Transcripts For BLOOMBERG Bloomberg Bottom Line 20150106 : v

Congress. Julie hyman. Taking another drop lower. Another drop lower. Another expectation that they will show an uptick and supplies that will show more bad news for oil. The fifth straight day of losses for the s p 500. The longest losing streak in 13 months time. It seems as though good news in terms of the drop of oil has definitely turned to bad as we have seen the ripple effects from the drop in oil. The s p down for. 5 since a last hit a record on september 29. Crude oil still trading below 50 per barrel and extending losses. Whereas before we were just seeing Energy Shares take the brunt of the selling it has really spread to other industries. Interestingly when you look at what stocks are doing today, financials are some of the worst performers. Energy also doing poorly. Any rituals on the list. There seems to be mounting concerns about some of the investments these Financial Companies have made. Energies also on the list. Also we are seeing in small caps it is exacerbated. The worst performance since september 10. Basically the bottom line is a broadbased selloff. A lot of it comes back to royal. At the same time were seeing yields fall as people buy treasuries. Investors looking for what a perceived as safer areas to be. This goes for gold also. The overarching theme is people are trying to get out of it what they perceive as risky assets. Bill janus coming out to say that he think Interest Rates where they have been is not enough to boost Economic Growth going forward. He thinks they will see assets not continuing the performance we have become accustomed to. Of course, gross has made some wrong calls before but that call getting attention today. Markets correspondent, julie hyman. I am joined by gene jim polson. Welcome back. Happy new year. Not the started 2015. When will oil hit bottom . I would have thought 15 or 20 ago. I think it has gone the work than anyone really thought. Dropping below 15 per barrel has proved. In the shortterm it appears fairly clear we will have to bottom the oil markets and take the bottom dollar. They will probably take together before you can get the stock market put in the bottom. I am fairly optimistic that were fairly close to that. If nothing else, the magnitude of the daily declined, alstom almost backtoback declines suggest this is getting toward the tail end. I think in the short run i would look at a bottom and maybe popular balance over this week and maybe the payroll numbers will help to do that by friday. If the major indicators show growth no Inflationary Pressure on the horizon and the fed does keep Interest Rates low how does oil throw a wrench into the mix . I am with you on that. Longerterm, we go into the year worried about the deflationary spiral into the globe. I think by the middle of the year we will see a pop in growth everywhere. Not only here in the United States but euro, japan, the emerging world. I cannot think of another year in this recovery that we have dumped him that as much to the list as much stimulus as we have in the past year. Look at the Massive Energy prices made available to consumers across the globe. On top of that, we have already employed the envy of all quantitative easing programs a massive drop in sovereign bond yields, not only the United States but all across the eurozone, japan, and the emerging world. I think the combo package of Fiscal Energy tax cuts, massive drop in long yield will each will pop in Economic Growth. Surprising when people are prepared for it deflationary spiral. You use the word pop a couple of times. What number . I think in the United States the real gdp is north of 9 right now. I think we will grow for the year close to 4 this year. I think it will be the strongest year of growth for the recovery. Overseas i am talking about europe going from zero. 51 . Japan doing likewise. From zero to 1 . If you show that policies are successful, suddenly the deflationary spiral concern in the United States with the Unemployment Rate at 5 will turn into over heath pearce and is the fed behind the curve . Bill gross of Janus Capital group wrote the good times are over. He added the next 12 months will probably see a turning point in the bull market. You believe the major theme for 2013 2015, 1 of them will be refreshing the bull run. Does the market still have legs . I think were headed to a year that will be more volatile in stocks. I take a broad range. We may see a 10 correction this year as well. I think the purpose of the year is to refresh the run. We just had a tremendous advance in the stock market. 15 in maine earnings increase. This was the columnist and most confident and has been in the entire recovery because main street is looking better. Values are up in the fed will have to start resetting rates. Priceearnings going into 2016 might be back to average. Sentiment will be improved and europe and japan will be doing better. That might set up the base for what could be another multiyear run before it ultimately ends several years from now. Joining us from minneapolis, minnesota. Always a pleasure to have you on. Thank you so much. At 12 gain in retail sales in december. We will talk to mike jackson about the games and get an outlook for the new year. Bottom line on Bloomberg Television continues in just a moment. John boehner elected reelected speaker at the house with 216 vote but not from hearing from a small but noisy group of conservatives who opposed his third term as leader. Our things off to a bad start in an already gridlocked washington . Joining me to discuss is peter cook on capitol hill. Our White House Correspondent Phil Mattingly. Peter, let me start with you. John boehner survived a vote for speaker but is he damaged goods as the Congress Gets underway . He did survive. This was a closer call than perhaps he and the rest of the Leadership Team had anticipated and embarrassment for john boehner. 216 votes is not even half. There are a number of house members not here because of the snow, problems with travel. Some are as mario cuomos funeral. At least 24 republicans in the house who voted for someone else or simply voted president present. That is assignee sign he will have to deal with the right flank going forward. Embarrassing for a day that shouldve been a triumph. The speaker about to speak shortly. Phil mattingly, the white House Keeping a close eye on this to see if there were any republican defections that may signal if there is dissension in the race, the white house could work with them . No question. I think the concern is the scenario peter laid out is more problematic than any other. They wanted to see him have a strong vote that would give confidence to come to the table with them and talk. Granted political he they take no short amount of lee watching him struggle. That i think they understand the fact that this is a core group of conservatives that is problematic for the speaker. As long as that is the case there will not be any major deals in the house. The big question becomes what can Mitch Mcconnell do in the senate. The first up, the keystone five glanville they will consider. The white house announced they would be toe the bill. Already contentious issues. The white house announced they would veto the vibill. What are the issues republicans are considering taking up first . Phil mentioned the keystone pipeline. We will see a vote in the senate and about in the house as soon as friday. The question will be for supporters, do they have the 67 votes to overcome the voteto . Maybe 63 in the senate. It looks like that battle will lay out and looks like the president is likely to prevail. Funding for the department Numbers Department of security. This is the one issue they did not resolve before because of the fight over immigration. Look for the new fight over executive action and funding over the agency. A couple of the smaller issues includingover the health care law. Look for a big vote on repealing the medical device packs as part of the law and the showboat to reveal the entire law come of both they know will go down in the u. S. Senate because they do not have the 60 votes they need. What are we going to find out when a record to find out if some of these areas of agreement can move or word . I think the early week are important. I think what the president decides to do on keystone and the travel weary he leaves tomorrow for detroit. Then phoenix and the knoxville tennessee. A sickly previewing the january 20 state of the union address. Basically previewing the january 20 state of the union address. There are possible areas of agreement. Maybe republicans will try to come to meet him on the issues. If he comes out and attacks and does the same thing in the state of the union, it just will be really difficult. The odds are stacked against if he tries to take the town. It seems in every new congress there is some breakout stars if you will, folks that come to the floor. As we look at a live picture from capitol hill, nancy pelosi the minority leader about to pass the capital to john boehner again. God bless you, mr. Speaker. God bless america. [applause] thank you, thank you. Friends, colleagues, countrymen especially the people of ohio eighth congressional district, thank you for sending me here. Lets today welcome all of the new members and their families to what we all know to be a truly historic day. [applause] john boehner once again the speaker of the u. S. House of representatives opening for one hundred 14th congress. I would like to thank my colleagues peter cook and Phil Mattingly for their contribution during the roundtable. We will continue to follow the developments in congress in the coming days and weeks here on Bloomberg Television. Turning our attention to autonation. Reporting doubledigit sales or december. Chairman and ceo mike daschle joins me from Fort Lauderdale on the florida. Welcome back. Fort lauderdale, florida. My pleasure to be with you. The 12 increase due in large part to consumers buying premium luxury vehicles. Did you have to entice them to go to dealership or is this climate of low Interest Rates and falling gas prices getting Consumer Confidence . The consumers coming in on their own, the economy is genuinely growing now. Probably at a 3 4 rate for 2015. We still have pentup demand for the great crash of 2009 and 2010. Credit is readily available at very attractive rates. Now all of a sudden we have very low gasoline prices. If i look at the Industry Sales being up 6 last year, almost all of that in trucks with trucks 10 plus 10 and 55 of the mick in december. Imagine last year Sport Utility vehicles outsold sedans. You just spoke about credit. Credit seems to be loose right now. The number of borrowers following falling behind on car payments is on the rise. Are you concerned about the increasing number of subprime auto loans and are underwriting and its too loose right now . Not at all. If you are moving from a very minor fraction to a slightly larger fraction tom at a really does not make any difference. People pay their car loans. They pay them quickly and on time. Certainly we solve during the 2008 and 2009 crash that this was the ultimate stress test. This was paid first before the mortgage, childrens education or the credit card. So we still have less than a trillion dollars outstanding with a fraction of them 3060 days late, a very small fraction ever moving into default. Another thing the Auto Industry never did was abandon Underwriting Practices. We have always kept our disciplined never made an assumption that it was an appreciating asset for ever like the housing industry did. We have always been much more conservative in the Underwriting Practices so i see no cause for concern. Do you have concern gas prices are falling too far, too fast . Well, it is a two edged sword situation. I think for the overall economy this is one of the most effective things you can do for middle and low income individuals as a reduction of gasoline price. It is really meaningful to them and think it will be very helpful for the economy. I daresay look at the Auto Industry. Washington is a bit jennifer schizophrenic and mandated we sell dual efficiency. Industry is investing untold aliens in fuel Efficiency Technology but with these extremely low gas prices people have very short memories and quickly forget about fuel efficiency. So there is a major disconnect coming if the low gasoline prices continue. Autonation is breaking new ground. You were using an online storefront with set pricing. How has this been received by consumers and what impact has it had on competitors . The challenge and opportunity we see and the disconnect is the consumers are having on experience in the Digital World and another in the brickandmortar or when they come to the store. They really want one experience where they can seamlessly move backandforth. That is the opportunity we are bridging with the digital storefront. The stores and dealership still have validity. They want to come to the store for affirmation and confirmation they have done the right wing. They want all the work they have done digitally to be captured. The key is the website has to be transactional. We are up and running himself lord a. At tremendous technical ability to be able to do it. Mike jackson joining us from orloff or dale, florida. Always a pleasure to have you on the rock cast. Thank you for your time today. Next, we continue to follow the equity markets. Julie hyman returns within on the markets update. Later, a discussion with Nobel Laureate Joseph Stiglitz. And its 26 minutes past our work. That means bloomberg is on the market. I am julie hyman. Taking a look at where stocks are trading. We have had a pullback heading for a fiveday losing streak for the s p 500 and off 4. 5 from the record on december 29. When it comes to individual movers ale well one of them. Shares are rising on report that verizon is exploring a potential joint venture. We are also looking at shares that have fallen by the most in almost a year. The company manufactures Digital Telecommunications equipment and downgraded to hold and removed from the conviction buy list. Though shares up about 35 over the past year. More on the markets in 30 minutes. Ah, got it. These wifi hotspots we get with our Xfinity Internet Service are all over the place. Hey you can stop looking. I found one. See . What do you think a wifi hotspot smells like . Im thinking roast beef. Want to get lunch . Get the fastest wifi hotspots and more coverage on the go than any other provider. Xfinity, the future of awesome. Quick welcome back quick look back to the second half hour of bottom line on Bloomberg Television. Im Mark Crumpton. Bloomberg news is just learned that alan brandon is the new choice alan landon is the new choice for fed governor. The fed board has had to empty seats since the departure of governor Sarah Bloom Raskin and jeremy starks. The fair has the fed has not nominated a vicechairman. The Consumer Electronics show has kicked off today in las vegas. Bloomberg businessweek Senior Editor brad stone is there. He is standing by with the ceo of dish network. Crack here with joe clayton, is ceo of dish. With joe clayton, the ceo of dish. How disruptive is your new subscription . There is a market that the paytv industry is missing today. Talked to 1835yearold, the millennial market, if you will they are not watching Satellite Television or give a television today. They are mostly younger welleducated, urban dwellers, and have different taste than you and me. We figured it would be complementary to our core satellite users. You dont worry that someone will no ahead and cancel their dish subscription because there are less expensive options . Class one plus one equals two and plus one equals three. There will be some but not majority. Will the Premium Sports like mennonite football be included in this package . Lets like monday night football be included in this package . What you know as espn today will continue. Especially among millennials, that is the number one watched. Its all about ultrahigh been television. Talks about how you are supporting that. What we think we are leading the way with four k grant. 4k grand. This one will allow you to watch ultra hd or 4k, the same thing along with these other units. This will work with any tv. And what do you have to do with your satellite infrastructure to support that bandwidth transmission . 4k uses three times more satellite capacity than hd does. There will be some tradeoffs we have to make, or indeed by more spectrum. Im a subscriber command this year has been characterized by disagreements with content providers. There was cnn, espn, now fox taking turns. Threatening to disappear from the dish lineup. What is going on . We have always been known as pioneers when it comes to technology. We feel strongly that if we do not stand up for the rights the consumer, who will . And that is in terms of technology, making it easier for the consumer to use. Our Remote Control had 57 buttons on it. This has 17. That is an example of what technology ca