Against fat cat bankers. We will break it all down for you. And also bill go an hour contributing editor will be joining us. But first, ending the year in an appropriate fashion, yes falling again. Intercept and down almost 2 in new york today, bringing the loss in 2014 to 46 for oil. It has not fallen this much since the financial crisis six years ago. Mean time, in the meantime and search crews have recovered more bodies and debris in the java sea from that crash. The airbus a320 crashed on its way from indonesia to singapore. Indonesias president spoke at a briefing. My deep condolences to the families of the passengers and crew. I am feeling their loss and i am and i pray that they are given all of the courage and strength to base this tragedy. Like they were 162 people on board there were 162 people on board. A couple of weeks ago the fbi said it had enough evidence to link the attack on sony to north korea. But every connection it looked that turned out to be a deadend. At least one former sony employee may have been involved. The fbi for its part does not seem persuaded. Saying there is no credible information any other individual is responsible. The bestperforming stock market this year was china. The shanghai composite rose 2 to finish the year of 350 . China has now surpassed japan as the worlds secondlargest equity market. And if you wanted to be among the first in the world to ring in the new year, new zealand is where you should have been. It is already 2015 in auckland. The year seems to be going great so far. Fireworks exploded over the cities sky tower just about an hour ago. Lets have a look at some of the stories that keep our interest is morning. This morning. What is on my mind is politics. Come next month, which is only a few days away, congress will be in session and there is a lot on the mind of the republicans now control of the chambers. There is a lot of the mind of the president as well. What is he going to do . He has nothing to lose now, no reelection to think about. There are five things hes going to do to mess with republicans. You can see on the list keystone, campaign finance, climate change, pardons, and possibly a nuclear deal with iran. I think keystone will be interesting. That will be top of the list with the Incoming Senate majority leader, mitch mcconnell. He saying he wants to get it done. It is more and more of a political issue and less and less of an economic one as the tar sands in canada become less viable as a way to make to get oil. If it actually makes the case for the president to say, you know god going to reject the keystone pipeline. I dont think we you know, im going to reject the keystone pipeline. I dont think we need it. And republicans say goodbye we need jobs and we are creating jobs, and look at where oil is now. And republicans say, we need jobs and we are creating jobs, and look at where oil is now. The head of the london u. K. Team wrote a beautiful piece for the end of the year looking at the archives of Margaret Thatcher that were released. He took a way at her handwriting, the way she underlined things. She had this shorthand that her aides had to understand. If she put a squiggly line it was im not so sure about this and if she put a Straight Line under it it meant yes. It is a beautiful story that you dont really hear about or see until the archives are released. I read through some of that is welcome and it is fascinating. Especially how some of her aides interacted with her as well and how they had to read the tea leaves. Hieroglyphics. Thats right. And sometimes some of the decisions she made she had to reverse as well on the advice of her aides, right . And we have this fiscal record of how she thought. At one point she thought she needed a memo and she gave them permission to act on it, but they did not have a copy and it was in her famous and bad. They had to retrieve it so they could act on it. It is amazing how so many years later the iron lady still resonates. And americans would come over and asked for permission to speak, to set the foot of Margaret Thatcher. She had to decide to not give permission to all of them, or else they all would want to. Given that bill , the author of money and power bill c ohen, the author of money and power will be our coanchor this hour, we are finding that on average, 121 bankers earned . 72 million. That sounds like a lot of money earned 4. 72 million. That sounds like a lot of money. But what it really needs is it is good to work for Goldman Sachs. In the case of bank of america their top 110 employees in the u. K. At earned on average to. 5 Million Dollars. Jpmorgan stanley, 2. 4 million. 2. 4 million. Jpmorgan stanley, 2. 4 million. Quest it sound like a lot, but it seems low to me visavis some of the onus is paid here in the u. S. Amongst wall street. But given the political outcry some of the bonuses paid here in the u. S. Among wall street. Given the political outcry this may be a reflection of how much some firms have had to come back. And looking for a note of skepticism. And there is a legal constraint, too. Absolutely, the u. K. Has been a leader in trying to constrain wall street bonuses. But at four point whatever million that is not sound like a lot of constraint to me. You have to parse this. You have wall street guys youre not putting up any of their own money and its no wonder they can attract the best and the brightest. But some of the Hedge Fund Managers who are putting up some of their own money, but david tepper and its a billion dollars. Hang on a second. David tepper is mostly playing with other peoples money. Most Hedge Fund Managers are playing with limited partners money. But they do have their own money in the game. Because they are forced to eat their own cooking. In the case of Goldman Sachs, and a reading from a Bloomberg News, 106 million. Of the total 483 million to beat up among the 121 employees 106 million with cash and 320 million was stock. Some of the they cannot divest for several years. They are eating their own cooking. With that is true, they are reading Goldman Sachs is cooking. That is true, they are eating Goldman Sachs ss cooking. But in the case of david tepper, they have not put money into Goldman Sachs except what has come to them for years. Even when it was a private partnership of until 1999 which is just the this past century, the closest entry to us now, they had to keep their Equity Capital in the firm as Equity Capital. No matter how this worked out, one thing that has absolutely happen this year is cooking, eating, there is less for the hedge funders to eat because they are being expected to they are terms are being changed for them. The market is demanding they take less up front. That is an interesting development. What an by the way, they have not been cooking that well this year and by the way, they have not been cooking that well this year. With we are going to be good metaphor to death. The hottest of in the kitchen the fed. The fed did not lying down, but stopped buying new bonds. It still has to unwind. We talked to alan greenspan, the former fed chair. He has an idea about what is going to happen next. There is nothing in monetary history would suggest that you can create the degree of balances in Central Banks that we have now without ultimately engendering a hiccup in the price level. He said theres no way to avoid inflation. How do you see this . First, i still marvel that he can still talk fed the fed speak even though hes not there anymore. It is hard to parse exactly what hes saying. But we think there is no way that inflation can go of at this point, but with all prices down 40 plus percent, there is obviously deflation in the wake of the feds decision not to buy the securities. And Interest Rates, especially high yield rate, have begun to back up into something that resembles normalcy. It does seem for the moment that the fed is able to walk this incredibly fine line. But how it really plays out in 2015 is going to be fascinating. At some point, they will have to raise rates and it is going to potentially curb some of the dynamism in our economy at the moment. Table generation of economists is worried about inflation. Youre sticking with us for an hour. Taking a quick commercial break here on in the loop. Stay with us. It has been another big year on wall street and who better to talk about highs and lows as we hit into 2015 than our country being editor bill cohan . He has written extensively on wall street. Lets begin with the one thing wall street and banks ceos are sure to remember, the record amount of fines and settlements. The attorney general said just visited that the doj had collected on the 25 billion in civil and criminal settlement for this year. Which began in november, 2013 with jpmorgan. I guess if youre the biggest share of in town and have the biggest arsenal of weaponry, the biggest sheriff in town and have biggest arsenal of weaponry, you can force wall street to pay these fines. And is not over. Absolutely not over. It seems like the year they probably got their guts. They went after the banks and some are saying this is a sea change this year. I dont see this as guts. I see this as something that benefits justice as some thing that benefits justice, it benefits the banks. One thing we dont ever get is a real trial what we learn things about how the industry works. That is exactly right. I completely agree with that. They are able with the settlements to sweep under the rug the real details of what went wrong. And of course, there is no accountability whatsoever. Basically, you have shareholders paying these big fines. We know jamie dimon got a big raise in early 2014 after settling with the doj in 2013. And the stock has gone up. The stock has generally gone up wall street stocks have gone up so wall street shareholders are saying we can do with this easily. Even with all of his coming out of their pockets. With deals cooked up in bar in dark rooms. It is deals cooked up in dark rooms. And we did hear about this from the garrett. I want to talk about dark pools, the other issue that came up this year with highfrequency trading. You talk to mike lewis after flash voice, right . Sure, because highfrequency trading is a matter of much debate and it did not take long for stephanie and i to get into it with Michael Lewis over this allegation he has made in his book and verbally that the stock market is rigged. It is rigged only insomuch as u you so invested in the idea this is fair . Wire you even arguing about this . Me . You seem to be. It is very clear that people are being front run in the market. Michael lewis in your face will stop question very clear that in your face. Very clear that people have been front running the market. I dont think it is very clear. I think there is some evidence to suggest that there has been something that you might find i dont know. You put words to it, bill. We can stipulate that Michael Lewis is absolutely the best at getting attention to an issue on wall street. There is nobody who even compares to it. Credit where credit is due. Frontrunning stocks in a big investors frontrunning stocks, investors frontrunning stocks, that has been going on for a long time. Less we can be shocked that there is gambling we can be shocked that there is gambling going on in the casino, but just because it is going on does not mean it is not in the fiduciary interest of their clients. Class i have heard i have heard michael speak from his book before the council on Foreign Relations in the fall. And a little before congress when he testified. He is sort of walking back to some of the more outrageous things he said. Maybe there is pressure on him. Im going to for a moment just quote my coanchor stephanie and say that this strikes me as a place a case where you dont hate the player. You made the game. Its all a result of the 2007 Read National market system regulation National Market system that changed trading and created dark pools and created the opportunity for highfrequency trading to exist. Lets let me just say here though, one person who makes the game, though its a little let me just say here, though one person who hates the game is Elizabeth Warren. And wall street bankers had said she is in jihad against wall street. She took aim throughout the year, but we just heard earlier this month from the senate floor when she lambasted the omnibus bill because it let through or roll back some of the doddfrank provisions. Heres what she said at that time. Class wall street is doing very well. Ceos are bringing in millions more. Wall street is doing very well. Ceos are bringing in millions more. And families across the country are struggling. We have to make this government work for the american people. How about we make Elizabeth Warren senator to president . What . No. How about we get Chuck Schumer not too close to Elizabeth Warren. Cant we all just get along . It does no good to be so polarizing. The American Economy needs wall street to function properly, to be fixed so that what happened in 2007 and 2008 does not happen again, but that does not mean you antagonize everybody who works on wall street. That makes no sense. Bill, you just said though that you just said a few moments ago that the department of justice did nothing and swept everything under the web. And that is a fact under the rug. And that is a fact, and shes right about that. But the undersecretary, just because he has worked on wall street it does not make them evil. All right, we will have to leave it here. We will be speaking about something very controversial on wall street, pimco. Who would have got all of this would have unraveled . Thanks welcome back. Youre watching a special edition of in the loop live on Bloomberg Television. Im betty liu here with Brendan Greeley and Erik Schatzker. Here is a look at Bloomberg Top news this hour. Disney is ramping up reduction for the next movie in the star wars series. They will produce everything from fashion to games. The movie opens in theaters next december. That is amazing. With only 12 month away. Only 12 months away. Ivm is down almost 15 this year. Investors are not buying ceo gina remedys plans to move to cloud mobile technology. And walmart sales in mexico have gone flat. The Worlds Largest retailer is taking a tip from smaller store; over half of sales. From Smaller Stores who have over half of the sales. They have opened bodega stores. Pimco, the manager of the Worlds Largest bond fund has just suffered the worst performance for that flag ship funds in five years. Bill gross was trying to stop investors from fleeing the firm he founded for decades ago. And in january came along. 2014 started with a big wall street banks. Or rather, a slant of the door with mohammed leaving pimco. A slam of the door with mohammed leaving pimco. It surprised almost everybody. Gross tried damage control tweeting pimco is fully engaged , the batteries 100 charged. Im ready to go for another 40 years. 40 years. Were we disappointed and surprised . Yes, i think we still are. And mohammed when you miss these moments in your childrens lives, is simple. 3 billion in april, 4 billion in june, another 4 billion in august stop 16 straight months of and he cant let go of mohammed. Quite disappointed. I thought i knew him better. Come on, mohammed, tell us why because the fury the fear or in the past few months in terms of the headlines has been quite exaggerated. And in the bombshell, gross walked out on pimco and has to janis. Janice shares surge. With built departure and bills departure. They still held onto 1. 8 trillion and have a new team in place. What a year. Here we are now, more than 85 billion has been turned pulled out from the total return fund on top of 140 billion last year. Bill cohan, our computing editor stays with us. Our contributing editor stays with us. There has been so much drama. They have lost 2 trillion in assets. They still going strong . You have such investment and people who really want them to succeed because they have a lot of money with them, but it really comes down to performance. As it always does, but even more so now. They need to be able to show people they are hitting it out of the park and they have people in place and they can function without will, if not without ill, if not better. Without bill is not better. Quick they started off that they started off better. With the they started out well. Driving record reductions record reductions. Things are slowing, but how much before it really hurts performance . Who are the big investment brains they are relying on . I think everybody has moved away from this one guy model. Again ive is in is the top dog dan iversen is the top dog. Nothing people respected a lot and he has a lot of clout, especially within pimco. I think people respect him a lot and he have a lot of clout, especially within pimco. At the think tank time, it is still hypercompetitive at the same time, it is still a hypercompetitive place. There is a lot of grandstanding and internal volatility. After an experience like this, lets try parallel to wall street. Lets say, its like a bank. If a bank went through an experienced Something Like pimco, how long would we expect them to last . Let mary is saying is probably great for pimco. Theres a lot of energy, a lot of aggressive what mary is saying is probably great for pimco. Theres a lot of energy, a lot of aggressive upandcoming guys. Both mohammed and bill gross are gone and it will come down, in my thing and, to how the fun performs. Money is going to follow the performance. That is not new. But how pimco deals with the post said unwinding timeframe is going to be huge. That is used for debt investors all across the market, but pimco is the leader that is huge for debt investors all across the market, but pimco is the leader and need to show how to manage the