Mobile devices for apple in taiwan. Quarter. Bad julie hyman has been looking at the quarter for blackberry. Wherelike a zombie movie you know what is going to happen but it continues you are still scared. We were talking about this this morning, that you know it is going to be bad but yet somehow you are surprised just how bad it is. Lets talk about the various metrics we are looking at. When you look at the loss from continuing operations, worse than analysts anticipated. A big drop in revenue of more than 50 . That is worse than what analysts have been anticipating. If you look at the revenue recognized from smartphones the Company Sells a certain number of smartphones in the quarter, but some of them, even though they are delivered in the quarter, maybe they were ordered before. If you look at the revenue realized from the actual sales that were recognized in the quarter, we are looking at 1. 9 million smartphones. 3. 7 million smartphones was the prior quarter. Makersher smartphone when they had introductions of new devices you get a little bit of it quarter to quarter. But that is a pretty big of. Big bump. The pattern portfolio, thought to be worth as much as 3 billion a key asset for black very. A talk that microsoft or somebody was interested in the patent, then wrote down the value, a couple of billion dollars. This was supposed to be the store of value. The patents and blackberry messenger. So, if you were looking at a lower value for the patent portfolio, obviously it does present a problem for the company. And then you look at the Foxconn Partnership as well and you have to wonder how much value is going to come from that. The partnership designed to target new phones in the indonesian market. It is hard to see where help comes from at this point. This was supposed to be the year of change for blackberry and it just starts spiraling since the beginning. Thank you so much. Julie hyman, senior markets correspondent. Day 10 ofr, it is Bloomberg Televisions 12 days of bitcoin. Matt has been a great job telling us everything we need to know about it going. Today we are talking about bitcoin mining. It is a complicated computational process. It is, but it is really the key to so much of the bitcoin network, the bitcoin movement. Youve got an open source currency here, right . So, all of the different people in the network are responsible in some way for controlling the process, verifying the transactions, for basically keeping the ledger in order. You cant have everyone controlling the ledger at the same time. Otherwise things would get crazy. So they basically devised this lottery system that involves an incredibly complex occupational problem that youve got to solve. The first person to solve the correctly gets to put the most recent page in the ledger, and point,y word at this 25 every time . So, you did the computing tasks as all this problem, it creates 25 bitcoins to the person who completed the task and then the next time the task of done it is twice as hard to do it. Like the Richter Scale it gets harder and harder. Of the hashart rate. Tellingis basically per this is in gigahertz second, and we reached about 10 million. At this point, the difficulty have gotten to the point where you need to do 10 million 10hertz per second or terahertz per second convocation. 10 trillion computations per second, that is what the whole network is doing. From going bbie on how to regulate the value of bitcoin mining. The higherthe the performance of the machine the higher validating the transaction. The idea is, build a very powerful machine in terms of performance and consumes the least power in terms of electricity bill. In the bitcoin world, performance minus electricity bill is your revenue. Machines for individual to be mining, but the problem is it has gotten so difficult and you need so much power to run these giant computers to mind that some people think it outweighed the benefits that you get you spent so much electricity building it that it is not that worth the value. A guy herelly have at bloomberg who is successfully and profitably mining, he is on the code side of the business here at bloomberg lp, that he brought in his rig today. I will set it up, betty, in the loop. 9 00. L be mining at of this is exciting. Just as exciting as our eggnog. P from theht a solo cu Bitcoin Christmas party. I cant tell you what is in it. Thank you so much. Matt miller. Moving and shaking, tracy the isirman of Benjamin Moore firing workers, freezing the pension plan and outsourcing the Technology Department to a company in india, according to the new york post. The job cuts are coming after years of neglecting Benjamin Moores the Washington Post she had to do something to compete with sherman williams. Imagine. Getting a nicotine fix in new york city got harder. The Council Voted to ban the use of these cigarettes in Public Places and could be followed by other big cities. The potential impact. This is an interesting story. A great column in the New York Times was talking about the Health Impact of these things. Cigarette people aps and now new york did he, too. The city says they think e cigarettes are a gateway to regular combustion cigarettes. That is rather controversial. The speaker said it would make it harder for smokers to quit traditional smokers. They think it normalizes it. If you see people smoking in they if kids see it, will think it is acceptable again and it is a big problem. Cynics say it is big tobacco by the latest effort to keep people addicted but that is controversial because a lot of, they say it helps equip. Colette research saying it helps people stop smoking. There are a lot of people on the Health Community on the other side. The former Surgeon General actually on the board of one of the leading ecigarettes start up companies and he wrote a letter to the new York City Council in opposition to the band in the says i am extremely concerned but unsigned scientifically unsupported effort like the current proposal to include Electronic Cigarettes in new yorks current smoking ban could constitute a giant that that court in effort to defeat tobacco smoking. There have not been taken of studies to conclude that e cigarettes are safe but they do not have the tobacco and the tire, but the carcinogens. Ofi have read other things that suggest that after people use these they are less likely to smoke and not more likely. Again, there have not been rigorous enough that is. I mean number one in the lancet, a very respected journal, cigarettes toe help you quit that there is no conclusive proof. Olivia, it is vapor is that what it is . Is a liquid that is laced with a nicotine and you heated up and inhale the vapor. You get a hit of nicotine like a regular cigarette. The big question is what impact that the and have on the industry. That is where analyst are divided. I spoke to jack russo from Edward Jones Company z does not think there will be a Material Impact but others think there really will be. Another analyst over at jefferies said the appeal of e cigarettes is you can smoke in the places you cannot smoke regular cigarettes. If you take it away, it would really be bad. The anticigarette camp is the all stop on that the private equity firm that is changing the game when it comes to rental housing. How it is working. We are talking about the company and bonnie technology and the demand for units, better snacks. We will be back in a moment. Housinging news in the front. Deutsche bank the latest to settle with the Housing Authority here in the United States on mortgages sold back in 2007. The settlement is for 1. 9 billion. Is about mortgages that were not disclosed properly and then sold to fannie mae and freddie mac. Earlier this year, bank of america, citigroup, and 17 other banks had also been in negotiations to settle the mortgage cases. A big fine. 2 billion is nothing to sneeze at. Housing, part of the american dream, owning your own house. Blackstone build americas first centralized rental Housing Market. Our bloomberg correspondent has a look at how it is working in one of lancet suburb. Outside of this courthouse in lawrenceville, georgia 128,000 the prices might seem high. But for multibilliondollar private equity firm, this is a bargain. Sold the property and a block of homes seized by banks. Art evan enormous bet on what some consider the hottest new on the street, americas singlefamily homes. The biggest players include five equity giant blackstone through colony capital, and californiabased American Homes for rent. Many of the houses they are buying up were until recently homes that belongs to families like the heart of ways. They have been struggling for their Monthly Payments for some time when in late september they requested a third mortgage modification from their lender, citigroup. Everything was supposed to be on hold. So we do not worry about it. After what they say was just a days notice earlier this month, the Mortgage Company sold the family home of 10 years to the highest bidder, blackstone. Wasiterally like our house stolen. Just in general no notice, no anything. This woman, acting as a proxy bidder, bought the house sight unseen. More than a dozen victories for her. She was one of a dozen others for blackstone. Inoss the state of georgia, one day, the firm purchased more than 170 homes. Angst of the rapid foreclosure process at historically low housing prices in some states, like stone Invitation Homes and major competitors have dominated these auctions, buying up around 2000 properties in Gwinnett County alone and nationwide in cities, suburbs, and subdivisions across the country, these large investors are placing huge bets on a large number of singlefamily homes. The major institutional players have put in about 20 billion to acquire north of 150,000 homes. Of the attention of cities like atlanta. You can buy thousands of homes and very nearby locations that makes the economics of servicing those homes feasible and aggregating large portfolios. Here is how it works when borrowers dont pay the mortgage on time, the lender or closes on the home and sells at auction. The private equity firm hires an auction Bidding Company to buy it, and addiction company to empty it, a contractor to renovate it, and finally, a leasing agent to rent it. They then gather together the rental income from their thousands of homes and, in blackstones ks, bundled the income streams together, price them, and sell them onto under investors. The number of american rental homes have jumped from 33 million at the housing crash to. 0 million today blackstone offer to allow them to stay in their home for renters, but for 200 more than the monthly mortgage, they could not afford. Left them as the latest family to be priced out of their own home and the american dream. It is not worth it to us anymore. I would rather rent. I would rather rent. And i never thought i would Say Something like that. s reality for many on main street to get a profitable business for the few on wall street. Bloomberg, gwynedd county, georgia. Inlots of different issues that piece. Great job. Here to look further at this from is Eric LundquistRealty Tracker published a report on private equity groups buying homes to rent. Buying homes in order to rent them. Also our economics editor mike mckee on the big impact on housing. You. Start with how much do these private equity groups like stone in particular how much do they make all of this . And the numbers work out for them. They are buying homes below 200,000, and on paper at least, when they are buying these properties, it looks good. They are renting them out at rates where they are getting yields of upwards of 10 , gross yields on these properties. But isnt it a lot of work to get that high in the return . It is. That is the big wild card in question, i think. Very companies have been good at acquiring the properties and the massive number of foreclosures that have been available over the last couple of years have made the process of acquisition easy, but now theyre real work comes, i think, with the management of the properties. That is what we look at in the report is little bit, the expense ratios on these homes vary widely even neighborhood to neighborhood and market to market, and you are dealing with a wide variety of Properties Across even if they are in a fairly condensed geographic area, it is a lot harder to manage of those vanities a 500 unit apartment building. Like like in it to short sellers thanks god for a short sellers coming. The buyers have an impact in the falling Housing Market . Very small impact. It has not been used but it has been helpful. We had an enormous overhang of homes of the shadow inventory, those in foreclosure or about the going for closure. When you have more supply, prices go down. The fact some of these things are being taken off the price for everybody. Including houses were people have not had payments for months toconnecting the hardaways blackstone did blackstone does not have anything to do with the fact they cannot make their mortgage. They are swooping the properties that in most cases were going to be vacant. In a lot of cities, with nobody living in the houses, it blanks out lots of property values. The debt many of these companies are using to buy the housing, is there actual Interest Rate risk for these groups like blackstone where they are locked in an investment depending on a very low Interest Rate environment that will not happen forever . It is fairly interestrate sensitive. I think as Interest Rates go up it is going to change their strategy. This ly they are in at least they say they are in it window and thus far they have been purchasing in markets that have the added benefit of very strong appreciation. Laces like phoenix and las vegas. Atlanta has become the new hotspot. Arent there some places, though, where we have seen lots of foreclosures im thinking illinois, for instance where they are not doing this . Market for prime buying these homes is places that have a lot of newer foreclosures. Robert is built in 1990 or later. In 1990 ores built later. I think these operators will will move to places like illinois as they run out of inventory, they will move to the secondary markets like illinois. But so far we have seen most of the activity in the west and now moving to the southeast. Mike, i wonder if some of these arms are doing this to the point where they think the rate working now but not working in the future. Where it will not be economically economical anymore. To get the kind of yield they are talking about you will have to pay the kind of rock item prices this was really hot a few years ago. This would have been a better investment a few years ago the now. Thank you so much, mike mckee and daren from realty trac. Coming up just trying to keep government snoop out of your business. A company that says it and keep your email safe from nsa surveillance. You are watching in the loop live on Bloomberg Television and streaming on your phone then bloomberg. Com. Im betty liu. Im cory johnson. Only six minutes past the hour. Chief markets correspondent scarlet fu watching Early Morning trading. What is a look like . Take onaiting for final thirdquarter gdp coming out in a few minutes. Ahead of that, features little changed to higher as we get ready to close out the week. I want to look beyond stocks. Treasuries falling. The yield on the 10year rising. Inching ever closer to the three percent level after the Federal Reserve this week decided it would begin tapering or trimming its stimulus, the Bond Buying Program by 10 billion a month. The dollar is at a fiveyear high against the yen. Gold prices continuing faltering. Bearish comments from Goldman Sachs on the gold that is certainly helping put the pressure on gold prices. Goldman sachs citing the decline is not over as it heads to the biggest annual drop since 1981. We are on the markets once again in 30 minutes. Thank you so much. And look at our lobar top headlines. More trouble for smartphone maker blackberry. The Canadian Company reported a significantly wider than estimated quarter loss. It abandoned plans to sell itself last month also announced a deal with foxconn. Nike posted a secondquarter profit that topped analyst estimates. The Worlds LargestSporting Good company said net income rose 40 of the quarter compared to a year ago. Sales of the higherpriced shoes helped boost revenue around the world. Overstock. Com plan to be the first major u. S. Retailer to accept bitcoin. In an interview with the financial times, overstock ceo said the ecommerce site could start accepting it sometime next year. No stopping this bitcoin train. In washington, lawmakers and president barack obama wrapping up their last day in office before taking some time off for the holidays. Correspondent phil meddling has Phil Mattingly has the rundown. Staying over the weekend to vote on the nomination of jimmy yellow janet yellen thats what changed . In congressa saying that you know things are going to start moving a logjam disappear when lawmakers start smelling jet fumes, when they want to get out of town for the holiday. What we have seen over the last couple of weeks and Senate Democrats took the very