I want to know from Robert Seinfeld where wall street in new york will be in the next five years. Were going to start off with the morning brief. That news out of china. They have been inspecting a slowdown in. We have suggestions that were going to get contraction in chinese manufacturing. Europe is going the other way. Expansion is showing more than forecast. They are not out of the woods. Spanish unemployment comes in above 25 for the sixth month in a row. Actually, 26 . Not good news. Here in the United States, we should get better news. Jobless claims are out at 8 30. At 10 00, existing home sales. Is the momentum continuing . Earnings, before the bell lockheed martin, mcdonalds. Union pacific, after the bell, microsoft. A lot of interest. Will they say anything about their ceo search . The bad news out of china is driving the markets this morning. Were seeing markets down across the board. That is the case for u. S. Futures. They are down by five points. Bit forso leading to a treasuries. The 10 year yield is lower. We expected this data to show that the economy was slowing. But not necessarily contracting. It is a question of degree at this point. That is also not be official number. Getting downng at against the dollar. Not sure why. And gold prices are off here it and gas prices are elevated. It is freezing here. The polar vortex is going south. Texas and louisiana are supposed get snow. Hell is freezing over. Tom keene is in the mountains. I have a vacation in new orleans in two weeks. I want them to be new orleans, not snowing. Polar vortex come over to you. Lets get to the front page. We scour the papers. It is not just china, it is also their internet outage. They call it the big web crash. The government says it was caused by a cyber attack. That is after speculation that it was caused by a malfunction in the censorship. That is the great firewall. They treated to a small storefront in wyoming. That is the front for a company that acts as a front for other companies. The chinese are trying to block them. Instead, they blocked their own. They have the highest ratio of Internet Users to internet waste. Highspeed cables. More than 600 million Internet Users. That is not a next man. Theyre controlling access in and out of the country. It makes sense or step easier. If you make that easier, it makes damage harder. It makes controlling damage harder. They have two points of failure. When one fails, they have a problem. Down,rica, if anyone goes you do not have the same problem. This with half of the worlds Internet Users. They cannot access the internet. Imagine an internet of things. Suddenly your fridge rater goes off grid not just not being open to observe not being able to open surfer juror. We also want to get to our second frontpage story. Carl icahn is at it again. He is targeting ebay. He proposed that they split off of paypal. He nominated to employees to the board. He started building a stake this month. He holds lesson one percent. He is making noise, as always. What does carl icahn bring to companies . He seems to buy a stake, go on a network, and say they should do this. Stock goes up, he cashes out and leaves. You do not see much change in the companies. Is a lot richer than i am. I cannot define what his purpose is. I do think he is right. About paypal and ebay. I have never understood what paypal i have never understood what ebay rings to a bow. Paypal. Bitcoin was always attached to silk road. Sent silk road was shut down, bitcoin has flourished. It is it own entity. In a prefers way, you can come pair them. There is no reason why paypal brings a lot to ebay. Theres no reason that the ability to verify transactions with a third party has to be tied to a market. The synergy does not go both ways . No. Ebay is not doing as well as it should be. Perhaps theyre splitting off. Paypal is one way to get there. The final front page before we get to that, our twitter question of the day. It has to do with what mike was just those in. What does carl icahn do for companies that he takes a stake in . Apple, all kinds of companies. What does he do for or to companies that he invests in . Lets get to the last frontpage story. Netflix is up 18 . Trading higher in the premarket as well. They beat assessments with growth numbers. They also talked a lot about the possibility of raising prices. I think this is interesting because they have been so careful about how they trot out this idea after a disastrous attempt at raising prices and splitting off services. That led to a big crash. In ireland, they were able to raise prices. That gives them confidence going forward. It is not just raising prices, but experimenting with different plans. Like were seeing with mobile phones. You can pay various cures for various levels of service. How many share your plan . Four. That is what they want to change. They have an amazing facility and expand the broad red abroad. 9 Million International subs cribers. They have expanded quickly. It is interesting to see how theyve have been willing to embrace netflix. They feel it they just provide a height. If they can provide something good, good. You do not have the conflict like you do here with verizon. That will be interesting to watch over the next year or so. The comparison between how netflix forces. And what the Cable Companies decide to do. Nobody rises as a competitor. Company news lets get to some other company news. Ibm and lenovo making it official. Ibm will buy a server unit. The price tag is 2. 3 billion. This helps lenovo to diversify. Analysts say they will grow their server business in china initially. Regulators are looking into the Berkshire Hathaway theyre trying to determine if the firm should be supervised by the federal reserve. This evaluation is part of a move to identify which nonbank firms could threaten Financial Stability if they were to fail. Toyota sold the most cars in the world for a second straight years. Sales climbed to just under 10 Million Units worldwide. They predict that they will cross the 10 million mark this year thinks to demand from the u. S. And china. Jim placed second. That is todays complaint is. We want to head back to douglas, switzerland. Tom is freezing. You have a lot of great guests. Gorgeous weather compared to the east coast. A private interview with a very private michael dell. He is the founder of dell. We will talk about technology. We will talk about the transaction of ibm and lenovo. From the World Economic forums, from a cold new york, it is bloomberg surveillance. This is bloomberg surveillance. I am scarlet fu. Tom keene is joining us from davos, switzerland. He just spoke with michael dell, the ceo and founder of dell. Also, david kurt after. Ibm has served sold its server unit to live at novell. You wanted to get michael dells take on them. Heres what he had to say. There is a trend of consolidation. We have been gaining share in the server space and the client space. We got our pc tablet business growing. Were doing that and servers. You see consolidation. This is another form of it. Switching from the client only to client and server is a fairly significant shift in terms of the sales motion and the process in the company. They will have some challenges. Michael dell with David Kirkpatrick. We will have more of that. Brendan greeley, what i thought was fascinating was that he Still Believes in the hardware. When you hear a guy like him talk about the new software and about hardware, is that believable or is he just talking his book . When you see ibm selling their server business to lenovo, it is clear that they have become a commodity. I have a hard time taking him seriously. Not just that go ahead tom. The economics of this i find it fascinating. These large transnational transactions. How big of a deal is it that ibm is selling this piece to china . It is who wants it. Who is able to make money off of this business. It leads you to believe that the cloud is taking over. Probably not as much of an option. It does not appear to be anything that will raise the National Security concerns. Can they come back to the united hates with these things . We regulate where servers come from. Very well said. When you look at the financial transaction, you do this better than me. What did you see . What is the distinction about what we see this morning . It speaks volumes. They already have this relationship. The Due Diligence went quicker than i would have with another company. There are Security Issues they might not have seen otherwise. It is interesting that leno though its getting into servers. They are still playing catchup in the bid to move away from hardware. Tom, i know michael dell also talked about hardware. Why is it so important to dells business . The product hardware part is still an important part. Value is shifting to new areas. Services and software. These are areas where we have invested tremendously. We have done 30 acquisitions. Millionbuilt a 21 Enterprise Businesses. We are intending to focus more on those areas. Brendan greeley, i thought michael dell really sized up with David Kirkpatrick and i were saying about apple. What is the distinction between the dell approach to hardware and the apple approach . I think apple has moved beyond commodities. We have seen that with mobile handsets. We have not quite seen it with the tv. Apple has proved that they can sell a piece of hardware and make it different from the other pieces. I do not think theyre alone in this. If you look at the internet carriers, their business is becoming a commodity business. Theyre trying to move into home security. I think it will have trouble with this as well. I do not see a good path. Not to mention that they are part of an ecosystem. The money that it creates around that dell does not have that. They are part of a pc system that is dying off. Everyone is shifting to android. I wonder whether michael dell addressed the buzzwords that you hear. The cloud. Did he talk about that at all . Little bit. I got more of that from John Chambers. The chambers love to talk jargon of the moment and transformation of technology. I do not get that from michael dell. He is an operational guide. He is original in that sense. He goes away from the jargon of the moment and spends a lot more time talking about how were going to compete. What will we do with 100,000 people to move forward . Did he talk about jobs, whether they are hiring . We do not give a lot of information because they are privately held. He says morale is better. He said he did not want to talk about the new dell. Unlike John Chambers who is a ceo. We will share highlights of your interview later on. Especially his thoughts on the internet of things. At this point, we have to look at the cover of the new business week. Look at the National Security agency and how it uses data mining. That is out on shelves tomorrow. That is another big theme. Of course, data mining. If you miss any interviews, you can watch them on bloomberg. This is bloomberg surveillance. Coming up, the ceo of blackstone. Ttephen schwarzman will si down with erik schatzker. Another titan of finance speaking with bloomberg. This is bloomberg surveillance. Tom keene is in switzerland. Mike mckee has our top headlines. We start in china. There are signs of a slowdown in manufacturing. There are signals that manufacturing contracted for the first time in six months. Economists say there is a slowing demand. The Lunar New Year will be next week. It is hard to Pay Attention to their ecodata this time of year. Theorters shoved cash at leaders of an Antigovernment Movement as he marched through the streets of bangkok for it it defied the recent crackdown on demonstrations. Elections, they also want the Prime Minister out. Home sales in the hamptons bad news for those of you looking to sell. 496 sales, down in the Fourth Quarter. The average price also fell 15 . Skewed byson, it was the Fourth Quarter of 2012. Those are your top headlines. I am glad you were able to sell. Of course. I am all about timing. Lets get to our morning mustread. Brendan greeley is with us. He picked a selection. We have the author of a massive three volume biography of john maynard keynes. He is returning to pursue happiness. The argument for free trade is an argument for welfare. Time is money. The more money you can squeeze out of an hour, the better off you are. The trouble is that the more you think about your welfare in terms of money, the more like you are to regard spinning time with your friends as an opportunity cost. The loss of money you wouldve made by working instead. This rang true because i used to work as a consultant. I was paid hourly. I used to calculate going to the movies in terms of the opportunity cost. I think this is interesting. The idea of looking beyond the utility of money is not new. There is an older study of happiness. What i do think is interesting is that he connects free trade to welfare. Not usually a link that you see. It is not. Despite all of the things that we disagree about, were greater free trade is a good thing. You both sides of the aisle pushing to give fasttrack authority to negotiate trade agreements. You have him here pointing out that free trade is good. It is good at maximizing gdp. Maximizing gdp is one a measure of wellbeing. It is not the only major. When you look at that number, it does not mean that the population is happier. It is interesting how banks are trying to rethink the way they built lions. Not by the hour. It has its own problems as well. Lets begin my morning mustread. It is on monetary policy. It is from the global chief Investment Officer at guggenheim partners. He writes about the fed history and how it is key to Ben Bernankes legacy. Any policy targeting one price inevitably distorts other prices. The efforts to preserve the Banking System will probably lead to rising asset prices. It all becomes Janet Yellens problem to resolve. Does not solve the problem, then there will be questions about bernankes legacy. She is the fed chairman. She will be on the very first trip chairwoman. Correction. A conversation with John Chambers coming up. This is bloomberg surveillance. You are watching bloomberg tv. We are streaming live on your phone, tablet, and bloomberg. Com. A still dark washington, d. C. Chair, janet yellen, will take over on february 1. She will take over the central bank. I am scarlet fu with Michael Mckee in new york. Tom keene is in switzerland at the World Economic forum. We will join him shortly. Micah, start us off with a data check. Is all about china. Numbers have dominated the early trading. S p 500 futures are off i five points. Were also seeing a move into treasuries. The 10 year yield is lower. Better than expected economic news. The euro trading a bit higher. Crude oil is down a bit. We will call it unchanged. We have been up on the back of the cold weather the last couple of days. It is pushing natural gas. Twoyear highs . Lets stay with the losing team. Advanced micro devices a big decline. Mid point missed the consensus. Pc weakness is a big driver. They are intels smaller rival. Coach down six percent. Sales dropped twice what estimated. We are not buying enough handbags. The weather has been a problem for them as well. Coach has a problem. Michael kors came along and there are they dropped off a lot. John chambers sat down with tom and they talked about the future of interconnectedness. This is ciscos future. Here is what John Chambers had to say about his plan to capitalize on the internet. Cisco reinvents itself every 35 years. We come out even stronger. Where will we be next year . We could be the number one i. T. Company. It is a 19 trillion contributor to business and society. Over the next 10 years, that is more than the entire internet since conception by 110 fold. Tom, air, and hans are all in switzerland. It seems like a lot of these lofty numbers were going to rely on the Smart Devices in the future. You saw the headlines on bloomberg hd. A lot of Different Companies really are having revenue battles. I thought this was interesting. You follow this more than we do. Do you agree that there is a grove global lethargy . They are monitoring the monthly stuff out of europe. Do we believe the numbers out of china . It seems like china is hanging over this congress this conference. Thinking we are missing something in china at the boulders. Bubble burst. They are trying to figure out a global strategy. Michael corbett is the new ceo of citigroup. He talked about the new era thinking and how citigroup looks different than it did before. You look at ray transitions. They are never smooth. We actually go into this one a bit that are then we have historically. You have to remember that taper is taper. It is not tightening. It is removing what was put in as excess liquidity. We are just getting back to where we think we should the. Taper is not actually a tightening. It is a taper. His comments on what the new citigroup looks like is interesting. They try to distinguish themselves from one another. I would say that more than any other executive here, it is the different executive. Eric, who was Michael Corbat 12 months ago . 100 days into the job. All he could say was the right word. That was what everyone wanted to hear. Execution. That is still his mantra for 2014. I said really . When will it not be execution . The answer is never. That is all that matters. Orbatat is the c distinction . This he have a bigger helicopter . No, it is smaller. The point that he wanted to make we had a fascinating conversation about universal banking. Think about the citigroup that was. That was the prototypical universal bank. I s