While longterm networks are struggling to keep it. Watch out. They are flipping cars. The coolest award you have never heard of is just in time for the oscars. Were going to kick it off with what everyone is talking about. Big news overseas, we are starting with japan. Formally the Largest Bitcoin Exchange has filed for bankruptcy in japan. 4 of a million bitcoins belonged to users. That is real money. The ceo of the exchange apologized. Here it is in the raw. [camera clicks] [speaking japanese] i am deeply sorry. There was a weak area the system. As a result, we lost bitcoins. I am deeply sorry i have caused trouble for everyone. Ceo apologizing for the bitcoin exchanges collapse. He has not been a popular man. This is video of him earlier this week trying to enter the mt. Gox headquarters. They have been holding a sit in outside the building demanding with a sign, where is our money . He lost hundreds of Million Dollars reportedly to hacker thieves. That led him to halt withdrawals on february 7. This is a serious disaster. This is a serious disaster. It appears to be accommodation of mismanagement and technical issues that led almost one million bitcoins to disappear. It is unbelievable. The company only realized it very recently. It may be this fraud was going on for years. The bitcoin critics are licking their chops after this bankruptcy. Is this an opportunity for proponents to make a case for bitcoin . Fortress revealed in a filing it bought 20 million worth of bitcoins. There is something going on in a lot of minds that says this is an opportunity. Street whenon wall there is blood on the street you by. Fortress is a 4 billion fund. 4 billion is pocket money. What is the challenge . Theyre going to need to show security and Consumer Protection stand the top of the list of things they need to address. You see some startups getting going on ways to secure bitcoins and that sort of thing, but it is a murky thing to begin with. Bitcoin arepeople safe and secure with them, that is an uphill battle. You lose credibility quickly. You build it very slowly. Mt. Gox stock withdrawals to prevent a panic. There is the same concern happening in ukraine. Getting cash in kiev has become a challenge. The company is trying to raise 35 billion from foreign donors. It does not help that the countrys coffers are empty according to the new premier. He says the former regime moved 70 billion into offshore accounts before fleeing. Kovych is in moscow where he gave a News Conference this morning. He says he is still president and the Current Parliament is legitimate. Security is another issue in ukraine. Prorussian armed gunmen took over the airport on the peninsula of the southern tip of ukraine. We are looking into this issue. With a militia member working to keep order in a city largely abandoned official lawenforcement. Is a 22yearold College Graduate who grew up 200 miles outside kiev in the largely proeurope western union. He joined antigovernment protests that broke out last year manning the barricades with thousands of others. On one side . Today, he is one of thousands of volunteer militia members tasked with keeping kiev safe. Theyre like the police but we are good. He showed me around his militia camps in the heart of revolutionary square, from the community commanded by this former Army Commander who previously served in iraq and afghanistan. Those who want to help can help us. Against perceived threats, the revolution is apparently a fulltime job. But none of these men are paid. There is little sign these band of brothers will disband any time soon. Ami of this in camera was not so obvious among others that make up standard security. Right wing paramilitary form of visible part of the new forces. Members of one far right group told me their ranks number numbered in the thousands and are growing by the day. The new government must figure out how to harness the enthusiasm of these ragtag men to rebuild a credible and accountable police force. Isv security, it seems, still very much a work in progress. Who is responsible for kiev now . There is no one exactly. Dramatic images. He also said that with the newly appointed secretary of the National Security and defense counsel. He asked about the growing tensions with russia. Yes, i am worried about it. Also, the capture of the government in crimea by units which were sent by russia from moscow. From russia, we see a very aggressive method of carrying out politics towards ukraine. We could observe their attempts to divide ukraine or take crimea. With the tension in the crimea region of ukraine, would you call for nato support against russia if required . Yes, for sure. We think we are owed from the United States and britain. Nato is a guarantee of safety in the black sea region. Of course, we are sure about nato. It has already been announced that they have your their own vision and will not allow the Russian Federation to create conflict. From kiev to washington, what got president obama and Vice President biden running around the white house . We will tell you. The chairman of microsoft wants you to join him on the cloud. His exclusive interview lunch money. Hiser on thank you inclusive interview later on lunch money. Rejoice. Iasts we have coverage from all three branches of government. The first time ever, a video camera secretly recorded a supreme argument. Video captures a protester objecting to the role of money in politics. I rise on behalf of the vast majority of American People who and corporations are not people and our democracy should not be for sale to the highest bidder. Overturn citizens united. Remember, the high court does not allow any recording devices other than its own audio equipment. Spectators and reporters have to pass through metal detector before entering the courtroom, so it is unclear how the videographer snuck in. The Supreme Court spokesman is reviewing the video and its policies. Now to the legislative branch of government. Representative dave camp is pushing to revamp the tax code. His plan would eliminate dozens of rates. I am not going to accept 2 growth as the new normal. Im not going to accept a minimum wage economy and the fact we are not creating jobs. Kids are living at home because they cannot get out on their own. We need to grow this economy and create jobs. One way is through progress tax reform. Heat has taken a lot of for this proposal. The banks are fighting against the plan new tax on banks which is intended to offer it offset lower rates for individuals. I think it affects about six banks. Look. They are going from a 35 rate to a 25 rate. In the financial sector, there are not a lot of provisions, loopholes to close because there are not many. They are getting a two minutes tax break. I think it is important there be a tradeoff. New taxes are going to make it tough for camp to gain support from fellow republicans. The plan is nowhere near firstng law, but is the major reconstruction attempt since 1986. Lets move on to the executive branch. President thursday launching a new initiative to provide greater opportunities for young black and hispanic men. Last february, obama met with a group of young highest old men in chicago. One attended a white house event and introduced the president. When he came, it was one of the greatest expenses of my life. Most people do not get to meet him. If they do, it is just a handshake. He sat down with us and shared his story. To my surprise, he was just like me growing up without a father and sometimes not too concerned with school. [laughter] i explained to them when i was their age, i was a lot like them. I did not have a dad in the house. I was angry about it, even though i did not necessarily realize it at the time. Im a bad choices i made bad choices. I got high without always thinking about the harm it could do. I did not always take school as seriously as they should have. I made excuses. Sometimes i sold myself short. Remember, you may remember this, after i was finished, the guy sitting next to me said, were you talking about you . [laughter] i firmly believe every child deserves the same chances i had. That is why we are here today, to do what we can in this year of action to give more Young Americans the support they need to make good choices. The first lady is celebrating four years of her lets move campaign fighting Childhood Obesity. She has two big victories to her credit. First, new food labels from the fda. We believe that new updates will help improving public health, incorporating the latest nutrition recommendations to chroniche risks of disease such as cardiovascular disease, obesity, high blood pressure, diabetes, and strokes. The changes include larger serving sizes and larger print for calorie counts. The first lady thinks this is a step in the right direction. We have the right to understand what is in the food we are feeding our families. That is the only way we can make informed choices, by having clear, accurate information. Ultimately, that is what todays announcement is all about. The second win for mrs. Obama, a new study shows the rate of Childhood Obesity cut in half over the next decade last decade, drops to about 8 . The first lady has enlisted celebrities and public figures to drill home the importance of leading a healthy lifestyle. You have to check out her most recent spokesman. You are hard to keep up with. After a good workout, you have got to drink up. Week . Ime next other celebrities helping mrs. Obama, comedian will ferrell, big bird from sesame street, and lebron james. Way to go, getting people slim. Coming up, the Innovative Company using 3d technology to fight disease. We will take a look at the oscarnominated films and hear from some of the stars later this hour. Youve got to see this. A smokefilled room in havana, snifter is of aged rum. The goal is to see who can create the longest unbroken cigar ash. Everyone started with a seveninch cuban and tried to smoke them down without losing the ash. One of the finalists . A 67yearold woman. She puffed away until all that was left was 3 10 of an inch. We have been featuring some of the most innovative thinkers coming up at the Bloomberg BusinessweekDesign Conference. Today were going to meet andrew who conducts research in programmable matter for autodesk. What is that . Abilitye, design is the envision, and then create that design. The beautiful part about design is the learning that comes from just realizing your design and having it in the world. Autodesk is a Software Company that makes design tools for modeling, simulation, visualization, optimization. The bio nano group i am part of his looking at a subset of those tools that can be applied to genetic inch nearing and cell biology. Many people look at genetic engineering in a negative way. I do not. The more we can grow the things we need as human beings, the more we will be able to keep the world sustainable. I am particularly adjusted in how we can design living things fast and cheap. I have been fascinated by viruses. I have been learning how to use Software Tools and print technologies to make viruses in a way that allows us to do positive things with them. I want to see viruses be used to hunt down and kill cancer cells. That is where i get excited every day. What i love about looking at life from the bottom up is it is a lot like the lego bricks and dinosaur. By themselves, they may not seem like much. But you can make complex structures where you have these bricks and can assemble them in different ways. By understanding the fundamentals of Living Systems and cells, we have this Incredible Opportunity to make and design beautiful things around us. Bloomberg businessweek is hosting the Second AnnualDesign Conference in San Francisco on march 10. For tickets and information, go to bloombergbusiness weekdesign. Com. Has createdimmy chu something he wants to replace the smartphone. In japan, there is a serious issue. , we make sure they stay indoors and do not [indiscernible] at the same time. It is a character i created in 2007. Up until recently, she was just an illustration. I wanted something more physical. I was born and raised in the u. K. I discovered Japanese Culture in the u. K. I decided i wanted to live and work in japan. I would share my daily japanese life online. That attracted an audience worldwide. I used to make shoes in my dads studio. He is quite surprised i created this anime world. He loves it. He has won at home. We ended up working on doll shoes. There are different versions of the doll. There is an automated version which is robotic and powered by electricity. Whichis a manual version is powered by your imagination. She functions with motors. At the moment, she is powered by an android device. Up to twitter,r facebook, instagram. Depending on what you tell her to do, [indiscernible] eventually, i want her to replace your mobile phone. One version will be ready in march. The robotic version hopefully by the end of the year. She will be able to do everything your mobile phone can do. I think it is perfect for lonely folks who do not need to be lonely anymore. Me of the reminds movie her, about the man who fell in love with his computer program. That is just one film up for an oscar this weekend. We will look at others coming up. New networks are vying for your attention. We will hear from the founder of one. I am alix steel. Were looking at a rally that continues to unfold throughout the day. Heatingis up 13 points 1866, that is again building on the new record high the s p set yesterday. Consumer staples is helping lead the way in the rally. He dow jones is up. 7 we are watching mens wearhouse. Onthis is lunch money Bloomberg Television and streaming live. Video is the story. Officials in an australian town are devising people to get out due to a fire in a local coal mine. The blaze has been burning for three weeks. It has been spewing ash and smoke. Officials say it could last another week and a half. People have been complaining of chest pains and headaches. Protests around the world to send a message to egypt. Demonstrators in washington and elsewhere showing their support for a group of al jazeera journalists on trial in egypt. The journals have been held since december. Egypt said they were aiding a terrorist organization by reporting on the muslim brotherhood. Drought stricken california finally getting some rain, and lots of it. Dump one forecast to inch hour was hitting Southern California yesterday. Yesterday was the first there was an inch or more of rain in Downtown Los Angeles since october 2011. A mixed blessing. Barren hillsides are now subject to mudslides. John thompson took over as chairman of microsoft at the beginning of the month. He replaced Company Founder bill gates, so he already has big shoes to fill. The real challenge for thompson and the man he picked as ceo is to keep microsoft competitive in software, mobile, and video. The issue for us is about focus. One of the reasons we chose is he has a new ceo Strong Technology background. He understands exactly what needs to happen to move microsoft forward. That means competing in the cloud. Microsofts website says it currently controls 50 of the market for enterprise class storage. Amazon, google, and ibm mostly controlled the rest. Thompson says he has the goods. Has demonstrated an ability to provide a cloudbased platform on which others can build applications. On top of that, office 365 is a very successful cloudbased application. I think the combination of those things provide the foundation on which microsoft can clearly grow its cloudbased business. The other dimension of microsoft strategy is focusing on how we become even more relevant to consumers. Devices and Services Strategy launched about a year ago is very much a part of that. It will be interesting to see how sasha augments that as we move forward. Thompson led the search for the new ceo. How thed to us about two along with bill gates plan to work together. The relationship between sasha and i will evolve as we become closer as partners in the redirection of microsoft. Clearly, the combination of me, sasha, and bill have a responsibility to not just work on the strategy of the company, but more importantly to do a Broad Communications strategy to support customers, partners, and investors understanding of what that strategy is. Young, the fact sasha is aggressive, and openminded gives him and me an opportunity to figure out how best to use me as he gets to unfold his strategy. I am excited about the possibilities of microsoft. I would not be on this board if i were not excited. I think he clearly is the right choice for us at this moment in time. Is satya working on a strategy . Do you expect that to be presented at the march Board Meeting . He has been in the job less than a month, so i would have to think he is working on getting to know all of the elements of microsoft, many of which he had little or no interaction with before he became ceo. There wont the a strategy discussion per se at our march Board Meeting. We will discuss many other things. But there will clearly be an opportunity in the nottoodistant future for satya to lay out for the board and ultimately for employees, investors, and partners exactly what our direction and strategy will be. He is the man in charge of strategy. Not me or bill, quite frankly. You can watch our full exclusive interview with thompson chairman john at bloomberg. Com tv. It is oscar weekend. Were going to look at awardwinning technologies behind the biggest action films. A new network for millenials. We will talk to Robert Rodriguez about his vision. Lunch money this is lunch money this is lunch money on Bloomberg Television and streaming live on your tablet or smartphone. American idol had its first finalists of the season last night. Bistro struggling in its 10th year. How did it happen . Tmz has been reporting the possibility of losing money. You have sponsors dropping out or cutting back. Is still a big sponsor but the company did tell washington journal it has cut back by 1 3. Ford admits it has tweaked its monetary support for the program. In terms of ratings, we have heard how fewer people are watching. It is no longer the Prestige Program it once was. 12. 1 million viewers, down 20 from the same time in 2012. The average age of the viewer has gone up from 51 251 from 39. Is where it gets interesting. Jennifer lopez is the highestpaid judge on the program commanding 17 million. Ryan seacrest about 15 million. The new set also cost up to 7 million, viewer phone calls as well. There is the salary the show is still paying to two executive producers who have been fired. What does it mean for the future of the show . Will it continue on fox . Is there a chance they might pull it . Theres was a chance they might kill it. Tmz says fox will bring it back in the next year. So they drop x factor would have some holes in their schedule if they dropped it, so for now it is not going anyplace. Made 6. 6 4 it Million Dollars per halfhour. The network went live after two years and 75 million worth of planning. It is digital. Back hulwill be hogan will be back next month after a sevenyear break. Robert rodriguez opted to go to cable for his new network targeting latinos and millenials. The real goal is to unleash the renegade in everyone. There were about 110 english networks, 10 of which were africanamerican. There were none like this for general entertainment, hispanic english language. They are the largest minority. I thought this would be a great cause. I have five kids who did not see themselves represented in television as much. Also a way to have really cool programming. It has to be exciting and entertaining for everybody. Our first show is from dusk till dawn as a series. To fill out the programming, we have to license a lot of things because there has not been a catalog of hispanic programming, so we have to create everything. Until then, we are running a lot of classic Television Shows i was a fan of. Kung fu, xfiles. From dusk till dawn was a fantastic movie. Everyone remembers George Clooney and harvey keitel. How do you make that into a series . Point entergy now and i have never done television Quinton Tarrentino and i have never done television. El rey will have something no one else could get. The show has an amazing cast. It is quintons characters. Will there be an online component . We are time warner, comcast, cox communications. We have others we will be announcing. We are looking at digital partners. It launches march 11. We will look at the nominees for this Sundays Academy awards. Also, special effects experts who make their living creating explosions. That is coming up. Who is going to bring home an oscar question mark that is the question on hollywoods mind. He is in contention for his role in 12 years a slave and he spoke with charlie rose. The most amazing experience i have had as an actor. It takes a bit of breath. I am enjoying showing the film to people and talking about it. I feel there is still so much to say about it. Not a film you open and get tired of the conversation about it. It is something that does still inform me. Spoke withalso Sandra Bullock about her film, gravity. Is this the hardest movie you have had to make . In the best way, yes. Challenging but exciting . Exciting and rewarding. Once i figured out i was fighting it and should be using everything that was a frustration and that limited me, all those things that frustrated me were things once i figured out were of benefit, because ostensibly the same thing is happening to the character in space. The loss of frustration the loss of control, frustration, loneliness. Instead of fighting it, you embraced it. It became a friend rather than something that was a problem. You can see all 17 of charlies interviews with oscar nominees tonight on Bloomberg Television. The best film of the year is big bad wolves so says quentin tarantino. It has put israeli genre films on the map. If torture and child abduction or what you look for in entertainment, big bad wolves may not be for you. It brims with horror and cruelty as a grieving ex policeman metes out justice to his daughters suspected killer. Society a militaristic where everyone is a leader of the pack. If something bad happens, you know what to do. Everybody has a knife, a blowtorch, a gun. Establishmentlm looked beyond the gore handing it five awards, its equivalent of the oscars. Movies first slasher where nasty things happen to pretty people. It seems to come naturally to israeli filmmakers. If they can produce awardwinning horror films, why not other genres . Alwayss specialty has been tearjerking family dramas and films about conflict. Trying out new genres says this director is risky, at least at home. Not like big blockbuster hits here. Abroad, there is more interest in this kind of filmmaking here. They would like to see something new coming from the genre. Another twist of the story. Having it in a different language and locale is something new for them. They like it. If the directors have it their way, cinema goers will soon be treated to israels First Western to be called once upon a time in palestine. We have had spaghetti westerns. The middle eastern western. I hope that is the future of filmmaking in israel, more diversity. I hope we see more horror films. So we dont have romantic comedies at all. That at least may be no bad thing. The academy also honors innovators who create cool stuff. This year, theyre giving a Lifetime Achievement award to the specialeffects gurus behind the pneumatic car flipper. What is that . Jon erlichman had some fun with it. If you saw transformers dark of the moon, you might recall the sea of exploding cars. This is not cgi. And even ars school bus flipping. The device that makes it happen is the pneumatic car flipper. He helped brew it up for michael bay when he was shooting armageddon. A car is placed on top. It looks like a floor jack. It is littered with highpressure nitrogen. It pushes into a piston and throws the car as far as 25 feet. You want to get the air in the cylinder as fast and as much as you can. Thats what makes it work. 3, 2, 1. That is how you flip a car. Before car flipper is, the tool of choice was a canon. To filmmakershem around the globe for a couple of hundred dollars a day. To install a canon in a car will cost one to 500. That gets expensive. If you want to get fancy with the flipper . Take a cable and wrap it around the car. You pull on the highspeed accelerator along with the car flipper, and it will pull the car. When you pull the car and it is in rough shape, what do you do with the car . They will go to a record wrecker. In four more years, it may be a bobsled at the olympics or something. Jon erlichman, bloomberg, los angeles. How would you like to take a bite of an oscar winner . A startup calling itself bite labs has started a crowd Funding Campaign claiming it will grow meat from celebrity tissue samples and make salami. You want a piece . Not me. Whichis 56 past the hour means Bloomberg Television is on the markets. The s p is trading around the highs of the session. The dow jones is up. 7 . The chicago Managers Index is coming in better than expected. We have better Economic Data offsetting the revision downward for the Fourth Quarter gdp. We want to highlight a couple of movers today. Shares of deckers are following the most since 2012. They are forecasting an unexpected firstquarter loss. They did report fourthquarter profit that surged 44 . Ofso reporting higher sales Energy Drinks in the Fourth Quarter despite the legal attacks that the product causes health risks. Investors are pushing into stocks and moving away from bonds. You are looking at treasury yields rising for the first time in four days. You have better Economic Data. Investors not looking for safety. Yields had touched a threeweek low on the 10year after the choppy data over the last few weeks and unrest in the ukraine. Keene and histom team spoke to the Philadelphia Fed president and asked what he thinks of the mixed Economic Data we have been getting recently. The data is very noisy right now with the weather and other things. I think we have to be patient. The economy left the end of the year on a good note. I think it is in a position than it has been for a number of years. Im looking for something close to 3 growth in 2014. That will continue to bring down the Unemployment Rate and allow the economy to progress. Relatively optimistic. Adam johnson has more on his comments. Turns out not all banks are created equal. We want to thank mr. Charles plosser, president of the Philadelphia Fed for pointing this out. The u. S. E banks in have fewer than 35 employees per day are effectively Small Businesses making loans to wall street. All the headlines seem to go to j. P. Morgan, citi, and bank of america. But 90 of bank storefronts, fewer than 35 employees. That got us wondering what small banks look like by the numbers. Turns out they are doing well. Loan growth at small to midsized about 12 , which is driving Earnings Growth of 25 . That gets our attention. Key Loan Loss Provisions are going down by 12 . Theyre having to set aside less funds for bad loans. That is a good thing. You want that to go down. Lets compare small and midsized banks to large banks. Loan growth at small is 12 . Loan growth at the large banks only 1 . Earnings growth 25 versus five percent. Look at the whole story. Loan loss provisions of the big banks going down, which is a good thing. Down 53 . That is the whole story on earnings because loan growth is only up 1 . That is not good. That favors the small to midcap banks. That is where you want to be. Not the largecap banks based on these numbers. We looked at the 74 banks. Here are the ones with the most positive loan growth and Earnings Growth. There are some small banks making serious money. Thanks so much. We are on the markets again in 30 minutes. Live from pier three in San Francisco, welcome to bloomberg west. Secretary assistant of the treasury and no republican candidate for governor of california is with us. He will we will talk to him about everything from the elon musk battery factory to the Silicon Valley gentrification wars and the overall state of californias economy. From films like armageddon