The president would act alone. Here is mitch mcconnell. I hope that the president would look at the results and decide to come to the Political Center and do some business with us. I still hope he does. The early signs are not good. May try to stop the immigration plan by refusing to find it. The bear market in allele raising questions about what opec will do, the price of brent rose. Heading for its eighth weekly decline, the longest retreat. Opec meets two weeks from now in vienna. More accounting issues at hertz. Hertz will restate earnings for the last three years. Eight review found 87 million in accounting errors. Cut 100 Million Dollars in costs. The battle between amazon and hachette is over. Agreement,o a new hachette will benefit from better terms when it gives readers lower prices. Amazon has agreed to feature hachette books. As some positive news out of europe. The euro area gdp through faster than expected and the Third Quarter thanks to better performances from germany and france. Showing signs of life. Lets go over to hans nichols. He has live in berlin. Does it look like a recovery is beginning to take hold in europe . Looks like theres a recovery that may be taking hold in parts of europe. On the periphery, especially. Three consecutive quarters of growth in greece. Spain did well. Portugal did decent in positive territory. The dark spot is italy. 13 quarters with negative or 0 growth. Their gdp is about 9 of what it was before the crisis. On the upside, france came in at 0. 3 . Germany came in at 0. 1 . Olivia, they simply are not enough to affect the labor onkets and bring hiring board and bring unemployment down. They are miserable from a longterm perspective. They only look good is the metric is north of zero. In europe the pressure is on germany to change its tune and support mario draghi to go ahead with more stimulus. Do todays numbers change that conversation . Makes ite ways this more complicated. Angela merkels domestic opposition is opposed not only to merkels party, not only opposed to spending for her but quantitative easing by the ecb. They will say germany is growing. Merkel gets more pressure internally to cut the deficit and trim spending and not to get into quantitative easing than she does in any of the International Fora where she is under pressure. Merkel will be pressured at the g20, like she is pressured every time she sets foot in brussels. Merkel is not going to spend more. The g20 is meeting in australia. A bloomberg poll showing that 38 of those surveyed say the World Economy is deteriorating. Concern about the euro area. Tend to beetings more photo ops then getting anything done. Any sign that we will see anything down on the European Growth agenda . Unlikely. You can always get surprised on some sort of agreement. There will be in eu leader summit later in september. Most of them have been taken over by events in ukraine. Every time there is an eu leader summit, you talk about ukraine. The next one might not be any different in december. Theres going to be a Foreign Ministers meeting in brussels and they will talk about adding names to sanctions. If there will be an additional round to sanctions and Angela Merkel and Francois Hollande went to push back against Vladimir Putin, we will see that in december. That means a missed opportunity for a conversation about growth and trying to bring the euro zone to precrisis levels. Hans nichols joining us from berlin. Thank you. Moving to wall street. Ms. About bonuses at one of the worlds biggest bond funds. Pimco paid former chief Investment Officer pell a bonus in 2013. 290 million the year in which is totally fine find trailed peers. Mary joins us now with more. An eyely this is watering number four bill gross. How does a bond manager it is clever. He started the company in 1971. A lot of ownership in the company. Pimco is notorious for compensating their employees. That is one of the draws. They deliver. Gotmed elerian, former ceo 230 million. Vacsyn. Listen dan i that is a subordinate guy. Other deputy cia has got 30 million other deputy cios go t 30 million. Why isnt a bond manager at black rock making that much . Larry fink made 23 million in the last year. It is such a different structure. It is a lot of different pods moving around. Pimco is a giant hedge fund. And there. This is in index fund that tracks the s p. At pimco ive always thought of it, bill gross is a Hedge Fund Manager in different clothing. He has big cause and macro bets. Put 5 billion you know it will be relatively homogenous. From that perspective he built the firm in a way that lends itself to compensation. You could get a oneoff payback in a year that defined that extraordinarily well. That is not what happened at the total return fund. It appears to be divorced from that. 2014 was not a good year for his total return fund. Funds, butome good the total return fund failed most of its peers. It only beat 35 . It was not the worst made 8eo of allianz or 9 million. Pimco denied the numbers. Thank you so much. Washington. To theres lots of movement on the hill. The house on legislation paving the way for the keystone xl pipeline while the president considers executive order on legislation that could bring another showdown into the holidays. Peter cook is following the action. Arent we really heading for another possible shutdown . Nobody thought we would be talking about a shutdown but that is what is on the table in washington, d. C. Over the last 24 hours. The threat of executive action from the president. He repeated in myanmar today that he will do this before the end of the year. That has a core group of republicans, including ted cruz and jeff sessions, pushing Republican Leaders in congress to block or defund any executive action from the president on immigration. The spending bill is due by december 11. Without that, we face the prospect of a shutdown. Democrats would never accept that kind of language. That is what is raising the prospect. John boehner is not ruling anything out. This is the wrong way to govern. This is exactly what the American People sat on election day they did not want. Are on theoptions table. We are having discussions with our members and no decision has been made as to how we will fight this if we proceed. Privately, republican lawmakers who have met with john boehner says he wants to avoid a shutdown. Mitch mcconnell on the senate side has said he does not believe a shutdown is going to happen. He will not support a shutdown. They have to come up with some sort of solution and they have got to satisfy conservatives in their caucus who help to them on election day get control of the senate and the house. It got to satisfy them while confronting the president. Sounds like groundhog day. Another showdown over the keystone pipeline. The house on the project. What do you expect question my we are expecting the house, for the ninth time, to approve keystone pipeline. That would pave the way for the pipeline to move forward, over the objections of democrats any reservations of president obama. The bigger question will be the senate on tuesday. There will be a separate vote, 60 votes are needed. Back story is that this is a proxy fight for the Louisiana Senate seat. Both the democratic senator Mary Landrieu and her republican is aent bill cassidy, who congressman, both vying for credit if they get this vote through. Trying to sway voters. Both have their fingerprints on this but the question is in the senate and whether they get the 60 votes. Even if the Senate Approves it, the president wants the full review process to take place. This could all be for nothing if the president vetoes any legislation even if it does clear the senate. Interesting to see how it impacts the louisiana runoff. Peter cook, thank you for joining us. Also happening in washington, we are talking to ceos and policy heads to find out what is in store for 20 15. Betty liu is that the bloomberg year ahead senate. She joins us. You have some big interviews. What can we look forward to . We have several big andrviews on in the loop through the day. Im trying to get over the summer and getting ready for the winter. We are looking towards 2015. A couple of big guests we are going to be talking to including the vicechairman at j. P. Morgan. I will be sitting down with him at the panel. We will be talking about 2015 and what is in store for m a. Last year he was on Bloomberg Television and said 2014 is going to be big. We have low cost of capital, a 25 billion leveraged buyout will not be impossible. He was spot on. We started the year with time warner and comcast and we had at t and directv. Asalso had a lot of misses well, at the end shire, sprint walking out of a tmobile bid. He also was one of the key bankers who brought alibaba to the public market. I think we have got a photo here that i want to show you of jimmy lee and jack ma on the day of the ipo. Becomend jack have friends, best friends, through this listing. He is going to talk about his close relationship with jack ma. Is goingwhere alibaba to go. Looking forward to it. The man who does jamie dimons deals. You have in interview with the ceo of the Weather Channel. Something everyone is going to want to tune into, given the new polar vortex. Im freezing here. I want to know what is going to happen for the weekend. And ceo of the Weather Company, which owns the Weather Channel. There is lots of speculation, is this Company Going to stay independent . Private equity owners actually sell, look prepared to sell the Weather Company in 2015. They have a problem that Many Television networks are facing, declining viewership. How are they going to turn that around as an independent channel. At the same time, continue to grow their audience online. They have millions of people who and log onto their website as well. He has got a lot of issues ahead. Im very excited to meet david kenney of the Weather Company. I want to know what the forecast is. Clairvoyantif he is. All those interviews coming up on in the loop. Also coming up later on and hour, talk is cheap, even on wall street, banks are changing the way they try to get ipos. Wall street banks preparing to settle charges. A headline you hear often. The source is different. He financial industry regulatory authority, is accusing analysts of pumping up estimates to win clients. News has learned that banks are already changing the way they bid to underwrite ipos. On companiesables as they go public. Leslie picker broke this story. How does this work . It sounds pretty obvious that analysts are picking up the books to win clients. This is reminiscent of the dot com days. Were accused of inflating earnings estimate so their investment banks could win is missed. Now you have Eliot Spitzer and they had settlement charges at one point that really created a chinese wall between analysts and investment bankers. We are starting to see analysts crop up again. In,nts taking the analysts interviewing them and trying to get a good source of what their estimates will be. Analysts felt incentivized to pump up those estimates so that their firm couldnt win business. It sounds similar. Slightly different process. Banks are taking notice of this. Our sources say a settlement could come as soon as next month. They are changing the way they do business. Trying to bulk up the chinese wall. Extremely difficult regardless of compliance. The basic fact is Research People are going to feel pressured to pump up valuation. We could see these policies take effect as soon as next week. They include logging the conversations between analysts and issuers so there is a record of what is discussed in the meetings. You can tell whether they felt pressured to increase the valuation relative to what happened in hindsight. Another thing is they have when they talk with the analysts, only the analysts are allowed to ask questions to the issuer. Like an earnings call. In the past it has been that the issuers were asking analysts where do you think this valuation will be . It will be more of a oneway street. You can imagine it being awkward. Tell me a little bit more about the case study that finra was looking into, toys r us trying to go public. Toys r us try to go public in 2010. They withdrew the ipo last year. This may be evidence as to why it was unable to go public. What finra found is that during the toys r us case, the analysts felt under pressure to increase their evaluation of to appeal to toys r us and their private equity backed companies kkr and bain. Finra started investigating. Not sure how exactly they got involved. Very interesting. A great scoop. Thank you, leslie picker. Something betty liu will ask jimmy lee, the vicechairman of j. P. Morgan when she speaks to him later on. Still to come on in the loop. Luxury chains may have the upper hand. Customers unhappy with old navy. Should your size determine the price of a pair of jeans . You are watching in the loop. Live on Bloomberg Television and streaming on bloomberg. Com. Heres a look at our top headlines. Better than for airbus. Ofit program superjumbo closer to breaking even. Old navy under fire for charging more for womens plus size jeans. A petition has gathered more than 36,000 signatures online. In an email, a Company Spokeswoman says the items are specifically designed and manufactured for plus size women and cost more to make. Mens jeans cost the same in matter what the size. With two weeks until black friday, the competition between retailers is heating up. Walmart is Price Matching amazon. Com and other retailers. The Price Matching plan formalize what many stores were already doing. Opening,d into the are little changed and hour before the bell. The s p poised for its fourth weekly gain. Slightly in the green. S p and dow hovering near highs. Awaiting retail Sales Numbers coming in a few minutes. On the markets again in 30 minutes. Counting onrs are the Holiday Shopping season to kickstart sales. One company talking the trend is nordstrom, the cheney refuses to open on thanksgiving day. Reporting a better than estimated thirdquarter profit, a sign of strength for the more affluent consumer. I want to bring in the founder of the Luxury Research firm that advises brands and has worked with nordstrom, burberry, and others. What is nordstrom doing . They continue to outperform. They have always outperformed. The fact that they are in the luxury segment, that makes affluent consumers more resilient to invent the mainstream consumer. It is the tier of the market . Fact that nordstrom outperforms their competition. They have Great Customer service and a nice array of products. They tend to outperform luxury retailers. We have been hearing, im thinking of lvmh, the parent and burberry,ci, they are all seeing a slowdown. How is it a slowdown if nordstrom is not seeing it . Singledigit growth or no growth. Gucci, louis vuitton, and product have stalled. That is a combination of china slowing down, russia and ukraine creating havoc in european retail stores. Ess tourists in europe. The u. S. Is a bright spot because of the Stock Market Holding us up. Christopher bailey is ceo and. Reative head and a lot of criticism about how much he is being paid. His 18 million pay package was rejected by shareholders this summer, causing commotion. Do you think he has the right strategy, can he fill the shoes of Angela Ahrendts . It takes three things. They have the product, the people, the Client Service in the stories. They have the growth in many different markets. They are the most advanced digital luxury brand. That makes a difference whether you are doing social media, online advertising, digitizing the stores. They had the best strategy right now. They also have carried a carag they also have delevigne. You are seeing an increasing number of young, female ceos at fashion labels that do not have fashion backgrounds. The new ceo of la perla. Seatkind of changes do you with incoming women managers driving in the industry . They are far more collaborative and sensitive to female consumer entity fashion oriented male consumer. What you are going to see is a lot more diversity of candidates and a great deal more execution. Not to put down the men. The women get more collaboration need tolenials, you have an inspirational and not a perspiration of culture. I think women will bring that. The women know how to work the elbow grease. Expectedund is what we and a rebound is what we got. That is what economists predicted. And unexpected decline in retail sales of 1 3 of 1 . Continuation of the backtoschool momentum. Last month, an increase of 3 10 of 1 . Both of those numbers better than what economists had predicted. Weve heard from retailers with sales side. S on the people were not motivated to buy the cold weather gear. Overall numbers are looking relatively strong. I will continue to look at where exactly the spending was. Something else that could contribute was lower gasoline prices. A tail wind and a positive into the Holiday Season. We are still seeing job growth. Julie hyman, thank you. That are then expected retail numbers. Small growth. Strong growth. What is your read through for those numbers for the Holiday Season . It indicates a positive trend. Theres too much inventory and too many brands competing for the same consumer. I think we are going to see a lot of discounting. Even in luxury . Was raiseg, the story your prices because the consumer is price insensitive and you can drive demand by becoming more expensive. When you look at nordstrom, theres a lot of al at activity. You see a lot of brands are sluggish. They will have to bring these sales in and get rid of inventory. The only way to do that in a slow Growth Market is to do some discounting and do some promotions. We are seeing a shift away from annual sales into promotions. Why is that effective . You are going to spread out the timing. You are going to get consumers primed during the year instead of one event. They are hoping this sort of scrimmage type of sales will be more effective than one big bank. You also said one of the trends you expect, there are too many players in luxury. You think we are going to see consolidation. I do. When you have a slow Growth Market and sell many brands and so many brands competing and trying to go upmarket. You are going to have some blockage. Theres only so many consumers and so much money to go around. Going to seewe are some fashion labels go bankrupt . Not bankrupt but you will see stalin. The brands that are not relevant will go into bankruptcy. The hot labels . Chanel, hermes. All of them raise prices. Thank you. Loop, the nexte ban big thing in tech with benedict evans. Prices near a fouryear low end leading to consolidations in the energy industry. A big deal in the oil services industry. Coming up in the loop. Oil trading near a four year low two weeks ahead of an opec meeting. Is in talks to buy baker hughes, a deal that will combine two of the biggest and honest names. For more on what the biggest and oldest names. For more on what this means, i am joined by oppenheimer strategists. Do you think this is a response to Falling Oil Prices . Absolutely. They are fighting over market share. All the companies will cut capital spending. The question is not if, it is when and by how much. That is been the case over the last 30 years. That is what gave us the consolidation 18 years ago when exxon bought mobil, chevron bought texaco. Were mergers, nato measures. I believe we are going to see the same pattern. Say if Oil Prices Stay at the current level, we are going to see an acceleration. Be a kneejerko reaction. It was only in may that oil prices were 80 or 100 a barrel. Is this short sighted . When you combine two companies, you create a company that can withstand a storm. Will also be a need for oil services. The combination of these companies will have a stronger market shares, stronger platforms and will survive whatever cycle that we will have of it the next few years. You think it makes sense . Absolutely. I did not hear you. I said absolutely. Talking about the u. S. Shale players. Conventional wisdom is 76 per break on crude to even. Are we going to see american producers hold . They will have to tighten their belt. They will have to get better at what they do. They have done a fantastic job of the last five or six years. Ost continues to decline Lower Oil Prices will force them to do a better job and they are capable of doing so. I not worried about the health of the domestic oil company in the u. S. It is here to stay. Production growth will continue. The question is not if but by how much. By 5 a year or 10 a year. Have Higher Oil Prices, we will grow Oil Production faster. If we have lower production, we will have if we have lower prices, we will have slower Production Growth. Coming from the u. S. Will be the elephant in the room at opec. What do you expect to come out of the meeting . Nothing. They have very little that they can do. The only way that they can bring oil prices to a higher level. If they can cut production not why 500,000 barrels a day, but about 2 million or 3 Million Barrels a day. This time around is going to be painful for opec to cut production meaningfully enough to get oil prices to above 90. Ive been saying for more than two years that Higher Oil Prices are not supported by market fundamentals. Higher oil prices brought about additional supply from very states, it isd going to be a problem that opec has never seen since it became a cartel almost 50 or 60 years ago. Final question. Im sure you saw the report out of Goldman Sachs saying that the u. S. Has replaced saudi arabia swing barrel for the price of oil. What are the consequent as of what are the consequent as of that for the conversation at opec . Opec the u. S. Ore this Production Growth is here to stay. Ow oil prices l go, it does not mean that technology is going to stand still. Technology will continue to bring costs down and infrastructure will improve. Lift the oil export ban, opec will be in deeper trouble. A strategist from oppenheimer funds. What is the next big thing and technology that could change the way we live and work . We asked benedict evans. A shocking big number. New data on how Global Warming is lighting up the sky. 50 . That is the increase we will see in lightning strikes i the end of the century. This is because of Global Warming. Ofentists at the University California at berkeley say that waterg will mean more vapor in the atmosphere. One impact is more wildfires, half of those are caused by lightning. Frightening. We have got a rare glimpse into pimcos compensation. Also, ibm ceo jimmy remarried Jeannie Ramadi is making big news. Beef lovers are not the only ones with sticker shock. It means a tighter supply of hides. What is the impact on the luxury industry . Mia saini is here with more. Letter prices are skyrocketing. Leather prices are skyrocketing. Drought, a higher price for feed and not that many cows out there in the supply chain. You go through the itinerary and then you get the final goods. Luxury houses often have contract prices, they have negotiated the prices six months in advance. I spoke to one analyst who is expert. The hide he puts out a report that luxury houses by. He says because the price of past five 90 of the years, 17 this year alone, many of the big houses like product and gucci, they have to downgrade the type of leather they use. The quality is not the same. They have to reduce the amount of letter. Leather. Ount of this is serious with the holidays coming up. The higher end go for the quality. Are there any implications for the fake fur market . Faux fur more in vogue . Often dictateda the trends a year and advance. He says when you look at what is vogue, ankle boots, not knee high boots, which require more leather. Where theee boots now back is not high quality leather. They will say that it is more slimming. They do things from a fashion point of view that is dictated by the prices of leather, up 17 . Hedgeury goods these the way airlines hedge oil. Mia saini on the spiking price of beef. Worldsat one of the biggest bond funds. Pimco paid former chief Investment Officer l gross a bonus of about 298 million in 2013 bill gross a bonus of 2013. Illion in a year when his total return fund trailed peers. Ritholtz,ts barry fundyear when the bond underperformed, how did he make 300 million . You look at the long arc of builtand what chrigross from scratch. Pacific life spun it out. Theears later, they are biggest and most powerful bond house in the world, running 2 trillion. How the total return fund does this not determine bill gross or elerians compensation. Billion. Ed about . 5 unprecedented for guys who ran publicly traded funds. Elsey hasnt anyone structured their compensation like this . Why isnt there a bill gross of black rock . It is a quirk of the history of the takeover of pimco from allianz. Allianz only purchased 70 of the company. 30 stayed with pacific life. Allianz was capturing 70 of the revenue. 30 stayed with pacific life, who pretty much deferred to gross. You work it out. An Insurance Company having the best bond manager in the world run our money. That is fantastic. Not to hurt yourself. Essentially, now that they pimco doubles since the crisis. Not only did everybody pile into bonds. Once the Federal Reserve started and pimco, defined a double that was a lot of money. It is a golden parachute, 299 in a year that trailed. We will be back with more in the loop in a few minutes. Stay with us. Welcome back to in the loop. I am Olivia Sterns for betty liu. Our top stories. Willes indicate stocks open slightly higher. Hovering near record highs. Retailers has rebounded last falling in3 after september. Consumer confidence has been boosted by lower gas prices and rising stock and home values. The accounting problems worse than we thought at hertz. Last threetate the years of earnings and continue a review that has found 87 million in mistakes. Looking into whether management had influence on the accounting errors. The Company Announced plans to cut 100 million in costs. The crisis in ukraine might summit in the australia. The u. S. And eu may impose more sanctions. Rushs Vladimir Putin has arrived in brisbane. A number of russian warships are off the australian coast. President obama has a timetable on acting on immigration. The president spoke before leaving myanmar. I indicated to john boehner several months ago that if congress failed to act, i would use all the Lawful Authority that i possess to try to make the system work better. That is going to happen before the end of the year. John boehner has said he will fight the president s plan. Obama will keep about 5 million undocumented immigrants from being deported, many of them will get work permits. 30 minutes from the start of trading. The top 10 headlines before the opening bell. Brendan greeley are joining me. Good morning. Good morning. Happy friday. We start with one youre going to like. Old navy feeling the heat. This comes as apparently the retailer is charging 15 more thanlus size womens genes for regular customers. There is a position that has garnered more than 36,000 signatures. How muchns, no matter weight you game, will still cost the same. Some research on this, i think this is silly. The cost of materials, is 35ularly cotton, percent. We are not talking about in oil refiner. When the cost goes up they have to pay a lot extra. Old navy charges more for plus sizes . Or that someone is making a fuss . I think it is silly that they charge more. Should they charge less for smaller jeans . Ofres a marginal extra cost materials. The company says we have a special team to designed specifically for plus size women. There a sick pacific theres a specific design that slims. Is the cost of doing business. Cost. Is 35 of the ibm ceo Ginni Rometty finally got her green jacket. Ibm has sponsored the Masters Tournament since 2002 and always gave the ceo the membership title. , a woman, became ceo a few years ago. This is silly as well. Is a private club. Their membership is under their discretion. I do not think it is our business. They have given a membership to rometty and a couple other women. Ande are womens only clubs there are mens only clubs. I dont think it is a problem. I disagree. What is this game . Golf . Is she good at golf . It is a golf club. Heres the problem. I am 40 years old and nobody younger than me plays golf. It is seen as boring. This is stupid. You are questioning why Ginni Rometty wants the jacket. I think it is silly. I dont play golf. Why didnt they just give it to her . It is ridiculous and outdated. Number eight, amazon and hachette, burying the hatchet. Resolving the dispute over the sale of print and digital books. Ending a standoff that cut off supplies to some publishers titles. The New York Times had an interesting take, both sides have been bruised because amazons reputation has been hit. It is seen by many as a bully. They saw a drop in sales. The publishers have exposed the weakness of their hands. Amazon was trying to move into publishing and that is now a done deal. They lost a key editor. They do not have the credibility with authors. Authors get a bad deal from everybody. 2 Large Organizations arguing over who could screw over authors the best. Same with musicians. It has been a story forever. I think someone like ani difran co, who sees this happening and then puts out her own music on her own label makes the right choice. If i were writing a book, i would do the same thing. O. You listen to ani difranc we will have to see what happens when taylor swift writes a book. Number seven is under pressure. Twitter was given a speculative rating, citing a significant risk. Alibaba gets an a plus. Twitter has think the same problem, it cannot figure out whether it is a platform to build stuff on top of or it is its own service. Facebook has the answer. Facebook is not a platform, facebook is facebook. Im speculative on twitter as well. I do not think the wrong call is on twitter. As open as an American Company gets. A Chinese Company getting in a class, do they had access to alibabas financials . They are listed on the nyse, they have a degree of transparency for a Chinese Company . Ive been wrong about twitter since 2006. Are you a twitterer . Im not very twittery. Porsche. Six, offering its 9 11 model in 22 variations. They may start to scale back as ofn as 2018 as a wide array choices becomes a handicap for customers and manufactures. Choice is working against them. Brendan is as much as a german oophile. I was in a porsche dealer yesterday. They did not have room on the floor for all of their models. It has become a problem. As a buyer is that a problem . I like it but i am invested in the purchase. A lot of people are not. Theres a quote from bloomberg news. Amount of choice is confusing. I prefer to have less complexity. That spoke to me. A porsche. Buying her allowance is 500 euros a month. She is going to go to the ford dealership. Stay with us. Coming up on in the loop, getting cold in new york city. The start of a new polar vortex. We hear from the ceo of the letter company, coming up with betty liu live from washington, d. C. Good morning. We continue the countdown to the opening bell. The Weather Company. Business is booming for this private enterprise. Lets find out how with betty andat bloombergs year conference in washington, d. C. She joins us with ceo david kenny. Here with the chairman and ceo of the Weather Company, Parent Company of the Weather Channel. Great to see you. Here. D to be it is freezing here. The first thing i did was check my weather app. Out ok, i need to dress warmly. That is at the heart of your business. You have actually seen a pretty significant rise of people who are now consuming whether content . People always consume the weather content. The average american spends 25 more time with the weather 141020 11. 20 a lot of people are consuming phoneine their mobile and their ipad. They are not consuming it on television. A decline in viewers. Gone down for not just the Weather Channel but throughout the industry. How do you reverse that . A we are very committed to better experience. We have had a ratings success in the morning starting at about 4 00 a. M. People begin our day with us and we give them a little bit more about news and sports so they know the headlines and are ready to start the day. How significant is it that you have been able to beat cnn and msnbc . We focus on our audience and not theirs. That is big . It is indicative that people like to watch us in the morning. It is. You and i spoke a few months ago when you were in the middle of your fight with directv over subscriber fees. You resolved that. You promised you are going to cut back on some of the Reality Television programming on the Weather Channel. What else did you learn with the fight with directv . I think all of our partners to our program and our cable and satellite operators are focused on their own business. What we learned in all of this is the need to engage in new technology. They are all looking at over the top. They are looking at a better experience. I think what we have found what is important is engaging with them on new products. To not just deliver a linear channel but deliver a better experience. Which means more Live Programming . Live programming works well on television during the day. We have a very straightforward schedule so people know what to expect when we are going to have entertainment and when we are going to have Live Programming, both are doing well. Do you find that that is working . Is it bringing on viewership to your program . Theive is strong in morning. We have a core audience during the day. In the evenings, prime time after 8 00 p. M. , we run a very good entertainment programming. Ands more about science nature and people are loving that. Anything you are going to withfrom your fight directv when you negotiate contracts with other operators . We know that our audience cares and our audience spoke up. We will continue to serve our audience well and make sure that our programmers and our operators understand our programming so that we have a Value Proposition that is a win win. They care that people watch. Some have said that one of the job ask for the Weather Channel is that it is an independent station some have said that one of the drawbacks for the Weather Channel is that it is an independent station. There is speculation that the Weather Channel will be sold. Are you looking to sell . Growing business and a lot of innovation. We believe in it. I think in the long run, the operators need to make a decision on each channel as to how it stands. I do not know where bundling will end up that we think we have a good Value Proposition on our own and we are focused on that. You are not looking to sell . No. What is your feeling on Net Neutrality . Is complicated. We need to make sure that every american has access to broadband. That every american has access to the best possible coverage. It is important to find a way to do that. Weve got to make sure they get the programming they want. Theres a lot of ways to solve it and i believe that everybody involved, the programmers, the operators and the government are trying to find a solution. Thank you for joining us, david kenny. The ceo of the Weather Company. Olivia, back to you. Betty liu with david kenny, the ceo of the Weather Company at bloombergs the year ahead conference in washington, d. C. We will be back with more in including bill gross 300 million final paycheck from pimco. In theome back to. Loop. Business it bloomberg weeks Brendan Greely . I write magazine articles. I write blog posts. Euro area gdp grew faster than expected. Actually arerance growing again. Italy is still stuck in a recession. Signs of life in greece. This will let germany say we do not need to do anything. And you are growing at a you have no. 1 , worries at all. No worries of a recession because they are growing. 2 . Greece is growing. 7 . Of greece, is 1 5 you have a problem. What is it going to take for germany to start buying stuff . Germans do not like to spend money. It is going to take have you ever written about bundesbank . Ive partied at the bundesbank. Talks to buyn in baker hughes. They would still be smaller than in thegest player industry, in response to the fact that oil prices are falling. You will see consolidation within companies that are doing fracking. There are Smaller Companies that cannot handle the lower prices. I was talking about this yesterday. It is evidenced by what is happening at alibaba. You can sell debt to investors at any price right now. Halliburton only has about 8 billion in debt, surprising for a 50 billion company. Baker hughes only has like 2 billion in debt. They can easily issue bonds. Investors are chasing yield and they can finance any acquisition they want. I was told this by a drunken guy on a train, the money is not fracking, it is selling things to frackers. Oil services. Revise itsll Financial Statements from 2011 through 2013 and continue a review that has found 87 million of errors so far. Out are trying to figure what are not any individual executives knew about some of this. Mark frissora, who resigned . I worry for him. You say 87 million is a massive sum, it is not even 1 3 of bill gross bonus at pimco last year. I dont know that that is a benchmark. A 10 million market cap. Driving revenues down . Is it better uses of capital through uber and zip car . Is thesharing economy real story. You no longer need to rent a car. The guys at Morgan Stanley wrote a piece about how they went to detroit and they took uber everywhere, they did not even bother renting a car. Sharing is caring. As we head to the opening bell, a look at where futures are trading. Little changed, slightly in the green. The s p and the doubt hovering near record high territories. Record retail numbers. We will be back with our number one story, next. And the opening bell. Welcome back to in the loop. Bringing you the most important stories before the opening bell. Brendan greeley on equal footing. Our number one story, it is not a tiger outside paris pimco paying bill gross a 290 million bonus last year, the year when trailedl return fund peers. Pimcos former ceo mohamed elerian, still with allianz, million. Bout 230 nice work. That worked out for them. Important to retain talent. Do whatever you can. To be fair, bill gross did not just run the total return fund. He started pimco. It is kind of his. On the other hand, mohamed elerian, it is hilarious. He comes in, he goes out, he comes back, he goes out. And meanwhile, this guy who is clearly a fleeting employee, very smart and very cool. And a jets fan. He gets a 230 nine dollar bonus. In compensation for being a jets fan. They had a long record of excellence. They are explaining this. He did have a couple trillion dollars under aum. Is no bill gross of blackrock. A couple days ago, pimco once to start paying employees more to keep them around. As stocks start to trade in a few seconds, i want to bring in the president of edge asset management, 28 billion of assets under management. She says Corporate America is in good shape and a rate hike is coming in mid to late 2015. Thank you for joining us. Back to pimco, have you ever sound he built pimco from the ground up. It is a lot of cash. Shareholders have to say, is that fair and are they getting value. Who invest ine the total return fund you you will im investing in a fund whose manager did not do a good job and paid himself a 300 million bonus. Do i want to be invested in that kind of fund . We are already finding out what their answer is. Lets talk stocks. The s p has opened unchanged. You say we will see a rate hike in late two any 15 late 2015. Jobless claims already 14 year low. Employment is improving. Corporate america is doing quite well. Saw the retail sales number this morning. Consumers feeling good. Oil prices are down. A lot of impetus for the u. S. Economy to grow. We dont expect real robust growth, but definitely slow, steady growth which means the fed has stopped their qb program and will think about their first rate hike sometime next year. If we only have slow and steady growth, why not leave everything as is . If the fed waits too long and inflation starts to pick up its not on the horizon yet. Bernanke told 60 minutes he could stop inflation on a dime. That happens so often by the fed, right . The wrong implement numbers having less meaning. At fed is looking underemployment and discouraged workers. All these other numbers on their dashboard. Do those also point to a rate hike . Certainly. Nt its not just that headline unemployment number, but the underlying fundamentals. There is also inflation. Just how general the economys going to be doing. We are not expecting robust growth. The fed will take all that into consideration. They do not want to stop the pace of the recovery. Corporate america is in good shape. They have a lot of cash. They are sitting on lots of cash. It tends to be Financial Engineering and buying back shares. It does not tend to be constructive acquisitions. Does that make you worry . It doesnt. Companies happens conservative companies have been conservative. Slow growth environment. There am and activities during to pick up. Reholder buybacks dividends have been increasing by the companies we hold. Stagnation sense at all . Creationist and stagnationist. Millenials dont buy houses. Wages are stagnating. There is a lot of different factors coming into play. We believe we are in a very long drawnout growth cycle. Its a slow and steady and not like a typical recovery of fa st, robust growth. What do you see overseas . Larger companies, multinationals are being impacted by that. We are seeing opportunities in the mid to Small Companies based. Company space. Why do you like energy with the price of oil . We are looking at a much longer period of time. International Energy Agency said oil was going to be 70 80 next year we are looking at 35 years. That is our investment horizon. Its definitely contrarian and a buying opportunity. We are adding positions we ieve over that 34 Million Barrels a day of Energy Consumption 2040. They must have an incredible forecast. 35 years out, do you think were going to sit on this 80 price of oil for a long time . We think it will be solved for a wild. Forecasting specific color prices. We are looking for companies that can grow even when oil prices are low. Such as . Profit point energy. A Canadian Company that has a lower breakeven point. 80 a barrel is the number everybody talks about. There are companies that can make money when oil is less than 80 a barrel. Our job is to find those companies that bottomup security selection to maneuver through a low oil environment. Saudi arabia has the ability to drive it even lower. To 70. Get down they can. But will they . Theres a lot of noise around opec meeting next week. We dont think about each of those headlines. We have to look through those headlines to what we believe is going to happen longerterm. Thank you so much. Thank you also to matt miller and brendan greeley. Up, from the stock market to bond market, alibaba is looking to raise more money in its first u. S. On sale. Bond sale. Dealmaker thet helped alibaba complete the biggest tech ipo ever. Live with jimmy lee. We have breaking news on the United StatesPostal Service. The post office stepping down. We are going to have our first female postmaster general. Brennan is currently the chief operating officer at the u. S. Postal service. She will be the 74th postmaster general and ceo of the company. Of the agency. Has been responsible for daytoday activities of the employees at the Postal Service. 491,000 of them in more than 31,000 facilities. As we know, the financials at the Postal Service has been somewhat challenge. This is the era in the situation she now is responsible for. Thank you so much. Postmistress general. Here is a look at the top tech stories. Aibaba planning to raise billion dollars in its first bond sale in the u. S. That bond sale may happen next week. 8 billion. Its September Ipo was the largest ever in the world. Depressed that nobody a has boosted its earnings target. Shares of the company fell more than 6 in helsinki. Almost all of its sales come from the Wireless Networking unit appeared the Justice Department is targeting american telephones in a secret spy program. The signals are picked up by devices on the planes and mimic cell phone towers. Data from innocent people is also being collected. Thegovernment wont confirm program exists. You can catch the latest tech and media every week on bloomberg west. Coming up, the art of the deal. Insidens top dealmaker alibabas record deal. Conference in washington, we ever knew inside in industry, companies and trends in 2014. Betty liu is with jimmy lee. Betty liu was speaking to jimmy lee right now. Lets listen in. Billion outit 25 ipo is not out of the question. When you look at acquirers, they go up. Will it be that way for 2015 . You didnt believe me. You proved me wrong. The conditions are still very solid. The fundamentals are there. The cost of capital, liquidity, ceo confidence, supporting Growth Initiatives and so on. As long as those fundamentals stay in place, you will see a nice steady state of plenty of m a. We continue to see that. We do. There are a couple of things on the horizon and 2015 that could change the game of it. The fed is going to raise Interest Rates. That cheap cost of capital may start to go up. Is that enough to derail that trend . That is a good question. People talk about this a lot. A lot of folks have various Interest Rate positions out there. For second. It if you are a single a raising pretax. Ound 3 if you are a single be raising money at 7 , not exactly highheeled. High yield. So long as those rates dont spike, i think folks are going to adjust to it. Historically, those are really low Interest Rates. I dont think thats going to deter things. Upess we have a sudden shift and a true spike that unsettles everything else. Which would be unexpected. In versions and the antiinversion movement in washington, will that have a dampening effect on m a . Inversions getting a lot of attention. Maybe they should. That crossroads of business and politics. When you look at the number of inversions relative to the number of m a deals, its very small. Theres been around 10 or so deals this year. It ald not really call megatrend or anything like that. They do get plenty of attention. Alibaba you were one of the several bankers who worked on this deal. You grew very close to jack my. Jack ma. We are showing pictures of you outside of the New York Stock Exchange where he is giving a peace sign. Tell me what you learned during the ipo process. That is a picture of jack and i happen to be in it. Ive been very lucky to get to know jack. I really have a lot of admiration and respect for him. Great leadership starts at the top. He has terrific values. Genuine, authentic i remember on the roadshow, the questions at this particular meeting were being asked from the podium to the panel and jack was on the panel. Questions andhe said, wait, i want to hear directly from people in the audience. That is unusual for a ceo to do that in the middle of a roadshow. Break the format. He wanted to do it because he wanted that direct feedback and wanted to deal with the questions oneonone. One of the main reasons the ipo was that he came to the states, he went to all the meetings, he was front and center and he showed the market this company is run with real value, starting at the top. Yes, the Business Model is amazing. Yes, the macro is amazing. The ipo theled correct way in terms of tactics. But, i gravitate towards companies and ceos that have that core valuesbased leadership from the top. They tended to do very well in tough times. Him coming out here and being the face of the company was really what helped turn it from a good ipo to a great ipo . I really do. Was there any point during the process where you were worried or felt like something might go off track here . The whole process. [laughter] i worried about this for two years. That is my job. Did you leave any money on the table . Good question. These largeview of are, especially those that for companies that have enormous consumerer and engagement. The brand and preserving the brand and stewarding the brand is really important to the companys success. Therefore, when you do a big ipo, you have to understand the asymmetry of the risk. If you price it right, everyone is happy. , you canice it wrong damage the brand or damage the company or damage company morale. Look at facebook. It took one year for them to recover. Why should a Security Software have that kind of damage when its the same company . Betty liu speaking with jimmy lee. That does it for today. Many more big interviews coming from bloombergs conference throughout the day. Market makers is coming up next. It is 56 past the hour. Bloomberg television is on the markets. Lets look at how stocks are trading. We do have little changed today. The dow nsp he the dow and s p lower. Still trading near record highs. Investors taking a step back for the end of the week. Looking at the earnings weve got so far this morning. Retail sales come in better than economists estimated. Look at commodities. We have oil prices rebounding today. There is some level of trading belowat 80 a barrel would force opec to cut production. Lets focus on the fundamentals for the oil industry. The commodity itself and the companies that produce it. We have seen some consolidation talks air. Halliburton in talks to buy baker hughes. Joining me is isaac. I want to start with oil itself today. We are seeing a bit of a rebound. Sayingthis, people were there is no way opec is going to cut. Is there a magic number here . There are a lot of things with the pressure building. We are seeing this diplomatic push. The saudis are going to venezuela. Are they trying to put together a deal . There was a lot of skepticism they could put together a deal before. You are looking into a period. Ly weaker when are they going to cut . The market is getting away from them because they control a lot less. We have these two venerable Oil Companies talking about teaming up. Is that everything to do with the price of oil . It absolutely is. The industry looking at a weaker period. Its hard to see prices bouncing back up to where they were this summer. Wheres the kind of period you start to see consolidation, particularly for halliburton and baker. You already have north america. This would consolidate to compete. They will get a lot of the pressure as producers try to bring down the contract costs. Do they had the ability to do that . Are there contracts written so t oi if Oil Prices Fall they will go back to the suppliers and taken you help us out here. We are trying to keep the burials flowing. The firstng to be pressure point. Companies are already saying theyre going to bring back production. Theyre going to bring back spending and start dropping some rigs. A free exert getting more efficient, can they get more oil with less money and keep the growth going . Thank you so much. Talking us through the oil price drop. Maybe we could see even more. Thank you so much. Market makers is up next. Welcome to market makers. Eric and stephanie are at the bloomberg conference in washington. They have a lot of exclusive interviews coming up. We will join them in a few minutes. First of all, i will give you the top business stories of the morning. More accounting issues that hurhertz. At hertz. The company will investigate whether management had an influence over those mistakes