Up. Its friday, and alix steel is my cohost today. Looking forward to a threeday weekend . Who doesnt love a threeday weekend. Also exciting for investors because we are near record highs. Picture, to the big julie hyman. If you take a look at the big stocks we are watching today, Occidental Petroleum is going to be breaking up and its california unit is going to be a separate, publicly traded company. It will be the largest owner of natural gas and Oil Properties in the state of california. Those shares are up. Saying itsp is baking and snacking unit performed well internationally and domestically and earnings shares Beat Estimates by about 4. 8 . Wearhouse is going down today. Joseph a bank has agreed to by eddie bauer in part to try to thwart the bid from mens wearhouse. Investors asking, where does mens wearhouse go from here . As they asked the question, they sell the shares. This is unbelievable. The banking business is going to pot. The federal government is going to allow u. S. Banks to get a cut of the legal pot business in colorado. But it will have conditions attached. Peter cook has more on the new guidelines just released peter, i have to say, this is pretty stunning. I mean, it is amazing when you think how far this industry has come in such a short amount of time. The banking issue was holding it back. How might it change now . This is a big step forward for the legal side of the pot business and a significant development. As you know all too well, retailers in colorado last month started selling Recreational Marijuana to users for the first time in years, decades. Even though it has been decriminalized, the sale and use is still a violation of federal law. Banking transactions would potentially violate federal banking laws, so all retailers were having to do their transactions in cash only, no credit cards. The new law addresses that thectly and allows banks in 18 states where medical marijuana states medical marijuana is allowed to do businessesth those directly. They do need to do thorough due diligence. Since marijuana is still illegal at the federal level, all transactions require suspicious activity reports that they need to send in each time. And the banks must red flag particularly suspicious customers that the banks think may be going above and beyond what is legal at the state level. It is a big step forward and another sign of the legitimization of marijuana. It is incredible. I remember first reporting on this in a documentary i did in 2006 and i dont think even then i had any idea it would go this far this quickly. Let me just ask you, is there a political component to this . Forwardhink as we move to midterm elections there is a reason why some states might want to have this on the ballot and perhaps rally their base . Absolutely. Coloradoat happening and washington. There are a lot of states washing this very, very carefully to see how it plays how thee and now federal government handles it. The fact that at the federal level it is still a crime and yet the Obama Administration is allowing it to move forward, that says a lot about where it may be heading in other states and how the federal government may be forced to question the federal laws. Big banks are looking for new customers. Some banks will jump right in in colorado and other states. Others may hold back a little bit, fearful of the tape that might be attached. We are going to talk about that a little bit more. Stay with us. Also joining us is the executive director of the joint policy alliance. Peter brings up an important point. It is one thing for eric holder to advise treasury to change the rules, but it is another thing for wells fargo and bank of america to say yes, we are going to allow this drug money to have an account with us. Are they really going to buy into this . Do you think they trust what the government is saying . Its business and they can make money. Banks can make money by dealing with the legal medical marijuana industry. I think some will dip their toe in the water and begin to do it. When they see that federal prosecutors dont respond, more will go win. This is one of the issues. I met a guy who got into the business, thought he was fine, talked about it a little bit on the local tv station in the next thing he knew the feds were busting him down the next morning. When i met him he was wearing an ankle bracelet. He was basically stuck in his home. And on his way to jail. This was in colorado before the legalization. Thats the point. The world has changed so much. Look at the Obama Administration which was sort of an example are on drug bad faith policy in the first term. He sort of did a 180. But how can you guarantee that will stay . More years tohree go. Other states are going to legalize the stuff. Questionsre also about what congress is going to do and where that leads congress. The tone we heard from the president in the new yorker institute, i think ethan is right. The genie is out of the bottle. It is hard to imagine this is going to roll back or the other direction unless something goes horribly wrong in colorado and washington. Critics are watching carefully for exactly that to happen, but the genie is out there. It is not just colorado and washington. 20 states have legalized it for medical. Florida and new york may boast do the same thing both do the same thing this year. Florida has an initiative in new york has a good chance. Youre talking about the majority of the population living in states where this is legal. What you estimate this business to be . The beginning stages of a transition from an entirely illegal industry to an entirely legal industry. The total value in the United States . 20 billion dollars . 30 billion . Nobody knows for sure. Strugglingmorris is with tobacco sales. Will they want to diversify . Its a good question. Tobacco and alcohol are on the sidelines right now. But they see things emerging and i think theyre hoping maybe a day will come when they can grab their share. I have met so many dispensary in colorado that are hoping for exactly that. They are hoping this goes the way of prohibition. All these small distilleries got bought by bigger conglomerates. For am personally looking the microbrewery model. To ask if ethan thinks the guidance goes far enough. Head of the Colorado Banking Association was pushing for this. Does this go far enough . They said here is federal law. Here is what is going on. Now, do the best you can. Make this work in colorado and washington given federal law. I think the Obama Administration pushed the envelope to make this work. And just remind people how difficult it is for some of these dispensary owners. If you are in a cash only system, that means you have to pay everyone on your staff in cash. Your customers can only pay cash. And then they have the added bonus of having to deal with all this cash. Can actually smell. If the banks smell marijuana on a they go to very elaborate measures. You have to pay for security movermed guards to your money. The quid pro quo is they have to enable these banks and themtries to serve legally. That is what is going on right now. It is a major change. The industry is moving quickly. A gray conversation. Great conversation. Thanks you guys. We appreciate you helping us break that down. Coming up, ladies and gentle men, we have a jobs problem. When people are unemployed for that long, they surely must get discouraged. They begin to lose their networks that enable them to find jobs. They decide to drop out of the labor force permanently. From dropouts to big cats. We look at where we stand and , and we are headed next where janet yellen can help. Plus, i am so excited, house of cards season two is here. And washington is glad. We will explain. Bitcoin in breakdown mode. In just the last week, the currency has had three major attacks. What they call a technical glitch. Yesterday, bitcoin said a denial of service attacks forced them to suspend withdrawals. Now they have been hacked. Silk road 2. 0. Third variation. Alex, you remember the feds came in and busted the whole thing. I dont believe it has been hacked. Of2. 3 Million Dollars worth bitcoins are missing from the site and the currency is getting pummeled as a result. Thehis the beginning of and . A professor from Boston University joins us. The chief Security Officer of black chain joins us and our resident expert, matt miller. Matt, you personally have knowledge of how the attack feels. Remember this moment . Adam, here you go. Trish. Private key on the inside that you can access and load into your wallet, if you have a block chain wallet or going based wallet. This is what i put on my phone so that when i want to go buy or sell or whatever, i put this on the computer, the computer reads it and knows to debit my account. Exactly. Backup for a second. Some viewers dont know this. People actually took that money from his bitcoin that you gave him. They stole it. To be fair, we expose the most it is like giving someone your credit card number or the back of your credit card number. It is a big nono, and only a bitcoin total newbie with do that. We only lost about 0. 02 bitcoin, but it was a good lesson. This is the issue that is part of all this. It seems like it going, like anything else up there, can get hacked. Well, if you go to the middle of times square and open your wallet with a few hundred bills at midnight with no cops around, somebody might take your cash. This does speak to the vulnerability of Digital Currency when you have one attack and it all goes to pot, excuse the expression. That is correct. What we have seen in massive , it is really questioning the viability of these e currencies. The confidence consumers can have that they are not going to be hacked and lose everything. Untraceable currencies. What that means is if you lose it, thats it. Thats wrong. They are traceable currencies. Even more traceable than u. S. Dollars. You can see exactly where they are going from an coming coming from and going. It is easy as long as youre willing to download nine gig of block chain. Were service attacks against atm networks about a year back and nobody said the dollar was going to crash as a result. Withdrawals are back online. They are continuing. The glitches were fixed. The network was never affected. The block chain trust was never violated. No funds were stolen from the bitcoin network. We have seen a lot of hysterical headlines and are hearing a lot of hysterical fear mongering, but the block chain system was not affected. The network is now more resilient than i was before. My concern. Is everybody says there is a limited amount of it going out there. Only so much can be mind. It is an infinite amounts. As opposed to fed policy a printing machine you can run whenever you need it. Exactly. But who is to say that some computer expert couldnt put more bitcoin out there and hack all of that . And therefore depress the value. Because thats not how the protocol works. Is based on trust through computation rather than access control. That means that computation secures the network and you can allow everyone to join and innovate at the edges of the network. You cannot forge or print bitcoin on your own. How it works. I want to get your take on what you think it would actually take for bitcoins to become more mainstream and more secure. Manyre, i think there are things that need to happen. First, confidence has to come back into the market about virtual currencies, in particular bitcoin. Highoin has to stop having volatility. We can see it move anywhere between 20 30 in a given day. This weekend alone, we saw bitcoin dropped from 102 to 600. That is kind of a flash crashed too, but we did not question the volatility of the dollar at that point. The dollars dont move like that. The liquidity of the currency is increasing over time and as a result, volatility goes down. We dont think when the nasdaq has a flash crash that is the end of the dollar. We will leave it there. That is misinformation. It is misinformation because it only took 6000 bitcoins to move that market by 80 . Because it is a small liquidity pool, but other markets have had flash crashes before and we dont have the hysterical headlines coming out of it. Of course, bitcoin has a small liquidity pool. Can i just say, if anyone is selling bitcoin for 102 apiece, please tweet me . So much. We are going to be right back with more street smart. Welcome back. Liberty globals john malone is getting used to losing. Just yesterday, comcast trumped deal to buy time warner. He has made 50 Million Dollars consolidating europes paytv business. Maybe this recent rejection will only fuel his efforts further. Why does he keep losing . Is he losing his touch . Has he lost his touch . This time he certainly has. This is something he did not expect at all. He was completely surprised by deal. Omcast my sources tell me 10 days ago they got a call that Brian Roberts wanted to do this. And where was john . Quietly plotting. Lets put in our own board, force our hand force their hand, force them to the bargaining table. All that time, comcast had been negotiating with time warner. They had a mentormentee relationship. Then i read there was a lot of ill will between the two. What is the real deal . They definitely typified the cable industry. At times they are in league. At times they are at odds. The cable industry is more collegial than others. They took advantage of that. They would help each other sometimes but a lot of times they fought as well. They came out publicly saying they were looking for this. Was malone to slow . Too slow in getting too low. How much debt are you going to take on by taking Time Warner Cable . What does he do now . Does he try to get the company or try to go overseas . Overseas is a big part of his not asuropean paytv is well built as it is in the u. S. There is still room for growth there. In the u. S. , there is still cablevision, charter. Is cablevision going to lose out . They are. They are not a prized property. And they are saturated in their market. They face more competition from fayez. But there are still deals to be had. Fascinating. Thank you so much. Coming up, we are going to be talking about jobs. Recent data spells trouble and wall street keeps chopping, but investors phased . Jobs have been in focus all week, whether it was digesting last fridays dismal report or Janet Yellens comments or aig announcing it was cutting its workforce. There is lots to sift through. We have our panel, chief economist at artie q economics, economics editor mike mckee and Senior Market analyst julie hyman. John, i am going to start with you. A lot of people say hey, this is just weather. The last couple of months we have had lousy weather and you really need to look forward to the future. We have had lousy weather. It was not a Beautiful Day yesterday. It is still pretty messy out there. And we are not going to get a clean reading in february either. One of the most ronson numbers constantons numbers after revisions has been that the economy created close to 200,000 jobs a month. It was picking up steam at the end of last year. There was no reason to expect the break and hiring was going to be sustained and nothing supported it. Payrolls were out on their own in this one. Ven the household number you thing next month is going to be bad as well . If it stays bad next month, the impact that has on depressing the growth sort of disappears. I would not be surprised if we saw strong let me ask you one question. He brings up something pretty important, the impact on the growth. If you are not hiring a lot right now because of the weather or for whatever reason, doesnt that have an impact, a domino effect as you go forward . You might say no, people need to hire. They are going to do so. But what is the effect in the interim . It depresses job growth for short time. We should point out that the survey week for february was this week. So yes, there is a good chance were going to have weather problems once again, but people know that. It may be not so much that people werent hired, but they werent at work. They werent on the payrolls because they couldnt get to work. Companies may have put a hiring because it is too hard to get people in for interviews once the weather is lousy. If we see people owe back to store go back to stores once the snow is shoveled, that will be the real indicator. Aig out yesterday saying they are slashing jobs. Who else . Erck. Morgan, mark 240actual jobs figure is 5000, which is lower than i might have expected. The jobs report we get every month is the net edition. Looking at jobs added on top of that. The kind of brings and to call how much the unemployment friday release really matters. Employment friday will remain not buying that for a second. Not buying that . I would take his place, it what would take its place, is my question . The Federal Reserve tide moves back in the early 1990s. The september taper or failure to taper was predicated on a couple of wobbly jobs numbers. Of the market cares. The market cares because the fed cares. Rates are at zero. The jobs numbers are the number one factor. There is a lot of information in this report besides just the headline number. It tells you how many people are in the labor force looking for work. It tells you the number of hours worked, whether or not companies are giving back. It gives you a snapshot of what peoples earnings are, whether theyre going to have money to spend. So there are a lot of reasons to care. Every friday, 830 1 a. M. , nobody is trading on the economic outlook. That is the roulette wheel. What level does it have to get to where you feel more secure about the level of job growth . And maybe a gets to a level where the market doesnt shrug it off, but where it doesnt become quite so pivotal because its stable . Thats right, but theres also the Unemployment Rate in there and the Unemployment Rate has been falling faster than the fed expected. The fed has loosely tied it state for raising Interest Rates for the first time on the level of the Unemployment Rate. That is now at six point six percent, only. 1 above the feds threshold. Coincidently, the bank of england had the same thing this week. That number was also 1 10 of a point above the bank of englands seven percent threshold. It is a theme that unemployment is falling. When you look at job cuts you brought in from corporate, you also have to look at wages. What is a common theme among Bank Earnings was that they are not going to pay the bonuses. People are going to work less. What is the wage trickledown . That is significant. If people are not at work, they are not going to have money to spent in the economy, which is a multiplier. Wages matter a lot. One of the reasons the economy has felt like it is treading water a long time is that median wages have not been going up. Family wages have not gone up for 20 years . When does that change . Wage growth is picking up very slowly. It is now running, on average, about two point 25 yearoveryear. That does not sound great. Especially if youre getting 2. 20 five percent inflation. But you dont. You dont. At least in the data the fed is paying attention to, it is much closer to one percent. So it is one percent real wage gains, two percent growth. That change . Es how do you start to see people make more money . Trish, that is pretty good. That is three percent real growth in wage incomes that is beginning to come through, and we are creating jobs. What about productivity . Where does that leave productivity . Spurred activity has been are markedly high. There is an interesting conundrum. Aggregate hours are higher, but the Unemployment Rate is tracking low, and the numbers dont quite add up. If productivity goes lower, we might actually start to see Companies Hire more. It sounds counterintuitive. In an expansion, you should see productivity falling. The productivity of labor falls. The demand for labor falls. This idea that we will hire more people if they are less productive may sound attractive can see inm a perspective, but strong growth supports aivity strong economy. Slow productivity growth has been a disappointing feature of this recovery. It requires political change. Thank you so much for being with us. Just in time for the threeday weekend, netflix is delivering a valentines binge for watchers. Im watching, what about you . Also, cracking down on the illegal use of flying drones. Why is there no love for drowns . Businesses cannot wait for drilling rules to be issued by the faa, and many of them drone rules to be issued by the faa, and many of them arent. Megan hughes has more on this unregulated boom. Quakes we are airborne. Drones have gone mainstream. Even modern family character phil dunphy has one. They are not getting high, they are making a movie. Without me borrowing it from his real estate business to spy on his son. Drones shoot properties in tophborhoods, capture surfers. The filmmaker of the gettysburg documentary posted about the technology. It can shoot from a few feet off the ground to 400 feet in the air. They are beautiful shots that also may be illegal. The faa does not permit drone flights for commercial purposes. You cannot just acquire one of these vehicles and launch it into the airspace. Thats not how it works. But you can. That is how works. I am saying that the regulation needs to say that. We went shopping in maryland to see how easy it is to get one. Camera is with the closer to the 1500 2000 range. Can we try it out . Sure. We have liftoff. The camera equipped drone is flying off the shelves and the sales are legal. How the drones are used in someone elses problem. Is there anything in here that is going to show me what the faa says i can and cannot do with this thing . At the moment, this box will not tell you about the faa. While the faa is struggling to write new guidelines, one person is worried about crashes. In this video, you can see the drone in helicopter airspace. Whats the worst that could happen . It could bring down the helicopter. So far, the faa has sent 17 notices ordering people to stop using drones, but issued just one fine. Last month, the faa did order lake mead beer to stand down after an online video pitched beer delivery via drone to ice fishermen in minnesota. Dronebeard imagery beer delivery actually would be pretty cool. What is the timeline for the faa to let businesses know what they are able to do . First, i have to agree with you. Beer delivery, food delivery, soup delivery, that all sounds great. But in terms of a timeline, when is this actually going to be allowed . They are already supposed to. The faa was already supposed to come out with rules for commercial use back in 2011. Now these rules are expected to be coming out in november. Commercialain, for use. Were only talking about 400 feet. Togress directed the faa come up with rules for planes and helicopters by 2015, but a lot of people dont think thats going to happen either. Its a competition process, but the faa is certainly taking its time. What is the Drone Industry doing right now and what does the lobbying look like . The Drone Industry is actually really upset about the lack of regulations and how long this is taken. We talked to one Industry Group saying essentially that the industry is looking for certainty. Were talking about businesses already using this. Is inhibiting businesses from going to a bigger scale. A lot of businesses are going overseas were the rules are more relaxed and they are able to use some of this technology. Their argument, they actually want to see regulations. This is an industry that wants regulation, believe it or not. So you can get your beer in a cornfield in france. Megan hughes, thank you very much. We appreciate it. Were going to head back to the Nations Capital in the next hour because house of cards season two is officially here. What a lawmakers think about how they are portrayed in the netflix hit . We will talk about that. That adamowth problem johnson has a solution for. Quakes we have a growth problem in the u. S. We also have a solution. Insight in action. Look at the difference between Earnings Growth since 2008 and sales growth. Earnings are up 34 . Sales are only up 7. 6 . Earnings, remember, you can manipulate all of that stuff. Sales, thats money coming through the front door. You want to see sales we went to see that line out here. Thats what it boils down to. By the way, this differential is in part why we are seeing operating margins right now the highest they have ever been. Differential is enabling this. It is maxed out. That is not necessarily dead. We need to go find topline line growth. If you look at the different sectors in the s p 500, you will see very clearly where you are getting the best growth. Its health care. Thats where you have the strongest growth. What do you buy . Real simply, i am going to show you the pharma tech eph. The bestperforming group of the past year is up about 50 . The s p 500, 18 . Its all about the topline, not earnings, sales. Thats what you want. Health cares got it. Lets get some final thoughts. A side from jobs, which seems like the obvious answer to topline growth, what else would you suggest . Margin expansion. Gdp,ns as a share of profits we cannot expand margins further. We need real wage growth and Household Income growth. We cannot have higher margins. It adds up to more than the economy is capable of delivering. What is going to boost nominal gdp growth . From an economists perspective, that is basically the total amount thats available for. Urchases of goods and services so what will boost growth . We need to see some pricing power. Are you one more qe . No, i dont. I am saying when we are looking at corporate earnings, were looking in nominal earnings. Corporate earnings are constrained by how fast the economy can expand with oath growth and inflation factored in. We need inflation. I think were going to see a pickup in inflation slowly and i think it is going to be a decent year for growth, but that is not going to add up for more than five percent Earnings Growth in 2014 because margins are maxed out. Do you think it is going to be good enough for the markets . I think the markets are going to tread water. We caught up with undervaluation in 2013. We didnt think the market was going go up 30 , but we did. This market is probably going to have to tread water for some time. And that is what i expect for this year. Thank you so much. Gregs from fragrances to soup, we have the top 10 sites you need to know about on valentines day. Quakes if you missed everything that happened during todays session, dont worry, we have you covered. Time for your top 10. Aig shareses down down after the company said it would cut about one third of its workforce. The company divested and has to repay its bailout. Cliffs Natural Resources rising nearly six percent as earnings Beat Estimates. The australian facility actually fell during the quarter, a big deal for these guys. The cheap operating the chief operating officer has been appointed ceo. The maker of north face and wrangler apparel issued a week profit out of it outlook for the year, disappointing investors. Gnc holdings down 14 as sales missed analyst targets. The seller of vitamins and supplements was hurt by shopping season. Number six, weight watchers, down 28 . The Company Posted a 47 drop in fourthquarter earnings. Membership sales continue to decline as rival Services Blue or more customers. Diy dieting and fitness. Number five, coty is up seven percent. Fell in the mass fragrance categories. Coty makes perfumes endorsed by celebrities like beyonce and lady gaga. Has been an ongoing issue for some of these companies. Cosmetics and perfumes have not been doing as well. I have had the same perfume for like 10 years. I dont change. Let me tell you, the most brilliant marketing move ever. When i gave birth to the twins, they gave me some chanel perfume in the hospital. Chanel gave out goodie bags. What hospital . Thats a new york City Hospital for you. But what was brilliant was you put it on and that baby you held next to you and you said this is my scent. And i have been wearing it ever since. Four years later. Perfume when you gave birth . No. Number four is general motors, gaining on news that haman bought shares of the automaker. Meanwhile, another fund of increased its stake in gm in the end of last quarter. Occidental will split its california year net. That will be the biggest oil and inural gas acreage holder the state. Number two, truly a falls after a jump in marketing expenses. It will have a new campaign targeting Customers Using mobile devices. Coming up on our number one stock of the day. Campbells beat revenue forecast. In celebration of valentines day. This is the president of the xo group, ticker xoxo, ringing the bell. We will talk to him in a couple minutes. He is the guy in the tux. Upeally cute little baby there. We will talk to him in a minute. Lets take a look at where the markets are here. The dow looks like it is ending up 126 points. S p up almost nine points. Because we got disappointing industrial manufacturing numbers of january. The slowest growth since 2009, in the markets didnt care. We got confidence numbers that Beat Estimates. Usually the market gives more credence to the numbers of activity. Nonetheless, we are 0. 5 from the record for the s p 500, which is kind of amazing. The seeming shift in sentiment, given concerns about emerging markets that seem to flare up and disappear very quickly. The focus this week was on janet yellen, and the fact that tapering will continue. That didnt seem to really faze the market, either. Correction is done, now people seem they will ignore the taper. A little Economic Growth, and they feel better about it. What if the Economic Growth is not strong . , none ofbs numbers them have really looked good. So far, so good. Nice to have it on friday and valentines day. Time for a round of stories were tracking ahead of tuesday. Cristina alesci joining us. There is a deal to talk about. Joseph a bank announced it will buy eddie bauer. Eddie bauer is owned by private equity firm Golden Gate Capital. In the context of this fourmonth fight between joseph a. Bank and mens wearhouse. The critics of the deal have get that bank is trying to bigger to defend itself from a hostile bid from mens wearhouse, and that it is not a good deal for the company because it doesnt make any sense. There is no synergy between eddie bauer and bank. On the other hand, the bank side is trying to defend itself. What does mens wearhouse do now . That is a good question. A lot analysts say that this puts mens wearhouse up against the wall, and potentially presses them to make a higher offer than they made before. Maybe bank is doing the right thing by toying around with the steal freddie bauer. Deal for eddie bauer. Most of the people i talked about that mens wearhouse was in his longer competitive position, that managementwise they were stronger. Market positionwise they were stronger. In terms of market position and Balance Sheet they did not need to go out and raise additional capital. Bank started this fight, it went hostile on mens wearhouse. And mens wearhouse is a much bigger company. The bank side had to go out and raise money from Golden Gate Capital and others. So much hate. Spin thatw what, the comes with it is amazing. Each side is trying to sell itself on this deal. It will be interesting, but it is not the last story. You have been busy. Back in january, room number hopedarmours ceo said he speedskating suits would be the key to u. S. Olympic success. We built this suit specifically for sochi. We are predicting, wishing, hopeful that a lot more medals will come from this. These guys are the best in the world. They understand making athletes better. That is the formula we will use across all our product categories. But you know what, the gold medals didnt happen. Now the company has come under scrutiny after no american finished better than seventh place in the speedskating events held last night. The latest news according to the wall street journal is that the team has asked olympic and skating officials for the option to switch out the suits. To be fair, the other suits would be under armour anyway. They would be older suits. Earlier today kevin joined bloomberg tv and denied reports that under armour apparel is slowing down raiders skaters. Listen to this. When you are not performing, you look at everything. From the training to the gear to the states skates to the pillows he slept on the night before. It is all very fair. This is our business. We believe we have incredible prospects. A bit of a head. Hit. But are people not going to buy under armour because of the speed skaters . The stock took a hit today. But heres the thing. The skate coach came out and it. It was not because of the athletes say, we just didnt do our part. The stock took a hit, but is still up 117 . Up 35 last quarter. Time after time but think of how great it would be if they had won. It was a missed opportunity. But this is not the only sport they are outfitting. Did the dutch have under armour . They were supposedly trying suits that were similar to the ones u. S. Athletes wore. Also, we areint not talking about the gold medalists and what they were wearing. It doesnt seem to work to the positive. It only seems like we are talking about it because this is a company that is so much about the technology, the fabric. They make a big deal about it. There was they were supposed to be fast. It would give them a huge advantage. There was all this buildup and it didnt wind up working out. Sometimes you just do a bad job. You just dont play well. Its an interesting lesson in marketing. Perhaps under armour would have been better to not have said, we have these suits and they will really help people when win. Maybe they could have taken a step back and if they won, then take your did victory lap. When you try to take it ahead of time it sets up a negative environment. Staying with the olympics, russian president Vladimir Putin dropped in on the u. S. Olympic Committee Headquarters today. We had a big delegation from the u. S. The head of the Olympic Committee actually never came out during putins visit. Russian security cap debt for hours before his camped out for hours before his arrival. His drink of choice was apparently red wine. They gave him a silver nike jacket that u. S. Athletes wear on the podium. For all that they are making about the conditions in sochi, this has been a boon for his ratings inside the country, domestically. But he also has control of the pr. They will do what he wants them to do. That circle in the opening ceremony, when that did not work, russian tv didnt see that. Inside the country, people feel very good about the fact that the country is winning medals. That there is a National Pride in russia, winning medals. Skating, that is their thing. Figure skating. That apparently will translate into a better feeling about food and putin. Will he smile . I dont think he ever smiles. The picture of him where the female protester is flashing. Then he smiles. [laughter] what could be a more perfect segue . Illustrated,orts the swimsuit cover is here. The 50th anniversary edition, seen by some 70 million readers. It was unveiled on abcs latenight talk show jimmy kimmel live. A lot of video from the shoots. Kate uptons outfit last year. Wasnt that that cover doesnt generate the same controversy as barbie . We hold barbie to a higher standard. We take issue with every other doll on the market right now. What about the princess dolls, american girl, what message does that send . Are these figurines, is that creating an inspiring character for women . The airbrushing we just saw on the cover. A little defense of the cover, those women are not waifs. Look at these women. They have some junk in the trunk. Are you kidding . Its not junk, but not emaciated. You are right. Kate upton is not a thin woman. Who is on the cover this year . I have no idea. We dont know their names. Well, we are going to move on. What does congress think of house of cards . We had to capitol hill for the answers later. Plus the president of the xo hisp joining us on how company is writing the love train all the way to the bank. You are watching street smart. Breaking news from the 13s filings, the filing funds had to showing their holdings as of the end of last quarter. Berkshire hathaway boosted stakes in wells fargo, exxon, u. S. Bank. Looks like they eliminated sta kes in dish and glaxosmithkline. It also shows a stake in Liberty Global at the same time that berkshire cut its stake in liberty media. Thesel keep monitoring filings to see what pops up and we will bring them to you when we have them. Thank you so much. , the group behind the popular websites like the knot, just rang the bell on the stock exchange. The president joins us from the floor. Your hands in babies, marriages, but there is also a lot of competition our there. What is it like to consistently reinvent yourself . It is a lot of fun. We are a very lucky organization. 2 million brides get married every year. Is a big day, very important to them. I should say on valentines day there is Nothing Better than ringing the closing bell with the team to celebrate. What is your busiest time of the year . We have to point out there is a massive amount of brides and babies behind you. We brought them as a team. For us, you asked about reinventing ourselves, the busiest time of the year. We serve so many brides. Everyday day is Wedding Planning season for us. Every year, more and more women want to complete the tasks and be inspired for their wedding on mobile devices. The biggest task for us ahead, one we have made progress on, is turning our business from a desktopbased Internet Company to a mobilefirst company. The Revenue Opportunities you see right now, people spend a lot on weddings. What does that look like for you guys . People spend 16 billion every year on weddings. 30 billion having babies. Homeseds moving into new spent between 100 billion and 200 billion. We have an industryleading position in the wedding space. All the brides on one side, and all the vendors on the other glove make the wedding day the best it can be. Revenue opportunities are significant, and we feel very fortunate to serve brides in this space. How much of your business has been mobile . Depends on the product. If you look at the bump, we see almost 70 of time spent with our products is on mobile devices, which is not surprising since you hold a baby in one arm, a smart phone in the other. For others, the numbers are around 40 to 50 and they continue to grow. It is really important for any Media Company to be a mobilefirst organization. We have had big moves in the mobile space, launching our fashion app. Showing huge traction for us. , you terms of your revenue have seen a merchandise decline. That would suggest to me that ecommerce, as you move to mobile from desktop, is a weakness for you. Story opportunity for commerce is significant. We did not move at the right pace. It is one of the things we are excited about going forward. We see really nice growth in registry. That business is up 25 yearoveryear. Are people still spending on weddings, despite an economic environment that is pretty uncertain . People spend 60 billion a year on weddings. If you are going to cut a corner, it is not this one. How does it compare to previous years . We have not seen a significant change. With the advent of gay marriage over the last year, what has that done to your business . We launched a digital day wedding magazine gay wedding magazine. That is a consumer segment we are very proud and excited to support with all our media. With wedding stuff, im always impressed about how you make me buy stuff i dont need. I dont know how thats possible. You are not going to want to hear this, but i eloped. No big wedding. I hope you come back to cs us at the bump. Mike steib, thank you for joining us. Coming up, bingewatchers rejoice. Netflix releases season 2 of house of cards this morning. What are members of congress saying about how the series or trays washington . And, looking for the Perfect Place to take your valentine we have your handbook. You want to top what you did in season one. And the bright shiny new object of releasing all the episodes in one day, releasing the show on the internet, is not there. It is just the story itself. If anything what it does is motivate us to really try to expand the scope of the series, to deepen our exploration of the characters, and challenge ourselves to do even better than we did before. These of cards executive producer speaking to our very own charlie rose. You can get the entire interview on charlie rose tonight at only on 10 00 eastern bloomberg tv. Housee on season 2 of of cards we want to bring in White House Correspondent phil mattingly. Netflix actually refused to release the episodes yesterday, when the whole capital was shut down by snow. Walking through this, and whether this was a bad business decision on their part. Obviously leave it to washington to assume everything revolves around them, including the netflix business plan. It was really funny, starting on wednesday afternoon and throughout the day yesterday top officials, top congressional aides, including a Senior Advisor to marco rubio, it even position popped up trying to get netflix to release early. Netflix said no, and the spokespeople were very blunt. They just said no. Is it going to have any impact . No. I know people who were up at 3 00 a. M. To watch when it was released this morning. Pretty much everyone i talked to has the long weekend planned out around these 13 episodes. We had about one day of outrage and everyone just decided, we really want to watch the show after all. We know the president is a fan of the show. Says will he be joining the Binge Watching crowd this weekend . He has been really open, he is a big fan of it. Out,night, they tweeted house of cards, no spoilers, please. There might be a reason why. He has a big bilateral conversation with the king of jordan in california, then he is out there for two days with nothing on the schedule. I talked to a bunch of people in the white house. The rumor is he will be consuming some tv, there may be some Binge Watching a season 2. Staff andot just hill the white house. You checked on lawmakers and ask them about the show. Our are they all watching as well . They really are. You have to take a listen to what we found on capitol hill this week. Take a listen. The only unrealistic thing about the show is that a democrat could represent gaffney, south carolina. It makes it look a lot more exciting than it actually is, a lot more devious. But it will be fun. He is a composite. None of us are quite that interesting. I am one of the few living americans who has not watched it. As you can see, really everybody, staff, white house officials, the president , john mccain, threeday weekend. Binge watching is on the menu. Thanks so much. I dont know how i feel about that, that kevin spacey is more exciting. Im excited to watch it. Coming up, we will look at how brazils rout is threatening your drought is threatening your morning breakfast. You are watching street smart. Breaking news on under armour. Earlier we talked about some technical issues with the suits the speed skaters in sochi are wearing, that are made by under armour. Under armour now says the skating team is switching to another under armour suit that is less technical. The Senior Vice President of innovation has said they are making this change. Apparently the majority of the skaters did not consider the suit an issue, but they did take a vote and a handful wanted to switch. We were going back and forth talking about this. It looks like this is the decision being made by the team itself. The question is if it will make any difference. The rise, and getting more precious by the day, headed to its biggest weekly gain since august. Goldman sachs reiterated prices will go lower. So what should an investor do . Eric balchunas has three ways to play goal. I feel like i have not talked gold in weeks. The obvious ways our physical gold. Here are some unique ways that fit with gold going sideways. Physical Precious Metals basket, which gives you a basket of Precious Metals. 50 gold, 33 silver, and the rest is platinum and palladium. Some of them have different catalysts. Different supply catalysts. It is a little diversification on your gold play. The other way is the gold shares covered call etn. Sounds risky. Not really. It is tracking physical gold and selling call options on the goal that are 3 above the price of gld. Right now it is yielding about 11 . A nice, hefty yield. What you forgo is that if gold starts to spike up quickly you will not participate. When gold went down last year this did not go down quite as much, either. You have not seen a ton of volatility in gold this year. This could be an interesting play to pick up yield. A third way is the advisor share goldyen etf. They Just Launched three of them. Essentially this goes long gold and shorts one of the currencies. It is a way to own goal out own gold outside the u. S. Dollar. This is one of the ab etfs, with packages which packages and institutionalstyle trade. Bethe yen and goal 10 to safe haven assets together, so it is an interesting combination. Last year, gold went down 27 but gold and yen only went down up. Ecause the yen got beat because it is valentines day, you brought me something chocolaterelated for the etf of the week. An etf thatoc, tracks cocoa futures. We have a 30 wrap up in cocoa over the past year. The returns are very tasty. Did you work on that . Actually that came right out, i swear. Just one caveat. This is an etn. Sny time you invest in etn you have a little credit risk. You have to trust the credit quality of barclays. But if you do this is a way to get quick access to the rising cocoa market, which is predicted to keep going up. There is a limited supply and growing demand for chocolate. Commodities etf world. Thank you so much. A pleasure to see you. Eric balchunas, etf analyst. Starbucks has seen 19 straight quarters of growth, but there may be trouble ahead. The coffee supply might come under siege. Here is a farm in costa rica, where starbucks is attending to put a stop to the apocalypse. I am a little thirsty now. America. , made in the luxury Handbag Company that is creating and keeping jobs in the u. S. We talk to the father and Daughter Team behind the brand. And how to avoid a valentines day disaster. Forget the champagne and roses. We are talking the sexiest food. Coming up on street smart. Welcome back to street smart. I am alix steel. Made in the usa, not something you see often anymore, but you club if you bought a 900 clutch by one of the few handbag manufacturers that still manufactures in new york city, carlos falchi. So great to have you here. Thank you for having us. These look like gorgeous products. All handmade. Tell us about the process. We have been making everything in the United States for 40 years now. [laughter] you dont look a day over 20. 40 years in new york. He came to america i always made my own clothes. You are from brazil originally. I am italianbrazil. Good combo. So i used to make my own clothing. By accident i worked in mexico city at the time in the late 1960s. I dressed a lot of important Rock N Rollers of the time. Team at turner tina turner, jimi hendrix. So you got into handbags. To the store on 57th street. I went to show my wares. Still able to manufacture in new york state, when so much has gone offshore . It is we use handpainted stuff. It sis from italy, we import them from tanneries and paint them in new york. We tan it in italy. I do the first colors in my lab on 38th street. The to italy and we create finish and the quality. Back to this idea of manufacturing in the United States. How do you stay competitive when so many people are going to other places . I think the definition of couture, made to measure, we hold true to it. You want something that is truly unique. It is your signature look. That gives us a Competitive Edge because it is not massproduced. Labor will cost more than it would in brazil. Thats right. But thats ok because your margins are intact because you offer Something Different . Absolutely. We are not advertising. We put the money back into the handbags. We feel the product should work for the customer. For us, that means we are not going to have is highvolume, but each bag will be real we have very loyal customers. Which for me is wonderful. I have the grandmother, the mother, and the daughter, all of the mail them now. Which for me is wonderful. , iy bring in all their bags have had bags for 30 years. But there is a lot of competition in the space, kate spade, michael kors, they tend to produce in bulk. How do you compete . You have to look at it as a positive. If you really grab hold of that niche market, where we are going after that customer from 500 10,000, in that range, they know they will buy the one bag but it doesnt work it will last for 20 years and will look as good as the day you bought it in 10 years. How many people do you employ . About 25. The beauty of it is, if you look at our bags there is no name anywhere. That speaks to our clients. It is not the labels and all that kind of stuff. A lot of ladies prefer that. Made in the usa. Thank you so much, kate and carlos. Thank you. Coming up, single and ready to mingle . We have a don kinds valentines day special playbook for you, coming up. Breaking news right now having to do with sac. The head of compliance is stepping aside. Steve kessler will step down as of february 28. The firm says it is so he can spend more with his family more time with his family. With has happened at sac, a former employee convicted of insider trading. There will be an acting head of compliance, a man named john casey. This is the latest change as this firm, which at this firm which has been under fire. For many people, valentines day leaves room for plenty of romantic disasters. To save you a little time and maybe a little money, too, we once again turned to chris and andrew, the cofounders of immaculate infatuation, a very popular restaurant review website. Welcome back to the show. Lets dig in. What restaurant would you recommend tonight for valentines day, if you would take your wives out, where are you going, what is the sexiest place . There is all kinds of sexy when it comes to places. Talking about the sexiest type of food, it is super cliche but oysters are something that allegedly drives the sex drive north. Opportunity. Good there are a couple great oyster bars across the country. Describe the difference between what you do and what yelp does. We provide you with one opinion. It is an opinion we think is credible. Instead of taking the law of averages from a bunch of different people, we try to guide you the right way. You can agree or disagree with what we think, but we think you are going to agree. That is it, a recommendation. For all the Single Ladies out there looking to meet someone tonight, or a single man, where do you go . Single anybody. There is a new restaurant in new york called toro, sort of chelsea meatpacking district. It is quite the scene. Ella, its a spanish restaurant. The original one in boston is super quaint, but the new york location is a there always single people at the bar. How do you account for different tastes . What we might think is cool is very different. Us we have what we call perfect four categories. Rather than categorizing things for each individual, it is categorizing it by the situation is elf. Itself. Maybe something is perfect for date night because it is quieter, a place for you dont have to fight for a reservation and you might get time with the person you are with. We think we can curate by what youre going out for and hopefully serve that function to help you find something appropriate for the locate occasion. You also do a lot with celebrities. What are some celebrity trends going on right now . We have a series called friday five. We hit up celebrities and find out where they like to dine. They get to choose from our perfect for categories. We have had some really cool people do it like aziz ansari, alec baldwin. What is the hot place for them . It is always different. Spotted pig, that is a big one. You get to see what peoples favorite neighborhood spot is, where they go to take their wife or girlfriend. That is why people like it. That is why we like it. They connect with it i go here, its a local neighborhood joint that may be some regular persons favorite place. How do you guys make money . We do a lot of Brand Partnerships with brands we love that we think our audience will love, too. We try to curate experiences. We do all kinds of things to tie our community and with the brands. I have a very special request, because i have two very special people that have made a special appearance. Elizabeth and alexandra. I have one more waiting in the wings, jamie. Im looking for a place to take my family for valentines day and i have five, a family of five. Five children . Not yet, thank god, right . What would you do for a family if you were going to go out . We love barbecue. A place for you can feel fine with letting the kids get messy. You can see the problem. There are some great barbecue places in new york where they can run wild and eat with their hands. You can tell they are probably going to run wild. Thank you so much. Bei think it actually might pizza at home with dad. There enough. Thanks so much. Great to have you. That is all for street smart. Happy valentines day, everyone. Have a terrific valentines day. A great night. Ve we will see you back on tuesday. Bloomberg tv is on the markets. Lets take a look at where stocks closed out this session trading just a half percent below the recordthe s p 500 despite some mixed Economic Data out. The nasdaq started the day lower bid ended higher by over three points. In the treasury market, we are seeing yield continue to work a little bit higher. The 10 years is at 7. 24 . We want to highlight a couple of commodity movers. Natural gas is one of them. It is tearing its weekly gain. We have seen a big gains in natural gas because of the terrible weather. We have been having in the northeast. Natural gas is used to heat nearly 50 of homes in the u. S. Gold is putting it its biggest weekly gain since auug gust. We are seeing silvers tenday rally the longest since march 2008. He thinks in on what is behind this rally we have seen in gold. The tapering situation people knew it was coming and it finally did come. The news was really traded before it happened. We didnt get tapering right well but we did get gold to rally over the last two months and we finally did get the tapering. It stems from people being afraid of higher Interest Rates. We have been watching corporate earnings. This reporting season has been beginning to wind down to lets take a look at what adam johnson and what he sees is the key issue with these corporate earnings. We have a little a bit of a growth problem here. Insight and action appeared look at the imbalance the difference between Earnings Growth since 2008 and sales growth since 2008. Sales are only up to 7. 6 and that is not good. You can manipulate the earnings. Sales, that money comes to the front door. Want to see sales much we want to see that line out here. You got to get these imbalances. This differential is in part why we are seeing operating margins behind the lowest they have ever been. That differential that is enabling this it has maxed out. We need to find topline growth, sales groowth. You will see very clearly where you are getting the best growth based upon the estimates compiled by bloomberg. Healthcare is where you have the strongest growth so what do you buy . I will show you the pharma biotech etf sph. It is up about 50 . 18 . It is about growing the top line not earnings, sales, that is what you want in healthcare has it. Funds have been reporting changes to their portfolios in their 13 as filings. We are confirming that he holds 4. 7 million shares. He boosted his stake in apple and we saw investment at a actually cutting its investment in apple. That is some of the highlights we saw from these filings. I am julie hyman. This is taking stock for friday, february 14, 2014. I am pimm fox. Well focus on getting to the bottom of things. The u. S. Government takes a step board in legitimizing the mirror one industry. The marijuana industry. We will take a look at the banking rules for those in the business of selling marijuana. We debate with the bottom payment scale actually be set and what this says to the economy. A new take on an old story. Firstpersono