Efficiency ratio in the forecast of 5590 . 5559 . In terms of fullyear net income, another record year for wells fargo on the heres on the heels of a recovery market. The u. S. Largest home lender last year. There was a lot of concern about Mortgage Origination revenue and how that would drop. We did have an anticipated drop of 24 . Thank you. The final government report on will beales or 2013 released in half an hour. Retail sales will rise 5. 3 . I know i did my share. Youve also hear from the big banks out with earnings this morning. Wells fargo firing up the conference line at 10 00. We will hear directly from white house officials on the nsa scandal. We expect the testimony to preview what the president might say on the speech later on this weekend. Moments ago scarlet fu brought us wells fargo earnings. The company missed analyst estimates. A tough year for jpmorgan. Steve case sitting beside me. From where you sit, are you getting what you need from the Banking Industry . Not really. They are getting more active, but they have told back a little bit less. We are beginning to see the early stage of the unbundling of banking and Financial Services. A lot of entrepreneurs are targeting financial technology. Things like landing. Before you had to go to banks but now there are dozens of companies that are doing Small Business lending. Or payments. A lot of people would digital payments. The coin getting a lot of enthusiasm. A lot of different innovation. Bitcoin getting a lot of enthusiasm. One in particular getting a lot of attention is Financial Services. I think the banks will continue to be profitable ranks. Over the next decade i think you will see the entrepreneurship wave. T is hit the Media Industry you mentioned banks have not been extending as much credit as some people like yourself might like. I put together a chart on the jpmorgan numbers. To deposit ratio, harvesting more deposits than any other bank in america according to the fdic. Loans it has outstanding keeps dropping. Should we be outraged like a number of 57 . I am not sure we should be outraged. Things are also a lot of under a lot of treasure. Thanks should be lending money. Companieshe larger trying to thwart Small Businesses. There are many things that do a good job on this. Clearly the Banking Industry has not been as helpful. Interest rates at record lows. If i am a bank, white take that chance . Why take that chance . Anything, you will be extra cautious. You have extra regulation. The fact that there is not much of the spread in terms of the profits on loans. Are a lot of structural reasons. That is why the community is rising. The lending business is bad, what about Investment Banking . If you take a look at Investment Bank compensation ratios, they are running a low 2012 levels. Third quarter jpmorgan the lowest. We heard the compensation trunk just over four percent. The question is how you incentivize people to work hard and do a good job and keep them there . Compensation in Financial Services is still rather robust. Considering what it was. Thehat jpmorgan is paying corporate and Investment Bankers, we just got forth order numbers. On average 2013, 200 7,000. That is obviously not poverty wages, but nowhere near where it was before. To go into incentive Financial Services and not follow the trail of the startup world . A lot of people do follow the trail to the start up world. Theou want to disrupt status quo, a big part of the startup is to have that. Collectively that is the wake suresure to wait make to way we are innovating. Still a huge sector in very profitable sector. Still attracts a lot of people. Great colleges and businesses want to go to wall street. Still pretty hot. Are delighted more people considering the start up past. The opportunity cost is obviously less. We were talking yesterday about a story, credit suisse, the latest to tell junior bankers they can take weekends off. Because they are not going to pay them. I have no problem with these firms having challenges and having people in the challenge. Is other area very exciting crowd funding. Before, if you wanted to raise money you had to go through the institutional brokers if you will. Now you can raise money if you are startup looking to raise capital through the platforms. All across the Financial Services sector why you are seeing this. They are really well positions and will continue to do well. They still pay quite well. Not quite what it was. I think you will see pressures as people start to hollow out. Speaking of banking and fees. I am watching Time Warner Cable rejecting charter takeover. The question is it is hard to make the argument when you have Time Warner Cable leave bleeding customers. Time warner is still fairly expensive. Valued at 17. 5 times earnings for last year, way more than comcast. The bankers are busy on this one. Warner. Ersus time do you think they are being unrealistic . The details. Now anytime you are involved in this situation there is a negotiation going on and trying to maximize value for shareholders is the job of Investment Bankers, but exactly what the right i should be is hard to say because i do not know the details. When you looknder at a guy like john malone who has an amazing track record and works magic when it comes to tax structures other he is putting too many eggs in one basket. They have offered a pretty rich rice. Time warner says it is 160 per take it you can somewhere else. Lets see if he steps up. Is there a danger in becoming too overconfident with a deal . Sure. Many yearsn john for and is pretty savvy. He is not the guy that gets so caught up in the frenzy of the pursuit. He could walk away. My guess is he will figure out a middle ground. He is a big believer in cable. I think technology is starting to tax the business. There are other channels available in terms of other people getting content. I do not even watch tv. I am a big netflix fan. Kids generally do not watch tv. Of the few things people results in watching tv. They want to watch the game while it is happening. Can the cable guys survive in this kind of environment . Wireless has a bigger role. Cable guys because they are not just providing content but conductivity. Connectivity. Wireless has repositioned them as Communication Companies with a package of content. The package of intent is under pressure. Everyone keeps saying cutting the cord. I had two conversations with people saying the next time they move they were cutting the cable subscription. How do you watch . Televisionwatch some. Most of it is watching things and recording things and watching it later. I do a lot on my ipad. During the day i am checking things and watching videos online. At night i will occasionally watch something. Usually it is prerecorded. Do not go anywhere. You are here for the hour. How to be productive in d. C. We will learn from this man. Can you get visas increased . We will talk about how to get it done after this. If you are looking at a live shot of capitol hill. Looks a little cloudy tom a but it looks like congressmen are getting stuff done this i whether there. I am trish regan. Guest host this hour, steve case, cofounder of aol. Right now we want to get to capitol hill where democrats and republicans came to a deal on a spending bill. Cake down then road. How many more are waiting . Peter cook has been digging through this. Looking at how many more things are on the agenda. 1. 1 trillion. Is a rare moment of bipartisanship. In washington and continuation of the budget deal last month between patty murray and paul ryan. Spending levels in washington for the next year or two. This bill agreed to last night thect of late goals out numbers specifically. That is why this represents compromise. Neither side got everything they wanted. This should past the senate tomorrow and this passed the house and senate later on this week. Enqueue. This is a bit of an optimistic sign. There are some that say perhaps the worst is behind us. There are important things on the agenda like immigration that have not happened yet. What are the chances of Immigration Reform . I think pretty high. The senate came up with a acrosstheboard legislation. Then things got bogged down. There were things in the fall bogging down the calendar. I think as we head through the spring it will be on the front burner. I am optimistic. There is growing recognition for the republicans and democrats we have to get this done to be able to win what is now a global battle for talent. Can down the road was really the spirit of compromise. Will it be a consistent small step or word rather than a big grand bargain for all of these issues, including immigration . I am not as optimistic as steve case is. In part because this is an election year. A lot of republicans saw what happened to mark rubio marco rubio. They saw his numbers drop. A key time to watch is after the republican primaries and early spring. If they can move past the primaries, there is an opportunity for apps to cut an immigration bill. I do not see a log of major pieces of legislation getting signed into law. Both sides gunning for control of congress again. Basically the same story written and again. I agree with your story. Late spring timeframe is important. I think a lot of people want to see the primary deadline pass. They are worried if they come out in support they make it their own party. Once the deadlines are passed, i think there will be more of an appetite to head to the center as they head for their own general election in the fall. That is the moment where i think something can happen. I think republicans will take it more in a stepbystep approach. It will not be one comprehensive bill but a series of things. I think momentum can be built in late spring is the time to watch. One thing disappointing about washington is the disappearance of the political mill. 1961, the number of people in the middle 2012, 11. Y 344 ursus what happened in that the nation has become so polarized . We keep seeing this in the primaries. How do you solve Something Like the . How do you Work Together . I think we have seen a hollowing out of the center of politics and need to figure out a way to rebuild it. Warty seven percent identified them as independent. A lot of frustration about how right things have gotten. There are structural explanations like redistrict thing. You get penalized if you move to the center. You get penalized in washington if you move to the center. Until you change the districts and how safe a are, you will not see any changing in congress anytime soon. The same with the fundraising apparatus. There is incentive for them to maintain the status quo. Until someone changes that come it will not be changing policy anytime soon. I think it will be difficult. Nelson mandela said it is always impossible until it is done. How do you get it done . Whether it is crowd funding or Immigration Reform, you seem to wield influence. How are you get people to you . People care about the country, care about jobs. People particularly two years ago when the jobs act was being kicked around, people were worried about unemployment at eight percent. We proved that startups create jobs. Has beene job creation through startups. Immigrants were involved in more than 75 of 7500 patents werded at top universities. Have so many students come into this country, 700,000 class per year, and they are all getting shipped back to their own countries where their own countries reap the benefit. Imagine if we tried to the Naval Academy recruited them from china. Gave them a great education at the nations expense, teaching them the strategy i round Naval Operations and then forced them to go back to china to join the navy. Idea where ahe foreign entrepreneur raises enough money in the u. S. And come here on a twoyear contingency a have to hire a certain amount of people in order to stay. It just seems it cannot get through. Like i have a question for you about the impact of the business lobby. You have been an interested as anyone on these issues. Your own efforts, do you think the clout of the business ceo stepping into a member of congresss office, does it have the same impact it did five or six years ago . It still has some impact but we need to think about how we businessut the community. The voices carry weight. Blood carries more weight is the businesses that are creating jobs. Our virtual march on washington. We will do the same thing on immigration. People recognize it is not one monolithic thing. Higrowth startups which is where a lot of the innovation and job growth comes from. Recognizing that and making sure all of those voices are heard is critically important. People in the Tech Community are starting to realize that. Not just arguing for issues barely around the industry but recognizing they have an obligation to represent what is in the nations interest more broadly. Steve case knows this intimately. Peter cook with us as well. We will be back in a couple of short minutes. Do not go away. You are watching in the lo op. Erik schatzker here with alix steel. Steve case joins us. Revolution. Wn firm, 26 minutes after the hour, which means bloomberg tv is on the markets. A market that is up slightly. Crossing in data just minutes from now. This is after a rather down day yesterday. We will be going to scarlet fu momentarily for the retail numbers. On,ock i am keeping an eye have you been following the direct tv Weather Channel issue . Quite a dispute. The Weather Channel has been dropped from 20 million homes. Seen this play out before. The Weather Channel wants more. I was addicted to Weather Channel in college. I watched it every day religiously. The moment i got an iphone, i have not watched it since. Lacks the last time i watched was probably hurricane sandy. Are people i guess that watch it. The argument is this is a matter of national safety. That is a little much. There are other options. Every year or two you see Something Like this. The rates keep going up and they want to put a lid on the growth. They pick a few targets that they try not to make a look too much. In a very public way. They are rallying viewers. Basically arguing. Sports and cbs had a calling card there. The Weather Channel has an average . 13 per month per person. Her team usa, but sends commands a few people that watch it. I do not know if they have the same kind of leverage as some of the other players. They did not, but they have some. It is a public negotiation. It is not surprising they are trying to mobilize. People out there that care about the Weather Channel. National safety. This is also from the entertainment or cable world. Stay goodbye to pilot season. Executives from the network revealed the move yesterday, saying the traditional competition drives up competition for prices and talent. Earnings seasonisms is in full swing. Two of the nations biggest bank reported. Jpmorgan profit dropped by more than seven percent. Litigation expenses for the bernie made off scandal laying a role. Wells fargo says they went up 10 . I wonder if things will be in a better position with the higher Interest Rates, or even just the threat of higher Interest Rates because people may be more incentivize to go and take out a loan. A Company Might be more incentivize. Higher,u think of going if you worry it is going higher. If someone says for the next two years you can get a really low Interest Rates, why do i need to put money down on a home now . You lock it in now, and then when rates go up, you are locked in that at a lower rate. We have the retail Sales Numbers crossing right now. Looks like right now is that retail sales in the month of december were higher than what economists had anticipated. Retail sales advancing from november. The previous month gain, november, the biggest in five months, was downgraded to in advance of. 4 . Retail sales increase increased on one percent. If you back out gasoline, the numbers bear out the same trend, better than expected but the previous month was downgraded. Thank you so much scarlet fu. Talking about retail, the game according to amazon. Others have respectively managed the rise. The secret a be filling a niche that amazon does not provide. What does that wind up meaning . They have obviously had a great run. We see the democratization of e commerce. Instead of relying on traditional players, you see millions of people opening up traditional storefronts. This basically empowers people to do this. Instead of having a store that is only open 1012 hours per day, it is not just capturing people who have to be happen to be walking down the street but down the world. A lot of companies are really fueling that revolution. Is that what consumer wants . Tont they just as happy sign up for amazon prime and it is such a wealth of choice. They do a great job but they urchins. He support of why doesnt everyone go to mcdonalds and ruby tuesday . The experience of eating out or buying food at one place is a physical, tangible thing. If you know exactly what you , somethingroduct like amazon make sense. There are many sectors where people do not know right what they want. If you want an experience, you can go shopping in the store. If you want the best price, you shop online. You themes amazon gives best price. Basically becomes a commodity. Part of the issue is amazon is really good at distribution centers. Guyse to think the smaller struggle with this. There are all kinds of different flavors. This is a part of ecommerce but a lot of other sectors. There is a company with kids close. They put a design up on facebook. They start taking orders and then start manufacturing it. That is ecommerce. It started making jobs in north carolina. Is a version of ecommer