Stocks and those of you joining us from around the world, welcome. Olivia sterns reports on states and retailers stopping selling cigarettes. And peter cook has the u. S. Response to the crimea secession vote. We will get to peter in just a moment. European Union Foreign ministers imposed sanctions on russia after this weekends disputed referendum in crimea. I am now joined on the phone from brussels. Good evening. Saw we and also imposed travel restrictions, effectively banning them from traveling within the eu. I spoke with seven for an ministers today. They go for economic stations just they wont go for economic stations just yet. Or evenhotter get target russian business leaders. Punishle point is to russia for this referendum that took place yesterday where the majority of ukrainian voters voted to secede from ukraine and join russia and discourage president putin from annexing crimea just because the crimean said they do not want to join russia hasnt mean to accept them. If president putin was to go forward it is entirely possible we could see sanctions for the European Union. What are ukrainian Officials Saying at this point . Ukrainian Officials Say the referendum was illegal. Happyk quietly they are to write off crimea. Theyre bigger concern is this weekend we saw a russian troops, russian forces, outside of crimea papa crimea proper. Their big fear is russia may be in the process of trying to build a land bridge between mobile the, where they have the same intro to have in crimea. They may want to build a bridge from there all the way through crimea and the south of ukraine and east of ukraine to russian proper. Ito russia talked to the Ukrainian Foreign minister about that. That is something they do not want to happen. What is Vladimir Putins next move . Good question. Tomorrow he will address the parliament. It will be 3 p. M. Moscow time. When wee when he learn whether he intends to annex crimea. The Russian Parliament is going to consider accepting crimea on friday. If Vladimir Putin moves to annex korea, that i think quite clearly all bets are off and we could see eu officials trying to respond to that. Joining us from brussels. In the meantime the president announced the broadest use of sanctions against russia since the end of the cold war. Peter cook has more on that part of the story. Who was on the u. S. s hit list . The eu has people targeted. We dont know all those names yet. We have 11 people facing an asset freeze and visa ban. The hit list includes seven top russian officials, all seen as playing a leading role in this crisis, as well as for ukrainians, including former president Viktor Yanukovych and officials of the crimean government. Vladimir putin is not on the list. Instead of members of his inner circle, president ial aide wladyslaw cirque off aide v ladislav surkov. Glazyev has been the president ial advisor. Matviyenko has been a strong supporter of russia. Doing his ise from in the u. S. With them. More sanctions will come if the government is not back down. The International Community will continue to stand together. If an continued Russian Military in invention intervention in ukraine will only people in will only deepen their international isolation. This new executive order does give the president more firepower in addition to allowing him to target russian officials as he did today. It also gives the administration the power to sanction anyone business anyone or any business and the arms industry. And anyone surprising that anyone providing support for russian officials, that would include cronies or oligarchs. One so far on that list has actually been sanctioned. That is one of the stakes still hanging out. What will trigger the next move on the United States . Much of what we have heard from Ryan Chilcote over in brussels. If the russians were to go ahead and formally annex crimea, that would be another strike. That would potentially force the United States to respond in kind. Further are going to be incursions into ukraine at this point, that would be a nether step that would trigger the possibility of greater sanctions from the United States. Either cook, thank you. Peter cook, thank you. Willll get through that we get republican reactions from senator john mccain coming up later today on street smart at 3 p. M. New york time. Joinore on the crisis, im by the former Intelligence Officer for russia at the National Intelligence council. She is currently at the direct currently the director at the center for eurasian and east german study. Thank you for your time today. Show. Leasure to be on the the people of crimea have voted and by an overwhelming majority they want to secede from ukraine to join russia. Now what . They are waiting to see whether they can become part of the russian federation. Their Prime Minister has declared they are now independent of ukraine. I have been asked to join the russian pet the russian federation. Mr. Putin will address this issue tomorrow and the Russian Parliament will take it up later this week. That is the crucial issue, how are they going to handle this . Is it going to become just another province of russia . There are many of these little states in the postsoviet space. They live in a gray zone. Join russia they will be more than a faction. Peter cook reported that president obama froze the u. S. Assets of several russian officials, including top advisers to president putin. Why wasnt he targeted . That is the nuclear option. Im assuming there is also no point in doing that if it is just the u. S. That does it. As we also heard and your report, they are quite divided on how far to go. Some of them are quite close to president putin. Whether they have that many assets in the u. S. Or whether they would want to visit the u. S. , it is obviously symbolic. I think this is supposed to deter mr. Putin from annexing crimea. Some of the other provinces in Eastern Ukraine saying they want to join russia. How does the factors play into this . Is Russia Holding all the cards it is not so much the oil reserve, it is the gas reserve. Europe gets roughly 40 of its gas from russia and some parts of europe. More some, some less. It needs the revenues from that to. I guess the answer is export lng produces as much energy as you can. Of course ukrainians are dependent on russian gas. With all politics being local, president putins actions, it does seem it is geared towards his domestic constituency. This Vladimir Putin care more about being loved at home that International Condemnation . Think he cares about the fact that his popularity went up 10 points last week. He cared about the domestic popularity, particularly since the economy was declining. 1. 3 growth rate predicted for this year. At least they can feel proud that russia is once again a great country and has taken over part of ukraine. He doesnt care about that more than the condemnation of the outside world. We have about a minute left. There seems to be two schools of thought here. Removal of victory and a co, the democratically elected president of ukraine, was illegal. Russias military incursions into crimea and parts of ukraine were also illegal. Where are we in terms of International Dialogue . There was a revolution in the ukraine. I dont know whether you call that legal or illegal. He is the one who left the country, he just signed an agreement. Certainly the referendum was illegal and, and unconstitutional. This would have to be a referendum that tf wouldve kievkey of that wouldve agreed upon. Correct the currently the director at the center for eurasian studies. Thank you for your perspective. Thank you. Coming up, the search for Malaysian Airlines flight recent and the. He will talk to a former adviser to u. K. s ministry of defense and ask him what investigators may be overlooking. Be sure to join us for special coverage of the Federal Reserves decision on wednesday and Janet Yellens first News Conference as fed chair. That is on bottom line starting just before 2 p. M. New york time. Theow turn our focus to search for Malaysian Airlines flight 370. Michael k isnt expert or senior officer, a former advisor in u. K. sat Ministry Ministry of defense. Welcome back to the broadcast. This has been going on for over a week. What has been overlooked in the story . It has actually been 10 days. The world is seemingly none the wiser. Really hard not to start leaning towards a hijack and sabotage type scenario and moving away from mechanical failure or pilot error. Everything has to be considered in a scenario just as scenario such as this. The aircraft where to get a 140 turn about, i was theing towards examples of f4 seven crash. It took them two years to find the wreckage. It took them two years and what happened was the aircraft developed a catastrophic stall. No distress call, no emergency code on the transponder. People were in the dark for two years. Very viablewas a scenario and outcome until we found out the more sinister evidence of the aircraft actually taking a 140 degree turn from the South China Sea and heading towards the indian ocean. That is the moment when i thought there was Something Else going on here. Lets talk about the Emergency Response that was taken by the malaysian and the its enemies air traffic officials win the code with the aircrafts position was lost on the transponder. The transponder does three things, it keeps a unique position with the identification code, it gives altitude, and the traffic Collision Avoidance system. Important piece on airlines. It is never turned off. That piece of kit alone is responsible for identifying aircraft during trans out during transoceanic flights. You lose primary radar about 30 minutes crusting the kos crossing the coast. It was the only method were at Traffic Controllers could actually see the aircraft with unique identification codes. Is this information streaming live . The transponder is. You will note the position of the aircraft. When the aircraft is 30 minutes outside of the coast, they all the transoceanic flight. It will be at 2000 at various altitudes. It is all procedural base. It is not radarbased at all. Communications between malaysian civilian and military air traffic, what do we know so far . This was the area where we have a big void of information. If you look at the point where the aircraft turned about, it is just before entering vietnamese airspace. Therell be a handover for Malaysian Airspace and malaysian authorities. Willietnamese authorities ask to put a unique clearfication, identify, it into the airspace, and continued en route to beijing. The transponder was turned off. Ist i would like to see more what emergency procedures was taken by the Malaysian Air traffic authorities to ascertain what happened to the aircraft when the transponder was turned off. It would not have disappeared off of their radar. Anything that would have alerted other sovereign Radar Systems . Other sovereign Radar Systems have generally what is called , andhad iad integrated air defense system. Aircraftet any sort of crossing sovereign territory that they are not aware about with transponders turned off they will all Start Talking to each other. Get their defense will come up, look at it, interrogated, and make sure theres not another 9 11 scenario about to happen. What the socioeconomic factors at play here, particularly as it relates to malaysia . Applyont think we can that template in this place. Malaysias economy is doing really well. It is a high to middle income economy. It is one of only 30 countries that achieved a seven percent gdp growth rate 25 consecutive years in a row from 1967 to 1997. They also managed to reduce down toverty household two percent. It is doing very well. Associateink we can socioeconomic factors at to why this has happened. We continue our coverage of the investigation of that missing Malaysian Airlines flight. Good to see you. The equity markets respond to the latest factory orders report in a agway in a big way. Them a welcome back. This is bottom line on Bloomberg Television. In new york. Pton thank you for staying with us. An earthquake rolled across los angeles today, rattling nerves and shaking buildings along a 155 150 mile area of northern california. The u. S. Geological survey says the 4. 4 magnitude quake was centered two miles from and see no and 15 miles northwest from the downtown civic center. We will continue to follow that story and bring you any details as soon as we get them. There are multiple ways to watch Bloomberg Television. We are on the web at bloomberg. Com. Is on apple tv. It is 26 minutes past the hour. Bloomberg television is on the markets. Byvia sterns is standing with todays market movers. Good afternoon. Back fromncing fridays selloff. Comes after we have had some better than expected data on factory output, showing factory output rose by the most since august. One stock we are keeping our eyes on is general motors. Are he has 1. 6 million cars with faulty ignition switches and is recalling another 5. 1 million cars. Concerned these are dealing with concerns over breaks. It is expected to reach 300 million in the first quarter. A shes focusing on the recall and something went wrong with the process. The stock has recovered has recovered from its false from its fall. Visit the potential for sizable cost and reputation. The marketsack in back of the markets in 30 minutes. Welcome back. Thank you for staying with us. Lets check the top stories were following for you this hour. The white house also announced it is working to identify and target the assets of other individuals who are not government officials but supporting it. The Treasury Department is also some also imposing sanctions on ukraine. Top adviser and two crimeanbased separatist leaders. Malaysia is asking for two dozen countries for help in finding that the missing plane. The search stretches from cuts extend all the way to australia. They are looking into the role the pilots may have played. The 8 10 of a percent gain in february was the biggest since may of 2009. The output began after snowstorms began to pick up in the United States and prevented some factories from receiving parts and materials. That is a look at the top stories were following in the news at this hour. They are the National Education standards that stirred up opposition in the tea party. We are talking about the National Economic standards being implemented by states. Conservatives are concerned about government overreach. Big business is pushing back. Withmattingly joins me more. Good afternoon. Good afternoon. 45 states adopt the standards back in 2010. There was little sign they would become the flashpoint they are now. Bolstered by grassroots pushes from conservative groups, like americans for prosperity, the common standards have been targeted for delay or repealed in more than a halfdozen states. This weekend big business expanded their push to defend this initiative, launching a national tv and campaign mark. Targeted directly at conservative audiences. Longtime, a supporter and bigtime funder of the standards also added to the push in an interview yesterday. To have high standards, quality standards, and those consistent standards i am thrilled this is moving forward. It is implementation is actually at risk in some states. It is not just an ad campaign. Theirre also having statebased organization and lobbied state governments and legislatures heavily. Businesses pay big money and can really lobby effectively as well. The move against the standards, it doesnt just come from the tea party. Who else is pushing back and why . This is why it gained so much attention from big business. Teachers have also had a big problem with it. The rollout from this, and court she is a supporter of the standard. Core standards, what they do is theyre trying to apply consistent benchmarks to language and math skills. They are going to basically connect the coherence. Is it includes the need for money and the need for National Federal official involvement. This led to a disorganized rollout mark. Are amongy teachers the libertarian ilk. And the conservative groups are really opposed to it. Phil, thank you. Dozen attorney generals sent letters on sunday calling upon the largest retailers to stop selling Tobacco Products in stores that also have pharmacies. Cvs caremark set a precedent announcing it would stop selling cigarettes in its drugstores. Olivia sterns is back with more on the story. Out attorneys reach who did they reach out to . How likely are these folks going to comply . Now they are not just going after pharmacies, theyre going after major discounters and grocery stores. Writing and walgreen it is an interesting move. It is not legally binding. For anretty rare attorney general to reach out to retailers and ask them to stop selling a product that is in fact legal. Theyre asking to voluntarily do this. That is with cvs already did. Nobody thought it would be a huge deal. He thinks it would cost walgreens about 1. 5 billion, which is how much he thinks it would cost cvs as well. For rite aid he thinks it is more like 500 million. Across the board he thinks it is two percent of sales. The key is they have to wait to figure out how much of an impact this has had a before it is clear which other stores would actually go along with this. Setting thened them precedent. What was the logic behind their ban . More and more of their business is switching to Provider Health care. There are these wellness instore clinics. Said it iscvs fundamentally incompatible with our mission as a provider of Health Care Services to be selling products that can kill you. Analysts want to wait and see how big of a hit it has taken. Potentially pharmacies could make even more money if they are able to figure out a way to take that shelf space from behind the counter. Lord es are at a very very low margin. In that case it could be a tailwind. Olivia sterns, thank you so much. Coming up, frank sorrentino, the chairman of connect one banquet tell us what the present lending environment is telling him about the broader economy. The economic recovery may be slowing but there are signs of strength in the Banking Senate Banking Sector. In studio now by frank. Welcome back. Talk to us about the signs of economic strength that you are seeing in terms of Small Business loans and which areas still bring you concerns. What we are seeing in the last few years is there has been a tremendous pickup in construction loan requests, multi family construction loan requests, or different types of housing related lending are really on fire today. We are seeing incredible confidence. There is very little in the marketplace that is causing us concern in the lending environment. All lending last year was up over 25 . Some stronger, some not as strong. Those are terrific numbers for our market area. My colleagues are telling us a similar story. We surprised by that, given the ups and downs we have seen over the past couple of years . I think there have been ups and downs but it is all trending higher. The economy has been doing better since 2009, 2010. Was news that Housing Confidence may be down somewhat. That doesnt really tell us what is going on in the marketplace. It the market continues to move higher. I think there are legitimate shortages in place of housing, business reporting, the ability to have land under contract. Movingre lots of trends in the right direction. You talked about the construction numbers. Younger people are renting more than they are buying. That is going to benefit multifamily construction and rental units. What does it say about the availability . There is there are a couple of trends. There are trends of younger people wanting to be in urban areas. That is a departure of what we saw a decade ago. Some can qualify for mortgage or they were unable to save for the down payment for that house or condo. The days of Home Ownership are not dead. Want to own homes. On the flip side, there are less homes under construction so the pool of availability is not there for them to buy. Are banks taking that into account . If you went through a rough area in the recession and lost your job or if you had to plow through your savings just to make ends meet and maybe if you had to make the choice between paying rent or paying your credit cards, obviously your credit score is going to get dinged. I people being unfairly penalized . That is one of the things we hold up. We will listen to their stories. And a lot of cases we will be able to figure out a way where they do not necessarily have to boxes andes him we can try to make a loan. The stats of things can happen and they should happen. I think that occurs. I think most things will do what they can to try and make it work. Going Federal Reserve is to complete stress tests of the ability of the biggest u. S. Banks to survive what could be called as a seismic event or even a meltdown. Those tests were instituted back in 2009. What have we learned from those tests . Are those scenarios fair . Part of this is trying to close the barn door after the horse has gone. Some of those stress tests make a lot of sense. I think the fact that banks have to go through those scenarios is very healthy for the Banking Sector and environment in general. I dont think it is going to foreclose the next event from occurring. To12 Smaller Banks are going be involved in those stress test. What are the risks for those banks and has the fed taken into account that the Playing Field may not be leveled . The capital ratios and standards should not apply for the Smaller Banks. I dont think you can have one set of rules that applies to 687,000 banks in this country. We have 30 million in assets and we have inks with trillion dollars in assets. That have banks with trillions of dollars in assets. Have banks with trillions of dollars in assets. Banks cant make those loans. Theyre more concerned with compliance with these types of stress test and Everything Else rather than actually going out and doing business. We have about a minute left. This week will mark the first meeting chaired by janet yellen. She will hold her first News Conference. What does the Banking Sector want to hear from her . See allnk we want to the progress that has been made under chairman bernanke continuing. Are moving along well. I think the stewardship of both chairman bernanke and janet yellen have been good for the economy. We are and where we are today we are where we are today because of them. Frank, it is good to see you. Look inside the largest supplier of train cars when bottom line continues in a moment. Another addition of a bloomberg series, made in america. We take a look at global economies that choose to manufacture in the United States. Here is a look at the largest supplier of train cars in the world. Than 100,000 of their trains in operation globally. A chunk of those are made right here in the state of new york. We are a company that surprise that supplies aircraft and trains worldwide. We are the largest supplier of Passenger Rail cars in the world. I have always had a motivation to move people in cities. We make cities alive and make them work. The vitality is the train system. The company was originated in the 1940s with a snow mobile vehicle. We moved into transportation in the 1970s. Them at the start of our process, we start with a sheet steel like this. This comes from a supplier in the u. S. Our first operation is to weld this together. We will put windows and doors into the vehicle. We are now going to go down through the assembly line. We are going to install the electrical harnesses, the floors, and the interior linings. Those will all be installed. We choose to operate in the United States because it is one of the most important markets in the world. It has great growth in emerging Commuter Rail Commuter Rail, regional rail, and light rail systems. Requirementamerican which requires 60 of the vehicle to have u. S. Content and also to be assembled within the United States. We are the main manufacturer for the u. S. Market. We have a lot of customers in new york and suppliers in this area too. We are building cars for new york city, building cars for chicago, for san francisco, for various commuter systems. The florida sun rail. Check one, check one. And we are going to move forward on our text crack on our test track. We are at the finishing and of completing the cars. Station one. Off we go. Stay with us, in other check is on the other side of the break for market movers. Get the latest headlines at the top of the hour on Bloomberg Radio and streaming on your tablet. That does it for this edition of bottom line. I am Mark Crumpton in new york. Thank you for joining us. On the markets is next. The hour, which means Bloomberg Television is on the market. I am olivia sterns. Lets get you caught up with where stocks are trading. Equities are climbing this monday afternoon. His follows a seat selloff on friday. We did get some better than expected economic data. Factory data rows. That helped boost sentiment on wall street. On the treasury markets, treasurys coming down a little bit, sending yields higher. Of the fedsead twoday policy meeting. We will have special coverage starting at about 2 p. M. Tumbling today to a fiveweek low on speculation that the sanctions in the u. S. And European Union are unlikely to disrupt oil shipment. He also want to highlight a couple of individual movers. New 52weekitting a high after it reported fourthquarter profit and revenue that came in well above analyst estimates. The company says results were helped by a new stable price environment and ongoing Cost Reduction efforts. And shares of irobot are charging higher. The 500 robot is now available for purchase. They give users a physical presence and view into a workplace without actually being there in person. We also have been watching ebay today, which has been under pressure from activist investor carl icon to spin off its paypal unit. Colin sebastian has another idea. Lets start with your big idea that you think google should be buying up paypal instead of ebay. Why . We think carl icahn has triggered a very worthwhile discussion about the value of commerce being put together or to be split apart. We think a better option than splitting ebay and paypal would be combining it with a larger healthy internet platform like google, which it also needs. We think this could be a creative transaction for google and keep payments from aba altogether. Is that something you hear or is it something potentially from google that they are in fact interested . This is more of a thought exercise. A lot of debate happening after carl icahn went public with his proposal. We took a look at the landscape, we took a look at commerce. We think google has the resources and strong engineering platform to be able to put ebay and paypal on their platform successfully. Apple is already another company we talked about as potentially moving more into the mobile payment business. The premise of this, do you think would carl icahn is saying makes sense and would ebay be willing to let go of paypal you know it is the fastestgrowing segment of their business. Good question. It is a fair point that there is value of paypal walked inside ebay. The question is to be a loud ebay to take the time necessary to unlock that value organically or is a transaction of some sort necessary . With google we think that ebay and paypal can remain together. Were going to leave it there. Thank you very much. Colin sebastian area and. Shrugging off a crimean referendum. Up triple digits. The s p lost gains for the year last week. The index now back in the green. Street smart starts now. Welcome to the most important hour of the session. We have 59 minutes