Roubini, why he says machines will take over the world. Welcome to Market Makers. I am stephanie ruhle. It is a special day because my partner, Erik Schatzker, is often they and their letting me drive the car all by myself. Matt miller is in the newsroom with the headlines. What is the word . Were seeing existing home sales come in slightly less than had been anticipated on wall street. The forecast in our survey of economists is 5. 2 million. Were seeing 4. 90 3 million, coming in just below that in the prior month of 5. 20 6 million. We are seeing the month over 6. 1 . Number down that is that it can lend you will see throughout the day that they can light you will see throughout the day. We are looking at it probably 1. 1 . That is look so great, especially when you look at the bar graph. But when you look at online of where they have been over the past four or five years, we are at a pretty decent level compared to, say, the low in 2010 but not nearly where we were at the high have 2005, 2006, 2007. Bring in ato Bloomberg Economist who appears with us to analyze the numbers. Weaker than expected but we are into november. We have to be very cautious as forecasters not to over interpret noise and volatility in the winter months. Weaker than expected report. One thing that does linger in the back of my mind, the National Association of retailers said it was a puzzling weakness in the report. We had a lot of bad weather. Six feet of snow in buffalo and the Northern Midwest was impacted. Very wet in the southeast. With the noreaster on thanks giving weekend over the eastern seaboard can we may be postponed or somewhat negatively impacted. Can we put that much weight on winter knowing what a horrible winter we had last year . When we get bad weather the Housing Market shuts down. We got a little hint of that in november. Im not sure it is compelling evidence but given the unexpected weakness, possibly impacting things, maybe they start to tell us something about the underlying story. The one bit of good news in this report is we looked at the median price of homes resold held at 5 . A year ago we were at 9 on price appreciation. Now we are down 5 . Year, low into next singledigit gains in home prices,. Biggestyou talk to the Real Estate Equity players, you wonder, that is not you and me. I think that impacted the numbers earlier in the recovery. From what i have read, it looks a private equity has slowed down purchases and in some cases liquidating purchases and that is why we are seeing some of this moderation. Driving the sector will be continued thawing and mortgage or at least the individual homebuyers, not the block buyers, to enter the market a little bit more on top of that. Better Household Income growth, following of mortgage credit gives the housing sector a little bit more light next year. Are you concerned about a bubble . I will be interviewing Sternlicht Barry about miami. Five years ago it was the anderson epicenter of the housing crisis. Average are not homebuyers in the miami market or new york or along the coast. As we look at the market as a whole, the gradual deceleration in home prices is good news as it tells us we are not overheating and seeing a big runup in prices like we saw in 2005 2 2008 that runup in cities like new york and miami and l. A. Doesnt have you can earn . Doesnt have you concerned . Those are different kinds of buyers. It doesnt squeeze the average resident out of it does squeeze the average resident out of metropolitan areas but that is a whole different story. That is a wealth allocation story. Thank you for breaking down the housing numbers. Now time to give you the bulletin, the top is the stories of the morning. President obama wont call the hacking of the Sony Pictures an act of war. The u. S. Has accused north korea of being behind the attack, which is cost sony hundreds of millions of dollars and effectively torpedoed their plans to feature the release of the interview. Here is the president speaking to cnn. No, i dont think it was an act of war. I think it was an active cyber vandalism that was very costly and very expensive. We take it very seriously and we will respond proportionately. The president s characterization drew a swift backlash from republican senator john mccain of arizona, who called the cyber attack a new form of warfare. Saudi arabia and the United Arab Emirates are once again pledging not to cut Oil Production to prop up prices. Instead, the two nations blamed nonopec producers for the supply glut and urged them to cut back to the Saudi Oil Minister says he is confident of the prices will rebound along with Global Economic growth and he is predicting that inefficient producers will eventually have no choice but to cut output. If you need to reach someone at cocacola headquarters in atlanta georgia, forget about leaving a voicemail. Office voicemail at the Worlds LargestSoftware Maker has officially been shut down. The chief Information Officer says it is simply a way to signify the way we work and increase productivity. Telling messages callers to use an alternative method to call persons. And Peter Jacksons final chapter of the hobbit franchise opened on top of the theend box office could warner bros. Film is generated 350 Million Worldwide and the latest night at the Museum Franchise was in second place, followed by sonys remake of annie, one of the movies leaked online by hackers. On wallbe a star street as a banking analyst but apparently those skills are not translating into managing money. Fund is whitneys hedge down 11 this year and remain investors demanding money back. Several top executives have left her firm and she is renting out office space. Max, what has gone wrong . She launched this year ago . It was literally november 2013 when they actually started trading. American revival fund, very optimistic name. You think of the best is yet to come. That is not what has happened. They have lost millions of dollars, top executives and now the biggest investor wants the money back. What does this fund invest in . The main idea is to put into effect what she sees as the great vision for the United States of america. She thinks states in the middle of a country like arkansas will have an incredible rebound, that their growth will be better than us suckers in new york and in california. She wrote a book about that. That is what her book was about. People, it isd to a little bit different to have a theory about what is going to happen across america and then be able to invest in actual companies. Bloomberg reported that there is where onalled conns, credit you get washing machines, s. Niture, plasma tv it is down like 60 this year and they lost millions of dollars on it. How big are the funds . Bloomberg reported that they had 50 million. 50 million . 50 million. Is that merediths own money or investors . Investors. She began with about 50 million from an investor and others related to blue crest and theres people wanted the money back. Her attitude has been like, no. When do they ask for their money back . Im glad no one asked me for the money back because i would also say no. But in her case it wouldnt be that she doesnt have the money. Your biggest investor formally says i will take my money, dont you have to give the money back . Not if you believe that they are in the wrong and they are not equally entitled to the money. We probably will see some squabbling as to whether they are allowed to withdraw this early on. Most investors get the money tied up for a couple of years. Sometimes you can get special arrangements and that could be the case. Have you talk to a lawyer . He gave us a beautiful quotation in todays story that everyone should go read that talks about what a visionary investor is and what a hard year it has been for everybody in the market. For me, the bigger deal on the thing that seems stunning to me is that this was just the first year and if her biggest investor and executives are leaving hold on, who are these executives leaving . Hurt cfo, her cofounder, the chief administrative officer. If she is still trading as last blue crest money but all of her lieutenants have left, what is it like Meredith Whitney capital . I dont think it is a buzzing, busy office. Her office from which is a full floor of madison avenue, fancy piece of real estate, is on the market to be subleased. A seven ord eightyear lease. She has many years left for millions of dollars of real estate. She wants someone to come in. A very nice executive at from with bathroom suite furniture available. Tough year. I guess so. , good reporting. You can read his story on bloomberg. Com. When we return, Good American apparel go private . Shares are searching. You are watching Market Makers on bloomberg television. Welcome back to Market Makers. I am stephanie ruhle. American apparel is confirming it has been approached by a potential buyer and is interested in reducing the retailer for up to 140 a share. The New York Post reported last week that a takeover could be in the works and it would involve ousted founder dov charneys return. Trish regan met with him a few days ago and she joins us with more. Could dov be coming back . He thinks so. That is a debatable thing. Just a little color on how i met with him he came to bloomberg, our record is, when i was on the air, and it was just as news broke that they were toentially looking at 1. 30 1. 40 a share for management. We had a long, lengthy discussion. He can be quite entertaining at times. Feeling right now that he has been taken advantage of by this hedge fund. Shares to them and they promised to give him his position back. Not necessarily as ceo, but that he would be effectively running the company once the investigation had been completed. Of course, there were charges of sexual allegations and misuse but he is the guy who founded the company. It is his brand. And he is the life and soul of that company could he lives, sleeps, eats, and pr that and briefs breathes this. It has been next ordinarily traumatic for him. Making more than 800 million a year as ceo. Healy has 100,000 a year to his name he only has 100,000 a year to his name. He is living on the Lower East Side at a friends place. He wants support to take his Company Private and to have a role there. He told me he had a big hand in picking the new ceo. She is a friend of his. 30 executives of the company said they wanted dov reinstated in some capacity. It speaks to how the yes in the heart and soul of this does he have anything to say about standard general . He is very upset about standard general. Standard general my entire lifes work and they agreed to put me back in, but instead they used this investigation to fire me, betray me. Sharesthem my heart, my they teamed up with alan and work against me. I bet the farm and they robbed me. I imagine that from the investors standpoint theyre feeling is that dov and all he is which is a lot. Is perhaps a liability as they try to get the company back on the rails. Clearly he is passionate, what did he seem rational to you . He seems fairly rational but there are times where he goes off on a little bit of a tangent. One of the things that makes dov and a lot of entrepreneurs special is that they have a passion. The question is, at some point, when the cover he to mature, as this one did, how much passion can you have and how much common sense no naked dancing. That for sure. That is the challenge he is in. They need an adult, so to speak, Management Team he is the lifeblood of the place. Exactly. He would like to see the company taken private. He is suing everyone, by the way. That 100,000 is going to go to legal bills overnight. Great reporting. Trish regan with the big news out of American Apparel. Miami was hit hard by the housing bust but it is roaring back thanks in part to investors like barry sternlicht. We will ask him why it is so attractive in sunny south florida. Small, Unmanned Aircraft are soaring this Holiday Season, prompting new worries about thrown disasters in american airspace. Chief washington correspondent peter cook has more. Drones are the musthave gift this year. Youve got sons, ive got sons. What my boys are getting because obviously all of those gifts are coming from santa claus, but i have a feeling i will have a droneheavy house. Im not sure i want to see you piloting some of those drones. We will talk about that later. Literally these things are flying off the shelves. Amazon has been selling 10,000 drones amon a month recently. The company is not confirmed that, but theres a chance that a chance that a lot of americans will be getting it quad copter this Holiday Season. With so many drones in the air, there is a growing risk of accidents and we have seen that in recent weeks. A couple of highprofile events in november a drone struck and injured woman in a florida antique show. You had a small copter flown at a tgi fridays that cut the nose of a news photographer. In september a man was arrested and charged with lying a drone within 50 feet of a new York Police Department helicopter. Perhaps scariest of all, and Airline Pilot at Laguardia Airport in september almost hitting a drone. Amazon trying to encourage a safety. There is a website that shows a link to a safety guide for how to fly responsibly. The faa does have rules were hobbyists come even though a lot of people dont know about them. Cant fly within five miles of an airport. You have got to be seeing your drone at all times. Next hour come even the faa this Holiday Season is taking part in a Conference Call with industry officials to remind people what the rules are because they see how many people might have a new drone after the holidays and they wanted to fly safely. A lot of those rules are being ignored. Do you actually think congress could legislate on this . Is it going to affect my boys in the new year . I would think congress has bigger things to worry about. You have a lot of members of congress who are pushing the faa to move faster to approve the use of drugs, particularly commercial growth the use of drones, particularly commercial drones. You have the faa ruling as soon as the end of this year, a new rule regarding smaller drugs for commercial use. Big interest there. They have been allowing waivers. They have allowed oneoff exemptions for the movie industry, for the Energy Industry to observe pipelines, for example. But right now, other than that, commercial drone use is not allowed in the United States. We are waiting for the faa to issue this rulemaking by the end of the year to perhaps give a little better clarity as to how commercial use of drones can fly in this country. Im worried about radioshack. Matt miller wants them to rename themselves the drone zone and go all drones, all the time. Chief washington correspondent peter cook. Stay tuned. We will have our own delivery drone later this morning. The horsefly drone. We have that and a whole lot more. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Welcome to Market Makers. I am Erik Schatzker. Welcome back to Market Makers. I am stephanie ruhle. Ispartner Erik Schatzker off, getting ready for christmas today. You have just me. And what a good year for munis. Meanwhile investors are steering clear of puerto ricos big problem. Where should you park your muni dollars and 2015 . Us lucky him joins us from miami, florida today. Tell us about what you have seen in the muni market . Sure. Very strong performance, also lower tier rated credit performed well. I think coming in for the first of the year, we are very well in the muni market. We oversold in 2013. , they put theings money back into the muni bonds, but there are improving underlying fundamentals like where . First of all i would say both are the coasts. New york, new york city also improved, the revenues in the budgets saw a Real Recovery in real estate, which helps the Municipal Bond markets. What about those who say that in places the muni market is so strong they cannot see the light of day . Sure. California is seen improvement in the Real Estate Market and also they are having more conservative fiscal management at the state level for a couple of examples. Puerto rico has been on a borrowing binge for the last two years. Newoes not for financing infrastructure, but financing paying on debt on the islands. As debt grows and growth falters in puerto rico, that becomes a risky situation. A over 2014 we have seen number of hedge funds raise money to specifically invest in puerto rico. Those who have done it how long before you think it has a payoff, or do think that will be a bad strategy . I think when it comes to Hedge Fund Investing in puerto to the best of my nature they are playing specific credits against each other. Electricle, mike the power of authority be trading too low . They trade at . 35 on the dollar, now up to . 50. Versus the general obligation the, still around . 85 on dollar. There are some short strategies t