For the new world . We love the canadians and rbc has been great. Intell me what is going on the u. S. Particularly with the stock market. We had this great run and everybody is concerned we are down about two percent year to date, which is really just noise. The real story is that corporate rockets are coming in really strongly during earnings season, the beats are coming in about 2. 5 , and it is all on the margin line, and that is a real surprise for people. I think it is actually a very bullish call or a list signal that profits are up. We have two Big Companies reporting, procter and gamble 121 versus 120, you had kimberlyclark coming up, they beat analysts estimates. But as he said, sales lower, profit higher, what do you think . Expansion of multiple that will lead this market higher . This year in a 2014 will be very different than last year. It is the earnings story that will come through. When a lot of who have been concerned about is the budget, they cannot go any higher, companies cannot squeeze any more out, and therefore the earnings soar he going to stay week. Like that at the that is the barricades. And frankly that is the consensus estate on earning. Really . My read is that it will expand, but the surprises that earnings were going to come in much better than expected throughout the year, and it has to be on some margin improvement, and that is why this earnings season is so encouraging for me. Yeah, but can you master earnings improvement by doing things like buying back shares . You talk about Companies Like ibm, right, what are they doing echo huge share buyback. You look every day and someone is offering a new share buyback. I think can color came on doing the 1. 5 billion dollars share buyback. That makes the numbers look great, but if you are not selling more, i mean, this is a little bit how long can this go on . It is like squeezing the air out of the same balloon. Every year we put up these donings trends, and what we is we exclude buybacks. We look at organic learning because exactly the point they said. For example, this corner, th is quarter, it looks like earnings are higher, to have nothing to do with buybacks. The eps number get looks good with buybacks, but we are thoughts about earnings, not eps because of that situation you talk about. What kind of companies though because not everybody is beating their estimate . No. I will take were the most upside are and that is where the groups are most economically sensitive. They had seven good in a row. Up. S are going to wrap materials and industrials are the places you have the greatest of sites, and they are doing quite well. The one area that is going to see the greatest weakness is the energy sector, and that is only because oil prices are soft but the margins that you make on refining businesses has been have been weakey for a while, and even though you would think a better economy, oil prices go up, in fact, it is a glutd to be they have of product and they are not selling for the price they like. Right to every much, Jonathan Jonathan gullit, to every thank youcapital very much, jonathan golub, rbc capital. Ed markey said it might be a pyramid scheme and ask for a probe into herbalife. Bloombergs julie hyman has been looking at some lobbying experts by the company and by bill ackman. It seems that they are on the same page, senator markey and bill ackman. Although markey was careful to cnn i am not saying that these allegations are true. What he does proposes a series of questions to the company, he poses questions to the sec and calling for anis investigation. It doesnt want to be done by february 28. At least he wants the answers. I i read the letter. He is careful not to make specific allegations. But the letter is obviously damning. Well anybody who reads it and planning was well understand. He is calling them out. Well, he says there is talk that this is a pyramid game hurting his constituents. Yes, he brings a couple of examples of his constituents. If you look at this as symbolic of the battle that is happened between herbalife and bill ackman, ackman has spent according to open secrets. Org around 100 30,000 over the span of last year making him one of the top according to 130,000ts. Org, around over the Senate Last Year making him one of the top spenders on politics. Our blood has spent herbalife has spent more than 1 million, it is a Large Company relative to the size of bill ackmans hedge fund. None the less, doing a lot of lobbying. The former mayor of los angeles is now an adviser to herbalife. Madeleine albright is doing some consulting. That is more on an international basis where that firm focuses. That in some serious credibility. That is what our blood has been working for all along. It has various doctors and sciences on it payroll as well as advisers. I was talking to an herbalife investor the other day, and he says bring it on, we want to make our case in the public sphere. Now what happens . Markey gets the answers from herbalife, but the sec and ftc only provide positive, not a negative. In other words, if the sec find something to be wrong, it will come out with a complaint. If it investigates the company says nothing is wrong, the sec will not come out and say is not a pyramid scheme. Exactly. So there could be some damning questions even after markey sure, the accusation could hurt the company even if it is not true. Although, i mean the shares fell yesterday, but overall it has not really hurt the company. And has done very well. All right, betty . Matt, heres a good number for you guys 1. 2 5 billion. That is how many chicken wings people will eat during super bowl sunday. This year, fans will pay less for them. Bloombergs alix steel with me. How many chicken producers rely on the super bowl . If you take a look at the look at the if you take a look at the Buffalo Wild Wings world, 5 in the first quarter, primarily due to the super bowl, which also estimate that for Buffalo Wild Wings, each store has a little less than 900,000 in sales a day. On the big game day, i could be 2. 5 times more. You and i might not eat chicken wings i like chicken wings. Really . They have competition. We talked about this yesterday. Mcdonalds is going to be selling chicken wings in the near price a various through the super bowl in the spring. They have a surplus, right . 10 million pounds. So the super bowl, though, i do not know this the second biggest eating event in the United States. Unbelievable. Right after thanksgiving. And we will eat 20 million more wings busier year than we did in years before. 1. 2 5 billion wings would stretch from the centurylink Metlife Stadium in new jersey three times. And the biggest difference between this year and last year. Aret of all, the wings really cheap. They are at their lowest price since 2011. A big part of that is more supply. This takes about 3, 6 months to get a chicken ready for slaughter, so it is really easy to ramp up production if there is demand. That is a big tail waiting for some of the guys like Buffalo Wild Wings. They are paying 1. 20 for wings now versus 2. 10 last year at the same time. Bonein wings account for about 20 of their total cost. Alix steel on tape in wings on chicken wings, thank you. Matt, what you think . I have my reservations, but i still eat them by the pound. Lidia head on in the loop. Lindsay ahead on in the loop plenty ahead on in the loop will notoehner why he be a president ial candidate in 2016. You want to show what you did when i asked that question before . I like to play golf. I like to cut my own grass. I smokenk red wine, cigarettes, and im not giving that up to be president of the United States. [laughter] quite that is right. That is not worth it. In just about half an hour, Goldman SachsCeo Lloyd Blankfein is in the loop live from davos to talk about retaining talent and much more. He looks more likable with his beard. You never say that about me. A big beard. Not the more sort of trendy, manicured beard. Im going to tell people who bill is. Please do. I know he knows and you know, but you never know. Bloomberg contributing editor bill cohen joins us now. He has written three books, including money and power. Bill, are you tired of dealing with the details of wall street . Int you say you know what, cannot make this up, the truth is a much better than the fiction . Well, it is endlessly fascinating, as we all know. Jamie dimon, the chief executive of jpmorgan, is going to get paid more, reportedly paid more or whatever it is, where there is smoke there is fire. Preks ok. How is it possible that when you are not risking your own capital, i understand you are risking a lot of other peoples capital, but if youre not risking your own capital on a daily basis, how come you get compensated at a level that implies that you are risking everything that you have worked for . Wow. You like that at 8 00 something in the morning. This is a very interesting topic obviously. The first point is that if you were to sort of poll ceos and Hedge Fund Guys and private equity guys around town, you would they do the blue risk their own capital, you know, the bill ackman, the dan loebs of they are, carl icahns, the ones getting paid, you know, 500 Million Dollars a year, 1 billion a year. Right, so jamie dimon, who got paid what, 13 million last year 11. 5 million. Ok, a down year for him. This year it will we closer to Something Like that, we all scratch our heads as to why if you are paying 22 billion in fines. Itow, that is, frankly isnt, but for the guys who kind of are in the Hedge Fund World it is a lot of money. It is chump change, and thats what you get paid if you are managing to hundred thousand people in a complex business. It is easy to see why they pay him that much because he has made them the investors, the shareholders to the extent that they are active in that that she has made them a lot of money. And they think of them as the best ceo on wall street, and if they do not pay him enough, he will go somewhere else. He is an exception. First of all, where are they going to go . It is not there are thousands of companies that will pay that kind of money. A jamie dimon to go into private equity and make more than that. On the flipside, you could say who else out there is as qualified as jamie dimon to run jpmorgan . As de gaulley, said, the graveyards are filled with indispensable men. So jamie dimon seems indispensable, and he has made himself and is visible i am not saying he is indispensable there are plenty of people and there will be people to run jpmorgan after jamie dimon. They will say jpmorgan will be 100 a share stock. They came in and 2004, 2005. Now we are in the mid 50s. Did he deliver on his promise . That is an open question. He is always the very qualified to run a firm ilike jpmorgan. This segues into is there a brain drain. Goldman sachs is cutting their bonus pull down. Does that mean they are losing the best people you go it jpmorgan pays jamie dimon less, does he go somewhere else . Point, exactly, you are not raising your own capital, there is no better job in the world and working on wall street. Where else can you get paid even less than you get paid . Even if Goldman Sachs cut its bonus pool, where is there anywhere you can get paid anything like on wall street not risking here are the numbers on it. Goldman sachs in this last year, i believe the Second Lowest they, or the compensation ratio is the Second Lowest since they went public, but if you average it out, each employee at goldman, would still be owing earning about 300,000 a year, compared with the average american that is better than the nfl. What if that have to do with anything . What i am saying is in terms of what is that have to i am saying, compared to the americanscome of that 50,000 the year, you are and what the risks are you taking . You are working long, hard hours, putting up with a lot of stuff, and it is relatively complex, but lets face it they dont have to do it. You get paid very well. Lets led to the idea of bonuses and the pay that is being talked about. Matt, you brought up something inside you understand very well why they would pay the chief executive of jpmorgan such a sum, granted, but does that mean that that chief executives compensation should only be tied to the share price and to the dealings of the shareholders . Because in that case, you would say all right, theres nothing wrong with that, let the shareholders worry about it. That is their problem. He is their agent. He works for the owners of the company. And they have a banking license, and word is that banking license come from . Are you going to get into too big to fail now . No. Let me get into too big to fail because you all saw the headlines about berkshire sathaway, Warren Buffett company, theyre going to a way whether berkshire is too big to fail. Remember that berkshire is rated aaa, so and a great story by the way about Jonathan Weil who writes aboutnkfei Bloomberg View berkshire is this a story or nonstory . It just makes Berkshire Hathaway more valuable in a sense because now, if the government says is too big to fail congo that it will not fail. And creditors will will even better about it than they already do. If you get this tbtf license, put 1ou can go out and bu billion on the ncaa bracket. Why not . But you do set it, they have the license. Who grants them the license . Who owns the fed . Other big banks only fed. It has got the appearance of being owned by the american legal, but it is not. Can we just disclose that since we have been talking about banks and jpmorgan, that you have a legal relationship with them that is adversarial at the moment. That is true, does been fully disclosed, be my guest and go look and see what jpmorgan is trying to do to me. Suing you. Price bill, you were in the middle of the lawsuit, and a still invited you to the jpmorgan conference. They are making a frenemy out of bill. Things Stranger Things have happened. Anyway, bill, you are taking a look, as the company, it is not a bad mark, it is not a red mark to be considered to be to fail because that just means you will get bailed out by the government. Look, youre going to be scrutinized anyway if you are a big Financial Institution by the government family. You might as well have the too big to fail select creditors think that you are not going to default on your debt. You spent a lot of time with Warren Buffett. Based on your experience with him as a person, what do you think his reaction is to this news . I cannot see for Warren Buffett, but i would assume he just rubs his shoulders. He is the kind of guy that declares evil of derivatives and then makes huge bets on derivatives, right. Matt, weight he is glad to take hate on, they are not huge bets. 1 billion on the bracket . Youre talking about two separate things. Theyre both derivatives you are talking but ensuring be quick and long bed and then saying that derivatives are weapons of mass destruction and he has been a part of underwriting those derivatives, they are very small, though, in proportion to the balance sheet. Price right like like jimmy dimons portion compared to carl icahns. Bill, do ive also been having a, starbucks said on digital. We will is when the next. Welcome back to in the loop live on Bloomberg Television in streaming on your phone and bloomberg. Com. I am matt miller. Take a look 26 minute after the hour, Bloomberg Television always on the markets, and futures coming down today, continuing the negative trend from yesterday, so the s p futures down about. 5 as our dow jones and nasdaq futures, concerns concerns about the chinese economy really fueling concerns about the u. S. Stock market. In a few minutes, live from davos, well talk to Goldman Sachs ceo lloyd blank line and we are on the markets again in 30 minutes. Pimm . One stock we are watching today is starbucks. The companys earnings load yesterday in the close of trading revenue. Sales missing analysts estimates. More people shopping online perhaps meant fewer people in the mall buying those peppermint lattes. A Bloombergs Julie Hyman has been following starbucks and is looking at how traffic has expanded and how they are trying to change the menu. Bought another company, what are they pay, 100 million for that . A San Francisco company. They are running out the product or all of their stores, but there have been questions a sense it was introduced because you have to heat up the stuff, and even before that, about the crowds at starbucks. We all know especially in new york city, if you walk into a starbucks, there are a lot of people, so there is than this question about how fast you get the people through these stores. Throughputs no problem. Look at what Howard Schultz said on the call last night. Not only is there absolutely nothing to suggest that there is a turbulent issue, but i would remind you that because of the andbucks caller gas card the adoption of mobile payment that we are speeding up the level of service and our stores, when you look at the amount of withe that are now paying a card and the unbelievable rates of adoption and how the payment is, there is no issue whatsoever, this is a myth that has no legs and for all of you listening on the call, you should just eradicate that thoughts. It does not exist. I am sorry. Have you been to a starbucks lately . All right, so a couple of things here, first of all, we live in new york city, so yes, the starbucks are very crowded. We are in our nice Little New York bubble. The company would they, and the analysts i spoke to with a part of it is these new la boulange things are new products, people are trying to figure it out, what to get, and as a pair of being heated up, there is more of a crowd waiting, so starbucks has said the perception is because there are more people in the store waiting for their stuff, ther