Delayed Jobs Report Out Today: Surveillance (10/22)

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Oct. 22 (Bloomberg) -- Full episode of "Bloomberg Surveillance." Guests: Neil Dutta, Porter Bibb, Michael Wolff, Michael Morgan Garland, and Jason Helfstein. (Source: Bloomberg)

If it is tuesday, this must be jobs day, delayed september report will indicate the pulse of the american jobs economy.

Countrywide, forget washington, georgia and california examine the trail of debris from countrywide financial in the legal bill.

The new ipad is lighter, faster.

Do i really need one?

We see the tablet wars heating up.

Good morning, this is "bloomberg surveillance." i am tom keene, live from new york.

It is jobs day, tuesday, october 22. joining me sara eisen, scarlet fu.

Are you going to buy a new ipad?

I just got a mi -- mini ipad.

I will only buy one if it comes in gold.

Jobs day tuesday.

Have we ever had that?

Morning brief.

Home prices in china, four major cities jumped the most since january 2011, a bullish sign for the chinese economy.

Prices in the 69 out of the 70 cities rose.

Britain's budget deficit narrowed overnight more than economists were looking for in september as the property recovery helped boost taxes in the u.k. in the u.s., it is a jobs day tuesday.

Very unusual.

We will get the numbers, nonfarm payroll, unemployment rates and all the good stuff.

Construction, spending, and also manufacturing index.

Pretty busy day in terms of economic data.

Busy earnings.

Dupont due out any moment.

Coach and united technologies, lockheed martin and delta.

After the battle, panera and amgen.

It is a global back story to this jobs day.

The screen is very quiet, much like a friday jobs day.

Crude really begins to drift away from 100. on to the currencies, it is a china story.

The fix showing the good equity markets, dollar index repressed.

Yen is weaker today.

Over here is this grind lower, stronger china, isn't it?

The whole hardening thing is drifting away.

For six days in a row.

Letting the currency get stronger and stronger today.

It went the other way, perhaps in a signal this is not exactly a one-way bet, be careful.

It is distance, -- a distant, but nevertheless, it is valuable to bernanke to have a stronger china.

And helpful for our exporters.

Time to check the front pages.

Usually, this is where we talk about jpmorgan.

It is, but today, bank of america.

Before we get to that, i want to mention dupont chemical numbers, third-quarter profit beating estimates by four pennies.

It does say it sees sequential growth in the industrial market demand and that global growth will be slightly lower for the full year.

The desire is to split it up.

We will continue to look for details.

Bank of america and regulators crosshairs because ceo ryan moynahan and the bank overall faces three additional justice department civil probes over mortgage backed securities.

There are ready sued by u.s. attorneys in august over an 800 $50 million mortgage fund.

This involves around countrywide and merrill lynch.

If claims are brought, bfa would join jpmorgan and basically inheriting these problems and getting punished for it after the government kind of push the -- encourage them to rule out weaker rivals.

13 billion, but it is not 13 billion, is it?

There'll be a cash component, relief for consumers.

We don't have a final number yet.

I havefour-ish.

That is what the real fine is.

The cash penalty.

It is still being decided.

Two days ago, it was six-ish.

With the $13 billion sticker number, the stock barely moved yesterday.

Jpmorgan finishing flat.

Perhaps it is a relief to get the uncertainty behind.

Our next front-page story is about two -- tablet tuesday.

Just unveiling 60 devices and other dobby -- abu dabi.

Nokia said the windows phone is getting instagram, which -- finally.

The first tablet is out from nokia.

Microsoft also coming out with its latest surface tablets today.

And then, drumroll, apple will be unveiling the new ipad.

That has to be tough for microsoft and nokia to have a launch day as the same day as apple.

Where do they go next time, indonesia?


Netflix reported earnings last night, investors cheer the results.

Third quarter beat estimates.

The stock is rising 11% in premarket.

Yesterday it close at a record high.

It is arty the best performer in the s&p 500. it has almost quadrupled in 2013. new subscribers to some 40 million subscribers worldwide.

In the u.s., it is now bigger.

It has more subscribers than hbo -- in the u.s. yes, it is not global.

It does have a long way to go before it reaches hbo's international reach.

We will time -- divan in a moment.

-- we will dive into that in a moment.

Neil dutta with us today.

He brings with is a trophic perspective and optimism.

Do you maintain your bernanke- like optimism?

I do.

We know most of the data for september.

Adp was around 170, jobless claims are down.

We are likely to get a decent employment report.

The bigger story is the economy is burning at the same pace of growth, despite fiscal tightening.

I was asking yesterday and today, to recalibrate after washington, out four quarters, how much will the station grow?

She said 2.5%. i think she's being too conservative.

They're significant upside potential and momentum.

I would not be surprised to see -- remember, we have been running 2.5% over the past few years despite no grudge or be shown in commercial real estate, state and locals detonating.

None of those things are happening today.

Does the number today move the needle at all for the federal reserve?

Would they consider tapering sooner rather than later?


because of the shutdown.

When you fish are saying it is off the table, you know it is pretty much off the table.

I am fascinated by this, we have never seen so much creative destruction.

Which creative destruction in media should we focus on right now?

Let's start with the fact we all live in netflix nation right now.

They are disrupting everything.

It is in flux.

Everyone knows print is dying, but everybody is buying print.

Cable is dying, but everyone is rushing into cable stock.

"new york magazine," said nothing is working right now.

He was talking about the magazine business.

Is nothing working right now?

That is a misnomer.

Virtually every major magazine is up and never ties between 10% to 20% this year.

Off the lows of 2008. where they're hurting is in circulation, which is collapsing across the board as the content goes to digital.

"vanity fair" has one of the best digital projects -- products of anybody.

But it is interesting, this whole print dynamic.

And as everyone spends off their magazine units.

Time warner is spinning off their early next year to magazines.

What i would like to see is spinning off hbo.

Let them track you netflix momentum.

We will talk more with you including what you call netflix nation.

John stay tuesday.

-- jobs day tuesday.

And our twitter question of the day -- tweet us.

Let's start with novartis.

It hikes its forecast for the second time this year.

The new alec comes after generic competitor failed to reach the market.

They're examining quality control of the indian company behind the potential medication.

Novartis said sales could rise by single digits this year.

Michael evans is leaving the firm after 20 years i goldman.

He was seen as a gentle successor to the ceo.

He will step down at the end of the army, senior director at goldman.

Shower hathaway is back on top.

-- berkshire hathaway is back on top.

Apple slipped to number two this year.

The rankings are from tiger 21, a group of wealthy investors.

That is today's companies news.

Warren buffett will be "in the loop" today with betty liu.

Watch that.

Very, very cool.

I wonder if they have ever done that?

Are they on speaking terms?

Very cool.

We will talk more about what she has planned for the buffets interview.

We have to go over monday night football.

The new york giants finally won a game.

Even i was paying attention.

Eli manning threw no interceptions.

They beat the minnesota vikings 23-seven.

It was their first win after opening the season with 6 losses.

I fumbled punt led to one score by the giants.

It was the first start for the quarterback for the vikings.

They are 1-5 versus the 1 in 4. does it reinvigorate the fans?

Everyone seemed pretty bummed over the first six weeks.

It is hard to make up for that.

I'm trying to think of something to say about the new york giants -- something kind.

Let's say something about netflix.

Here's a number for you.

31.1 million, the number of subscribers netflix reported yesterday for the first time, hbo's u.s. subscriber base.

We will talk about why this milestone is significant, next.

? it's a game good morning.

"bloomberg surveillance." this is truly special.

Warren, howard and howie with betty liu.

Three generations of the first family of omaha.

Some would say the first financial family of the united states of america.

Financial royalty, really.

Any have a bank account like that, you are royalty.

This is "bloomberg surveillance." we have to talk about netflix.

Hooking viewers with original series like "house of cards," and "orange is the new black." investors are hooked.

Third quarter earnings beat analysts estimate.

It is remarkable to look at the turn of the company that used to ship as dvds in the mail.

Now it is all about the online streaming and the subscriber numbers.

You can say what you want about the earnings per shale -- for sale, but subscriber numbers in the united states, paid subscribers, almost 30 million.

20 9.9. netflix is passed hbo in paid domestic subscribers and could reach as much as 31.8 million in the fourth quarter.

It is fun to talk about the original shows, but netflix has been in the news because of some of the partnerships it has been doing with traditional cable and media.

Teaming up or i should say in discussions with cable operators.

They no longer see it as a rival but more as a potential partner to keep on the subscribers.

They can't ignore it.

They have negative free cash flow for last year.

They do make some money at the gross profit line, but it is all about the forward view.

You see what the stock price does with amazon and netflix -- and that is one concern that a lot of analyst site, which is the valuation of netflix is too high.

Even though the streaming business looks pretty good right now, it is not sustainable.

One says hire content cost will continue to drive the stock down or at least profitability of the company down.

We need perspective.

He was behind the monitors at woodstock.

It was that long ago.

Porter bubb -- porter bibb with this.

Is it a correct is this plan?

I think the future is very scary for reed hastings and netflix.

As scarlet mentioned, they have a very difficult model to sustain.

He has done a brilliant job of creating a new concept for binge viewing, but netflix is not just a shift from male over -- mail order envelopes to his television viewing, now not movies.

They said they're looking into producing original movies as well.

Sure, but that puts them into the hollywood poker game with their one out of 10 is a hit.

Critically, can you compare them to amazon?

Amazon is in the tangible sales business where netflix is in the concept.

What is getting everybody crazed about netflix is, where is the competition?

You have amazon, google, facebook, even sony has something that nobody is ever heard of cut and netflix competitor called crackle that is six years old.

Original comparison him this comparison is netflix versus hbo, which is why yesterday was so significant because netflix topped the number.

Netflix made $32 million net profit from a $7 million free cash flow this past quarter.

Last year, hbo did $1.6 billion in profit.

That is why netflix is having a difficult time -- what is interesting, netflix has verbalized this themselves.

The chief content officer famous for the line, the goal is to become hbo faster than hbo can become us.

Reed hastings is concerned where momentum stock and he wish he could tamp that down.

Then he says, but i'm in the midst of talks with comcast.

Last month it was time warner.

Are they a profit generating entity?

They're making money now, but they plan to spend more money as well.

They plan to doug rule -- a double their investment.

They raise money to fund it.

What they don't reveal is the churn rate.

It is very significant.

Secondly, the off-balance-sheet liabilities.

They carry half $1 billion of debt on their balance sheets.

They have over $3 billion in future liabilities for contracts or content acquisition.

Dragon lady, my whole thing for netflix is winter is coming.

"game of thrones," you are waiting.

It is not dragon lady, it is queen of dragon.

Excuse me.

It gives than 15 million to 20 money new potential subscribers.

What i'm worried about is where the cable company so interested in netflix because they will offer you and me a subscribers eight dollars for 10,000 movies versus one movie for six dollars.

You and i have to stop talking queen of dragon.

Porter bibb.

We will talk more with him.

Coming up, larry fink says washington needs to prove itself.

We will look into why he's making a splash about washington now.

Our morning must-read is coming up on "bloomberg surveillance." ? midmorning, "bloomberg surveillance." it is jobs day, friday -- i mean, jobs day, tuesday.

This is a must-read for anyone interested in politics.

Angela merkel is the subject of the piece in "the new york times," a former editor of the german magazine newspaper.

It is a great morning must-read and a great read because it talks about how she is performed in european debt crisis with all of these men leaders and some of these not so stable -- she has been a force of stability and changed the entire landscape when it comes to politics and stereotypes in europe.

He says a little girl on the subway asked, can we ever have a male chancellor because she has had such a strong role and been such a force, a power.

You wonder when the u.s. will see something similar.

Well, you wonder.

One the 16th of the event full, to say the least -- 2016 could be even full, to say the least.

She says in the op-ed, today there are four acting female governors in 16 states.

Before angela merkel came to power, there was essentially none.

And janet yellen has been approved.

It will be lonely.

It is an adjusting thing how europe has moved on.

-- it is interesting thing how europe has moved on.

Did you see how turn down the bank of israel?

And they will have the first female similar to janet yellen.

What will move markets mark, the launch of the new tablet for apple or the jobs report?

Treat us -- tweet us.

? this is bloomberg's "surveillance" i'm sara eisen.

It is never happened before.

The u.s. release is a job support on a tuesday.

How about that?

Futures boring.

Can you boring.

Euro, boring.

Nymex crude gives us some entertainment.

98.94, well under 100. a soap opera continues with jcpenney.

They agreed to deal with martha stewart's company to a narrow range of products.

Wow, it was seven dollars two days ago.

We know the jcpenney has been under attack from naysayers out there.

It is been forced to fend off anonymous attacks on twitter as well.

People up and saying things that twitter head-to-head bankruptcy attorneys so jcpenney had to die that.

This is into the holiday season.

That is not a vote of confidence, is a? it?

A wonder how many pension funds have to sell their shares, if they own it, under five dollars?

Our top story of the day, that unusual jobs report due today.

Better late than never.

The bureau of labor attempted to retort you can -- attempting to restore economic order.

The brinksmanship that brought us here has given few signs of abating.

With the distraction washington, the american economy slides forward.


Of renaissance macro agrees with german bernanke that job growth will improve in 2014. are we for action finally seeing a rising real wages go we are, and we have been for a while.

One of the things is that employment has been steady throughout this recovery.

Calling it subpar is doing a disservice, tom.

We are running out of faster pace of job growth -- we are running at a faster pace of job growth.

That's good?

The august job report was not stellar.

Long-term unemployment, revisions back that were very disappointing.

I think focusing on one month is not -- is not one month.

It is revisions for prior months.

Let's keep it in perspective, ok?

150,000 back in september of 2012, do you honestly think the fed would've done their opening qe at 150,000? how does this jobs report fold into the shift from her 90 y twoellen?

Bernanke to yellen?

Given the consternation in washington, march seems to be more of a likely date for the fed to begin tapering.

If they were going to do it, they should've done it in september at this point.

Bart seems like the most likely option.

Your fellow economists on wall street, is there a form of groupthink in washington?

In reality we know now that everyone, always furloughed workers are going to get back pay.

It is a wash over the quarter.

How do you respond to the report?

Is that nationwide and if it is true, what does the gloom crew get wrong?

And a measure of consumer confidence is a call for the stock market.

We are in a benign inflation environment.

The are in an environment where growth has risen from two and a half to three percent.

I am buying equities.

With us am i going to do?

Only 50% -- that is always true.

How does that impact your economic forecast?

As i say, my job is not to make social judgments on whether the growth is strong enough.

That is our job very my job is to convey to investors what the economic environment implies for the capital markets.

If you are an investor you want to be overweighting equities and shorting the treasury market.


I'm going to bring in porter bibb.

Netflix, google, these companies that are doing so well.

They don't hire a lot of people.

They are destroying jobs in the end.

They aren't but content producers do.

The production world in content and film has exploded.

What the overlaps in computer graphics and all that?

The cost of making a movie or television show is funny five percent of what it was 10 years ago.

The new technology that is available.

The job krishna and media is going on terrifically.

Killing jobs is in print.

"the new york times" has cut their newsroom 70% from five years ago.

With your decades of perspective, do you believe that the service sector, your world, is the same as the goods producing sector?

Goods producing is definitely in decline.

We are a service nation right now.

I was going to say we are a netflix nation, but we are a service nation.

I think one of the most interesting things has been households.

U.s. households have delivered a pretty good recovery and good spirited and buying cars, we've been buying appliances.

We haven't been spending much on services.

A lot of that could be measurement.

The bureau of economic analysis was measuring video market rentals, are they measuring itunes downloads?

I'm not so sure.

One of the things that you see is a steady downward shift in services spending since the late 1990s. in the gdp statistics.

If services had been growing, we would've been talking about a three percent consumer, not a two percent.

You get to that psychological barrier of three percent plus, just by counting and how many downloads they do at the food household.

-- at the fu household.

What will move markets more today?

Apple's product launches?

Apple, three percent.

That is bigger than exxon mobil or the jobs report at 8 a.m. -- at 8:30 a.m. how many phone with us when be because it reflects the economy before the government shut down.

Also coming up today, tonight on see week.

The ceo and sole owner of cross fit traded is a fitness company that involves an intense workout heard cross fit has 60,000 trainers, all thought -- almost a thousand gyms across united states.

He would tell us why he thinks of cross fit has become a movement that is transforming the industry.

We have been asked if we are called.

It must be her worst kind of cult to be leading one and i don't know what it is one, right?

House is not like a cult?

I do know some of the things about cults that don't seem to be operative here.

One thing is of cults usually come with some kind of crazy belief system.

You really believe that?

Here's what we believe.

We believe that there are salient changes that you can make in your lifestyle in terms of your exercise that will make a profound difference in your life, profound.

Bottom line, success, i believe, comes out of doing something important, do something significant it also more than ok with that not panning out.

At the end of the day we're going to have no regrets because we're going to do the right things for the right people for the right reasons.

It turns out that it is handsomely profitable.

Those people that find higher purpose in business are the ones making all the dam money.

Jeffrey hayes led tonight.

Fitness cults.

A third day in a week is tough.

You did cross fit?

I find it really hard to believe.

No way.

[applause] you're talking to the wrong people.

Fitness cults?

Can't relate to that.

It is tough.

At a not anything about cross fit or any exercise, for that matter.

Congress are not the only ones making predictions about jobs reports.

Twitter has its own forecast and we would tell you what that is.

See how it matches up with what the economists say coming up on bloomberg's "surveillance" streaming on your tablet and your phone and on

? this is bloomberg's "surveillance" as always with tom keene and scarlet fu.

The two leaders apparently spoke by phone yesterday after reports that say the nsa eavesdrop on millions of phone calls in france.

The report in a french newspaper was based on a document from edward snowden that said the u.s. had intercepted and recorded 70 million hits.

According to a former employee, no rules on the use of corporate credit cards of employees taking family trips to disney world or buying thousands of dollars of wine.

A former worker was testifying in the trial of five employees of the firm accused indicating meet us $17 billion fraud.

The problem plagued obamacare website was rushed to market without testing.

This according to people involved in the rollout.

The site went live even though test to see how the consumer would expensive were never done.

President obama said yesterday that he admitted the site had been slow and vowed to have it fixed.

Those are your top news headlines.

It is jobs day.

It is a tuesday.

We'll have all that for you soon.

Right now, the single best chart, here scarlet fu.

You don't have to be an economist to get in on the action in terms of guesstimating where we are going to be with the payrolls number.

Everyone is tweeting a guess as to twitter with the ##n s he guesses.

-- and s p guesses -- nfpgue sses jobs report has been delayed over the last couple of weeks because of the shut down.

Twitter is looking at 170 one.

It really shows the band that is left in that chart.

How big is the dartboard on any job support?

Well, it could range.

We know what stiff -- we know what statistically significant it is.

My guess is that twitter is going to be more accurate than the economists on wall street.

Have that much faith in myself, let alone the people in my profession.

An important question professionally, how do you come up with a number?

Typically, job listings of the single most important seed into the monthly employment number.

We also take things like i s m, the take adp for example -- you burn incense -- we know what the ranges, right, tom?

Rigor to the economist porter big here with his analysis.

-- we go to the economist porter bibb here with his analysis.

A lot of people say this a be the last report with the clean numbers because it was the last one before the shutdown.

He writes in the ft that confidence in america drive from our economic growth.

Neil dutta, are we going to see the results of this government shut down?

It should start to fade by december.

In terms of confidence being badly shaken because of the shutdown, i don't buy this for a second.

We arty know that consumer sentiment has popped now that the shutdown is over.

This idea that we are like little lemmings waiting to find out how this shakes down in washington, i think it is a bit amusing.

We have been talking about political uncertainty for three years now and yet all the while the economy is growing, people are going back to work at yes, but businesses are not spending enough.

We have a relatively normal capital spending.

That is just a myth, the idea that uncertainty has kept business pending extremely negative.

They be it is weaker than it otherwise would be, but -- well, it is a huge debate.

The facts tend to line up more on one side than the other, let's put it that way.

I dislike arguing with you, neil dutta.

All right, you win.

Our guest was for the hour.

The debate, the confidence question.

No debate, the giants won the first game last night, but the real winner could be the fans.

We will talk about the business of live streaming the nfl when bloomberg's "surveillance" returns.

Bloomberg gives you a snapshot of what is moving, plus top news, charting and ways to track your portfolio right on your iphone, ipod touch or ipad.

Down load the free bloomberg application available at the app store and stay in touch with your money wherever you are.

Bloomberg mobile.

Greg stay tuned for today's bloomberg forex report.

Visit interactive brokers

Good morning everyone "bloomberg surveillance", futures flat.

Three generations of the buffet family of nebraska.

Warren, howard and howard junior together.

That's prequel actually.

We've got some company news for you now from the files of bloomberg west three netflix shares are soaring more than 10% in the premarket after the company topped wall street estimates with $.52 per share in earnings.

A nickel better than was predicted.

Netflix has a new subscriber milestone, 40 million which makes him larger than hbo in the united states.

Oakley -- nokia unveiled six new devices in abu dhabi.

Nokia says its window phone is finally getting the official instagram app.

Speaking of apple, apple and microsoft had their own events today.

Microsoft was resenting its new surface tablet.

Apple will start selling ultra high definition televisions in the fourth quarter of 2014 is the prediction coming from tokyo-based advance research japan.

That is the newest company news from the files of bloomberg west.

Is anybody predicting a gold ipad?

For fans who can't stomach watching the team stumble on the big screen, there's always your phone or tablet.

Scarlet, i know you have been looking into this.

It is a big business for the nfl.

It is, but right now it is only available to subscribers of verizon wireless.

Starting next year, verizon wireless will pay two and $50 million to give customers the ability to live stream thursday and monday night games along with off market sunday games.

And how the nfl is making money off these kinds of extraneous deals.

Porter bibb is a managing partner at media tech capital specializing in this area, media technology.

Porter, to me this reflects our debt the nfl is at monetizing and expanding the -- we aren't it's already exclusive partnership.

Not only adapt but immensely profitable.

Six out of the top 10 cable programs last week were nfl games, way ahead of the american and national league play up tension ships with -- way ahead of the american and national league playoff championships which were great games.

Will people actually start watching football and mobile?

The nfl is arty exploring a netflix type services streaming games to mobile.

I wouldn't be surprised if espn doesn't come up with something similar, because sports is driving all of video right now.

Is it the league's ultimate goal to get everyone to sign up for these mobile apps and drop cable operators completely?

Not going to drop them anytime soon because they are what a long-term contracts and with hundreds of millions, but when those contracts expire, the shift will go mobile.

Critical important here, you are the hipster, your out on hipster, are people like you and me going to ship over to watching football games on an internet stream?

Let's start with the 80 year -- 80 or hundred -- 80,000 100,000 person stadium.

You can get all the statistics and compare that run -- of they're going to cannibalize their audience from tv viewers?

Not cannibalizing, but giving them a richer experience and tying them much closer to the content.

Compare and contrast verizon, which is a big fee, versus the end hlr what baseball do, which essentially everybody gets, right?

It is just a superior practice.

It depends on the fan.

If you go to 30-year-olds and under, they're not watching television, they are all on mobile.

If you go older, it is the committed sports fan who's going to want a richer experience.

He wants more content, more statistics.

Who is the loser are the commentators sitting there because the don't have anything left to say.

Talk about advertising rights.

During no anything about how much -- this is a big issue because mobile is really still a hurdle for advertisers.

Mobile for advertising is intrusive.

You don't have time, you don't want it to interfere with the mobile experience.

Advertisers have to work on that and solved.

Native advertising tells the story will give some kind of content information, that is going to be the way that they get it.

As a morning moves on, i have to ask the question.

Twitter ipo, where are you on that?

You just saw that they close down the music service.

How much can he do in advertising in 140 characters?

I get except about this i saw an ad the other day and it was really intrusive.

That is the problem.

They're going to have to come advertisers are going to come up with new creativity and make it a story or a product with content that you want to porter pouring cold water on twitter optimism.

Thank you also to neil dutta for joining us on this tuesday job state.

Foreign exchange reports round of the hour.

We have to check out what the dollar is doing right now.

Not a lot of movement.

I would be watching the dollar versus the japanese yen because this one tends to track treasury yields as a good initial reaction.

Good numbers usually strong dollar against the japanese yen and you can see that it is pretty much in a week dollar story.

The economy is going to suffer in the shutdown and that is good to push out the fed tapering.

Coming up on the next hour on "bloomberg surveillance." michael wolff wrote the book on rupert murdoch.

He is our guest on changing news business.

? this is "bloomberg surveillance". a delayed september report will indicate the health of the jobs economy.

Nokia and microsoft unfurl pretty new products today.

Which ones and how many will scarlet's family need?

As we look today at the small companies driving growth and ipo wind energy takes over.

We will look at that.

Good morning, everyone.

This is bloomberg surveillance, i'm tom keene live from our headquarters in new york area is job state tuesday, october 20 second.

Sara eisen with me, scarlet fu with me, our guest host this hour, michael wolff, author on murdoch's the man who owns the news.

We need to get briefed on the job state.

Overnight, prices in china for major cities.

Prices actually climbed in 69 out of 70 cities that the government tracks there.

Britain's budget deficit narrowed more than economists forecast in september.

The property recovery there in great britain is boosting taxes.

Economic data in the u.s.. it is a busy one, it is a job day on tuesday.

Eight: 30 a.m., the fun begins.

We will get the unemployment rate, will get the numbers for the month of september.

There is a lot of earning to watch.

We've heard about coach and united technologies, lockheed martin will be in the 7:00 hour as well, so will delta.

After the bell, an nara and amgen.

There is your morning brief, a busy one in terms of economic and corporate earnings.

Scarlet has some company news for us.

Some quick headlines.

We'll keep an eye on whether stocks trade.

Meantime, the justice department setting its sights on bank of america.

The firm faces three more investigations over mortgage backed securities.

This according to people in knowledge of the situation.

The bank is arty being sued by u.s. attorneys.

The potential violations being investigated now are related to countrywide and merrill lynch which the of a purchased.

11% in the premarket after the company topped wall street earnings estimates with $.52 a share, five cents better than the consensus.

The company saying that profit this quarter could be well be well beyond the current analysts estimate.

It is tablet tuesday.

Just a little while ago nokia unveiled six new devices at an event in abu dhabi.

Nokia hosted devices will challenge apple and samsung on smartphone market.

Apple microsoft meantime -- apple and microsoft introduced their own items today.

That is in today's company news.

We will get to smart on a tuesday morning.

A special morning.

It chief economics correspondent , from washington he had a chance to sneak away.

Phil adderley is here as well.

Is long overdue -- in his long overdue job support.

Bill gross joining michael mckee later on on bloomberg radio as well.

Good morning.

Good morning.

Is interesting, isn't it?

Is odd.

I'm not used to it yet.

You have to remember what we're looking at his data from the week of september 12. it is kind of like sarah going home every night in checking in the refrigerator the old take out to see if it is still edible.

Unite disagree.

I think it is a big deal today.

I have nothing in my refrigerator.

You don't think this one of the markets accor it won't move the markets unless it is a fabulously out of line number.

Anywhere between hundred 40 thousand and 200,000 isn't going to move anything.

Why not?

It is a cleaner age.

-- it is not a clean read.

If it is positive, we could see the fed move sooner than later.

If it is extremely positive.

But the trouble is that an you ask what happened in between.

Did that affect the consumer, will that slowed on the economy going forward.

They're going to want to wait for clean data and we're not going to get in october.

Sure they're going have to wait for the november read and figure out if that is clean enough.

All the data points that are coming out in the coming days, which should be focused on given that they're all old?

Interesting and is that coming out of the reports of be the revisions.

104,000 in july?

Did those get revised up, did we have more strength going into the fall?

That would make people feel better.

He is more optimistic i'll let chairman bernanke.

Where is consensus on the economy and how the jobs economy relates into that?

A general consensus is that we are getting better.

Still treading water, 2.5% range.

If he could just carve d.c. often floated out to sea in the first part of next year we could start to see growth pick up towards about three percent.

Michael mckee on this jobs day.

Still not used to it i'm a tuesday.

Let's will get back to fridays to make you feel better.

What will move the markets more today, apple's product lines or the jobs report?

Remember, apple is a three percent index waiting for the s&p 500 are the biggest and most important one.

Will be watching apple stock in the job support at 8:30 a.m. not at the shutdown is over, all the focus is on the president's health care legislation and president obama did speak yesterday on the chaotic rollout of the healthcare exchanges.

Have a listen.

Here's the bottom line.

The product, the health insurance is good.

The prices are good.

It is a good deal.

People don't just wanted, they are showing up to buy it.

Nobody is madder than me about the fact that the website isn't working as well as it should, which means it is going to get fixed.

The president is mad and getting a lot of attention right now on

Big story that officials failed to complete testing of the federal website, health before the rollout in a perfect storm for a meltdown.

Escaping the tumbled, this has gone beyond just a bipartisan, a partisan battle over the health care law.

It has become a problem for the president.

It really has, sara.

There are two issues.

There's a policy side in the political side.

Why this is become so problematic is because it is really impacting policy side.

The administration has goals to meet the one 7 million people enrolled by march.

We have 500,000 people that have just started this process now.

You're talking about a couple months, a process of not working.

This is the centerpiece of the health care law if they can't can figure this out, that is problematic.

We are the president talking about the product and praising it really.

But the process is getting in the way.

What is that mean for kathleen sibelius's tenure as the director of health and human services?

She's at the center of this.

A lot of people are frustrated because at that as they were watching this robot happen this is the perfect time to go after the health care law.

Now that that is done, now kathleen sibelius has become the target for the failures of this rollout.

What is great about this, phil mattingly on politics, achieved economic correspondent michael mckee and michael wolff here with the new village aunties which is your -- with the new vigilantes which is your new social media service about the speed of information transfer.

The president's product is good, the process is faulty, he gets to something really that is that fundamental division in the economy right now, which is that the product is the process.

That is what technology people -- you sound very marshall mcluhan there.

I just can't believe -- i heard this yesterday, i thought the guy does not understand anything about technology.

That doesn't make him distinct.

Effectively, the entire political and business world that is outside of the technology space does not understand anything about technology, which is why they are being run over.

When you observe phil mattingly's world over the last two or three weeks, did your world of digital speed change at debate?

To me it was profound how the speed and how people adapted to the news flow was original and different.

This is the other point about this, that nobody seems to be able, especially in the political world, to fathom how fast this changes.

Everybody else outside of the political world is as fast or faster than people in that world.

To nfp estimates?

Did you do it?

No i didn't. i saw was out there, but it didn't do it very should we do it?

Ok michael mckee and i will do nfp -- you have 90 minutes.

The twitter estimate is 171,000. i am betting on twitter, michael wolff, what you think?

I'm completely betting on twitter.

The earlier discussion about twitter's advertising problems misses the point again about what advertising is and what it is becoming.

It is not a 30 seconds by.

All right, we're going to dive into that with you, just getting started on the twitter ipo, on the changing media landscape.

We're going to talk about an energy company betting big on wind power.

We will speak to the ceo of pattern energy, all coming up on television and radio -- all coming up on bloomberg surveillance television and radio.

Morning everyone this is "bloomberg surveillance" i'm tom keene.

The fiction is newspapers.

Jeffrey bezos has acquired the "washington post." they like the old media.

We are seeing this everywhere.

The guy that runs ebay is going to run out and do something.

Bezos is going to do something.

Going to do something, what do they see in old media we do not know what they see.

It could be as simple -- i don't think there is much reason to cb on this.

-- see beyond this.

They are buying meeting, influence, purpose, respectability, a little bit of glamour.

The question is -- do they have an idea beyond that?

Can they reinvent something here?

You have to shrug, maybe they can.

Jeff bezos has succeeded where no one thought he -- part of your charm, joyously nasty.

The idea of the michael wolff charm is two things.

You set up your digital website -- if you were sitting with jeff bezos, what would you advise him after you went through that digital website experience at?

A good question.

I think that i would say -- here is a set of experiments that you can try.

You can take a newspaper and take a general interest publication, you have got to pick three verticals, that is your concentration.

Whether it is the federal government, crime, i do not know.

Talking about the conversation -- our editor in chief talking about journalism, where is journalism right now in the media debate?

That is unreal, nobody knows what journalism -- where is the future of journalism and serious reporting?

I only say do not tell me this.

Serious reporting is a myth.

There is this idea that journalism was once great and sacrosanct, it is baloney.

Journalism has always been what we can do today, now, in this moment for this amount of money.

Michael wolff, always controversial.

So much to talk about.

Betty liu, later this morning with three buffets.

? good morning, everyone.

"bloomberg surveillance," 1, 2, 3, buffett cubed.

All three together with betty liu in the 9:00 hour this morning.

The youngest one owns 400 acres in nebraska.

How old is he?

Why do you ask?

I am just wondering, i know he is not single.

Three generations of buffetts, coming up.

Sara eisen with tom keene and scarlet fu.

Our guest host for the hour, mike wolff.

More fears of a housing bubble in china.

Home prices in the four major cities jumped by the most in 2.5 years.

They rose 17% in shanghai, 16% in beijing, they rose and 69 out of the 70 cities that the government tracks.

President obama is trying to reassure french president hollande.

Reports that the nsa ease drop on millions of phone calls inside france.

The report was based on documents from edward snowden.

It said that the u.s. had intercepted and recorded intelligence and communications data last year.

The giants get there first win of the season, beating the vikings 23-7 and monday night football.

The giants had opened the season 0-6, the worst start in 37 years.

Those are your top news headlines.

They beat them i need -- they beat the mighty power of minneapolis.

Some good news, finally.

Time for our new series on businesses driving growth in today's economy.

We are looking at pattern energy, the first u.s. wind only energy company to go public.

The ceo is here to talk about the industry expected to grow more than sexual by 2050. tell us -- to grow more than 60% by 2015. we are reserving cash, doing acquisition, acquiring the 8 original projects -- the third area is working capital.

When we hear wind energy, we think federal tax subsidies and credits.

People make a big deal out of it, every energy resource has subsidies.

This industry is turning off of good subsidies, it will be good parody of natural gas over the next few years.

We would like to see an extension.

Our company believes that we can survive without it.

Price waterhouse cooper had a scanner.

-- a scatter dot chart saying that wind was not sustainable.

Can it work?

Can you scale what pattern energy does?

There are a lot of new studies that counteract that position.

If you look over 20 years, it is at parity with everything else in terms of cost.

Over the last 4 years, the production we get out of the same resource from new technology is 50% to 100% more energy than the technology from four years ago.

Like fracking, there is a new technology, the stereotype of wind energy is just a stereotype.

It took many years for fracking -- did we do enough physics there?

I want to bring it back to washington for a moment.

Lately, republicans have been making noise about this subsidy.

If it -- it is due to be renewed at the beginning of 2014 as the result of the fiscal cliff deal.

Are you worried that it will not be?

A one-year renewal will cost $6 billion.

Those are a little inflated, the estimates.

I am not worried.

I think it is the right thing for the industry and the country.

We have about 500 manufacturing facilities supporting wind, will be awful to shut us down.

The other industries get renewables, we think it is fair that we get extended.

We have been an advocate to take away all subsidies, we would be happy with that.

Wind energy gets about 42% of electricity subsidies.

In 2012, it only generated about 4% of u.s. energy generation come how much do you need?

We think it is only 3, 5, 6 years and we will be at grid parity.

Part of the issue is that for the last six years, it has been the number one or number two new capacity additions in the north america or canada, the largest amount of energy being produced.

With growth -- you are on twitter, you want to bring energy from your twitter page -- how do you bring wind energy to chicago or new york?

Usually we do it through utilities.

Most of our contracts are 20 year to 25 year contracts with utilities.

That is one of the benefits of wind, long-term, fixed-rate contracts.

There are some avenues for true utilities and independents to buy directly.

Michael wolff with us, do we need wind thingys?

Wind turbines?

An essential part -- in central park.

Do we have to have them?

Do we need the propeller?

For the most part, yes.

You are not telling the energy you generate to coned?

Yes, that is exactly what we do.

You do not have to do that with propellers in central park?

We prefer to do it away from towns and people.

We have to leave it there.

Thank you for joining us.

This is "bloomberg surveillance," i am scarlet fu.

Joined by tom keene and sara eisen.

Lockheed martin just reported earnings, and ongoing earnings per share of 257. higher than what analysts had been looking for.

Boosting their full year earnings per share forecast for 2014, look for that stock to rise in the premarket.

In other company news, the justice department setting its sights on bank of america.

They face three more investigations over your niche backed securities.

The bank is already being sued by u.s. attorneys -- over mortgage-backed securities.

The bank is already being sued by u.s. attorneys.

Jcpenney reworking it martha stewart deal.

The pair will no longer make products at the heart of a lawsuit brought by macy's. macy's suit's -- sued stewart last year.

Apple had held the top spot, berkshire hathaway is now a number one.

The rankings are from tiger 21, a new york-based group of wealthy investors.

Be sure to watch warren buffett with betty little, joined by his son and grandson, in the loop with betty liu, three generations of buffetts.

Rupert murdoch, the scandal that will not die.

Rebecca brooks goes on trial in charges that she interrupted -- intercepted voicemails in a hacking scandal.

Scarlet, you have been looking into how this is impacting or not impacting the company.

News of the world was shut down and news corp.

Has split up its businesses.

The company seems to has returned to financial health.

Full disclosure, bloomberg llp competes with bloomberg -- with news corp.

And providing financial news.

We want to bring in michael wolff, he knows the empire pretty well.

News corp.

Returned to profit last fiscal year, murdoch was forced to split up the company but he comes out ahead.

It depends how you define "ahead." he has been forced to split up his company, he has been forced into an interesting kind of ex ile.

He is not in charge of news corp.

In terms of chairman or ceo.

He spends almost all of his time on news corp.

The largest part of his holdings are run now by paid executives, not by his family.

This is something that rupert never wanted to happen.

On top of that, he has enormous problems in his own family.

Rupert is a family man, that is as important to him as newspapers -- his children and their love for him.

That love is -- but i found interesting -- the love for him from shareholders.

Recently, 21st century fox's shareholders elected him to maintain chairman and ceo positions, despite a challenge by some shareholders.

He always gets those challenges and he is always resoundingly reelected.

What can we learn from the rupert murdoch?

You mentioned the family drama that you have chronicled, what can other news organizations learn from the murdoch decade?

News corp.

And the murdoch fox and the murdoch family -- there are not too many other family dynasties like this (if there is -- like this left.

If there is a lesson here, if they all run aground -- dynasties do not last.

This one will not last.

What is going to be the final kick in the gut?

The final kick is going to be that rupert is going to die, he is 82 years old.

Then, everyone has different interests.

Nobody is going to march in lockstep.

Michael wolff, @mic haelwolffnyc.

You get a lot of hate mail.

It is not a good day if i do not hear -- a quick data check before the jobs report this tuesday morning at 830 a.m. futures, little change, 10 year yield, also unchanged.


This is "bloomberg surveillance," on bloomberg television, bloomberg radio, streaming on your television and your phone.

Here with tom keene and scarlet fu.

Our guest host is michael wolff, he wrote the book on rupert murdoch, the man who owns the news.

Talking about technology -- three companies rolling out new tablets today.

Apple, microsoft, nokia -- the tablets are different.

Technology coverage -- the coffee at san francisco's airport is suspect.

I will miss the weather.

Three tablets, what is the distinction we need to know today between apple, microsoft, and nokia?

Apple is up against a crowded market.

They are the leaders in the tablet market.

It is theirs to lose.

Samsung is coming out strong over the last couple years with a wide array of tablets.

Now, microsoft and nokia are teaming up.

Is of the same decision -- particularly an san francisco -- is it the same buy transaction as a phone?

I treat a tablet differently than i treat a phone.

It is a very different decision.

You are using the tablet for a larger array of activities and tasks.

People are taking it into the workplace, they are reading glossy magazines.

The phone is a very different device, it is different price.

The price is the key, that is where apple distinguishes itself -- is it worth $100 versus the other tablets?

You are buying into an ecosystem.

When you buy a tablet, a phone, you not -- you are not just buying that, you are buying all of the software, songs, magazines.

It is not simple to just drop apple and go to a different provider.

There are so many parallels to apple's position in the smartphone market.

What have they learned from the smartphone market that i can apply in the tablet space -- that they can apply in the tablet space?

Apple dominates the market, they have got to contend with competitors, not just the other makers.

They are competing with themselves, bringing different price points for their phones.

Sam with a great story today.

How critical is the 64 bit architecture to the announcement?

You want the functionality, you want to be able to toggle between tasks.

Everyone is competing on how fast you can multitask.

Michael wolff, you want to jump in.

Isn't growth dependent on converting new users enter this market -- into this market.

Even if you are an apple user and you are going to remain loyal, apple still has to get a commensurate share of this new market, which does not have any loyalty and is going to be more price conscious.


Young people are getting out of school, in high school -- teens are buying smart phones and tablets.

You have to win their hearts.

Apple has lost some of that cool factor.

Samsung has come in strong, there marketing is very much you do not have to buy apple to be cool.

Samsung is cool, funny, hot.

Doesn't apple -- isn't the bigger factor in apple -- where apple goes from here is holding onto its margins, which it cannot hold onto.

That is a factor for tablets as well.

You want to go beyond the u.s. market, you want to move into china.

That is an area where their are a lot of price -- the whole apple thing is that it has founded several years of unnatural margins.

They are going to lose those.

I don't know how you recover that.

I am not there, i think the ipad is a not still -- upscale market they don't want to give up.

All of technology for bloomberg news, how does he do it?

Is there going to be a gold ipad?

I think it is a little premature to talk about that.

Our twitter question of the day, what will move the markets more?

Good morning, everyone.

I am tom keene.

Jobs stay here at bloomberg.

We are not focused on that.

"in the loop" anchor betty liu with us.

How did you arrange this?

Three buffetts.

The three generations will be live right here.

Warren buffett, howard g. and howard w. they are out, noting this new book.

Primarily authored by the middle one.

He was given about $3 billion, put it into his foundation, that money went to the foundation.

$3 billion?

To all of his kids, three kids.

Howard buffett has taken that money and is fighting against global hunger.

They have this book called "fort y chances," what are the different ways to help fight hunger in this world.

Stop rolling your eyes, tom.

What are you going to say to the grandson, how much did he get?

He did not get any -- he was the executive director director of the howard g buffett foundation.

Michael wolff with us ats well.

Where does mr.

Buffett fit into the media world?

He has been a minority owner.

A substantial player also in the newspaper world.

The deal for "the washington post" many people believe she has been the pivotal, the pillar -- the pillar director at the post.

For you know, 35 years.

He was the one.

Many people said let's get out of this -- his support of local media, small-town newspapers.

He has a very small investment in local newspapers, which i think are a different business.

They are the paper of record for the local communities.

Local sports and news -- real reliable cash flow areas, nowhere else to advertise in a small community.

If you have a car -- if you have a book, you can do that on "in the loop." bring your father, bring your son.

Three buffetts with betty liu.

What do those guys know about fighting hunger?

Find out.

Good morning, everyone.

Jobs stay on "bloomberg surveillance." the day after jobs day, ceo don baer joins us.

Linking washington policy with the state of american business.

Tomorrow on "bloomberg surveillance." today, tuesday jobs day.

Our guest host is michael wolff.

Scarlet has some company news.

Radioshack -- securing a credit line.

Receiving commitments for a $835 million in new financing.

The new credit line boosts radioshack's liquidity as they try to get suppliers to support their turnaround.

Nokia unveiled 6 new devices in abu dhabi, hoping to challenge apple and samsung in the tablet and smartphone markets.

Spain of apple -- speaking of apple, and analysts predicting that the company will start selling tv's a year from now.

They will likely have a frameless design, the analyst says.

That is today's company news.

One stock on the move in the premarket is netflix.

Shooting higher after reporting third-quarter earnings that beat analyst estimates.

I want to welcome jason, he covers netflix at oppenheimer and company.

An upgrade of the stocks.

Raising the price target, a lot to be bullish.

What has you changing your tune?

The company continues to grow strong.

They grow subscribers 24%, 25% in the u.s. quarter and, corner out -- quarter and, quarter out.

Looks like they are on track.

If you can break through the ceiling that hbo has been stuck at in the u.s., you are in uncharted territory.

It is known that hbo has more subscribers internationally than they have in the u.s.. what does that say about this company's international opportunity?

The report yesterday gave an optimistic outlook.

What about the spending side of the equation.

Netflix says it plans to double its investment.

The way it advertises original content, there will be more hits.

The company focuses on two things, they give you a contribution margin, they reiterated 400 basis points of gross -- growth.

That has been a trend.

Secondly, they threw out a number for technology of about 400 million -- mid-double digit growth, not an exceptionally large number.

I am on the edge of 1999. extrapolate out to 2018 to make your model work, why do you do that, why not go out one or two years like 98% of other companies?

This is a growth company.


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