Jobs Crisis Over?: Surveillance (11/08)

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Nov. 8 (Bloomberg) -- Full episode of "Bloomberg Surveillance." Guests include John Paul Dejoria, co-founder at John Paul Mitchell Systems, Bloomberg Businessweek’s Cam Simpson and Robert Peck, analyst at Suntrust Robinson Humphrey.

This is "bloomberg surveillance." jobs day.

Resilient-american economy, is the jobs crisis behind us?

And other iphone boom, limited by its ability for someone in the paul to make -- in nepal.

The human migration behind an iphone launch.

A conversation with robert iger on twitter, netflix, and star wars.

This is "bloomberg surveillance," i am tom keene, live from new york.

Jobs day, november 8. joining me, sara eisen and scarlet fu.

Nothing happened while i was off yesterday.

You took a bad day to take off.

The twitter ipo and the ecb -- the news kept coming -- the markets kept moving.

You made it back for jobs day.

This one feels weird.

First, a morning brief.

Some overnight news in china.

Experts return and imports rose.

S&p downgraded france.

In the u.s., 8:30 a.m. jobs report.

Also get numbers on personal income and spending, the pce inflation gauge.

Nine 50 5 a.m., the university of michigan confidence number.

On the jobs front, the change expected 120,000 jobs added, it will be distorted.

There are some lower.

The month before 148,000, we are losing momentum, we need to get to a period where we can shake off.

John herman of mitsubishi pushing, saying the economy is resilient.

The estimate here is for a gain of only 50,000. also, some corporate event before the bell, earnings from cablevision, lions gate, brookfield.

Also watch out for mcdonald's same store sales.

Slow on jobs they -- day, equities, bonds, currencies, commodities,. the euro weaker yesterday off of that announcement from the ecb.

Vix, 13,.91. the two year yield has gone from point 302.28 in the last days -- from .30 to .28. copper bouncing down.

That is enough of a data check.

Time for our front page, we scour the web for the most important stories.

Watching twitter trading.

We are all twittered out.

It was a skyrocket yesterday, up to $45.10, it shot up to $50, it went public at $26. ending yesterday just below its first trade.

Two of its founders are billionaires.

Evan williams and jack dorsey.

This is the biggest one-day jump for an ipo of more than $1 million since 2007. a notable extension.

-- a notable distinction.

Michael mckee and i were talking about who they should replicate, the container store.

We are seeing these really substantial pops.

A visit october 4 ipo's. -- a busy october for ipo's. the nbc interview where obama said he misled america.

I am sorry that they are finding themselves in the situation based on assurances from me.

We have got to work hard to make sure that they know we hear them and that we are going to do everything we can to deal with folks who find themselves in a tough position as a consequence of this.

He did signal some tweaks to the law, saying the administration was working to close some gaps in the law.

This comes at the white house is fighting back against troubles that are overwhelming the rollout.

It comes after election day where the message was loud and clear.

Lacks it is not everyday you hear him apologize so blatantly, what is next.

His approval rating is below 40%. staying in washington, putting a price tag on the 16 nation down.

I costs -- backpay costs, $2 billion.

Private sector jobs 120,000. this according to the omb.

We could be heading for another shutdown and must congress can get its act together by early next year.

We have terrific guest posts for you on "bloomberg surveillance" today.

John paul mitchell, -- john paul, mitchell systems cofounder and petrone spirits.

You know you have had that.

Running a business and looking at businesses worldwide on the american economy.

Jim glassman at jpmorgan.

You never went public.

What was the advantage?

We are self-motivated, we did not need the money.

If we did go public, we would be under rules and regulations as opposed to being more creative and our thinking.

You have got to talk to the public on a 90 day basis, what will be twitter's biggest headache yet the obviously the fact that they are not going to have any profits to -- until 2015. i am amazed their stock doubled the first day out.

They are doing to have to make sure they had those profits coming.

What rules and regulations would you worry about as a public company?

All the reports you have to turn in, all the meetings you have to be in.

As opposed to using that time to be more creative and what you were doing and running your business.

There is a lot of time required and restrictions.

You mention profits.

I remember my father's echo over what paul mitchell heller -- hair stuff cost.

When you use higher-quality ingredients, it costs more.

Is not too early for tequila, either.

That is becoming quite popular these days.

With keynesians?

And economics joke.

Patron?

When a company goes public, you need to get someone out in front of investors and regulators to talk and assuage them, it takes your attention away from the business.

That is correct, too much paperwork.

It takes away from your business, you cannot be hands-on as much as you were before.

You are dealing with regulators on one side and the public on the other side.

Jim glassman of jpmorgan.

Sara and i went back and forth on the ecb announcement.

Link together for our viewers the three days we have seen.

Is it just about global recession and slowdown?

Is that with the jobs report one decay?

-- will indicate.

The jobs report is messed up.

When you watch the ecb, you are learning the difference between the way they run policy and the way the fed does.

You have to give jockey credit for what he said last july when he broke the fear -- draghi credit for what he said last july when he broke the fear.

Whatever it takes.

If you wait until inflation comes down, you are late.

The ecb approach is look at the inflation mandate.

The fed looks at employment, it anticipates what is coming.

The fed has been more forward- looking under ben bernanke.

That is why we are obsessed with the labor market data.

What we are learning is the reality is that the european, because the crisis has passed, news is getting better and growth is picking up -- it is all very slow.

There is still a lot of work to be done.

It looks like there is a parallel between europe and the u.s., nobody has inflation.

We need inflation, healthy inflation to pick up economic activity.

How do you see it in business?

Are you raising prices?

No, you could judge the economy from beauty salons.

The economy went south in 2008, they did not stop coming, they came every six weeks and set of every four weeks.

Now we are seeing them come back.

Those that were coming every six weeks are coming every four weeks now.

We are global at john paul mitchell systems and patron.

We see the global economy slowly picking up.

That is a little contrary -- this has been a hallmark of yours, jim glassman, anecdotal evidence.

You hear the same story from dentists and doctors.

People postpone things when times are tough.

It is slowly coming back.

We forget how long it takes to get the economy back on its feet.

We lose ground so quickly.

A lot to talk about on jobs day.

8:30 a.m., the announcement.

Let's get to friday company news.

Fannie mae and freddie mac spell out -- balilout.

Returning $39 million to the u.s. treasury, just $2 billion to pay back after getting $187 billion during the housing crisis.

Boeing warns it could build outside washington state as it gets union resistance.

The contract is designed to keep the 777x production in that state.

Ubs setting up a day for toxic assets, paying $4 billion to switzerland central bank.

The fund was set up in 2008 as part of efforts to stabilize ubs.

Another story, the most powerful typhoon on record to make landfall, super typhoon haiyan slammed into the philippines.

Winds of almost 150 miles per hour, 125,000 people have been evacuated.

Bloomberg industries estimates that economic damage could reach 14 billion dollars, most of that is uninsured.

I find that that goes south of minera -- noah -- of manila.

The philippines is always the epicenter.

The area has been slammed.

In the huge area.

Typhoon season is almost over when?

The end of this month, this is a late one.

Coming up, a lot more to talk about.

$2.09 billion, how much twitter raised yesterday.

War than google.

What will he do with the money?

Coming up on bloomberg surveillance, streaming on your tablet, your phone, and bloomberg.com.

? good morning, everyone.

It is jobs day.

El-erian of pimco "in the loop with betty liu." 9:00, i will speak with bill gross at 8:30 this morning.

The pimco up and put new normal" ---- the pimco "new normal." twitter spike in its trading debut, raising almost as much as google.

$1.8 billion for twitter, $1.9 billion for google.

They got 30 times as many shares as were offered.

In terms of retail shares, about 8 million shares, 11%. they barely got any.

They got what was typical.

This is not a very big offering overall.

What do the streets say?

A lot of banks cannot talk about it because they are involved in the ipo.

Of the banks that came out with recommendations, the price target was for $39. it ranges from $30 to as high as $54. we are going to talk in the next hour.

70% buy rating, fairly bullish.

Lex what was the -- fairly bullish.

Mark at rbc called twitter the next internet utility.

Right now it captures less than 1% of any given market it is working in, the potential is massive.

They are looking for sales to pay off in 2015. jim glassman from jpmorgan, you are any economist, not an internet cell setback -- an inte rnet sell side guy.

This is the fun part, not creative destruction.

Creative construction.

People come up with ideas and together with the financial system, investors are able to use their imagination and figure out where this might go.

It makes it easier to conduct his nose, it drives innovation.

This is a magical thing that is happening.

John paul dejoria with paul mitchell and patron.

What is your biggest headache dealing with financial guys?

Oh my gosh.

Which bank do you hate the most?

Paperwork, paperwork, paperwork, that is the biggest frustration.

Why is this necessary again and again?

You are and efficiency by.

-- an efficiengycy guy.

-- with the 53% -- 72% pop, is it overvalued/ some people think so.

People think it is too expensive.

Even at $45 today, the enterprise value of twitter is about the same as companies like discovery communications, cbs, even yahoo!

Cbs the media company.

Makes a profit.

He prefers facebook when it comes to social media.

The photo stream -- do you get the photos, i hate it.

What am i going to do when they are ads.

You don't have to click on them, they come out.

They are ugly, go away.

They have to figure out how to make money finally and not disturb the user experience.

That -- the buzz word, user experience.

I wonder if janet yellen is worried about the user experience.

Twtr.

Coming up on "bloomberg surveillance," med love devices , is high-tech missing out on women?

Coming up on "bloomberg surveillance." ? this is "bloomberg surveillance," i am sara eisen.

Here with tom keene and scarlet fu.

Some top headlines, president obama saying he is sorry.

Apologizing to thousands of americans losing health coverage as a result of obamacare.

He made his apology in an interview with nbc news.

It comes after his approval ratings have been chosen lower -- growth in lower.

John kerry will be in geneva as a deal with iran edges closer.

Kerry will be looking to narrow the differences between iran, the u.s., and other world powers.

Tyson haiyan -- thyphoon haiyan slammed into the philippines, one of the strongest typhoons ever to be recorded.

It could become even more powerful in the south china sea.

As in your top news headlines.

East to west.

Just south of manila tomorrow morning.

Morning must read this jobs day.

Twitter trades a full day that i -- today.

This links to twitter.

There is a new website founded by two of the twitter guys called medium.com.

This is from medium.com.

It is from a sociologist studying protests in a sample.

The way technology -- women are missing out.

There is no rule that says the screen size must get bigger and yet it does.

For many women, it is a reminder that the tech industry does not remember your existence.

Her complaint is that the extra 0.2 inch means she cannot take a picture one-handed when she is documenting teargas at a protest.

Why not?

Is too big for her.

The nexus phone in particular.

I have the smallest hands on the planet and i have no problem.

A martini glass, no problem.

Size and scale here.

I have small hands.

It is freakish.

Do you buy this, john paul?

Is the reason you ladies have such big purses.

My wife uses the iphone.

She is leaning more towards what my son has, the larger ones.

They do consider women, more than likely, women buy as many phones as men by.

Spoken by someone who caters to women.

Is a matter of how you use your phone.

Especially since we are asking more of our phones than just a device to answer phone calls.

I don't know.

I have a morning must reads on the fines we have been seeing in the news for the big banks.

The government is exaggerating a little bit.

He looks at the doj as an example with the announcement of the two-point billion-dollar fine against jpmorgan.

-- $13 billion fine against jpmorgan.

Deal-padding has been standard practice.

He points to sac as well.

He says they are totally exaggerating, they are leaking stories to the press and inflating numbers.

Penalties, fines, other entities.

A political move.

It was comforting to see the gdp number, even with the -- this is tangential to economic recovery.

Do you agree?

Recoveries have a mind of their own.

A lot of of the stuff that dominates the airwaves is really -- and a time we have got, how do you respond to someone like locksmith pakistan -- lakhsman akushan.

There are a lot of problems, that is why the economy has been slow.

There's been a huge transformation, innovation has displaced jobs.

It is taking times to get things back to normal.

We will talk a lot about jobs until the 8:30 jobs report.

Our twitter question, what is the president next step?

@bsurveillance.

? good morning.

New york city this is bloomberg surveillance.

I am sara eisen here with tom and scarlet.

It is chilly.

Stay with that shot.

The new tower downtown.

I was at the base of it two days ago with citigroup.

Stunning.

I bet.

Just can't say enough about it.

The close-up was even more emotional, more dramatic than i expected.

Less emotional, the data check on jobs today.

Warring.

Let's take a look -- boring.

Let's take a look at equities bonds.

Nymex hasn't moved, but brent has moved.

Twitter shares are trading higher in the premarket.

They're up by 9/10 of one percent.

Yesterday it searched 73%. other gainers and losers that are notable -- a couple of the companies posted quarterly results.

There are some disappointments there.

Nation star is trading at a four-month low, off by 17% in yesterday's trade.

Solar city is all over the place.

They are always up or down by quite a bit.

With the jobs report out today, where is the economy?

Yesterday we got news the economy grew faster than did, but that is not the whole story.

Economic data has been murky.

With the jobs report unclear -- with the jobs report, unclear what the shutdown impact will be.

For decades, james glassman has written on the american labor economy for jpmorgan with a focus on what our children are doing.

What they have been doing is staying in school, waiting for a search of normality in the american job economy.

Thank you for your commitment to "bloomberg surveillance." you were out front, saying kids with stance cool.

Are they throwing in the towel or going out and getting employed?

If the market is tough and you're not able to find something, going to school is a good idea.

Parents are better able to help kids.

You are waiting to see the market about -- market open up for young people.

Have we escape velocity?

We are not quite there.

Folks that lost job early -- jobs earlier, they have pretty much come back to normal.

This is the employment ratio.

My favorite phrase -- anxious america.

There we are and the plunge.

Why can't we get back to a normal job market?

Because the economy has been slow.

That is not a demographic thing.

When you lose something in six months, that is a cyclical problem.

That is the young people.

The younger you are, the fewer people have a job.

Families support kids so they have more flexibility.

That is why it is taking time.

John paul dejoria, you have some thoughts.

I do.

There are more jobs in the united states that cannot be filled.

There are over 6000 jobs for auto mechanics that cannot get filled.

We do not have the skilled labor in trades.

A lot of people went to technical jobs and a lot of the rate trade jobs -- the great trade jobs cannot be filled because we do not have the craftsman.

Are you hiring?

All of our companies.

Paul mitchell, a in our warehousing, our manufacturing facilities, our labs.

You need more engineering skills.

They don't have the technical skills.

He is living in the real world which is sort of educated, good people, looking at a reasonable -- what is the compensation level, roughly?

40 grand, 50 grand?

In my companies, a lot more than that.

How do we employ the americans like this?

A lot of state governors are interested in the story because they realize it wasn't until recently that we thought that we do manufacturing in this company.

All of a sudden, people are figuring out that there are a lot of jobs.

You cannot become an engineer overnight.

It has to start in second grade, third grade.

You are seeing across the board problems with hiring.

It is not just manufacturing.

There are confidence problems, government -- government problems, regulation.

You are growing at 2%. 2% growth is fine, but it does not employ all these people.

We want jamie dimon or john paul dejoria to invest to create jobs.

Is he not investing because he is investing in malaysia?

Malaysia is part of our economy.

You can see the guy whose job went to china, but you cannot see the jobs that are getting created by this development that is going on in asia.

There are jobs here that exist because of what is happening with our activity in asia.

The head of the teachers union 40 years ago -- should waitresses wear -- learn calculus?

What do we do about that part of america?

You don't need to know capitalist to do a lot of jobs.

The economy does better -- there will be a lot of jobs for everybody.

There are jobs for everybody, but it is taking time to get everything lined up.

I think the problem is -- it takes time to become -- to get the skills you need for some of these jobs.

We just end up with an over educated america?

You don't learn the skills for a job in college.

The sociology classes i took, they did not help me get the skills for the job.

It is what you learn when you're in shop class, when you're on the job.

The job has to be there.

That is where you learn.

Jim glassman and john paul dejoria with us.

Coming up, bob eiger surveys the landscape, twitter, netflix, and star wars.

You will hear from him on all of these topics on "bloomberg surveillance." ? this is "bloomberg surveillance." i am sara eisen with tom and scarlet.

The white house is putting a price on the government shutdown.

It cost the united states about 2 billion dollars in lost rod activity because of employee furloughs.

The shutdown will also cut economic growth by 6/10 of a percent in the fourth quarter.

A corruption scandal in the navy.

The washington post reports navy officials suspected they were being ripped off by leonard francis but they recently discovered moles were feeding him sensitive information.

The fda -- the food and drug administration looks to ban all trans fats.

Banning them completely could prevent 20,000 heart attacks a year.

They can be found in frosting, microwave frosting, coffee creamers.

Doughnuts are a big trans fatty food.

Does bacon have trans fat?

It is mostly processed foods.

People have been warning about this for years.

Does petrone tequila have trans fats?

-- patron tequila have trans fats?

No trans fats.

I don't drink this.

It was a gift.

Disney reported earnings yesterday.

It was another profit and sales beat for the mouse house.

The surprise was the rare decline in profit at espn and other cable networks.

Profit in that division dropped seven percent.

This is the division of disney that usually contributes 40% of earnings at the company overall.

When espn does not do well, that is a disappointment for investors.

We could be setting up for a decline this morning.

It was a surprise.

John erlichman spoke with bob eiger yesterday.

He spoke about the outlook for the company because disney is the reflection of a consumer giant.

They talked about the consumer options and choices people have.

It is an interesting marketplace because the consumer is winning because there is far more choice in terms of content and experiences for the consumer.

There are many more places the consumer can access this content.

That is great.

If you are a content owner, it is great because there are many men -- many more ways -- netflix is a good example.

Content is driving so much of the growth that we are seeing when we talk about options available to media people.

We saw that with the time warner-cbs flap.

Jim glassman of j.p. morgan, howdy factor in the content and media frenzy going around with the challenges the economy faces overall?

It does not affect the overall economy, but it is a reminder of the way we get information and entertainment.

-- in entertainment.

Is a service job as good as they -- it depends on what kind of skills are required.

What kind of job is it?

There are some jobs that are low skilled, some are high skilled.

The pace bread is probably very similar to the good sector.

-- the pay scale is probably very similar to the good sector.

I think there's potential there.

We can make our content available to twitter users.

It is another means of distribution.

What is interesting about it, it speaks volumes about things that are compressed and concise.

We are seeing that migration in media as well.

Yesterday's short is today's long.

We have to be mindful of that.

Yesterday's short is today's long.

I like how he talks about the structural change in media.

We consume things in smaller doses.

Are you making smaller items for people who want smaller samples for everything?

Several years ago we went to 3.4 ounce spurs because it is a perfect size that will last a couple of -- several years ago we went to three point four ounce sizes because it is a perfect size that will last a couple of weeks.

It is more economical.

I prefer the bigger bottles.

Coming up on "bloomberg surveillance." apple announces a new product.

Wait till you hear about the massive migration that has caused a problem in the supply chain.

? this is "bloomberg surveillance." i am scarlet fu, joined by tom keene and sara eisen.

We have company news for you now.

Details on the pay package for the -- -- for the ceo of blackberry.

He successfully turn around sybase and was named the executive chairman and ceo.

More people are moving to deals on mobile devices.

More than 60 million downloads were made of groupon.

They also made a deal to buy ticket monster.

Priceline is getting a new ceo.

Aaron houston is being promoted to the top spot.

Their longtime ceo will stay on as chairman.

That is today's company news.

Jobs day.

Jim glassman is with us of jpmorgan.

With us as well, john paul dejoria.

You know him from paul mitchell shampoo, patron, and also, he creates jobs in wisconsin.

He joins us now on the boat i need to buy.

Yachts in northern wisconsin.

We took it out of bankruptcy.

Jobs for craftsman.

Marquis yachts, so forth.

We took five companies out of bankruptcy.

The quality is so good, besides creating hundreds of jobs, we have a foreign entity wanting to make their yachts in the united states.

How did you get into this?

You have a tequila company, here company, and a yacht company.

Where is the synergy?

Its quality.

It is something that is exciting.

Votes are exciting.

Both are expensing -- boats are expensive, they are not exciting.

How do you compete with grand banks?

You have picnic boats and the sailboats -- how do you compete out of wisconsin?

It is the quality, not the price.

When you see one of our boats compared to a boat that is much less expensive, you say for the extra few days -- for the extra few dollars, i want this.

Which engines are you putting in?

A lot of our buyers are from china and different parts of europe.

It is amazing because of the quality.

That is what people get back to.

It is not just price, it is quality.

When you get into something sensational, people will pay a little more to get that extra quality.

I get on the boat -- lisa take the ferry to the vineyard and i get so sick so fast.

We hear a lot when it comes to technology and apple.

Behind the numbers -- a massive rush for apple and its suppliers to higher workers to make millions of phones in days.

Tell us how someone without a job in a paul someone -- suddenly -- in nepal suddenly ends up working around the clock on iphone technology.

It is an amazing concept.

Apple is the king of global outsourcing.

Their business model depends on 250 suppliers on five continents around the world.

We hear a lot about people who assemble our gadgets in china, will we do not hear about the rest of the giant, sprawling supply chain.

When iphone is unveiled in a stage -- on a stage in san francisco, what you don't see are the wheels that are's ending in these -- that are spinning in the supply chain.

What struck me is how last- minute the whole process is.

Describe the sequence of them getting on stage and announcing and then a week or so before the product goes on sale and what is happening on the other side of the world.

What we write about is the iphone fi5 in this case.

You don't want to end up like microsoft with a write off for tablets sitting in a warehouse.

You want to shorten the chain.

The camera factor that makes the cameras, one of apple's biggest suppliers, it is a giant company.

They have a factory where they're going to make the cameras.

They need workers.

They need them immediately.

They reach out to nepal to get migrant workers in that factory.

They retained four brokers.

There is a frenzy that is released across the country that none of us know about to get as many men as quickly as possible out of fields and on planes.

You talk about an individual in this.

His name is dong any moves from nepal down to malaysia.

Does he feel like he is being used?

He does not know what the system looks like.

He is a farmer from nepal.

The people who are recruited from the poorest corners of asia , he doesn't move.

He is shipped.

These people are recruited out of the poorest corners of asia.

They live on what they grow in their yards.

Is their life better when they go to malaysia and get a day job with apple?

Some of them are better.

For some of them, they have to buy these jobs.

That is the thing.

The brokers involved in this network that reaches across the world, thousands of brokers, they lower these guys into buying these jobs.

They take on huge debt.

Family's mortgage their futures to buy these jobs that are sold to them.

This is how you scoop up workers from across the world and the ship them over the indian ocean to make the camera and the phone.

If you read the details of the story and follow the journey, they are all worse off.

It is extraordinary.

Cam simpson, thanks for joining us.

Tim cook is the supply chain guide.

This is his wheelhouse.

An amazing journey.

Nick up your latest journey -- pick up your latest issue of "bloomberg businessweek." where were the plastic bottles of paul mitchell made?

All of them were made in america.

We found more ways to be efficient here with a higher quality.

All of our soft products are made in the united states.

I was skeptical you two would get along and not take swings at each other.

This has been fabulous.

Thank you.

Jim glassman will continue with us.

John paul, bring a boat next time.

Matt miller can take it for a drive.

We are seeing the euro flat ahead of the jobs report.

Coming up in the next hour, we're going to talk about the economy.

? it is jobs day.

Is a job crisis behind us?

Twitter -- they move so far so fast.

We stay to a twitter bull in moments.

Wall street gets ever so smaller.

This is "bloomberg surveillance." i am tom keene.

It is jobs day.

Joining me as always, sara eisen and scarlet fu.

Our guest host is gary parr.

He is the vice chairman at lazard.

Mario draghi cuts rates and the whole world reacts.

Twitter -- the ecb was stunning.

Another exciting day.

We will kick it off with overnight news.

China -- exports return to growth.

That helps to point to a root -- a sustained recovery in china.

The ratings company downgraded france.

Here in the u.s., the fun begins in the u.s. at 8:30 a.m. the jobs report.

We will get numbers on personal income and spending.

At 955 -- 9:55 a.m., a consumer confidence read from the university of michigan.

Also keep an eye out for mcdonald's this morning.

Gary parr is our guest host.

Really, our first look into 2014 on the state of wall street -- what is the state of wall street?

Still recovering.

It is a slow rebuild.

The darwinian exercise.

M a we will talk about that in a bit.

Sarah, talk about this as well.

What does that signal for european wall street?

And tell something from my point of view.

It is still weak, still building, stabilizing.

The debt capital markets in europe are not that well established.

The banking system needs to work to provide liquidity.

It is supposed to help as long as the banks don't sit on the cash.

I want to go back to the idea that wall street is still recovering.

The idea by regulators is that wall street has recovered.

Is that fining hurting the recovery?

It is.

It may play through four years.

It is hard to tell how long i will go.

And bounces back between europe and the u.s.. you have a particularly interesting perspective on this.

You were involved in the deals.

Is it fair or unfair that jpmorgan and other banks are being penalized for the bad behavior of the banks they were forced to buy?

Jpmorgan stepped in and helped the economy and the system.

To find them guilty or have a liability follow -- there is a non-fairness issue.

Is james diamond and jpmorgan -- jamie dimon and jpmorgan being patargeted?

They did something's wrong with the london whale.

That was jpmorgan.

With the washington mutual liability -- there was an issue there.

They were not allowed time to conduct due diligence, examine, and isolate issues.

They did something bold.

Lots of talk about with gary parr at lazard.

It is the first day of trading for twitter.

It was a hit.

Sales climbed to 44.90 a share.

Two of twitter's founders are now billionaires based on the trading.

Fannie mae and freddie mac's bailout funds are close to being paid.

They reported third-quarter profits and that leaves them with just $2 billion to pay back after getting $187 billion in bailout runs in the financial crisis.

Boeing warns that it could warn its 777x airline outside of washington state.

Their contract is designed to keep the reduction in the state.

That is today's company news.

Let's get back to twitter and its ipo pop.

Suntrust analyst robert peck was the first on the street with a $50 price target.

People thought he was not.

Twitter spiked to 50 bucks a share within the first 10 minutes of trading.

He joins us on the phone.

Is this an i told you so moment?

Thank you for having me.

Our $50 target for the end of next year, so about a year out.

I think you'll see the price more dictated by supply and demand.

Look for the price to settle in the next week or so.

They price it at $26 a share.

$50 you think is a fair share -- is a fair price.

How do you reach that number?

We walked through the financials and came back with about $2 billion in revenue in 2015. we put a 17 times multiple on the revenue and i get you to $50. i wonder about the supply of shares that are coming on.

There's going to be a lot more supply.

This will be a drag on a stock going forward.

That is the case with any ipo.

None of the insiders were selling during the initial ipo.

I think you will have a long- term view on the stock.

What would you give advice to somebody that could not get in on the ipo?

What did -- what do you do?

The stock needs to get to about $90 in three years at the end of 2016. if you look at our revenue number 2015, 30% growth will take you to $4 billion.

That is what an investor would need to believe to get there.

Those are the assumptions an investor would need to believe.

$90. that is the first i have heard that.

Robert peck of suntrust.

The image yesterday was how quiet they were ringing the bell.

The effort of twitter to do this differently.

Gary parr with us.

The only person on the planet that went to north carolina state then onto unc.

No one in carolina did that except you.

You can't talk about twitter, i understand that.

Didn't we learn any lessons when you're first -- when you were first boss?

You were referring to when things went to the height.

There was a time when the item was not about multiple of earnings, it was multiple of extrapolation.

Is this healthy to extrapolate out until 2018? it is rational to look ahead.

On the other, the ipo market is like ace -- is like the derivative on the market.

It tends to come with exuberance and excitement.

The market is interested in new products, ideas, technology.

In 1999, some products succeeded in becoming public.

How do you discern the good ones from the bad ones?

Therein lies the secret.

You have 30 seconds.

The banker for goldman sachs on the twitter deal tweeted "p hew." he was relieved.

We do not see a facebook face plant.

The bankers miss out on an opportunity?

In a time like this where they are enthused about stocks, it becomes difficult to price and ipo.

You know there is a lot of demand and you know people are enthused.

Retail investors are enthused about equities.

Where do something trade day one becomes difficult as opposed to easier.

What did they learn from twitter?

A lot of the lead up to twitter was they were low-key.

They were telling their story.

They did the roadshow.

Not a lot of height in terms of thing -- not a lot of hype.

They underplayed things.

Do you have a twitter account?

Yes, i do.

I watch.

I do not tweet.

Much more with you, gary parr from lazard.

Our twitter question of the day -- the president apologize for obama care and those who lost their insurance plan.

What is his next step?

? good morning, everyone.

"bloomberg surveillance." at his job stay.

I am tom keene.

This matters to our guest, gary parr.

The dna continues to mutate.

Wall street will be different sooner, rather than later.

The process does continue.

It has taken a long time.

We are still 60% to 70% of the way there in terms of addressing what happened in the financial crisis.

How will things be different?

There will be some noble -- number of global winners.

The world needs some number of firms -- a handful will be providers of that.

Other firms that are trying to survive -- i do not think they will make it.

What skill set does the younger crew need to achieve three years from now?

I have to think like agents rather than principals.

They had big positions and spreads.

That was a real engine from 1980 until five years ago.

They have to think back to customers.

How did they deliver a product to the customer, distribute ipos, distribute financing, and so on.

? transactions will be underplayed.

It is too expensive to carry the asset.

That will shift.

Does washington understand your world?

Somewhat.

The first piece of dodd frank that was passed was debit fees.

They said we had a terrible financial crisis and put a cap on debit fees.

That had nothing to do with anything.

Dodd frank is only 60% of the way through.

People know the vocal room should exist, but it has not been defined.

If you defined it as the big banks, there are growth areas that i alluded to.

There are please -- paid -- places people want to be in finance.

Gary parr gets us going on our view to 2014. you will see this in the coming weeks.

You will also be sending more packages in the coming weeks.

Ups is worried about making money off logistics.

It is not boring.

We will have on "bloomberg surveillance." good morning.

? this is "bloomberg surveillance." i am sara eisen with tom keene and scarlet fu.

In top headlines, president obama says he is sorry.

He apologized to the americans that are losing health coverage as a result of obamacare.

He made his apology in an interview with nbc news.

Speaking of the white house, but the price on the government shutdown -- put the price on the government shutdown at $2 million.

-- $2 billion.

Typhoon high on -- haiyan slammed into the philippines.

It is one of the strongest typhoons ever recorded.

They could become more powerful and threatened vietnam or china.

Those are your top news headlines.

It has been a bad typhoon season.

We are going to move from weather to dealmaking.

Companies looking -- focusing on growth.

There is a new survey out from pwc that says manufacturing is where the action is.

What a shock that would be.

Normal business is doing m&a. we will see the wall street spirit come 2014. gary parr is the vice chairman at lazard.

He is enjoying the evident flow of capitalism.

-- the ebb and flow of capitalism.

The ceo confidence around a variety of things in u.s. is a big issue.

Big ceos have said i do not want to be the one remembered as announcing an acquisition and then washington completely collapses.

That is one issue.

In your up, that is a note -- that is a whole mother area.

-- whole mother area -- whole nother area.

I can see better into the future now is what manufacturing will be.

You need and ability to see out of the horizon so you do not think it is a cliff.

If there is a rising confidence, why is there so much action in the telecom space?

The three biggest yields, verizon, telco, sprint selling equity.

The telik knology field around the medications -- the technology field around communications is dramatic.

They have to act.

They have to address the change.

They do not have a choice.

As we go into next year, do you find a new focus on use of cash to actually invest into economy.

? have we found a peek in dividends and buybacks?

-- peak in dividends and buybacks?

Possibly.

The bunnies want to make sure they are protected to the downside.

In the u.s. there seems to be greater confidence.

A year ago, there were signs of mergers and acquisitions picking up area and -- mergers and acquisitions picking up.

This time it wasn't as in washington, so one can hope that it does not have the same negative consequences.

Companies can take longer-term views.

If i had to identify one item to watch, that is washington function smoothly so people can get on with business.

What about your wheelhouse?

The financials, the big banks.

Are we going to see banks make any sort of deals?

Not many.

The regulatory environment is one where regulators are not interested in banks taking on risks.

They are cautious about too big to fail.

What is taking place is rearranging.

Part of the exercises we talked about earlier -- part of it is rearranging portfolios, geographies.

Let's say, god forbid we get into another crisis situation where we need the bank to do what they did last time -- banks would be reluctant to do so.

Why would anyone step in and take a big risk to save an institution?

That is a valuable lesson learned.

It is easy to address and say i will carve out liability and you take it.

You could do it in one page on a mergers and acquisition agreement.

Real estate will be a big theme in 2014. it has been that -- it has been active in 2013. all monetary conditions be easing up?

They will be relatively easy.

You have assets and real estate of multiple types.

One is the trophy properties.

That is a trend we see continuing.

The other is the large portfolios of real estate that the banks own.

A number of banks are getting to a place where they can begin to sell those poor folios.

There's a lot of supply held up in those bank institutions that need to come in.

Gary parr of lazard.

Remember when ups told its drivers they could not take left turns?

That was one innovation that came from ups years ago.

How they are using big data now to become more efficient.

? good morning, this is an aerial shot from the " surveillance" helicopter with the christmas tree making its way to rockefeller center and there it is.

I can't believe it's already christmas.

It's only early november.

We are not rushing it.

It is thanksgiving frenzy in 15 days.

Where is the snow?

We need snow.

We are not there yet but it is a cold day.

Good morning, this is "bloomberg surveillance." we've got company news -- we are starting with coca cola outlining its china plan.

It will invest 4 billion dollars in the country from 2015-2017 and the money will go toward holding factories and adding new products.

The investment of $4 billion from 2012 through next year.

Groupon says more able or moving onto deals offered on mobile devices on the company reached a record of mobile usage last quarter with more than 60 million downloads of its mobile app and groupon struck a deal to buy ticket monster for $260 million in cash and stock.

Ups is buying back a fund that was set up for toxic assets.

The fund was set up in 2008 as art of the effort to stabilize ubs.

We will talk about the u.s. post office.

As we get close to the holiday season, it is clear the u.s. postal service has serious issues.

Leaders want to end saturday delivery and restructure employee benefits but they are getting pushed back.

You spoke with the postmaster general?

He was very cheerful which is strange.

Maybe it was because the post office is full of gingerbread houses.

It certainly was not the state of the post office, facing pressure from unions and getting no traction from congress on the proposed overhaul of the post office and it is bleeding cash.

We have about 9-10 days of cash on hand.

250. that $250 million in cash comes in the door every day.

The gingerbread houses are actually quite pretty.

It's a serious problem, 8-9 days of cash left.

This is nothing new for him.

Also billions of dollars in losses is nothing new.

You are shaking your head and your involved in the situation.

We advise the postal workers.

You cannot really comment.

Other than to say all signs -- all sides realize the issues to be addressed.

If the dog chases after a post man, your ideas to return fire?

[laughter] i wonder if the lawmakers are getting in the way.

The proposal to end saturday delivery is reasonable but there are people that say it would help everyone, yet lawmakers are saying no, the constituents need to saturday delivery.

Right.

Let tom's helicopter deliver from above.

One thing that he can be hopeful for and is relatively optimistic as they are expecting a better outlook when it comes to shipping of packages on this holiday season.

The big change will be packages.

We will have about a 12% lift in packages, total for the season of about 420 million packages.

I asked him how he can compete because the post office has less than 10% market share versus fedex and ups.

He says it is competitive but we also gain monday game gain because they have partnerships with them.

There were three or four little limes on top of the gingerbread.

When was the last time you had to wait on line at ups or fedex like the way you do at usps.

It raises the question of what happens to the post office.

It is unsustainable unless they can get get congress to do something about it -- what about the public?

Royal mail had successful private ipo.

I asked him about that.

We are very different than royal mail.

To a large extent, royal mail is minimum mail volume.

We still have a lot of male and people still get four or five pieces of mail every day.

We think there is still growth opportunities there.

We are competing with the internet and we understand that.

We have seen nice growth across some of the business lines.

He says that is not an option for the post office to do that because they still have the basic function of delivering mail.

Royal mail does all sorts of other services.

Tooo bad no usps on the stock market.

Stocks are moving higher this morning.

S&p futures are up three points ahead of the jobs report.

It is perhaps not as essential as in the past because it was disrupted by the government shutdown and comes a week later than usual.

The 10 year yield is little changed.

The dollar-yen is flat at the moment.

Good morning, everyone, " bloomberg surveillance," it is job day.

Sara and scarlet fu is with me this morning.

Lots to talk about as we go to 8:30 a.m., our guest host, gary parr, vice chairman of lazard.

Mohamed el-erian will join betty liu after the jobs report.

We are watching twitter but also ups, they have a new high- tech program to use data to streamline deliveries.

This is from the company that outlawed the left turn to increase efficiency.

A part-time package loader for decades ago is now the chief information officer and is joining us from atlanta.

How much more inefficient has ups become in the four decades since you are packing boxes?

-- you were packing boxes?

We have used an amazing amount of technology to transform our business.

It is so substantially different than when i joined.

We use handheld devices with their drivers and these are state-of-the-art and it allows us to have degrees of optimization and levels of service that are unparalleled.

What exactly is the data project doing now?

We know it is costing $1 billion.

How does it work and how much will it save ups?

Ups has a strong foot in technology.

We backed that commitment with investment about $1 billion per year and we are just announcing a new exciting software product called o'ryan.

The objective is to put it in our drivers hands that provides additional optimization and navigational capabilities to make our drivers that are already the most efficient in the industry even that much more efficient.

Orion is exciting because it drives great savings.

How much?

Do you have a number on that?

Certainly, just one mile per day for every dryer over the course of the year would have savings of up to $50 million.

Wow, what i appreciate as a consumer is the inside look at how something like my iphone 5s moves from the factory in china to my front door through the checking app -- the tracking app.

It took five business days to get from china to the united states, 1.5 days was in the united states which is quick.

How do you get something to move more quickly and other parts of the world to match that kind of speed you get in the united states?

Ups has made smart investments that connect their systems with our millions of customers.

We are able to move large amounts of data very efficiently.

It goes ahead of the packages and it allows us to preclear those packages with u.s. customs so as the planes land in louisville, the packages margin to our domestic sort them out to your home.

What does the new technology do that you cannot do on google maps?

Google maps is certainly good but ups has taken the combination of the massive amount of data we have, proprietary mapping software, with a secret ingredient which is our drivers expertise and using those in a combination.

We have very specific routing that drives les miles, less time and allows us to save the $50 million i was talking about.

What is the distinction between you and fedex right now?

Within the logistics you working, what is the ups difference versus your arch competitor?

If you take a look at ups, we excel at the application of technology to advance our business.

We have over 6 million customers that have signed up for my choice which we announced two years ago and allows you as a consumer to take control of the delivery experience.

From our smartphones, we can control ups drivers.

If we are not going to be home on a packages schedule, we can reroute the package to a ups store or a neighbor of choice or have you ps hold a package for it it is that type of technology that optimizes the customer experience which is a key to our success.

Thanks for joining us.

He is the chief information officer.

Coming up, is the jobs market really bouncing back?

We will take a close, hard look at what we know ahead of today's jobs report.

That is coming up on "bloomberg surveillance," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com.

? good morning this jobs day.

After the jobs report, mohamed el-erian of timko would betty liu live at nine a clock a.m. on the american labor economy.

Time to answer our twitter question.

Sorry.

What is his next step?

Some of the answers -- i'm surprised.

I thought it was going to get more vicious.

Harry truman never would have apologized.

We have julianna goldman.

The presidential apology struck me as unusual.

It means that the white house realizes this is starting to snowball in a bad way.

They know they need to recognize and the president needs to say to the people who are losing these plans that there is a problem here with the policy.

The white house is emphasizing that this is a big eel that he said this but he is not apologizing for what he had been saying since 2009. he is they did not get the policy right.

Was this choreographed or the president acting ad hoc as he is known to do?

I'm not sure it was choreographed.

It took him a while to get to the " i'm sorry" part.

He was pushed a little bit on this print i think it is now -- it has now opened a pandora's box where you have house speaker john boehner saying -- is he sorry, too?

No, he says it opens the door to a legislative fix.

However, the administration is saying that the president will get a team together to figure this out so they can fix this problem through administrative action, to help people whose policies were counseled who are facing higher premiums and who are not -- gary parr is with us.

Is this leadership in washington?

It's good that he stepped up and said there is an issue and we need to affix it.

It is good he admitted it rather than saying it is someone else's fault.

There is a lot to fix.

Does it make him look weak?

They keep saying they have to get the website sex.

Having the website not up and running and having the spanish language site down, having kathleen sebelius testifying when the site goes down for 90 minutes, it opens the door to all sorts of criticism.

That's why they have said november 30 is the date the majority of people will be able to get online.

They think once that's fixed, they will be able to get asked some of these other issues.

What do i need to watch for in the sunday talk shows?

Chris christie.

Also, i am interested in the news of the possible deal with iran and see how the white house is reacting and now members of congress are reacting to whether republicans are some -- going to be going for more sections which is what that's not what the white house is doing.

Always good to have you here.

More coming up next.

? this is "bloomberg surveillance." our guest host is gary parr, vice chairman of lazard.

We are starting with details on the package for the new blackberry ceo.

He is getting a total payback valued at about $88 million.

$3 million of that is in salary and bonuses and the rest in restricted stock.

He successfully turned around sybase was named the new blackberry executive ceo.

Telecom italia is looking to raise billions of dollars to solve its debts.

They have a plan to raise $5.5 billion.

Its new ceo is trying to turn the phone company around rate it recently had its debt debt to junk by's. priceline gets a new chief executive officer.

The online travel agent promoted darren fused into the top spot who was head of the company's booking.com unit.

The longtime ceo will stay on as chairman.

That is today's company news.

It is time for the agenda where we look at the major stories that are shaping the day.

No question, job economy, we will have full coverage at 8:30 a.m. as we look at this important number, the impact of the shutdown.

There is a real mystery to this jobs day.

One of the great mysteries is what do we do moving forward and within the agenda, it's about the real economy.

Gary parr is with us.

Nothing solves things like gdp.

Exactly.

Are you optimistic about america's growth in the next year?

Actually, yes.

Many things are working well in the economy.

If you look on a global basis, the u.s. economy is still one of the stronger economies.

What we fear as much as anything is other economies dragging is down.

I wonder what is holding us back the most?

I said it before, politics.

There are many other things working quite well in the u.s.. the politics and the uncertainty of the environment is the issue.

How do you respond to the idea it is jobs day and a better economy for roughly 20% of america?

Do you see a new normal in economy?

Or can you be more optimistic about everyone finding advantage from four percent gb -- gdp growth?

I think mohamed el-erian is always right.

He is a smart fellow.

The issue is you flood the cap made -- the economy with liquidity and there certain things that benefit first like the stock market and other financial assets.

There is the case that many wealthy people benefit first as the money floods in and stocks go up.

We are seeing that now and then you hope for the secondary effects.

Even the stocks going up, that is a lot of people's pension plans and retirement plans.

That is good for an overall economy and good for housing.

Does everything changed when the fed pulls back?

Hopefully, they don't pull back until they really believe the engine is running and whining well.

-- and running well.

How long does it take for the economy to run on its own without the liquidity?

What did you learn at lazard during the bond shock of late summer?

Bond prices were down and euros were up and you had a bad morning.

We don't do sales are trading or a balance sheet so we are fine.

What did you learn on the street?

Is the issue of what it cost for financing and the number one issue for the u.s. economy is housing.

How will it affect march -- mortgage financing and refinancing?

That is a major driver to the u.s. economy.

Do you think the central banks have run out of options?

Even with the european central bank that yesterday, the fact they cut was not a surprise but the timing was.

All i have now is timing.

There is an issue of another rate cut in europe and they could do an equivalent to monetary easing.

There are such things but it is politically complicated and takes more steps for them to do.

It takes more to get there for them in particular but we already have arguably3/4 of the world is pushing liquidity into the market.

Japan, u.s., europe and even china.

China is making sure they hold their gdp up.

Your agenda is the number two value mail?

Yes because mike dolls will report its same start sales numbers print mcdonald's said last month it is on comparable sales comparably flat.

Mcdonald's has been trying to retool its extra value meal.

It is no longer offering the dollar menu items because it was not paying off.

The franchisees were complaining that they were losing profitability even with increased foot traffic.

It really spake stu the consumer and how tired the consumer is -- it really speaks to the consumer and how tired the customer is.

What about buying healthy stuff that mcdonald's? if i go into mcdonald's, i want large fries.

[laughter] that is a bloomberg exclusive.

Extra-large fries.

Do you buy salad from mcdonald's? i would rather go somewhere else for a salad.

On my agenda this morning is the president.

He has apologized to the american people, to at least the ones who lost health coverage, over not being able to follow through with his -- with its promise they can keep their plan if they.

The following continues and his approval rating is an an all- time low, below 40%. you wonder if republicans will continue to beat him up on the sunday talk shows or if the apology could potential

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

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