The halt turning point seems to be fukushima. Cs was supposed to be helping. We get some Economic Data today as well. We will get new home sales figures. Itll probably show home sales slowing for the second month. Cest year for home sales sin 2008. Dallas fed manufacturing ofivity a key measure state manufacturing activity. Scarlet will be breaking down the caterpillar earnings, always a bellwether for global manufacturing. Will this big investment be petering out . The new construction in u. S. Homes, will that help . We cannot help but talk about apple. Cory johnson will join us later. Check. O a data i want to get through this in quick speed. Markets on the move, particularly in turkey. 4. 40. Es back up onto the Second Screen where we get into what is going on and the emerging markets. 12 to 18 while i was away. There is the quote on the argentinian peso. The turkish lira all over the place. A. M. And of the central bank sets an emergency meeting for tomorrow. We have a stronger lira and the past 30 minutes. In the past 30 minutes. We pulled an all miter to come up with this chart. Ter to come up with this chart. Not your typical pair. We blowout six standard deviations. There it is. The out. Ch,. Brazilian rio versus argentinian peso. Lets get started with the front page. The market meltdown. It started in emerging markets. It spread around the globe. We start the week with the dow trying to recover from its worst week in a year and a half. Futures are bucking the slide we have seen in emerging markets and european stocks. Is this a shortterm pickup . Hiccup . P i would point to what we heard out of the president of Goldman Sachs speaking to bloomberg market makers. We have to get used to more moves like this. You see that in the vix. Average on the vix is about a 20 , going back two decades. We are getting back to average from the huge complacency. The decision comes out on wednesday. It doesnt affect what the fed does does it effect what the fed does . My favorite quote out of the weekend came from the wall street journal. Until the tide goes out that we see who has been swimming naked. That is what were seeing in the emerging markets. We are seeing that economies like turkey. Pages, in the front looking ahead to president obamas state of the Union Address. Will emphasize that he is willing to use unilateral president ial authority to get things done and bypassing congress. Is the kickoff to the 2014 election campaign. Other papers say he is taking a nonambitious agenda. He is looking to add incremental progress rather than bold legislative action. Why shouldnt he . He couldnt get them onboard with gun checks, raising the minimum wage. Maybe he will have to do an executive order. This is the tilt as we head into the state of the Union Address tomorrow. As we prepare for the super bowl , we have a sports business story. We are focusing on espn because it is aggressively pushing into online services. The network wants to profit from demand for online video. It does not want to push away its paytv customers. Tvrategy is to allow pay subscribers to stream games that aaron its various channels. Espn is the big moneymaker. I love what they do right now. Their usage of video i go back and look at the Anaheim Ducks highlights nobody doesnt like them. What is amazing is how much emphasis they put on football. Even the days they are not broadcasting nfl games. Did you go to rangersdevils . I watched it from the comfort of my own home. I cannot handle that. Too hardcore. Joining us this hour i will get it out. It is monday. Help me here. We will talk about a busy week of internet earnings. We will talk to jason t rennert. How concerned are my about turkey and argentina . Can you link them . I dont think so, for very long. This does not look like 1997 to me. A 1997, you had extraordinarily thin markets. All of the countries that had received international dollars. Now the situation is much more diverse. You have certain countries, like argentina or venezuela, who really have made their own bed and now they are sleeping in it. Other countries, like the brits, are in far better shape. Did you change your Investment Strategy in the last three or four days . Should our viewers . No. We have been underway developing markets for quite some time. We think the dollar is going to be quite a bit stronger. That has generally not been a Good Development for emerging markets. Also, the taper, part of the same story. Things conspire against emerging markets. We have not changed a thing. If anything, we think this could be the pause that refreshes. , hate to say that we are due but we are due for some sort of correction, consolidation in the u. S. Equity markets. This could be the opportunity. What is interesting is what did not happen. We saw the violence selloff in emerging markets, yet people do not flood into the u. S. I think there is still a big love affair with the growth in the emerging markets. We looked at the relationship between the growth in the emerging markets and the return on equity of the equity markets themselves. Tuple are paying way too much for the equity markets. Theyre getting too enamored by the underlying economic growth, not focusing enough on the companies themselves. Olivia sterns is having a back and forth on email. Corporate profits are at an alltime high. Gdp is at an alltime high. Stock markets are at an alltime high. Yes, we have fallen 3 from their, but people think that with a break they are hearing the crack of doom. I saw that at the yahoo party in davos. The internet world going to survive the turmoil that appears distant from the world of facebook, yahoo , and google . Is your world really care about a global turmoil . To those stocks just keep chugging along . I think it cares a lot. The thing that we see now in the internet world is that we are based on earnings. We are based on real performance of the stocks. Even the underlying private companies. I think it matters a lot. You look at bos world is grossly undervalued. Not necessarily. We just talked about bill miller. One of the guys that would tell you that it really depends on how you define value. Value depends on what you take the future expectations. Just because a company does not have earnings today does not mean it is overvalued. I dont have religious fervor on this. I think if youre going to value something, you do need capital and all the rest of it. No quote on the argentine peso. We will look at that through the morning. It lets get to company news. Busy monday morning. We start with at t. It has ruled out a bid for vodafone. It will not make an offer for vodafone in the next six months. The speculation of an at t buyout had driven shares higher in recent weeks. In stock was down about 4 trading on this news. Sam sun and google are teaming up. Are agreeing to a longterm patent licensing deal. The deal strengthens ties between the two companies. They are the main supporters of the android mobile operating system. A deal in the netherlands. Liberty global is buying ziggo. Liberty already owns a 28 stake. The deal will let Liberty Reach 90 of dutch households. It is not the deal that everyone has been waiting for. That is the one that is front and center. Immigration is front and center for us this morning. President with a historic speech in front of the Brandenburg Gate a bit ago. He will need the energy for the state of the union this week. It is bloomberg surveillance. Good morning. Good morning. Dozing tomorrow night. A challenging state of the union for the president. It troubled 2013, the president looking for new momentum. The president of the United States works on the state of the Union Address, House Republicans will be unveiling their principles were immigration reform. What they are willing to do in 2014. Peter cook joins us now to discuss. Are the going to look ahead what is beyond . Their usual talking points will be the big issues on the table. Republicans get set to showcase movement on the immigration front. This is the best opportunity for a big come a bipartisan deal in 2014. Probably happen after the state of the union. Most likely on wednesday as they head to the retreat on the Eastern Shore of maryland. The big Sticking Point has been all those folks undocumented in the country already. They will suggest legal static status for a lot of those people. Who is driving was more influential in the Republican Party . The moderate republicans or the conservatives . You can be sure that the folks who up and pushing for an immigration deal have been a little quiet over the last year or so they are starting to feel a little more traction, in part because the tea party set got a bit of a setback over the last few months. John boehner criticized them. John boehner is driving this train and he is asking for these principles, given it his blessing. A couple of people to keep an eye on paul ryan can provide political cover for others, if they can move forward with these principles and get enough buyin from a majority of the House Republican conference this week. You say that boehner is driving the show. The government shutdown, it did not look like he had control. Will he be able to get the ducks in a row . I think there is a 5050 chance. One of the reasons here is the timing. April is important. April is the deadline when republicans cannot face a new challenger. If there was someone out there who shot saw this immigration , april is the filing deadline for a primary challenger. You move it past the deadline and then people might be a little bit more comfortable about testing this vote. Casting this vote. Thank you very much. Rennert with us. A major u. S. Executive said to asteriska ceo with an next to me. These are tender box issues. Immigration. You, with your heritage. It is something we lived dayto day, isnt it . Unfortunately. I am not defeatist about it. I do think the u. S. Is one of the greatest places on earth in terms of the equality of opportunity. Particularly when the customs lines at jfk are short. I try not to buy into that too much. That there is an enormous opportunity here for everyone who is willing to work hard. It is harder for some groups than others. If youre looking at it globally, the u. S. Is still one of the better places to be. About yahoo lk and facebook. Smart stuff on the news feed i hate so much. Did you stay up late to watch the grammys . I did not watch beyonce. It is our twitter question of the day. What would see her favorite grammys moment . Vampire weekend. Yes that was a few years ago. Good morning. Bloomberg surveillance from new york city. Liu. He loop with betty 9 00 a. M. Suisan lyne on the state of internet. I am tom keene. Scarlet fu gracing us with her presence this morning. Olivia sterns has top headlines. Antigovernment protesters in kiev have seized the building housing the justice ministry. They set up barricades around the building. Activists have now taken over nina spoke buildings in 10 cities. Buildings in 10 cities. Edward snowden accuses the u. S. Of industrial espionage. He made the accusations in an interview with a german tv station. He also dismissed accusations he was a spy, saying he acted alone. Office, ride along took the top spot for the second straight weekend. It collected 21 million. Lone survivor took the second spot. Those are the top headlines. Buzz beganal sphere on a controversial moment for twitter and for Silicon Valley, as well. Here is Olivia Sterns. Basically, an oped in response to the wall street journal about the demonization of the rich. Progressive kristallnacht coming. Any of you watch fawlty towers. The number one rule is to not mention the war. Ure that thes never go well. I am not sure why he says this. We were shocked by his views expressed. How shocked a Silicon Valley . I didnt even know there was a perkins. The guy is not involved. Not involved. Does he speak for Silicon Valley . In any way . In no way. In no way. I have no idea who he even is. It is very strange. His outrage comes from the fact that he thinks there is a perceived rising tide of hatred of the successful one percent. 1 . I cannot get to the tragedy of con number europe in the 1930s. It is a stretch and it is not going to go over well. Do you see signs of social unrest in the bay area . No. Not at all. Feeling this is an older gentleman. Tom, inequality was the watchword at davos. The 199 where is split . I think it is almost more social, frankly. In the developed world, it has a lot to do with education. A lot to do with the fact that you do not have you have Service Oriented economies that are not providing manufacturing jobs for people that are not going to have College Educations. That is a bigger story. I think you need more profits. Rather than more laws. Personally. Up, emergingmarket currencies. This is bloomberg surveillance. I am scarlet fade away anytime keene and Olivia Sterns. We need a data check, futures are resisting the selloff in the emerging markets. Futures up 1, up 5. Here is the second part of our data check, the fix of 5 big points. Quote onet to see a the actual argentine peso market. Certainly not on the black market number, much higher than that. I have seen it at 13 pesos to 1. Turkish lira all over, that is the litmus paper. Belowos watch euro yen, euro,trong yen weak emerging market data check. Was that selloff a hangover from 2013 or has that there bear sunk its claws into the equity market . Trennert, oneason thing larry fink said at davos, the turmoil is going to be indicative of the year and there is too much optimism and financial markets. He said we are going to be in a world of volatility. It makes sense, last year more than 80 of the move in stocks was due to multiple expansion rather than profits. You are focused on profits this year. I do not think the u. S. Economy is improving. There is a pentup demand for capex. The dollar and u. S. Equities tend to be the default asset class in the world in which you are not sure what the riskfree asset is. I am not that worried, but i think it will be more volatile. Does a great more opportunities for investors . For our clients, institutional investors, they want volatility, they want correlations to come down and dispersions to go up. They can strut their stuff and show they are confident Money Managers, it is hard when everything is moving in the same direction to add value. I feel like we start every year off with Money Managers who say this is going to be a stockpicking year. Like an 2013,ls the fed did the heavy lifting, multiple expansion. Do you think the focus is now going back to earnings . Mainly because the fed is withdrawn liquidity. Little by little, tapering is not quite tightening. By the same token, at the margin, things are changing a little bit on that score. It is already having an impact. Last year, as soon as they started talking about tapering, emerging markets got run over. This is more indicative this is the key question, can you blink . What we see in imagining can you link what we see in emerging markets to chairman yellen . Itnot yet, but you can link why wont we see the same turmoil we saw in august . Why should i be so confident i will not see bonds lower, yield higher . Inflation still in the developed world is very low. The back up in Interest Rates and the u. S. Has been almost entirely in real terms, it is probably suggesting you will have higher real gdp growth in the u. S. This year. It seems like the u. S. Treasury market did get the message from ben bernanke that tapering does not mean tightening. It does not seem like the emerging markets got the same message. These are two different types of assets. One is very risk on, the other is not so much that. 1. 5, it is more concern about deflation in a lot of parts of the world. Back to profits. The Profit Growth we have seen has come from cost cuts, will investors start to make the distinction between Profit Growth from cost cuts versus topline growth . I think so. And i think m a will be a big part of Earnings Growth strategies. As his cliche but you are not left with other auctions. You have guys like carl icahn, who is he picking on . Ebay blue chips. 500 billion market cap companies. If you are not safe as apple, no one is safe. Synthesize for institutions a confidence or a belief in the market. If i am not institution and just someone out there, i have never seen this. Look at the dow industrial. A correction free dow industrial, 10 down is in this society, 13 900. If you look at Mutual Fund Inflows last year, only 24 billion dollars of equity market domestic inflows last year. Million. Onal was 145 there was more of a confidence and putting more money to work. How is that going to change . I think it might come back to the u. S. , they will say it is more risky than i thought out there. You mentioned m a, bo peabody from greycroft, talking about private equity and m a. Very good news. I just saw that google bought deepmind technologies, 400 million purchase of an Artificial Intelligence company. This is what makes google unbelievable. A Little Company called Semantic Technology that became the profit driver of google. Android, nobody knew anything about when google bought it, now it is the biggest small and incremental acquisitions, not highprofile. Google is good at buying these delicate companies and blossoming them. It is amazing. It looks like a much more proactive google, this follows the acquisition of nest, the push into hardware. I tweeted this, their biggest purchase to date in europe. Is them looking way forward. Is the day of the big merger over . Bull . 4 the year of the shows that the big megamergers generally do more to hurt shareholder value than to help. M is the more strategic ergers. Chartertimeue for warner cable . Most of the time it has more to do with ego. Should actmpanies like venture capitalists, do 10 200 million acquisitions rather than one 2 billion acquisition, see which one work