About the biggest stories in business, but im pretty sure weve got to tip our hats to the new york giants. Last night combined in my kitchen and tiger dog, and rehab or andy hubbard says, youve got to get in here and watch this catch. Watch a catch in a giants game . A 20 times. Watched it was amazing. It would have been so much better if the giants had one. Or if he was not wearing could he have made that catch if he was not wearing the sticky gloves . Its a debate we will have later in the show. Either way, it was awesome. We also breaking news out of washington in the past hour. Its not just about a great catch by a new york giants. Defense secretary chuck hagel is officially stepping down. Lets bring in our correspondent peter cook. At least here in new york, this seems like a very big surprise. Onthere has been focused changes within the obama administration, maybe changes within the white house. We know about the changes that the at the justice department. This was not a change anyone expected. Chuck hagel was only on the job for a little less than two years and the assumption was that he would serve out for the remainder of the president s term as the head of the Defense Department. That we are getting news that after a series of meetings with the president in the last couple stepeks that he would down. This decision was announced this morning from the white house. It leaves a critical job in these remaining two years in his presidency open. It will not be easy to get someone else confirm and it raises questions about why hes stepping down. Given the challenges with the islamic state, and separate issues of ebola, that and more on the plate of whoever the places him. The timing is odd coming given what you just enumerated, and other some of the andignpolicy issues defense issues that the white house has to confront. Im just familiarizing myself with all the reporting explaining why hagel is leaving. Hesounds first of all like was the odd duck, but also that he was totally masqueraded. Tex that he was totally emasculated. This is someone who never felt totally comfortable within the administration because he was a republican and never part of the obama inner circle. Sometimes people were left to wonder when he testified or spoke on capitol hill whether he was truly articulating the ministrations position. But people close to him said that those were challenges early on in his tenure at the pentagon that he had overcome. We will have to see whether reporting bears out, what we hear from the two men. Beene pentagon, there is pushed back on the notion that he was pushed out. But i think we will be given the sense that the president wanted to head a different direction. Think you, peter cook. We will have live coverage of the president s announcement right here at 11 00 a. M. Eastern time. Solidly above trend. That is for Goldman Sachs expects for judy growth in the next two years and its a lot better than it sounds. Here are some of the highlights. Gdp expanding at a 3 rate or higher in 2015 to my 16, and 2017. A pickup in Consumer Spending and easier access to credit. Improvements in the labor market. No nearterm inflation, and the drop in gasoline and oil prices could mean even less inflation. And fed rates reaching as high as 4 by 20 2018. Lets bring in goldmans chief economist. Thanks for being here. Thetrying to put myself in shoes of others, looking at your projections, and the one question that immediately comes to mind, given the weakness in europe, the troubles in asia, the slowing chinese economy, the surprise rate cut by the chinese, how is it that you can feel this optimistic about the mediumterm trends for the u. S. Economy . Clearly, there are some negatives that have come across the radar screen in the past few months commencing love that is the direct effect of the weakness in many parts of the world economy. Some of it is the appreciation of the u. S. Dollar. Negatives inerate terms of the growth outlook. But weve also had an upsetting move in oral prices, which we think is about the same order of magnitude in oil prices, which we think is about the same order of magnitude. In our model, we sometimes find that the impact of oil prices is a bit eager and sometimes a bit smaller depending on your perspective. Sometimest bigger and its a bit smaller depending on the perspective. But with the global economy, including all of those factors, it somewhere close to zero. When i look at the domestic strength of the economy, im impressed with that we are now seeing pretty broadbased Movement Across the key areas of ,rivate domestic demand homebuilding consumption, and business investment. One of the things i wanted to ask was for you to quantify the impact of 75 per barrel oil. Is the impact to gdp of 75 per barrel oil versus 95 per barrel oil. Per barrel oil . It is relative to where we were going and where you think of as the starting point. 20 is a sort of conservative assessment of that. That should give you an extra maybe quarterpoint or so. Of jeep of gdp. There are some models that give us an even bigger effect, but if you take into account some of the upsetting negatives from lower u. S. Oil production and shalethe capex in the industry, a quarterpoint sounds about right. But what growth in the private industry are you expecting ahead . Its about the same as the overall economy. The government will be pretty neutral. The fiscal drag was such an important part of the story in 2012 and 2013 and is now behind us. I would say, roughly 3 as well. 3 for the private sector. Point, the federal government is pulling back on spending and from what together from your forecast, you expect that to continue up to 2018. Will you be in a time in 2018 to look forward to will we be in a time in 2018 to look forward to fiscal expansion . There are some reductions in federal spending, youre right. But if you look at the state and local side, which is a significantly bigger share of total gdp, we are getting an upsetting positive there. Overall, its pretty close to zero. Could we get fiscal expansion . I think its conceivable that there will be some kind of agreement to increase defense spending. Maybe that will be more of a republican demand and then in addition to that, also increase some nondefense spending which would be more of the democrats pushing in that direction. I think thats conceivable, but i dont think it will be very large. It does seem that across the board you are moderately positive. What are you negative on . Are you concerned about concerned about . In the u. S. , we are positive about the direction in which we are growing. An ah is almost Vantage Point above the longterm trend and it will be improvement in the labor market. The labor market is pretty far away from unemployment. If you look at it from the perspective of level two trend, i dont think we are there yet. The job is not done yet from a monetary positive policy perspective. That is what we are a bit later from the point of lift off than other people are. That would be my perspective within the u. S. Outside the u. S. , there are many places that still have a lot of problems. Europe still has a lot of problems. Japan has just had to negative quarters. Two negative quarters. Nevertheless, these are still very troubled economies in a lot of ways. To what degree are your excitations policy dependent, on the downside or the upside . If we had, for example, Corporate Tax reform, is there a potential upside to what you expect with the economy . Our exhibitions are always policy dependent in that we have a sort of baseline cap for policy that underlies baseline path for policy that underlines our actions. If the fed were twos dark 2 where to start to tighten earlier, that would affect things as well. As far as Corporate Tax reform, its not our baseline that we will get meaningful Corporate Tax reform. We think the ability for that has gone up, but its only about one in three. It, it probably would mean a little more perhaps for business investment. It depends of the details, of course, but it would probably be a positive development if it did happen. What about corn inflation next year you are you expecting that to go up . Whate expecting about corn inflation next year . Are you expect a net to go up . We are expecting no movement. Our staycation is that we are moving closer to lower employment. You should see some upward growth on upward pressure on wage growth. The argument for deceleration is basically the passthrough from the decline in oral prices and other Commodity Prices into the Core Industries come into things like airline fares, for example, which are in the core, but have quite a bit of sensitivity to Commodity Prices. Does that not set the stage potentially for a rapid acceleration in inflation at some point if oil prices reverse . In other words, if we get closer to full employment and the Unemployment Rate drops below 5 , than there is much more room for the economy to soak up Higher Oil Prices if that is what happens. That is true. If you did get a reversal, the new get some upward pressure. Most of that would be an issue for headline inflation, but there will be some impact on the core as well. One of the reasons we like looking at core inflation rather than headline inflation is that effects are smaller, but there is some effect. Youre right. But the starting point, of course, is that we are below where the fed wants us to be by half a percentage point for some initially, acceleration and inflation would be good news. But there could come a point where that would no longer be true. Chief economist at Goldman Sachs, jan hatzius. When we return, we will look at media consolidation with two of the biggest players in the business. Welcome back. Weve got a special treat for you kicking off this thanksgiving week. A conversation about the future of media with two men as plugged in as you can get. His advice on several huge deals this year, including msg dealase and a 1 million with disney studios. And we are joined by industry veteran, having also served as cfo of time warner and viacom. He was a dealmaker at the private equity firm thomas h lee. Jenna, good to have you both here. What do you gentlemen, good to have you both here. What do you think will be the biggest media story in 2015 . It is not just one. There are many to track this these days. Not only is content of the linear cable model over the top, which is a huge story these days, but we also have spectrum options. Weve seen an astonishing figure of 30 billion. Just a way of comparison, the top four Wireless Companies in this country invest 30 billion a year in their spectrum. In one option you are seeing 30 billion in investments. Is then the Music Industry going through a lot of changes. Clear channel and iheart is in the middle of that. Arethe lowInterest Rates still there. M a volumes are still at highs since 2007 record levels. We think we will see border activity as well. Is a rya is a diplomat will not name names hes a banker. What is the influence from your perspective . It starts with technology. If you look at a lot of these deals that are out there today, you know, he referred to size. Our feet have to keep moving. We have to look at what is happening with the consumer. 15 to 20you go back years, it was about the connected home. That was the governing point that establish a lot of them Media Companies and how they decided they wanted to look. Now its the connected consumer. Everything is moving toward mobile. Thinking about that, then companies will line themselves up in terms of having the right content and technology to be where the consumers are every day. That is over some publication, but that is the lens i would look through it on. Has the could the power, the consumer . Or the content creator right now . The consumer always has the power because they have the power over content. Has antent creator certain amount of power over the consumer. Millenials watch three times as Much Television online as nonmillenials. Of looking ature the way the behavior has changed. And most of the consumers like to consume content outside of the home. Most people think of traditional media as only inside the home. The Radio Business is largely outside the home. The consumer moving around in different areas is something that Media Companies have to be attuned to. Are traditional Media Companies to big to be nimble . I think it is the opposite. They have to have more scale to create more technologies organically. Sometimes you can do that through mergers. Other times, what rich has to focus on are the organic investments and one of the ways to capitalize on it low Interest Rate is to redeploy investment new business line. Fox is notoriously good at creating new businesses from scratch. Them you surprised to see take a run at time warner . Everyone is being opportunistic these days. I think time warner has many options in front of them, and im not surprised the deal did not happen this time. You are a. Or you surprised to hear that potential deal were you surprised to your that potential deal announcement . Im notnswer is no, but surprised at any potential deal announcement. You need to keep moving. Yeh talked about consumers. Two thirds of our business is outside the home. Two thirds of the way people interact with their mobile devices is actually inside the home. People love relies for sub you , whichat handheld device i had to put down before coming on stage. Im having the shakes. But people spend more time outside the home today than ever before. , ifou are a Media Company youre an appetizer, if are an advertiser, the challenge is that time outside the home. Two thirds of our time with the radio is outside the home. That is one example of the company and what we are all facing. We are trying to talk about content to mobile we are really talking about in about 10 seconds is distribution. Wheres the bounds of power between content and distribution right now . The balance of power between content and its tradition right now . We are relieved from the promotion of content. We have 40 Million People that we reach on a monthly basis. It is always about the balance of great content and many it to consumers wherever they are. Im not try to give you a nonanswer, but it really is about having great content and bringing it to the consumer, wherever they are. That is what is also driving this phenomenon. That thought. We will be back in just a moment. Hold that thought. We will be back in just a moment. Coming up, the next big media deal. We will be back with Aryeh Bourkoff and rich bressler. Plus, president obama is scheduled to speak this morning, announcing his the resignation of his defense secretary, chuck hagel. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Im Erik Schatzker. And im stephanie ruhle. We are back with our two great guest. Were talking to Aryeh Bourkoff of line tree is here and rich bressler of ihardmedia right beside me. I heart about media right beside me. I asked you about content consumers and the balance of power. Now we are back. There is a debate about whether they belong together or are separate. With comcast that resurfaced. When you look at times and change and times of change and dislocation, whether it is because of new technology or new geographies that are actually it isg markets overall, pretty important. When you look at the Music Industry, for example, you have labels that have new forms of distribution happening all the time. It used to only be radio and now you have things like i heart digital streaming, pandora, spotify, etc. When you look at times of technology and change, having content this tradition together inhouse yields better economic models. Instead of going after time warner, fox should have bought charter . Examples of distribution together. Comcast and nbc is one of them. You can see the same strategy in other places around the world, for example, india. Almost all of them have content inhouse. The days of having the icon and cbs separated, or fox corp. And separated can be attractive. But having everything in can be the best strategy for the Management Team. If you go back historically, rights holders and right sister beaters, you know, broadly defined and rights distributors, you know, brother defined, broadly defined, the have typically been in same house. Its only been in the past 10 years that they have been disaggregated. Bring the best offering to the consumer, you see more and more people bringing back rights holders and right sister beaters back into one company. Do you think that time rights holders and rights distributors back into one company. Time warnerhink will be a possibility at complex a possibility . Cable . We talking yes. To a degree. What about the Net Neutrality issue and will there be anything that will make it less a cup less attractive to comcast ecco less attractive to comcast . Almost four years ago with the sec that was not related to a merger in the environment, but not if one could agree. It will matter with title to another things, but not with the merger. Because they are a Cable Company buying the in buying another Cable Company. They are already exposed to the dynamics they will be dealing with. I think it will still go through. That significantly begins comcast argument. Weakens comcast argument. Walk awaye allowed to whenever they want. At the end of the day, the title issue will be debated for a lot longer. Surprised to see the president weighing in on title to . Title two . I will not comment specifically. We are big believers in companies trying to keep the government out of all of our businesses. A little over a year ago did a deal with warner music directly. We have done a deal for music rights. We did the deal with warner music label. We have done a deal with majority independent labels in th