A good idea . Our guest says we should regulate and it has been Holding Hearings this week to make his case. I have got to ask you, why does this need to be regulated . We always want innovation and we want to attract more Tech Companies to new york to do more great things. It is clear bitcoin and Virtual Currencies has become a place where we have seen a lot of Money Laundering. On you worry at worried are you not worried about stifling innovation . Balance to make sure Money Laundering is not going on. Permitsame time, innovation. We can do both. There have been a number cases already. A massive amount of International Money going on. Through a little bit. Who was doing what to hide what sources . I am not a prosecutor and we did not do the case. A lot of crib though currency being used to move money out of foreign companies. You do not think the coin is a bad idea. It might be a good solution. You just need an end to Money Laundering. Yes. They have potential and down the road, there could be a real alternative currency that could bring costs down for transactions. They could eliminate a lot of credit card fraud. You do not have to give identifying information. The whole motion, i realize someone has got to make it is as an about how it will work, but the nature of the coin depends on the emanated he. Anonymity. We license money it is looking more like some of the entities in the bitcoin world are engaged in money transmission, the transfer of money over state lines. We have an obligation to license them. Do you . The history that is but is that really necessary now . It is. The bottom line is, we want these companies. Some regulators, we have seen over the years these companies and we want to make sure there is enough capital there so consumers do not get stuck at a huge loss. Is this a commodity or a current . You are talking about regulating currency. The price volatility suggests bitcoin is a commodity. Different countries are opining over the issue. Some say it is a commodity. The key for us is money transition going on. We need to put in antiMoney Laundering guardrails. That is our job. Become a let the area place where all these activities go on. Drugsive amounts of dealing going on. Definitely a national topic for conversation. We put the question to alan. I do not understand where the backing of the coin is coming from. There is no fundamental issue capabilities of repaying it in anything that is universally acceptable. Is that at the heart of the matter . It is out there and it is useful. B makes a good point. I have that reaction initially when i learned about it wants to go. You have to study it and understand the benefits it offers. It is easy and a lot of people have the same reaction where they are very skeptical. We are trying to resist that. Really keep an open mind. If we see a lot of Money Laundering going on in the area, we have to make sure we are getting control of that. Money laundering facilitates a lot of bad things. We need to get a handle on that. The wholejust say thing is ridiculous and give up on it. You talk to the state regulators or federal regulators looking to set for amateurs. Absolutely. Many were at the hearing yesterday. We have other federal entities today. Part of treasury, they already opined on this and said, we need to think about Money Laundering rules. We are talking to treasury and other state regulators. If we come up with something smart, it could be an example for others. How quickly can you get something done . Give businesses certainty about what the rules are, they will plan. Businesses do not mind regulation. What they really mind is a lack of certainty about the rules. You. Ank coming up, 11 stories underground. New yorks new subway. State in the loop yuriko loop. Welcome back. Yahoo release forecasts shorter than estimates. Numerous a myers struggling to turn this company around and that continues. Paul sweeney, you know yahoo well. What do you make of the quarter . Another disappointing quarter. A Revenue Growth story. There is no revenue. One billion users to generate Revenue Growth. Digital advertising is going 15 a year. Yahoo , aol, unable to take advantage. Marissa mayer is probably feeling pressure. We saw alibaba results. They are trailing. It is slower than it has been. It starts to slip to show some signs it is maturing, as well. Right. Indid slow a little bit terms of Revenue Growth in the Third Quarter. People generally feel very bullish about alibaba and e commerce overall in china. Alibaba, the valuation associated with the ipo, it continues to be the driving force. Exactly. When people look at the price, they say mercer mayer turned around the company. The results, you do not see it. What we really see is dan lothian particular finding a way , followingf alibaba the finding a way to make that work as well. A good jobpany did returning proceeds to shareholders and making acquisitions. From that perspective they have done a good job. Aght now, the stock is almost complete that on the value of the ipo. Yet. Al improvement mercer myers said it was a multiyear turnaround. Let me turn to facebook. I have not updated my model yet. To facebook to be reported, what kind of trend . Mobile advertising. For facebook, it is a mobile service. 75 of monthly users are mobile users. Investors have focused on the fact of how fast they can convert those users into revenue producing users. The method we are looking at is mobile revenues. Two quarters ago, it did not give the for the ipo. 0253 or 54 this quarter. That is good news. Still, the challenge for facebook is 75 of users are mobile but 53 of the revenue is mobile. Ify have room to grow their you are a bullish investor on them. Numbers have been good and the stock has been great. It is amazing they could take a business with no revenue and suddenly make a turn. Youre talking 1 billion a quarter. An amazing turnaround. It is. It goes to the fact when the facebooks and twitters came into the market and the business plan, mobile was becoming a major part of the internet. Compare it to yahoo and a low where mobile was not part of their dna growing up. They have to adapt. Thank you. Cristina alesci is joining us with our guest for this hour. What have you got . Else would we talk to but bloombergs columnist and anchor of political capital, al hunt. You hosted our state of the Union Coverage last night. For those of you who did not catch the whole speech, you have got a Readers Digest version for us. Moments in the president posses 65 minute speech, lets start with the warning on income inequality. After four years of Economic Growth, corporate profits and stock prices have rarely been higher. Those at the top of never done better. Average wages have barely budged. Inequality has deepened. Upward mobility has stalled. Cold hard fact is even in the midst of recovery, too Many Americans are working more than ever just to get by, let alone to get ahead. Too many still are not working at all. If you planned age ranking game around the term, inequality, it would not be exciting because he mentioned it only two other times. Did that surprise you . It surprised me how he mentioned it. Eight lot a lot of democrats and republicans who thought this would be class warfare, as republicans call it. It was not. More measured. The facts are undeniable. It was a topic last week. You do not have to be a radical list to say in Committee Quality is a major problem. The president did it in a measured way and that offered opportunity for limited things to get done in washington. To you feel he backed off . We heard this would be the democratic issue this year. He backed off a bit. Onalso put down markers minimum wage and pay equity for women and economic mobility, which you could build on. There, butt was not i thought he weve did together skillfully. The know that you like speech. Did he make mistakes . Were, i do not think there any big ones. When you have polished speech writers, you have a man used to speechesed to giving for over a decade, you have a venue like that. It is hard to bomb. There is a whole operation apparatus around it. There were nice touches. Addressrned around and John Boehners his father and the fact he was a bartender. Amusing. A little bit i expected john to cry, but he did not. He blew his nose once. We will have more with you and your two other top picks last night. You withome back to that. We want to talk about markets. Markets will be at the mercy of the federal reserve. Comingest Rate Decision your way. Willng us for perspective, we get anything remarkable today . I do not think so. Some people the thought the fed would pause but that is a major stretch. They have outlined the process. What is more interesting is bernanke said this case will continue at each meeting. And that is what we can expect. The next meeting is not until march 19. What if they wanted to do 10 billion every month . They would have to announce 20 billion at this meeting. That is not likely either at this right. It is complicated. Turkey in an emergent the meeting slashing all of their wage. You talk about china taking measures to shore up their system. To the u. S. At do central bank . They backed a minute to the corner. They have got we watch emerging markets. Janet yellen has emphasized the fact emerging markets have their own set of problems and they have the powers to be able to deal with them. Matters at this point. She is. She has taken over the leadership role. A lot of the problems in emerging markets are isolated for the time being. I heard turkey referred to as the fragile five. Indonesia, south africa. I missed one. More important thing right now is what is going on in china, that they have over 1 trillion issued tost products investors, investors who thought they were guaranteed security. With a bailout. What investors learned by them bailing it out is those products are indeed not darren t. 660 billion of the trust year andare due this to really save those securities, they have to be rolled over and investors will be more reluctant now that they know they are not guaranteed. They have to avoid a financial crisis. What does that mean for the u. S. Central policy . We are in a globalized world with connected supply chains. What it probably means for china is Slower Growth. The government could come in and buy out all the securities, but it probably means Slower Growth and lower lending, which means the suppliers to china will get hit. Is the fed back into a corner . You think they should have been on winding Balance Sheets a while ago. That is the key. The investor has a problem because the fed basically, i think, started the taper before the were able to have economic strength they wanted. A tapered really because of the financial stability. Timeare pulling back at a when the economy is still fragile and that is the danger. Not a great spot to be. Thank you so much. Do stay with bloomberg. We have live coverage coming your way at 2 00 p. M. Eastern. Unlocking value. We take stock of nintendos is uphill battle to profit. Stay in the loop. Breaking news. South africa raising its benchmark Interest Rates. Theyprecedented meeting had overnight, they raised their rates as well. Interesting what we are seeing. Lets check in on u. S. Futures markets. A different tone from what we saw yesterday. Futures pretty much at their lows of the session, down half of one percent on all major u. S. Equity averages. Also ur Energy Earnings out this morning. Two earning releases. Boeing down on the news 3. 6 . Dow chemical is going in the other direction of seven percent. We are on the markets again in 30 minutes. Think nintendo, the Third Quarter profit plunged 77 . Youpers are shunning the we wii u console. I went to the e3 conference in los angeles last year and the we you wii u missed. Shape. S not in good the president of the company said that. Cori fell asleep a couple of times in the state of the union address. If the wii is not selling, you have no developers. The we you is also struggling because you have the gamers going to xbox one and the ps four, which is a lot faster. Then you have players like may. I am buying a five dollar game from itunes for my ipad. Therein in lies the issue for nintendo. They make everything and do not go outside and that is the good part about them long run, but also the hard part about their company in the short term. Wethe question is, how to know if they open up the system and actually put mario and luigi on ipad, that is it will actually sell . We remember the game, but is the brand 440 million games in the last 30 years. A huge Brand Recognition at nintendo. Five. Onic arts has they have a huge brand power and recognition. I was talking to michael that estimates their Brand Recognition alone is worth for million dollars. They have a lot of power. Do question is, will they that . Will they open up their system . The opportunity has been on the table for 20 years. They really felt the software had to be tied to their prototype proprietary hardware. The wii was a surprise success. It seems the president wants to move in some way. Or the playstation three or four, they want to be more aggressive. Forget about the we you. Put that aside, take your time, brand and license some of your brand for now. Sell it to other devices and make a better console, wait until you have it set, and then roll it out, estimating they could sell 10 games per year and sell 5 billion. The nintendo console, all pennies at the local group local drug school. A lot are doing really well. The handheld is double the sales of their actual console. Growth,ill slowing in not quite game over. Thank you very much. We will go underground, 4. 5 billion, right after this. It is one of the biggest publics works project ever. Looks more like the landscape on mars. Deep under new york city streets, there are 659 miles of subway track. For the first time in more than 50 years, this is finally getting a new line. This is the 2nd avenue subway tunnel. First conceived of in the 20s, 80 five years later, construction is blasting forward. This is where we go underground . 11 stories dissenting. This is awesome. Belowground, michael runs a tight ship. Above ground are you face . It appears to be the case. With me on 2nd avenue. The price tag, a twomile stretch of rail with just three stops, 4. 5 billion. Some people here the price tag for two miles and they get alarmed. We put a lot of people to work. Planners used a map first drawn in 1865, which shows the waterways that crisscrossed manhattan. So far, so good. Have a and there, you spot, but in general, you are very dry. The faces that will extend and complete the line. Are you not budgeting because you are scared the price will be so high . The process of doing the budgeting. We do not have any idea exactly how much it will cost. But the short sets section for the 1. 3 million subway riders who squeeze on the single train line riding on manhattans eastside. More than boston and san franciscos entire networks combined. And economic success. The investment will be returned many times over. What is the timeline . In the next 20 years. Cool graphics. Anyway, it has been a wild ride for real estate prices near the construction zone. Rent and Property Values of the earlypped during stages of construction. The completion of the first phase is near. The first phase is in the zip code of one of the most expensive in the country. Discuss whether it is the time to buy is jonathan miller, the president and the eeo of samuel or samuel miller. Is there a bargain to be had . You can see in the pricing there is probably a little bit of one because they are getting to the end. They are in the process of moving the big structures sitting on 2nd avenue. Youre looking at housing prices outside the zone of the subway rising at a pace of about 12 to 14 , more than in the subway zone and rent is rising it or send more. Really lagged and that perhaps provides opportunity for people. It is tricky to analyze. That is why we have you here. When i went to the Upper East Side to check out apartments a couple months ago, they were saying, you are buying at a good time now and we will price that and because the Upper East Side never had service and it will. Sellers expected a little bit of angst for that. everybody built that in. The problem is the reality of living in a construction zone. Concern and penalty for it was higher early on as we get closer, the penalty reduces as people see the upside. Do not live in a vacuum. Sellers are watching this situation, as well. I live in california and grew up here. It is interesting the way certain projects have really changed the city. The underground park avenue. The 3rd avenue coming down changed the eastside. Does this change that part of the city . It does. It elevates the price structure of housing. Commute fromeasier the far northern reaches of the austin Upper East Side. The train will go down the 2nd avenue line. The rails. Will it lead one of the things happening is the breeze turn part of the outer manhattan, there are a lot of Public Housing and a lot of institutionalized low income housing. One might argue that is a good thing. It could change things up there. That is already happening. We have seen a tremendous amount of new Development Creep its way eastd into hes harlem. That is part of the process. You will see rents and housing not spike that there is more upper pressure because you have really eased the way to get to work. It is one of the drawbacks of the Upper East Side as you move east away from the lexington line to the left. Good stuff. Thank you so much. Carol . Thank you so much. Al hunt, anchor of political capital. For those who did not catch the whole speech, you have a Readers Digest version. Income talked about inequality and we want to take a look at what the president said about the immigrations the stem. Aboutwe are areas seeomic growth, it is time the call of faith leaders and Law Enforcement and fix our brochure broken immigration system. Andle come here to study contribute to our culture and they make our country and more check it waits for businesses to locate and create jobs for everybody. Lets get Immigration Reform done this year. A top priority. What was fascinating about that, it was only about 100 words, a paragraph. It was intentional, and done because they think it is the one big thing they have a shot at passing in the white house. The house is working on it and the conventional wisdom was that they cannot do it. What the president did not want to do was throw a challenge warehouse republicans could get there back. Factrevity reflects the they think something should be done. They get much from what might result from congress . They will either get something significant or nothing. The Senate Passed a bill that is the dream of most immigration advocates. The house will not go that far. If the house does not go far enough, democrats will not play. You cannot get a bill through the house without their support. There may not be a full pathway. O citizenship for all i went back to a year ago and the president gave a speech saying the congress finished the job and this has been a long time coming. It has been. Of the 41 proposals in that were enacted. Wo immigration is a category of its own because it is big. There is at least a chance. Tough slide faces a with his caucus. Coming up, the cost of advertising for the super bowl will cost big bucks. We will tell you how much. If you want to advertise during the super bowl, it will cost you. Digging into the mindbending numbers behind the most expensive commercials on tv. Big bucks. Inflation is alive and well when it comes to super bowl prices. Up 70 over the past decade. At theon is up 26. 5 same time. Three times as quickly as the rate of inflation. We have a chart. Cost half 1ed to million. I will only get you three seconds of airtime now. Million right now, 133 per second. If the growth rate continues in the future, it will draw a line. 10 million for 30 seconds by 2040. Quite an increase. The question for a lot of companies is, is it worth it. Touringr, the audience commercial breaks was 163 larger. Making a point to watch commercials. Being a part of the watercooler conversation the next days worth a lot. You have got to talk about the next the next day. Jack wire is investing heavily in the super bowl this year. Seconds. Led out 60 and that does not include the cost of making that commercial. Speeding vehicles and helicopter shots. They also have to spend money on teasers for the commercials. They need to make sure it is a success and they are investing in every way. Thank you so much. Dow chemical hit it out of the park. 14 . 4 billion are the biggest increase in revenue in two years. Looking at dan loebs involvement. Lets talk about how they are doing with the investment. Making a compelling case. It is one resonating in wall street now. Look at some of the analyst notes out. A breakup, which is what dan the breakuping for, value is 150 one dollars and . 40 per share, versus the 43 it was trading yesterday. It is a compelling case, a logical 1, 1 we have heard other activists make. The question is, will he put pressure on the Company Given the fact Warren Buffett has been gotod supporter and has supporters. Dan loeb has taken on bigger and bigger supporters. . 22, im an idiot. 61 loss in the same quarter. I wonder if you look at this business. Dan loebs investment. Has it changed a lot for ham . Yes. It changed exponentially. Nothing. D with almost it has been a good ride for him. That has forced them to take on companies because it is not efficient to go after smaller companies. The one thing he is known for is doing a lot of work. Lets talk about those that are forked out well. Seen itsr, you have oh increases. Not only is he doing well, but if you look at what he has to getre is a report out at who is doing what. They say dan based on their tracking system is up 73 . That is big. Lets not forget, he has got a tough time ahead of him. He is skewering the ceo, calling driveperial, trying to efficiencies there. It will be tough for him. Awesome entertainment. This will have more after break. Concerns about emerging markets. South africa a short while ago. How will it is fact the fed today . Talkingesident obama about innovation in america. China and europe are not standing on the sidelines. Neither should we. We know the nation that goes all in on innovation today will own the Global Economy tomorrow. This is an edge america should not surrender. The president is taking a strong stand and is for innovation. That is a good thing. He has tense relationships with some industries. He has always felt comfortable dealing with a hightech innovation. He spends a lot of time in Silicon Valley raising money. This issue hits his comfort zone. He feels passionate and he has a compelling case. Broadening things out a little bit, we talked about immigration, technology, inequality, but come at the end of the day, one of his driving messages is that he will get we know the big stuff he cannot do. What realistically will be the number one priority . Foreignpolicy issues will be there. They still want an immigration bill. You cannot do that by executive order. You cannot. The stuff you can do by executive order says online the late presence. I am not going to be able to do things that really add jobs and get Economic Growth just by executive order. You cannot. You can be a factor, but you will not change things. Thank you for joining us. 30 minutes to the opening bell very the countdown begins now. Welcome back. Here is what we are working on. Droppingatures are steadily. Cut in stimulus. Fell short of wall street estimates this morning. Seeing the secondhighest year since 2013. Shares of yahoo are recovering after taking a hit last night. Where is the turnaround Bristol Myers has promised . The president laid out his agenda. Now ring the gap between the rich and the poor. Joining us, my guest host for the hour, and phil mattingly. Lets start with you. Give us the rundown. How closely our white house officials planning to stick to every whiteeory, house wants to follow the large number of proposals they lay out every year. As we saw last year, things tend to blow up in their faces. Theyyou saw last night will stick to is the new governing philosophy. You will see executive actions they can do on their own. Small but things they can move forward with. They want to bring private industry and connect. That is what you will see them try this year. Stay with me. Ed will give us the republicans take. I have having you speak for the entire party. You watched the whole thing last night. If you give the president credit, where would it be . I thought it was the incredibly shrinking president. Tone. Iliatory not as feisty as i expected. Almost like he gave up the fight. You have two kinds of president s. Those that have enough people to unite against the extreme end negotiate, but unfortunately, he chose the latter path. Forcedhave republicans him into that . We could blame both sides, but he has taken radical positions increasing spending when we have record levels of debt. He pushed obamacare through reconciliation and refused to make significant changes to obamacare that would have improved it. Backlicans have pushed trying to stop a reckless agenda. Republicanthe response. Give me the rundown on what they said. What he is saying is pretty in line with what you are hearing from the party right now. Any time a president wants to act unilaterally, congress will get upset and republicans were wary of that. Republicans want the president to come to the table. They feel he has operated the last five years without them. They think there are opportunities here. I would the interested on what ed says about her postals. The whitet trust house or the president and that will not change. Where is the compromise . We should stick within the budget. It would not be expanded, but we could trade one change in spending for another. I think republicans are willing to make significant changes to entitlements that primarily theyt rich people, i think would rollback medicare and Social Security significantly and raise taxes on the rich for that part of it. Mitt romney signaled that and they signal that throughout. On immigration, bringing in high skilled immigration is something republicans would be eager to expand. That to ahave links larger issue of low skilled illegal immigration. Giving a pass to illegal in the unitede states. That is a big issue. We will talk more about this. You are my cohost for the hour. Thank you, phil mattingly, our white house correspondent. A quick look at other top company news this morning. Plans to go public. The italian automaker which has full control last week. It also cut its profit forecast after posting fourthquarter earnings that fell short of wall street estimates. A new look for the company. Considering a bid for the rebel can see no and hotel. It cost 2. 6 billion to build. Already the biggest layer. Working on a new strategy following disappointing of its we you console. One point 1. 2 billion on its buyback. It plans to unveil a new Management Strategy tomorrow. Joins us onim hines his take on the state of the union address. A unique perspective on what the president s clans could mean for jobs and the economy. Atter than estimated from look at the numbers as well as freezing temperatures and how they caused havoc in the south, including atlanta. What a mess. Stay in the loop. Herbalife was called a pyramid scheme. Maker stephanie is looking into this. Where is he going . It is a big deal. If you are someone who wants to read herbalife. Number oneackmanss analyst. His first herbalife presentation at the conference. He is leaving now and not going to another fun or doing something as his own activist investor. He is taking a break. Going to the trade has been a serious beat down. You might want to take his money and run. I imagine. Razy few months there months. Did withber what he general growth properties. Whos a young guy from texas just got married. We do not necessarily need to look into this. He is saying, he has done it and made his money and he is going home. We have not seen anyone leave akron. Just this week, the biggest bowl. S far as analysts go, left he has a major Long Investment in herbalife. Him, they go work for have the same addition. It is the government going to do something or not . That is what acronym is betting on. Thank you so much. Big night in new york city, i might be out. Up and watching super bowlhe table, edition. I am watching bloomberg tv, state of the union of last night. Thank you. Titan at theur table. Stay tuned. The mayor of one of the towns hosting the super bowl in new jersey talks about getting frozen. Welcome back. John boehner and the president taking messages to social media. Night, it is time to restore opportunity for all. I appreciate what the president did tonight. Americans are asking the question, where are the jobs . We are back with ed. Who do you think did it ask . Class i agree with boehner. More relevant question is shall we meet. It is like watching your dad tried to figure out social media. I feisty myself and both of them. Lets continue the focus on the state of the union. Ted cruz wrote an op ed reacting to the president posses speech last night. He said, mr. Obama, may be right at some of the laws may be changed. The typical way to avoid to voice that has been to work with congress to change that. Joining me now is the democratic congressmen. Former executive at goldman sachs. The author of unintended consequences. How do you react of ted cruz essentially a cruising accusing the president of lawlessness. Stifle trying to laughter. Ted cruz, singlehandedly responsible for the wave that shut down the federal government. To say this president is not working enough with congress is beyond laughable. It is part of the ongoing cloud of issues. Have enough jobs been created, no. But jobs have been created and the Technology Reality and figure out how to move forward. He is right here. The proshers who have the president have said, why wont he continue to work with congress . Why will he continue to go ahead with unilateral do on . Not much you can that front. He needs to work with republicans and congress. I spend my days. It is not comfortable for members of congress to be told by the president if you do not do anything, i will exercise the loads that of my powers. Very people in the country the president ve has been completely and totally unwilling to work with republicans reaching out and being kind and looking for compromise. That is the opposite of reality. Ofimmigration is one example what we are talking about. The democrats are holding out for citizenship for Illegal Immigrants and that is holding up the process. It has four years. Gets blamed on republicans. It is clear who is trying to use negotiating on this. That is another example of something that is completely not immigrationhad to reform. A lot of republicans got a signedge petition here by every democrat saying, let to the senate bill. It has been eyed by one or two republicans. It is the steve king weighing of the Republican Party saying, no, we are not doing and earning pass the citizenship. Americans understand who is holding up immigration. Lets do Something Else. Democrats put forward Something Else. You say we cannot get it through congress and it is therefore the republican fall. Why not put Something Else through . As i said, 78 senators voted for a bill negotiated for the senate. You have to get it through the congress as well. Not the democrats. Why not put both houses through instead of only one. Im all for that. I was one of the 38 votes for the simpson bowls budget. I have a long history of reaching across the aisle and i agree we should trash to get comprehensive Immigration Reform done. Of the Democrats Holding that up is beyond laughable. Let me switch gears on minimum wage. The was another one of reactions, that the president has gone ahead and he will allow them minimum wage it seems a majority of americans are for an increase in minimum wage. There are important issues. When you dig down, you find compositional shifts in employment. When you raise the minimum wage, you get a lot of students employed at the expense of lower skilled workers who cannot get come outecause people of the woodwork for 10 and take the jobs. Shifts inpositional employment here in many years we decided we had its targeted at the poor and away from parttime students and parttime others, two thirds of whom are living in house hold two thirds if you combine the tax credit with the minimum wage, the combination has kept up with inflation. They have focused only on minimum wage. Sound right to year . Yes. A lot of what he has said is right. What he said is largely true and nobody is they raising the minimum wage is a Major Initiative that will solve poverty. That something you do makes it better. What was good about the speech last night is the president spoke about minimum wage. President is what the said about education, making sure every child in the country has access to education. We have done tremendous they to start new businesses there it we are deep in. I happen to believe we should raise the minimum wage. If we want to change the world, we will focus on education. Wewe have got to run. Continue our coverage of the reaction of the state of the onion. Just a few minutes away. Time wise their the top and it you will not want to miss. Keep it here. Past the hour. Joining me with the latest on futures. Futures have been deteriorating over the last few hours. He s p, they are down and it could shape up to be a pretty brutal day. 72. W 17 the big reason for this has turkey raisingut its overnight lending rate to 12 and south africa falling later in the morning. Emerging markets are fighting back, only it did not stick. They are losing steam against the dollar and it has dragged down markets. Yahoo and at t coming up short. The Rate Decision is having an impact on the treasury market. You are seeing money flow into the treasury market. We are back in 30 minutes. Thank you. Market. The i want to get to the call now. Mike mckee is joining me. With the Global Market strategist at j. P. Morgan Asset Management. Joe thinks the earnings season is better than some feared. Closerpect it moves us toward Monetary Policy. We could always debate what normal is. Economic the pace of growth warrants this. Markets, isty probably a good sign. Is the impact it has on emerging markets. Deficits. Ccount stop trying to you cannot blame the fed for that but you can attribute some of it to the fed. It is not the same as 1998 where everything is strictly correlated. The fed will look past it because they cannot solve the individual problems and they on it the decision has been better and has been direction. Better fourthquarter growth, which we thought would be 1. 5 , it is now forecast to come in at four well, i would agree that they will do a moderate strategy and not make any radical changes. I think there is a structural problems. A lot of risk diverse savings. I think the fed policy makes that more volatile. It could flow around the world, move out of the United States in and and into developing nations and things like that. I do not think you can blame the fed for the fact that the world has the riskaverse savings. Click so far you think the fed has been ineffective in the Monetary Policy . Without a doubt. At this point you are pushing on a string. Money sitting in the bank on council and has had very little effect in the economy. The problem is when the economy recovers that is when you could get inflation. They want to tax savers of that time, they could. You have handed them an enormous power. That causes the economy to dial back. Im not saying they will use the power. At that point, wouldnt the economy be healthy enough to absorb shocks . The economy will be healthier , and do earnings replaced the fed as a driver for the markets because finger Getting Better . The question is how quickly and how effectively can the fed get rid of the power . Remove the excess reserves. Thereis uncertainty out that may weigh on investors. Qe1, we canack to argue the fed stepped in and helped to voice financial armageddon. Then look at qe3 or four or 1700, watch what impact is each additional having you go i would say the returns have clearly kicked in. For that reason, we see the fed pullback. We see a time when Institutional Investors have benefited tremendously. Arguewould question or how much of what we have seen is truly driven by the fed as opposed to Corporate Health improving. Earnings, the pace of Economic Growth improving. Part of that has to do with easy Monetary Policy but the huge part is underlying fundamentals. Do you think it bothers the fed and you see polls that say americans do not go better off than they did five years ago . It cannot help but make you feel bad but i think they look past it because their argument is you do not know what it wouldve been like had we not done this. So they have to console themselves with that thought. I had a strategist say to me this week him up worse were seeing markets do this. Are repricing the markets and will be volatile and ugly until people can figure out what a World Without the fed is like. In the end, could it be a healthy thing . Will drive up equity prices in the future. That does not cause financial speculators do well in the short run. It has no effect on main street. Managers of companies do not look at the high overpriced stock price. I think the multiples is driven by the policy. Managers do not get more optimistic because of the high stock price. Aose high stock prices are matter of fed lose policy and trying to protect itself from the risk of inflation. Thank you for being with me. J. P. Morgan Asset Management on the call. And michael mckee. Coming up, huge swaths of the southeast head by a huge winter storm come a we will talk by tom earnings thath beat estimates. His Energy Outlook or the region. As manhattan prepares for the big super bowl party, i last the mayor across the river is his town is getting the cold shoulder. Just a few minutes into the session. Southern Company Reported earnings this morning painting a picture of economic strength in the region come up but also really cold weather. Its me to look at the results in the business of powering the south, tom fanning. The deputy chair of atlantis federal reserve. Great to see you this morning. See that you actually made it to the studio. We were hearing nightmare stories of people stuck in atlanta for six plus hours sleeping in stores. Worse than that. Power through birmingham as power in birmingham as well. They were good enough to feed the children in a School Across the street there. It is really something. Was the demand like or what has it been like powering through this . During the first quarter,uring the polar vortex things we have seen for the first time in a long time Severe Weather and the fact that we needed more power than we budgeted. The snow with all of and ice, we have very few outages across the southeast. Tell me what you are seeing on the ground with an economy with the economy. How is industrial demand doing . You and i meet regularly like this. Throughhave said is 2013 we would see a flat first half and acceleration in the second half. In fact we saw that. Told bowl numbers were not as good without for the whole year but for the second half we started to see pretty encouraging things. In the Fourth Quarter they were up 4. 8 . With all several segments, eight of the top 10 segments that were positive. We saw several segments, eight of the top 10 segments that were positive. Mainly associated with housing automotive, and things like that. Let me play part of the president s speech last night. I want to get your reaction. The shift to a cleaner Energy Economy will not happen overnight and will require tough voices along the way. The debate is subtle. Climate change is a fact. When the childrens children look us in the eye and ask if we did all we could to leave them a safer, more stable world, i want us to be able to say yes, we did. Is the debate settled . There are a lot of interesting questions. I have been talking about all of the above. In fact, Southern Company is, the only one building that future out. E are building new Nuclear Natural gas, renewables and energy efficiency. Thing, and ing have also been speaking about this, from a National Energy policy standpoint, the United States is in a position to become Energy Secure by 2020. I think we can play offense in the challenging economic environment, grow jobs and personal income and make jobs better. You would want to do that if you believe the debate is settled but is it . Of one of the Largest Companies in america, the Energy Production we have is similar to the nation of australia. Responsibility to the families we are privileged to serve is that we provide clean, safe, reliable affordable energy. 48 of families are make less than 48 thousand dollars per year. Those families want to make for their kids a better place to live. Better food on the table, better everything. He have to make all of that balance work. Response would be Natural Gas Prices have gone up. Coal is the way to go to deliver that. It is always a portfolio. We have option a la the. Some years ago we produce 70 of the energy from coal. 16 from gas now 45. E have made a big shift to gas leo is have the option a la the to be able to deliver the best reliable lowest price energy to drive the southeast. One more interesting fact, the whole United States, and president obama last night talked about the notion of moving towards natural gas. That is not free. You know that. Is the need to build sure weastructure, make have firm transportation. Make sure we have adequate storage. In the southeast we have been fine with four dollars 80 five cents cap. The northeast over 100. We have to run. Thank you so much. Ceo of Southern Company. Back in two minutes. Jonathan tisch has been working over a decade to bring the super bowl to the big apple. This weekend his dream will come true when they face off that metlife stadium. An exclusive look to see what goes into hosting the largest book all game of the year. Of the year. Ame perhaps no venue or staff is better prepared for an event like this. 20 times a season metlife goes under a total transformation. A staff of 20 takes two days to change from one team to another. That includes the removable end zone. The turf from one team is rolled up and stored under the stands. The other teams turf is rolled out. Special and zones unveiled for the broncos and seahawks. That is about all the nfl is saying about the game. Some ofwill find out the cosmetic changes when i find out. I know were standing on the 50 yard line. That is not moving. I know there will be a coin toss right here. Jonathan tisch is the cochairman of the super bowl host committee. That aint making sure the stadium he helped to build is ready for the big day. What keeps you up at night . Power is a big issue. There was a blackout that affected the game at the mercedes superdome. Oh much work has gone into ensuring that there will not be anotherfailure. Problem, mother nature. The stadium has a team of 1000 to clear snow from the stands using a network of shoots. We put a snow melter up here and one on the field. They have a 600 pound one in the parking lot. They have a jet engine inside. The heat reduced is what melts the snow. A very big operation. Like he says no matter what the weather, it will be a great day. Some of the greatest gains weather. Played in it may snow or rain but it could be 45 degrees and gorgeous. Super bowl 48 will be very exciting. We want to make sure the region knows the super bowl along seer. Belongs here. An interview tonight with Jonathan Tisch tonight bloomberg. Do not miss it. Staying on the super bowl. Many folks living in northeastern new jersey are used to being overshadowed but when the super bowl comes to town, the towns in the center of the action are not even on the ticket. It is hard to swallow. Of the me is the mayor town. You also are putting on your own super bowl celebrations, right . We are. We have a great super bowl celebration. Called the winter blast. Thursday, friday, saturday this coming week. To put spent how much the celebrations on . We did it through corporate sponsors. We were able to lock in big sponsors. The public costing 150,000. You are not getting help from the nfl on this . They have said you cannot call it the super ball . Planthad a formal ball and objected to the word super. We are calling it the pregame for the big game and objecting to that. I feel the nfl could have stood up much better job of working with thompson, new jersey. Secaucus is a town a mile from metlife. You should share in the revenue and the fund. We are like the ground zero of super bowl but did not get that respect. Giving youpapers not any respect either. I am a new jersey girl so i feel for you. The new york daily news, they put to not give your self, new jersey, bans aint here for you. Lets right back at you. It is a jersey even. Will have a jerseystyle event. The Worlds Largest football. We will have the naked cowgirl. She stands out in times square every day but lives in secaucus. Broadway stars. Housewives of new jersey. Rooms, some of the prices are higher than what you see in manhattan . I do not know about that hotel room certainly jacked up prices. 13 hotels. They are pretty much all booked. A lot of the folks in the media have booked a lot of hotels in town because we are so close. Theyre so close to this jersey even. Beginning of new jersey, the other thing people think about is chris christie. You endorsed the governor before this. Now the hoboken mayor talking about withholding funds. How do you feel about him now . I have been in the governors presence a few times. We endorse him because of his leadership during hurricane sandy. I was told at one point in time he was becoming a real pain in the but because he was calling us every day to send us resources and things we needed. He was great. Inc. You for being here. Us today. t for this afternoon, bruce ratner joining me and cory johnson as guest host of street smart. Hour, whichpast the means Bloomberg Television is on the markets. I am alix steel. Taking a look at where stocks trading, looking to be a relatively ugly day. The s p down half a percent. Traders are watching 1772 as the level. A trader saying below that and could get pretty scary out there. Not only did we have weaker earnings from at t, bowling, and yahoo boeing and but lower Interest Rates. All of this ahead of the 2 00 decision. Time for futures and focus. Gold is our focus. Fomcng higher ahead of the decision today. Economists expected to cut by 10 billion per month. Joining me is ken hoffman. I my standards, if they taper, that is a negative for gold. Explain why gold is up . Happened on the way to taper. The problem has become, taper happens, and then all of a sudden one by one emerging economies using the money to fund their economies found themselves in big trouble. Argentina had huge problems. That spread to venezuela. Turkey having problems. Central banks who come back at our raising Interest Rates. Real rates is a nail in the coffin for gold. You would think that as well, but look at turkey. They raise the Interest Rates like crazy but has a very short term effect. The turkish lira are having all sorts of problems. Hillare running for the and all of these areas and when they run they go to gold. Of 13. E only why isnt it out more at this point . I think the jury is saying how many tapers does it take to really cause a problem . That will be the issue. If they taper again, what if we see more emerging economies have problems that go then we will see gold continue to do well. Of course be emergingmarket currencies fell off and we see the turmoil. That actually help the dollar. What is the effective of that on gold . Dollar rallying is very good, but imagine if you are in turkey, would you rather own gold or the local currency . Those people are buying gold a lot. Haven, dollars safe haven. They are all safe havens in the markets and that is why they are doing well. The Pivotal Point is want white doesnt cause more havoc and i want what point does it cause peace . Exactly. I think that is what people are really focusing on. Taper on its own it seems like a negative to the market. The market is taking a pause, singing will it have unintended consequences we did not anticipate . We havest question, seen these firms lowered their to 11. 60. Y 12 will we see these guys rethink strategy when it comes to gold . Gold keeps going higher, i think they probably will. They are all saying this seemed like a slamdunk. Will be the big question going forward. Watch the emerging economies. I think you. Really appreciate it. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Follow the smart money. Richest the worlds people investing at the start of 2014 . Our exclusive interview with Morgan Stanley head of wealth management. 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