is what consumers want.

I think if they take a little bit of the magic they managed to crack in the xbox and bring it to the rest of their business, they will be successful.

The xbox seems to be the only december-basing thing that has been successful.

They got the basics right.

The right games, the right delivery.

If you talk to gamers, xbox is winning.

Rim turned to blackberry now blackberry, who knows what is next for them, but are they going to have to do something radical with the actual brand because it has become so -- tarnished, damaged.

It will be tough.

A lot of tech is fashion.

What does it say about me if i'm using an iphone versus generic?

If you pull out a blackberry, you're not considered cool.

Are you like they're your apple user?


I think blackberry has an image of stodgy and is at this particular point -- stodginess at this particular point.

Using a blackberry is like using aol for e-mail.

What advice would you give them?

Stay focused, execute well, less is more.

If you try to be every thing everybody, they will fail.

It will be a challenge because scale matters in this business and they have lost scale.

Ultimately, hooking up with the right partner makes a big difference.

Chapter five in your book is brilliant.

You talk about the marathon.

But it is not a marathon anymore.

The marathon is to be 26 miles.

Now it is 500 yards.

Does google have a marathon?

I think they do.

They are the only ones.

They take a very long view and when they do products, -- how much has microsoft destroyed their brand?

I think they have challenged it because they lost focus.

Also, their cheese moved.

There what?

Their cheese moved.

It moved away from the mouse.

They were playing their game, doing their thing, and the market changed.

Branding and in business today, if you don't stay current, don't innovate, if you just do what you did last year, you will fail.

Isn't that fascinating that happens to some companies?

What is it about a corporate culture where at some point ceos are in their bubble and they're either in denial or something else is going on?

The bigger the company, the harder it is to change.

If it ain't broke, don't fix it.

If it worked last year, your data that says if we do the same thing and spend this much money, it will work next year.

Allen adamson and henley smith, thank you.

I want to know what the "surveillance" cheese looks like.

Which cheese should it be?

Have you read the book before?


let's do a cheesy report.

It should be emerging markets, but it's not.

Commodity angle.

Dollar-and does nothing.

Very quiet currency markets waiting for economic guidance.

Dollar-canada stays weaker.

Australian dollar, commodity- based come just can't get the .90. weaker australian dollar today.

You just see the sum of all this which is the dollar has gone nowhere.

Gyrations here in gyrations there, but dollar looking at traditional trading partners of the dxy stays under 81. one of our most popular guests is ian bremmer.

We will talk to him here about the geopolitics of the surveillance world.

All of that coming up.

Stay warm and good morning.

? america freezes and shuts down.

Chicago sees the cold of 1880 four.

Temperature plunge in new york city has not been seen since 1920 one.

Chairman yellen considers a better american economy and the unemployed.

You can say they change the game.

One of my hero's joining me today from cornell, kenneth dryden will join us.

How cool is that?

Good morning.

We are live from bloomberg world headquarters in new york.

It is tuesday, january seven.

Joining me, demanding to be on the show, betty liu.

Cristina alesci joining us as well.

Ian bremmer gets us started on 2014. a little bit?

There was western hockey and eastern hockey.

I was so tall.

All my teeth are real.

Time for the morning breeze.

Overnight everybody was watching samsung because it posted its first profit decline in the first quarter since 2011. not a surprise.

We sell the stock tanked over the past two weeks.

On the economic front in the u.s. we get trade balance today.

And, tom has google glass.

The consumer electronics show in vegas.

Lex i think they would look good on you.

-- i think thetyy would look good on you.

They have to make the more fashionable.

The sac manager, matthew mark thoma, his trial starts today.

Not wearing google glasses.

The u.s. senate makes it official.

The first woman in charge, janet yellen, confirmed by fit a 6-26 to replace chairman ben bernanke . his term expires january 31. samsung post-up first profit decline in nine quarters.

Profit dropping by seven point $8 billion.

Being pressured by apple at the high end.

Cheaper phones also hurting the margins.

And, we have been talking about the deep freeze.

Temperatures in the east and the south plunging as the cold air sweeps across the u.s. but not boston.

Hot boston.

New york in the single digit.

It missed new england.

Not happy about that.

Florida and not used to cold.

43 degrees in vegas.

That is kind of crazy.

A car that read the engine one that recognizes the owner's voice.

Or even a banner ad that can tell you are interested simply by your gays.

Personal technology products like these will be the hottest products at this years consumer electronics show.

Joining us is tom jiles, cucumbers technology for bloomberg news -- consumer technology for bloomberg news.

Why is there such a distinction between the technology companies that have shown up to the show in those that have not yet go microsoft and apple are not there this year?

Some of the biggest tech components have never been a big presence.

Microsoft for example.

That shows the shift.

We have been talking for a long time about how microsoft has changed what it does and the perception of what the gridlock is.

No longer a company that is all that relevant when it comes to smart phones or personal computing.

Apple there is a snobbery there.

Too cool.

They do their own unveiling and on their terms.

They do not need to go to ces.

I am not a big fan but the fact is a lot of cool stuff is launched here.

Starting back in 1967, thanks to the people at wikipedia, the idea of the vcr in 1970. the compact disc 11 years later.

Plasma tv.

Tablet a couple of years ago.

There is a couple of things to keep in mind.

One of them is enviable -- bendable tvs.

Kind of like fahrenheit 451. it gives you flexibility in terms of where you put your tv, how you watch your tv.

Lex but that is a good point from tom, which is why do you want a bendable tv?

Other than it looks really cool, why do you want one?

It is a wow factor and also where do you put your tv?

These guys need to find a way to get new revenue, the next big thing.

I have been writing a lot about microeconomics.

Is it still true at ces, every product has to get down to a tipping price point?

Rice really matters in all of this.

You need more and more people coming into the market.

One person doing bendable will not cut it.

It has to become much more affordable.

We need a celebrity to really screw up.

You got this for us this morning.

Give us the background on this.

I am sure that you saw this already.

Michael day coming out, the director.

Bad day for samsung.

Cannot follow the teleprompter, becomes frustrated, and walks off the stage.

Let show you what happened.

I try to take people on an emotional ride.

The curve, how do you think it will impact?

I am sorry, i am sorry.

For those of you on worldwide , you did not miss anything.

That was better on radio and tv.


day came out, it missed the teleprompter or something in the silence you heard on reading -- on radio.

Good morning.

Why did he not have it on his samsung watch as backup?

How did that go over?

It completely took over the coverage.

The twitter sphere took off.

Sam grobart went to apple computer.

They took the high ground that they will not go to the low ground.

Who is winning though we will make a lot of apple versus samsung we will sell one jillion phones and make no money?

Who was winning the battle?

You are seeing the results.

Apple realizes it has to go down market to some degree as well.

Not going as low as some people say they have to, but they will increasingly be pushed in that direction.

This place is a business of globalization and international korean company and a american company, a new mobilization or the same old globalization?

One reason they are going down market is because so many of the consumers are coming into place the new middle class does not have the cash that they do in the united states and europe.

And they understand you have to have connectivity, great products and have the same kind of aspiration or brand that you do in the u.s. samsung is fighting a little bit of the battle in that u.s. companies are very innovative in south korea and china.

They are not generating pete all that are innovative enough that can create an apple.


certainly true you do not have the kind of entrepreneurship to develop these kinds of products that you do in the united states.

I would not underestimate the ability to get off the curve quickly.

They surprised us how quickly they were able to develop.

They surprised us how quickly they could be as efficient as we are in food cost dosing technology.

Do not underestimate these guys.

What is the big risk of 2014, a government shutdown or market decline?

That conversation heating up next.

Good morning, everyone.

Bloomberg "surveillance." our guest host, ian bremmer.

He looks for a surprisingly quiet 2000 port teams.

Republicans and democrats part.

People used to hear you on serious, germany and the rest.

Your major focus is on u.s. domestic politics.

The major focus is on the united states in that domestically we will not see very much.

We will have governance that is a little less dysfunctional.

Immigration not going to pass in my view.

What you are going to have is a decline in u.s. foreign-policy.

U.s. foreign-policy in decline.

Alliances are increasingly troubled.

Is there a difference between secretary clinton and kerry and how they go about the ian bremmer world?

I think there is.

She was the architect of the pivot to asia.

The statecraft dealing with state capitalism.

She has not mentioned the world -- word had it since taking office.

His focus clearly is israel- palestine.

He does not have the trust of obama.

When we look at international relations, the idea of the washington consensus seems distant.

Talking about hub and smoke.

What is your new prescription for the united states?

The united states needs to decide what kind of country it wants to be.

It is clearly -- clear it does not want to be the world's policeman.

Not so much that the u.s. needs to do asia first, it is that america's allies want to understand how america conceives our nation.

Would john adams recognize our foreign-policy today?

I do not think anyone would recognize it today.

Certainly people understand the tendency towards isolationism.

People understand risk aversion.

We need to show what our strategy is.

It the united states will retrench and we will not be involved in wars going forward him and tell people that.

American allies from germany to france to brazil to south korea to indonesia are really concerned.

Ian bremmer with us.

They changed the rules for pilots that are battling fatigue.

We will have that for you next.

? good morning, everyone.

Dow futures up 57. real complacency out there as we began the five-day working week known as the first week of the year.

Guest host this hour is ian bremmer.

Betty liu has top headlines.

Growth and spending remains at the lowest since 1960. wrote rate falls to almost $3 trillion according to the center for medicare and medicaid services.

The report looked at spending on hospitals and nursing homes and found spending remained weak during -- due to the economy and jobs market.

The last of the jetliners has been retired.

The oldest passenger plane that debuted in 1965. it has been replaced by other jets.

In florida state scored in the final minutes to beat auburn.

The seminoles use the second half comeback to beat the tigers and win the bowl championship series trophy.

The wind broke a seven-year streak.

Are you into college sports?

College not so much.

Really good ratings.

Not as good as bloomberg donut hole.

One of her most popular guess, ian bremmer.

24-seven considering risks around the world.

There are many.

Continued carnage in stearate -- bacteria, the risk canada will not take hockey gold.

Most focused on the u.s. administration and what we do with our significant alliances.

On the u.s. we have alliances.

Is it like world war ii and our -- and our allies?

The good news is despite the fact that all of our allies are wondering if we are committed or there for them, some of them have no choice.

Japan, israel are stuck with us.

Canada and mexico are economically stuck with us.

Germany, france, turkey, brazil -- you see lots of countries that are absolutely changing policies toward the united states as they fear a strong alliance with the u.s. is no longer as useful for the national security.

Pre-k's henry kissinger would fly around.

Secretary kerry would fly around.

What is the tactical to do to reengage with allies?

Some of this is clearly the fallout from snowden.

You look at germany and france and you have a whole bunch of countries that will change regulatory policies because they're upset.

You look at china specifically.

You said it is all about the soft landing in china.

The whole dialogue is changing around where this country is going.

What is the real story on china?

This is the year where china starts to change.

For 20 years -- we have not had a domestic risk and china.

The story has been a strong state investment.

They need to reform or we have real problems.

Now they have a leader that is reforming.

Starting to open the financial system.

Doing anti-corruption.

Also reforming politically.

Bloomberg knows this.

He is also closing down and really consolidating power around himself so if there are problems from the losers created from this -- different than the prior generation?

We have seen more reform and this president than we have seen in an entire decade from china.

Instability in china that they will respond to very strongly, and his willingness to use foreign policy against japan.

That is an -- enormously unpopular in china.

To help fear the nationalism away from challenges to his own world.

You him on the other analysts have said a slightly more functional washington is positive for the markets, positive for growth.

We have extraordinary growth in light of the dysfunctional washington.

Have dysfunctional is washington anyway?

Not very.

For the past six months i have probably met that the ceos.

Not a single one has told me they will change their investment plans on the basis of the breathtaking dysfunction we saw in washington in 2013. if we just get a level of baseline confidence, just baseline confidence -- you had debt limit crisis but it was not real.

You shut down the government for 13 days, but no really cared.

Washington was run in 2013, it just was not run well.

In your studies, the oceans always protect us, the new digital age, the speed of elite travel, are the ocean still there to protect us?

They are helpful.

We are not dubai.

Al qaeda becoming much stronger.

How much of a risk is that for us?

Is this all new al qaeda?

It is completely new.

It is franchised.

They declared jihad against.

. lex a lot to talk about -- a lot to talk about with the geopolitical risk.

The nhl.

A career.

? good morning, everyone.

I am tom keene.

With me today, cristina alesci.

What is it like their team degrees out cap go -- 13 degrees out?

Jetblue lanced resume flights at 10:00 this morning.

They shut down the service late yesterday to cope with delays caused by the weather.

Overall airlines have erred he canceled more than 1400 flights today due to the cold.

Workers at general motors, ford and chrysler likely to see record profit-sharing checks.

They could see a $600 boost to profit-sharing checks that average more than $8,000 last year.

This comes as all three automakers are posed to post higher earnings in north america.

Blackberry ceo telling jon erlichman that the company will go back to offering their keyboards rather than the touchscreen on the other phones.

Refocusing on the corporate and government customers that fueled the early success.

That is today's company news.

Lex a lot of people happy that black hairy sticking to its roots.

The weather has been a pretty serious issue.

A familiar scene in airports this week.

Long lines stranded passengers.

One airline also blaming new highlight rules.

Adam johnson has more on jet blue.

Not only are they being hit by the storm, but singing the faa is disrupting them as well.

Jet blue being very aggressive about the impact.

Effectively saying the new highlight rules are taking a bad situation and making it worse.

Let me tell you what the actual change is in the rules.

This is taking effect as of saturday.

A maximum of nine hours in the cockpit.

Minimum of 10 hours off before you can fly.

A minimum of 30 hours uninterrupted breaks per week.

Is there any chance this goes back?

It is really only jet blue saying there is a problem.

Southwest, difficult to characterize any specific delay.

The united airlines have said most of the delays have been weather-related.

Why is that?

If you go to fly to where -- flight aware, it tells you where all of the delays are, but they have a map to show you where the maps are.

It is all in the northeast.

Are we asking too much of the airlines.

I vaguely remember trains.

Are we just asking too much?

We are.

Delta airlines has a great commercial.

They say think of what had is happening as we sailed through the air.

They wanted me to do the commercial.

A conflict of interest.

It is amazing when you think about it.

We have thousands of these things happening all day.

The fact is, think of the different things that have to happen for that airplane to take off.

I have to rip up the script.

Do you realize we're on the set with two of business insider's sexiest?

Tom and i can barely contain ourselves.

Has your life changed?


i think that will help.

Why did you do that?

Likes my question -- my question with a serious one.

What is wrong with the faa putting those regulations in?

I hate flying.

This goes back to an accident that happened in 2009. pilot fatigue was blamed.

This is what it goes back to.

A great saxophone player.

Exactly right.

The pilot was tired.

Fatigue is a very real thing.

It is one thing if we're sitting here talking on tv because we did not get enough sleep at another if you are flying an airplane.

Please check travel today.

We cannot say enough about cold is cold but this is different.

I will do a data check.

Futures up seven.

Nymex crude advances.

94.10 per barrel.

Good morning, everyone.

We are on bloomberg television and bloomberg radio.

Betty liu with me.

Cristina alesci.

Ian bremmer with us as well.

We have to talk about one of your favorite topics.

Usa hockey board of directors meeting this month to consider a ban on fighting for all levels of amateur hockey.

The good news, fighting has decreased 20% this season.

An interesting debate.

Something we will address immediately.

Then we will move onto the bigger issues of hockey.

He simply changed the game.

Drafted in 1964. you did not go to college.

Ken dryden said no.

Went on to a famous career at cornell and ran than said what it meant to be an nhl goalie.

Once again -- boy do i remember this.

What do you mean he is going to law school?

Played seven season and was the first inductee into the hockey hall of fame.

The game with ken dryden.

Wonderful to have you on the program.

Let's get out of wave the fighting issue.

John ferguson you played four years.

Is the fighting another time and place of john ferguson and the battles?

Will it be something of the past?

It is moving that way but moving that way in a different way.

What happens in the past 10 years or so is that historically fights what happened when players would basically fight their own fights.

They would be the ones that would fight.

Now you have designated fighters on each side of the team.

They have gotten bigger and tougher.

They know how to fight.

Instead of flailing around on ice, which is pretty tough, and now they know what they are doing.

They have injuries as well as the rest.

That is the problem.

We saw this with the montreal canadiens recently as well as others.

We are really banning this.

Is that the way to do it?

Do you imagine five years from now they will limit fighting in the national hockey league?

I think it will keep being committed.

It gets to the point now where all of the traditional rationale for it are gone.

It used to be this is spontaneous and just happens in the game and how do you stop it?

Now it is not spontaneous, someone else who comes in and does the fighting.

I think gradually it will either remove itself from the risk of injury or become so laughable to a fan base that it will embarrass themselves and disappear that way.

Pre-k's any ammunition on the other side of this debate?

Is less fighting going to make it less appealable to fans?

That is part of the debate.

The best way to answer the debate is it ask those same fans what the favorite games are of the year, and i think almost every one of them will say it is playoff rounds.

In the playoffs, the designated fighters almost never dress for a game.

If they do, they almost never see the ice.

I think that is probably the best answer.

Because of the time we have in the game, i spoke to the nhl commissioner about this a number of months ago, do the goalies have much equipment now?

Where i sit they are shading the stick side.

Their gloves are so big.

Would you like to see a little less goalie equipment so maybe they have to play like ken dryden the?

Goaltending has changed that way.

Basically because the equipment itself is all whole lot lighter, which allows for something that is a lot bigger.

Just like him based all where traditionally gloves came in in order to save the hand from injury, they went from saving injury to being an instrument so you could catch the ball better.

The same equipment protects the net more than it protects the body.

Thank you so much.

? good morning, everyone.

I am tom keene in new york.

This would be absolutely impossible with our guest, ken dryden.

Truly one of the great sports book of all time.

"the game." erik schatzker asked me an important question.

Is the game today better, more entertaining, a smarter gave been when you played in the early 1970s? i think it probably is.

It is certainly more skilled.

The players play 11 months per year.

They do work off ice longer.

The training is better.

Like in any sport, there are improvements year after year.

It is much more difficult to play.

A much faster game to play.

In order to play at a fast level in anything, it is really a challenge.

Lex tell us what the olympics mean for canada.

You have been 243. then the vancouver which was so exciting.

What does it mean to go to canada with the national sport?

It means a lot.

I think it will be an olympic gold medal in hockey.

One that is regretted where we would all wind.

It is our signature sport.

We are very good at other sports now.

We won the total medal count and then -- in vancouver and getting better all of the time that hockey holds a special place for us.

The showdown that people recall from the 1970s and later where for canada, soviet series, i think there will be a special atmosphere.

I have to get on your case for one thing.

The canadians won in 1993, the last time that they won the stanley cup.

What is going on?

All canadian players, right?

Under 60%. i think what happened in part was the 1990s and through the early part of the 21st century, the canadian dollar was paid way lower than the u.s. dollar.

It meant a lot of canadian teams had a hard time competing financially.

That was part of it.

Now there is a salary cap in place and the dollar is much closer in terms of dollar.

I think you will see more canadian teams competing at the top.

Soon there will be a stanley cup winner for canada, i think, i hope.

A former goalie for were no and the montreal canadiens.

A lot to talk about here.

Futures update.

Good morning.

? -- futures up 8. coming up tomorrow, lending tree ceo.

Very interesting executive.

We will speak to him about the basic idea of can you get a loan?

A lot of viewers and listeners who think it is tough out there to get a loan.

We will talk to him about that.

It is bloomberg "suveillance." i'm tom keene.

Ian bremmer with us as we look at the geopolitical news of the year.

Samsung posting the first profit decline in nine quarters.

Trop in 27 .8 billion dollars.

Samsung being pressured by apple at the high end of the low end, drescher of cheaper phones.

China has lifted the ban on the sale of foreign game consoles.

This paved the way for microsoft, sony, and made tendo to enter the 14 billion dollar gaming market.

No word on how long it will be lifted for.

Netflix and sony teaming up.

It will begin offering "house of cards" and other programming.

The new format is known as 4d. resolution four times the -- that of existing tvs.

Do we want to be in 4d? time for morning movers.

They are moving this morning.

I have never been in the store.

You have definitely been in the store.

You have daughters.

Lululemon was raised to buy from neutral.

I do not know if he is raising it, but the 12 month price target is 73 dollars per share.

This could be a turning point for the company that has gotten a lot of heat since the executive said certain people should not wear its pants.

We can.

You can.

Netflix, just talking about house of cards, still facing a lot of competition from hulu, amazon prime and others.

They got cut by morgan stanley so that stock is down.

Microsoft reporting pretty good numbers out of the xbox sales.

They topped 3 million units last year, which is pretty good.

A bright spot for microsoft, especially on the consumer facing front.

As you know, there is talk of microsoft possibly selling the xbox unit at some point.

Now it is time for the agenda where we look at all the stories shaping today.

We are watching very closely the confirmation of janet yellen.

We go to february 1, which i believe is the signing in for the chairman.

And bremmer -- ian bremmer with us.

All five of her speeches are pretty much the same and center back to the labor economy.

You studied the mobile leap for -- global labor economy.

We are still at seven percent unemployment.

It is coming down.

It is not going to come down to where it was, and that is because so much of what generates cash is much less labor-intensive.

We are getting much better at figuring out how to add value.

It will start dropping down as people drop out of the workforce.

That is certainly true.

The real number is well over seven percent.

American demographics are growing.

I think the janet yellen story is a good story.

We have all decided we love janet for -- ben bernanke.

She is drinking from the same pond.

Like she might surprise us.

-- she might surprise us.

I think the fed is a nonstory of global risk in 2014. i do not see emerging risk tailoring -- tapering off.

What a lot of people do not talk about is the power to regulate financial institutions.

In terms of capital requirements and all of that.

I think in all the problems we have -- leases we are problems the fed is not one of them.

Tom, this is the part where we say goodbye to you.

Heading over to radio.

Like thank you.

Continuing with the agenda.

We have been watching this all morning long.

The goings on at the consumer electronic show.

Michael day, the biggest headline.

Blackberry, obviously many people wondering what will happen with the company this year and next.

Jon erlichman talked with john chen who said i will make this change, i am bringing back the keyboard.

I personally love the keyboards.

We will look to blackberry going to keyboards, not exclusively but predominately.

Whack berry has had so many inflection points.

-- blackberry has had so many inflection points.

It has never been a straightforward ride.

You have the tension between the board of directors and what will happen on that front.

At the end of the day, they are really challenged and will have to find a way to get into the enterprise business.

We were just talking to ken

This text has been automatically generated. It may not be 100% accurate.


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