Over 47, brent crude below 49. Goldman sachs says oil has two state lower for longer. That is the way the market will be rebalance. Gas prices have fallen . 27 a gallon. The average price of a gallon of regular gas is 2. 20. It has fallen below 2 a gallon in 17 states. A breakthrough in finding out what happened to the air asia plane. One of the black box recorders that may tell what happened in the final moments before the plane crashed two weeks ago. The black box is composed of 2 parts, a flight data recorder and the cockpit voice recorder. The one thing we managed to find is the flight data recorder. The wreckage is 105 feet below the service of the java sea. The crash killed 162 on board. The biggest crowd in modern history in france, 3. 7 Million People marched to mark the terror attack. French president Francois Hollande proclaimed paris as the capital of the world today. John kerry will fly to paris at the end of the week. That may be an answer to criticism that the u. S. Only sent in ambassador to yesterdays march. The Detroit Auto Show, gm is introducing the brands first convertible in 25 years. And to compete with bmw, jaguar says it will build its first Sport Utility vehicle ever. \ yes what are they, eight years behind . 15 years. A big night for boyhood, the movie won awards. It took 12 years to make an follows a boy from age six to 18 years old. Gran Budapest Hotel won for best comedy. The golden globe is a must watch for Olivia Sterns as she prepares for oscar coverage. I saw a lot of red gowns. Big winner was amal clooney, George Clooneys new wife. They presented him with the Lifetime Achievement award. Amal is a human rights lawyer tonight we are giving her husband a Lifetime Achievement award. It was all over twitter. Very cool how that couple came in. What is the difference between the Golden Globes and the oscars . Mine is they serve alcohol. The Foreign Press races the oscars, the academy. We will have some coverage on bloomberg surveillance. Lets do a day to check. Futures up 11. Eurodollar under 1. 18. That bears careful watching towards the ecb meeting. Nymex is the story, brent as well. Olivia sterns driving brent crude lower. A new low the sterns effect. Very narrow spread, nymex crude. Ruble weekends, nowhere near the 64. 65 from a bit ago. Lets make you smart. Monday, a simple chart. West texas intermediate. Heres the lehman low. Everybody calls it the lehman low even though it has nothing to do with lehman. Were back there. This is a bust in demand, this is a boost in supply. We are in the same place for different reasons. Microeconomic brendan greeley. During the crisis every other asset class cratered. There is a big disconnect. What did you do, get enough sleep this weekend . Right here was where i bought my vw diesel because i was concerned about the price of oil. Right there is where i will be buying a jaguar suv. We will go to the Detroit Auto Show and talk to the head of vw. Goldman sachs, oil for longer for lower. Edward at citigroup has been out front. Here is the Goldman Sachs piece. One year ahead, wti swap needs to be below 65. Near 55 for next year to sideline capital, too exhausted that animal spirit and keep investment low to keep investment rebalancing. We are thrilled to bring Tobias Levkovich and Craig Moffett. A nonopec note. The microeconomics of u. S. Shale. You get to the same summary but through saudi arabia. He is saying opec is going to be disappointed by the lack of u. S. Response to lower oil prices. If you have the infrastructure in place, the production trends and break even starts getting down to the 30s per barrel and not 40s or 50. The marginal cost of shale production is low enough that it does not force it. Our wall street audience owns the oil. How does Tobias Levkovich adapt when you talk to a guy like ed morris or talk to Goldman Sachs . I have a lot of good friends there. In terms of when we look at the Energy Sector as a whole, big o il is the heaviest weight. We are neutral on the area. We are interested in enp and drillers where weve seen growth. We are not going to fight that by 1000 cuts. The drop in the price of oil is not going to break all show producers. Who can hold out longer, big oil or saudi arabia . Then you start getting into speculation. To me, that is not investing. I want to bring back the year to date chart on crude. Olivia sterns started talking about the drop. Down it goes further. A bit away from the banner. That is an ugly price. Im responsible. How worried are you about contingent . A lot of Shale Oil Companies are heavily levered. That is where they got the money to do the holds. Banks could be exposed if it goes belly up. How worried are you about contagion . In a similar way but not entirely. Im worried about bond yield spreads, particularly in the highyield marketplace. High yield energy once have gotten into a funding issue. The cost of funding is higher than it was at the 2009 low. It is more expensive for these Leveraged Energy companies to borrow than it was when we thought we were at the abyss of an economic depression. Spreads have widened in the emerging market area as well. That is where i worry about it. This is in subprime. The entire Energy Exposure of highyield debt is 180 billion, it is not trillions of dollars in 2008. Lets bring in Craig Moffett of moffett nathanson. I remember you at sanford bernstein. Do you get awhat ed is thinking . Why do you care what they say about oil . Ive been talking about the affordability problem. The sectors that i cover, whether it is cable or telecom they are part of the smaller set of companies that benefit from extra dollars in the consumers while it. Affordability is a real issue, especially on the media side. Prices keep going up and incomes do not. What you are saying is as wage pressure increases people are less likely to block at the bundle balk at the bundle. Over the last 10 years youve seen the price of paytv subscription rise by something, i want to say 58 or 60 . Incredible. Wage growth has been flat of the that period. You start getting people falling out. Where are we on cord cutting . Where is cord cutting 42015 . It is a drip, drip but you are seeing new services. The winner of the price was announced last week at ces. Did you go . I did not go lucky you. He is not a device guy. Craig is at the bottom of the stack. I and the infrastructure guy. You missed a lot of crowds. I want to point out that the stands effect is over. Brent somebody was about to put together a media page. Were going to talk about Tech Companies trying to cash in on video. What that means for cable providers. By the way, it is not good. Good morning. Bloomberg surveillance. Futures up 12. Olivia sterns with me. Brendan greeley . Online video advertising will be up 30 next year. Facebook is buying a video compression startup. Twitter is launching a video. Feature with us is Craig Moffett of moffett nathanson. The best way to explain what craig does. There is the story you have before you talk to craig and the story after. Lets look at facebook. Forget netflix. Is facebook the challenge to the cable bundle . Facebook is the challenge to the advertising bundle and that is where it starts. The pressure you are seeing in the ecosystem is not from people cutting the cord. At least not yet. The pressure right now is because the advertising dollars are leaving the traditional paytv system. My partner Michael Nathanson has been saying you are starting to see media buyers take money out of traditional tv instead of taking it out of print. For years, it was print that funded the growth of online. Print is not big enough to find online. Dollars are starting to come out of tv and that is a scary proposition. You look elsewhere for revenue and break the bottle. Ad spending is going towards smaller and smaller bits of video. And more and more targeted ad buys. Buying targeted customers, that is a big change. Is anyone watching insta videos . Yes. People much younger than you and i. I know. People like olivia. Thanks. It is funny. Here is my sense of the video bundle. Everybody is looking at new aggregation models. Everybody is looking at dish network aggregating a bunch of channels. Sony is about to aggregate a bunch of channels. I think we are looking in the wrong place. If you are thinking about what our millenials doing, millenials are not saying i need a better way to get the same dog food everyone is watching. Millenials are saying i am entertaining myself with a different mix of media from social media at is not the traditional paytv channels just in different packages. It is no longer i want my mtv. I want my netflix. The technical definition is born after 1980, thank you very much. Why is she onset . Im not going to spend 120 for a cable bundle. Millenials rent, they are not buying homes. They are less likely to buy a cable bundle. Pass stuff starts to be available in online, a la carte packages. Everyone wants to write the article that says if you try to recreate the bundle it is more expensive. Who once to recreate the bundle . Millenials are not trying to recreate the bundle. Tobias levkovich . Im not on social media. The millenials want to watch somebody with a go pro camera. It is weird. I would rather watch game of fthrones. I wont binge watch. We keep talking about how channels are becoming disaggregated. One of the things you have written, forget the idea of a channel. A channel is an app. Forget the idea that what we are going to take his traditional shows. Game of thrones is great for the people around this table. Except olivia. The real disruption is coming from companies you have never heard of producing media for 1 10 the cost per minute of traditional media. I want to summarize this. How afraid should every ceo in media be of facebook . Very afraid. Not because of what is this going to do to disrupt media. But afraid because of what it could do to deflate advertising. Getting into a price war of some kind. Cost per million. There is so much inventory that could come from facebook in advertising that it can be tremendously deflationary for cpms Craig Moffett with us. Smart people. Coming up from morgan stanley, betsy on banks. An ugly story about expense control for 2015. From our World Headquarters in new york city, say with us. It is surveillance. Good morning. Boiled down over one dollar a barrel. Wti and brent under 48. A morning must read. Interesting. Here is brendan greeley. This is from ken rogoff of harvard. It is worth bringing back up. The effects of sanctions are often fairly disappointing. So much so that scholars have included that governments can appeal to domestic audiences. I use it to sit higher in my desk. Very valuable work. Tobias levkovich,this is are there situations in which economic sanctions work . They are very limited. They have not worked well in the past. That is where rogoff is coming from. We have tried to moderate behavior but sometimes you are talking about people you have no interest in their behavior being moderated. Lets talk about putin for example. Somebody who does not seem to be that fazed by whatever sanctions are put in place. I think the question is are they effective, what is the history have they been proven to work . For the most part, they have not. I immediately think of russia. He debate on whether or not it is the sanctions or the price of oil. Richard haas often says the only sanctioned that works is the price of oil. Perhaps that is the only thing that can put pressure on president putin. Tobias does this change your view on multinationals in the u. S. . Youve got to change your earnings and adjust . Im more worried about what is going on in oil for earnings. If they keep coming down we look at the future and it is telling us earnings should be down 30 for 2015. 30 . Over 30 . Current consensus is about 21 . I do not think we have covered this. What is your appetite on equities this morning . My appetite is i want to buy weakness. I still think 2200 by the year end. I was thinking more about back to sanctions. We were wondering, there are few conditions in which they work. There have to be international consensus. You can talk about apartheid in south africa. There has to be some will to change and that is the other point in rogoffs morning must read. In russia there is no will to change. How do you do sanctions against islamic fundamentalists in france . That is an interesting question. You cannot. This is the dynamic that has changed. We have a justice ministers talking about there is no state actor to do anything about. Back to the sanctions point would you say they worked in cuba . That is what obama was saying we tried the same policy and it did not do the trick, they are changing the course. We must do something, this is something, therefore we must do it that is not working. Ultimately you can talk about radical islam. You can talk about cuba. What you are punishing, typically, is a much Broader Group than the very targeted delete that you are trying to force change from. So, those are the interesting effects. Well, there it is on sanctions. Rogoffs piece is good. He is scheduled to visit with us. We will have to see. Our twitter question of the day. How low is too low for oil prices . We want to hear your thoughts. Tweet us bsurveillance. This is bloomberg surveillance on Bloomberg Television. Streaming on your phone, your tablet, and bloomberg. Com. Good morning. Top headlines. China auto sales slowing down. According to china, total deliveries may top 23. 5 million last year. John paulson posting losses in his hedge funds after bad debts on energy security. The Advantage Plus Fund itself fell 36 last year. Shares of a holding up more than any other time since his 24 billion reorganization plan. His fortune stands at 30. 8 billion. That puts him ahead of alibaba chairman. No one getting a raise. That appears to be the take away from the jobs report. Wages decreased. They are climbing at a measly 1. 7 . I am not interested until something 30 off. About a 1. 5 trillion dollars global decline or shift if you like from producers to consumers. That gives people a little bit more money to spend. I was impressed by the things i have seen in the last few months. We are seeing better wage gains. If you look at one month data point we are seeing things improving. One thing we want to the number of civilian unemployed. If you have six unemployed workers for every job, where down to about 21 right now. Energy prices, people think it is going to be a boon. Is that really good for the entire sectors a good for the Dollar Stores . It is good for the lower end. It will be fast food restaurants, etc. We have upped our gdp forecast. Can you take the retail and bring it over to content . Is a stimulate advertising . The bigger push is if you are a telecom and you are running out of the cycle of smartphones and trying to figure out how to get more money out of a household, income is a real issue. U. S. Household net worth has climbed roughly 30 trillion since 2009. It is the rebound in stock prices. Securities are a bigger proportion. This goes back to the earlier point. The third issue i was going to talk about was the net worth. Higher income households own 80 of the stock market. It is the top 20 . 80 of the stock market. That top 20 accounts for 37 of all Consumer Spending in america. A lot of these names you cover have been some of the biggest winners in the bull market the past couple of years. It suggests this is not the time to buy. True. We break it out into various industry groups. This is your chart. We are neutral autos in consumer services. We think it will play in with people going to buy more from retailers. There are challenges in the retailers. You see it in the valuation from online purchases. These things have not gone away. You get some upside here in retailing that you did not have last year. This is the environment like jcpenney. Wet seal has gone belly up. Arent you concerned about the stores shutting their doors . It is more about can you get cost reduction. Estimate revisions starting to pick up off the bottom. We watched not the magnet team not the magnitude, but the percentage of changes. If you have 90 of estimates to the downside and it becomes 60 some of the downside, that is an improvement. Which retail . General merchandise is the biggest. You have some online retailers. Walmart and macys just slowly understand, the amazons are in retailing index and walmart is in Consumer Staples retail. I did not do that. Talk to s p. We are about Consumer Discretionary behavior. In retail. I want to suck rate from the media content. We will take a look at the Banking Industry and where they are parking their assets. We will talk to mr. Moffat about the telecoms here. It is an elephant in the room. What is the Fastest Growing asset at u. S. Banks . Excess reserves. It is earning 25 basis points. Bank deposits spiked in 2000 nine after feds offered a return on them. A 15 year on year increase. Is this the best they can do . In the demand. You need people to move the reserves to the market. And they have access cash. They do not have to go to the banks and borrow money. The consumer has been deleveraging, particularly in the credit card side. You have not had the demand. If you are paying people and you are making 25 basis points, you make the spread without risk. Why wouldnt the fed take this away . They mentioned they were going to do this a few years ago in the banks had a freak out. The banks were wary of doing things that would get regulators and a half. There tends to be gun shyness coming out of the banks as well. They have gone negative on the overnight rate because banks are desperate to stash their cash. They goes to show the limits of monetary policy. You can cut rates, but you cann