Morning with the Economic Data in u. S. At 8 30 a. M. Then a tertiary index and Industrial Production and capacity. On the schedule today for companies, its the first day of the skifor montclair, fashion manufacture, up 41 in its milan trading debut. Draghiesident mario speaks to the parliament this morning. Lets do a data check. Futures are doing better after a challenging week last week. The euro is up after a poor showing end of last week. The twoyear yield is higher. It is a risk on field to the american economy. Chart to get your economic week going. The fed will have an important meeting. Overl sales go way up 2007. Our Industrial Production is way behind . You have different grades of manufacturing like utilities in that ip number but manufacturing is way down from where it was. It is two separate economies. We are buying more stuff from overseas. Stay tuned for our full coverage of the fed meeting tuesday and wednesday. Here is scarlet fu. We talked about a spirit of compromise in washington last week but it appears to be gone. It may have been shortlived. Republicans and democrats actually compromise on a budget deal. The house approved it but it faces opposition especially from senate republicans. Paul ryan and patty murray said republicans will insist on more concessions before agreeing to raise the debt limit. They are doing that again . We knew there was something wrong with the budget you when it seemed too good to be true. Could hit their limit in this bring. We know how the government can stretch that out. April, probably first quarter. Snowden, the nsa leaker, the nsa is considering offering amnesty to him. They are assessing damage just how much the leaks caused. They said amnesty is worth thinking about if he agrees to stop leaking documents. Its really not in the morning papers. This is something that has been percolating based on what Edward Snowden had been slowly leaking to the press and the damage he is getting to the u. S. Government and they want to get him out of the way so maybe amnesty is an option. Our final front page story this morning is about google making bets on robots. It just bought boston dynamics, a company where robots can climb hills at 25 miles per hour. It was founded in 1992 and has been designing robots for the pentagon but no word on the price tag. It is the eighth Robot Company that google has bought this year. The effort is being headed up by andy rubin. He started up the android business. Thats what caught my eye. Honor thes it will current military contracts at boston dynamics. It is probably interested in developing robots for more commercial use. It seems like Pure Research and development. You wonder where it is going. Front pagere our stories. It is a busy week but we are two weeks away next week is a fourDay Work Week . A zero Day Work Week for tom keene next week. Its a rumor. After the glow of 1986 compromise, capitol hill looks for to rancor. Senators and Congress People have hit the ceiling over the debt ceiling. Phil mattingly is with us now. What is different this time about the debt ceiling debate . The problem is is that nothing is different this time. The budget deal last week that was negotiated by paul ryan and patty murray and the senate is likely to approve the deal by wednesday. There is republican apprehension but enough will get on board to move it forward. On sunday, paul ryan said when we reach the debt ceiling, february 7, we want something. No longer world built be clean no longer will there be clean debt ceiling agreements for it we thought we were out of the woods and now we will have to deal with shutdowns for the next two years . We have to deal with the debt ceiling and quickly into 2014. What is it they want . The budget has been going down with sequestration. What are they looking for . Its about cuts. They dont have to be specific. They just want cuts. About a necessarily specific cuts. Its about numbers, being able to go back to their constituents and say we are reducing the to and bring down the deficit. Thats all they care about. They want bold numbers and thats why they had problems with sequestration being raised. Theyyou will see is that will regroup after a rough couple of months and come back in january and go to retreat and come out with some specific proposals. Ofthe minority runs1 3 government, they need something, like a lot of politics. We appreciate it. Our guest host this hour is the author of bargain fever. Mark elwood joins us. Nic thompson is with us as well with new yorker magazine. How is the Holiday Season . Saw the same store sales increase in november, it was 13 which is the lowest its been in three years. Is it just shifting to new retail venues . Have you been into a store recently . No. There is a feeling of desperation. What does that mean for the postchristmas sales . Some people hold off on buying things until after december 25. I think it will be like rummaging in a bizarre. Immediately after christmas, we 70 off or more. It will be a frenzy in a will be interesting to see in january after they review the season. I think there will be few people who have done really well. If you search for whatever you are looking at, you get 14 things right away. I dont need a robot to do google search. Why are these guys doing well . They are trying to build up a clientele for google glass. Thats a good as answer as any. They are building up robots and trying to change the world around us. They want to change everything about life that is inefficient so they want robots that can clean up their house and robots that can deliver packages and robots that can do everything humans can do now that humans dont like doing. Can they get a robot to search google for me . Absolutely. Montclair, you cannot keep the codes in. Coats. They are up 41 . The jacket is like 1000. Montclair does the one thing every one is doing which is keep inventory tight. They are tight about what they produce. Its not like a spew of stuff. If you go to cambridge university, you say spewing. [laughter] lets spew you with company news. I dont spew. Aig is closing in on a deal for one of its units. Aig would get 3 billion and another 2. 4 billion in aircap stock. Aig has been narrowing its focus due to new regulations. Apple, walt disney, and ibm are pushing a stock ive back to record levels. The stock choir equaled 6. 4 of daily trading in the russell 3000. That passes the previous high of four percent. Its first will hold auction in india this week, about 8 million in modern and contemporary art will be up to sale at the event in mumbai. It has attracted the attention of the auction house, the buyers in india. The buyers there grew 22 last year. They wont need montclair jackets and most of india. When they travel, yes. 40 one percent is our number, 6. 5 billion dollars, thats a much business could be generated by facial recognition products by 2018. We will discuss this coming up on bloomberg surveillance, on Bloomberg Television, streaming on your phone, your tablet, and bloomberg. Com. Good morning, everyone. I am with scarlet fu and Michael Mckee in this week of the fed meeting. Great to have you here. It is december 16, a busy day. Right now, my face all of our faces. It is the price of privacy. This is a security issue with business implications. The white house will focus on facial Recognition Technology early next year. We are furring to Tech Knowledge he is the stuff of movies. Remember minority report. Pictures of your face and advertise to you and target your ads based on who was walking by. A patent just awarded for facial Recognition Technology and that could potentially be used for a future iphone or ipad. Facebook already uses this software to tag photos of friends and families. One of the pioneers of the industry calls it disrupted. Tech knowledge he that facebook had launched using face recognition is a game changer to some extent. As more and more people start putting images of their lives on facebook and automatically create a database, it allows you to search and retrieve and create links. Creating links for you and your social Network Profile and advertising has targeted as. Lockheed martin is looking for potential uses for this facial recognition software. Security is an obvious application but it will probably all come down to advertising. Walmart is looking into a way to reduce what they call shrinkage in the industry. Magazine isyorker on the cutting edge of face Recognition Technology. Do you bite this idea . Do you buy this idea . I think there are many users and one was described in the wall street journal which is china making sure that people are over 15 years old. Facial Recognition Technology can tell if you are older or not. It probably comes down to advertising and security. Largescale facial recognition like crowd skimming scanning does not work. Does it work for travel . Can i take a picture of my ugly face . In your case, yes but for the rest of us not yet. Its coming. They have applications that use eyeball retinal scans for security purposes. They talked about that for airlines. The big question is whether people will allow this technology to be used on themselves. Do you have to sign off on this . A lot of the security cameras at scores at stores are being upgraded so you can identify a frequent shopper and tell they are in the store. I want this for a party. I want to be able to pick up my phone and recognized someone that i already met. That would be helpful. Most people can tell who you but youd on your phone can turn your phone off but you cannot do that with your face. It is one of several reasons why it is under scrutiny. The Commerce Department will meet with the Companies Involved in this and come up with some ball and terry rules of conduct. Some mandatory rules of conduct. This is moving forward. The white house is involved with this. That is our question of the day. Should Edward Snowden run our facial recognition . What should google do with robots . Im thinking the offense of line of the new york giants. They could use some help but robots might not help them. Andy rubinfact that who headed up android is in charge of this. He had a good track record of hits. We will stay with technology because coming up him a the Samsung Smart watch or the black very phone, we will show you which were the biggest tech flops of 20 13. That is coming up next on bloomberg surveillance, on Bloomberg Television, streaming on your phone, your tablet, and bloomberg. Com. Good morning, bloomberg surveillance. Last week, everybody left on friday thinking the news of the economy was good at in china, the preliminary reading of the hsbc index falling to a three month low. The pace of growth is slowing as the effect of government stimulus for grams where all. In japan, abenomics, Japanese Companies cutting their capital spending. The projection for his third increase in 4. 6 at the largest companies. Bird months ago, but forecast was for 5. 1 . It snowed over the weekend on the box office numbers, the hobbit took in the number one spot with 74 million. And 22 million in box office receipts. Petere movies, after otoole died saturday at the age of 81, his performance in lawrence of arabia earned him the first of eight Academy Award nominations. Lawrence of arabia is that knowledge as one of the greatest movies ever made. The amount of money it took back in 1962 tells a different story. Arabia won seven Academy Awards and was nominated for three more and made a total of 70 million worldwide. Hobbit made 70 million in the first weekend. Its also on more screens. That is back when you had the singleplex. I saw it in rochester, new york. Widescreen was big at the time. David lean change the movie business. How many people who are under the age of 40 actually saw lawrence of arabia . Maybe in school. Movie. S a five hour long they will not show it at school. You would be surprised what they do at school. This is about technology and how it does not just do things for us, it does things to us. The president was involved in a selfie not so long ago during the Nelson Mandela event earlier this week when he was when he was with other world leaders. You wonder how that will reflect in five years. All this stuff is somewhat disposable. Everybody takes a picture and forgets about them. More coming up on surveillance, including dirty one percent which is how much jcpenney increased discounting during cyber week. We will talk about that next. Midmorning, bloomberg surveillance. Its a federal week this week. Of the have coverage meeting midweek. After a difficult week last week, the s p 500 is up seven. A stronger euro on a backand forth morning. Nymex crude has done nothing. Scarlet fu and Michael Mckee are here. Newon retail, whats old is especially at jcpenney. There has been two years of declining sales there but now, the Department Store chain is posting gains as it trims higher end brands. Jcpenney is back to selling more of its private label brands that they can produce more profitably. There it is, christmas or no christmas, we look at what we are due and we are obsessed 24 7, americans have bargain fever. Writtenod has bargain fever. Does that transcend up to the Luxury Brands . It is more evidence of Luxury Brands because everyone assumes mass markets are discounting. Very secretly, the highest end brands are doing it and they say they dont discount. I hope they have their fingers crossed because they are all lighting. Lying. At will i see 40 discounts Bergdorf Goodman . Chanel can do what many cant which is resist the lure of discounts. So many fashion brands are being bullied by wall street to show growth. Chanel is privately held. Montclair nowmean has to do the same because they are publicly traded . Carrie bradshaw bought luxury labels and then her boyfriend was the one, the real life mr. Big pushed those labels into the mall. They also pushed for more growth. The upper label brands, how do they discount . Or to walmartne if i want something cheap. You are going into Bergdorf Goodman and your Sales Assistant has called you and says right at sales started a week before the regular sales, would you like to shop secretly at 40 off . Sales are being used smartly as a reward for loyalty. They are happening in front of your eyes. You are acclaimed for your research. You went to the university of chicago and dove into a topic. What did you learn in your research . I think its important to think about the psychology of shopping and the psychology of retail. It is the way we respond to prices which is very much at discount chemical reaction. Also how we are manipulated by every store we walk into. Are you saying we should get drunk before we go shopping . No, shopping will get you drunk. What did you learn at jcpenney this weekend . They finally ended two straight years of declining samestore sales. Are they ready to turn things around . Getting into a doctor who moment by getting and undoings everything that was done in crossing their fingers. They are reinventing the store like it used to be. Will the customer go back to that . We are talking about Holiday Retail which is different than ron johnson a few months ago. They had one price point. It was a sterile and pristine presentation. This is the Michael Ullman we love. The problem is is it is triage to make sure it jcpenney does not go bust. Even though ron johnson had a bad attitude toward customers, them msaan teaches treats them with more reverence. Big discounts . Can they survive . I think jcpenney will survive but it was about profits when ron johnson took over and i think it will end up that profits about profits once again. Who is their competition . I went into a Garden State Plaza mall in new jersey and jcpenney is in the same mall as a Neiman Marcus which is fascinating. Thats the bifurcation of america. Is sitting there like their leg has been amputated. I dont know if the jcpenney customer is the amazon customer. If you look at a lot of real value shoppers, you would be fascinated by how minimal the penetration of smartphones is. They are not show rooming. They are just clipping Old Fashioned coupons. You mentioned amazon. Amazon is broadening its customer base. Costcoe now going after and sams club by opening up a wholesale business to help it expand into that growth area. Shipping and the prime business at put together. What do you think about amazon making this foray into Club Shopping . I would like to see them make a profit before they expand into anything else. Everyone treats amazon like a golden child. At some point, i want my money back, not market share. This amazon pantry, there are lots of little asterisk problems. It will be certain weight and then it will qualify and that just oozes problems for me. I want to order 10 bottles of laundry detergent so i o dont have to carry them home. That will be too heavy for that service. Customers can buy because shipping will be free. I can order a oneyear subscription to new yorker magazine and it will fit in the box. Its a steal. Is that the future for the new yorker magazine, subscriptions to amazon . Subscription certainly but magazine subscriptions are relatively easy to handle compared to shipping laundry detergent. Is amazon big in the United Kingdom . It is but the uk is a smaller country. It is more dense so shipping and ordering things by mail is a very american hobby. It was very novel and amazon did this. We can just drive to the mall more cheaply or jump on the train. To answer aot able gl