Looks like 1856 is the level we are at now. It looks like heading to the lows of the session right now. We will see a little bit of suspense here. Lets talk about the big three stocks we are watching into the close of trading today. The first one is monster beverage. The company has been leading the s p 500 in terms of percentage gains. The companys earnings per share missed estimates but sales keep going up for monster beverage and the shares are going up as well. Sales beating estimates with a gain of more than 10 . Second starch we are walking is wereds stock watching is deckards. This Company Coming out with a negative forecast. A lot of people talking about the harsher than typical winter weather, saying that could have benefited them. Like thehead, it looks momentum will not continue necessarily. Shares, salesforce. Com, sharply down by 6 . Even though the numbers look relatively strong, there were disappointments in its Earnings Report so those shares are taking a hit as a result. Gdp expanding at a slower pace than initially estimated for the Fourth Quarter and u. S. Home sales rising less than forecasted for january. Despite soft data, we are staring at a strong comeback. Investors looking past the economic damage done by the polar vortex, or is very a dangerous disconnect between equities and the economy . For fully the manager of the inflation rotation fund. Michael, is it whether or we in bad shape in the economy . When you look at 30year treasuries, the bond market does not seek to suggest it is as much about whether as it is about slowing down or removal of this idea of escape velocity. The soft market has disregarded that notion. Everyone asks themselves, how was it after that 30 rise in stocks, the supposedly 12 effective last year, retailers have not performed that great. That the idea to that everyone says, it is just weather. At some point weather translates into real problems. If you are a Small Business owner and you are not seeing a lot of traffic because of the weather and you are not able to make ends made on a given month, at some point that may translate into laying people off. And then it becomes a compounding problem for the economy. It will bounce back . Could you get a bounce back or will you be out of business . Maybe you will bounce back in other areas. Maybe the business one out and Something Else on the upswing. If you look at the Market Reaction today, leaving bonds aside for a moment the s p 500 just turned negative. Now it is actually down on the day. To be broadly by economists that they are looking not just past the Fourth Quarter Tony Crescenzi of pimco joining us as well. Always a pleasure. Were talking about the weather. It is freezing out. We are getting snow on monday. None of this is good in terms of retail Sales Numbers or if you are a local business that runs a pizza shop. Does this really catch up with the economy, or does it not . Some activity gets delayed or destroyed. Thes thinking about president from 1970s. He grew peanuts in the 1970s. One week in the northeast, thousands of flights were ed. A lot of peanuts were not given out on those airplanes. Jimmy carter and others were suffering during that week. Certain sales will not be replaced. That activity gets destroyed. You will have a few extra dollars in your pocket so that you might i Something Else, you might buy two cups of coffee buy Something Else, you might buy two cups of coffee. What happens to that business that did not receive the dollars . Money gets reallocated to different areas. Certain things there are needs for. Think of the average age of vehicles in the u. S. Manufacturers are faring well. The average age of cars is 11. 3. It has been shooting upwards because people delayed buying cars in the crisis. Even if you will not i two cups of coffee, even if you come back to the level where it would have been were it not for the weather, is that good enough . There will be missed sales for some companies but other companies will pick up. Does it come back in the second and Third Quarter . Unless consumers decide, i saved a few dollars in the first quarter. And i did ok. The savings rate will rise. That is a onetime effect. Like there is a general concern about the weather issue here. Down, barely positive. S p just turned negative. We are at an alltime high on the s p. I we getting ahead of ourselves . When you look at emerging markets, which have been poor performers, the suppliers of the developed economies have not performed well. There is a universal theme of a rising rate environment out there. I will keep saying until it registers. You cannot normalize retail unless you normalize growth and inflation. Inflation has not been normalized. The wealth effect is supposed to be benefiting the consumers. Didnt the Inflation Numbers come up to an extent . Morelittle blip is transitory to begin with. There is no real demand. The only way we will get inflation is from cost push inflation. Clearly we will not get it from the fed. Thank you. Ago told you five years that the bank of japan in england and the Central Banks would be pumping trillions of dollars we would be talking about bitcoin. We have to ask ourselves what is happening in the mechanism here, where inflation is not being treated. If the emerging economies are in their anticipation of future earnings growth, the u. S. Stock market is very wrong. What will it take to get inflation . Higher wages. 77 of inflation comes from wages. You think about, what is the biggest cost to all these employers . Wages. Not nickel or zinc. We could get a little boost from policymakers on this. Perhaps, but it is still under the control of the privacy private sector. The old normal was 3 . Less companies are paying more for people. Up, usuallymy picks you get a little inflation but he could pick up a cousin invest more in equipment and factories and that boosts productivity. But we have not seen the best productivity numbers as of late. There has been softness there. Auld one interpret this as good thing to the economy because companies are realizing they need to do more . There are three sources of productivity. People, stuff, computers, factories, etc. And how it is used. Where it is weak is in the stuff, the capital intensity perunit of labor. Companies have decided to keep their investments low. Companies with a liquid assets are the lowest since the great depression. Inple think it will pick up 2004. You guys were talking about equities but you guys were both bond guys. Bond and stock on our side. Where do you think yields will be . Where are you allocating your resources . Since last june, the 10year 3 . Sury maturity, 2. 5 to it has not budged. The base case is a slow normalization of rates. Two and three quarters, three and a quarter. That is the best case based on a Consensus Forecast coming to fruition. Everybody hates bonds. That would drive yield down. Notyone came into the year liking bonds and they had to change their mind. On whether the Consensus Forecast comes to fruition. Janet yellen will continue her taper. Thethe market will fed has pulled back. The market has replaced, pushing yields lower since december. You continue to buy treasuries as an investor . If you believe in the broader disinflation or a trance, probably. If you believe the search for yield flows outside the u. S. , you want to look at emergingmarket debt. Im still waiting for this crisis everyone is saying out there. Junk debt yields are historic lows. Currency can be a strength if everyone has bombed out the currency. Areasnt to look at the that have been bigger laggards. Brazil and china are showing signs of life. Thank you so much, michael gayed. Were going to go live to kiev to bring you the crisis. Ukraine could be on the verge of tearing itself apart. Russia putting pressure on ukraines new government to act today. Ousted leader yanukovych says he is still the nations president , urging russia to refrain from military intervention. Ukraines acting president said russia is trying to provoke conflict. Our bloomberg reporter on the ground in kiev with the latest. It sounds like we could be getting closer and closer to a splitting apart of ukraine. Im not sure i would go that far. I would say that the new acting president has said that russia is trying to provoke them into a conflict. The region that georgia and russia fought a war over. I spoke to one of turchynovs cabinet members and asked him whether he was worried about Russian Military nearby. Yes, i am. I am worried about it for sure. The capture of the government in crimea, units in my opinion which were sent from moscow, from russia we see very aggressive methods of carrying out politics towards ukraine. With all the tension in the crimea region, would you call for nato support against russia if required . Yes, for sure. We think that we are owed from the u. S. And britain. Nato is a guarantee of safety in the black sea region. Of coarse we are sure about nato and it has been announced that they have their own vision and will not allow the Russian Federation to create conflict. I know you have been talking to a lot of people there on this street. What are you hearing from them, and do they think that a separated ukraine might be the direction the country is heading in . That security chief i spoke to said that was one of his big concerns. It depends who you ask. Some people say they are hoping for this new government to be one of National Unity that will avoid this fate. That people understand there are big divisions inside the country and those in russia looking to exploit those differences. What is the economy dealing with right now there . You and i spoke earlier and said there is still commerce happening. It is getting more difficult to access money . Absolutely. The tensions flaring in crimea in the south, but in kiev things are relatively calm today. The main revolutionary square behind me is surrounded by hotels and cafes and they have been doing business as usual. The one concern people have is about withdrawing cash. A lot of the banks have been refusing to allow drawing of money from atms. I met one American Lawyer at one of the banks i went to to get dollars out of and he was standing there with atm card after atm card, trying to make money out. He said, ive got to pay my expenses and my staff and im going to drain this machine until it is dry. You certainly dont want to see a situation like that. Willem marx, thank you. We have seen the market since we began at the top of the hour turn lower. You could ask the question whether or not this is linked to , and as thosebles continue to boil over, the market is getting nervous. As we get more and more headlines about troops entering the crimea and questions about who the troops are affiliated with the ukraine is alleging it is Russian Troops coming into the region under the guise of a training exercise. Theres no confirmation on who these people are. Theres a lot of mystery involved in what is going on. Certainly russia wants closer ties to its bordering neighbor and so does the rest of europe. It is up for grabs. Interesting. It feels like the cold war in some ways. Very much. Up next, we will be talking about that twine. Mt. Gox has applied for bankruptcy. Today mt. Gox, the Worlds Largest former Bitcoin Exchange file for bankruptcy in japan. Lost 750,000 bitcoins belonging to its customers and 100,000 of its own bitcoins. Trackingter has been the bitcoin saga for a while now. My favorite part of this is mt. Gox saying that the Company Believes theres a high possibility that bitcoins were stolen. Yeah. If they werent stolen, where could they it reads sort of like a comedy of errors, they just disappeared. It reads a bit like a punchdrunk boxer sort of shocked at what happened. They dont seem to know precisely. It will take a lot of smart techies, a good amount of time to figure it out. Theres probably some cash gone to. If you still bitcoin, what do you do with it . T can spend it and if you get this amount of bitcoin turning up somewhere, there is so little of it, wouldnt that be obvious . The beauty of this crime, if we can call it that, is that it was done over a long period of time, possibly years. So it may already be spent. It trickles into the bitcoin ecosystem. Who knows . There is a Cottage Industry of people trying to assemble the bitcoin addresses where this money came from, see if they can track it through this public ledger. Can you track it . Theres a dispute as to how anonymous this is. People in the Bitcoin Community will tell you its not that anonymous. Does that mean we can actually trace it back to its original home on mt. Gox . The tricky part of that is that when you entrust your bitcoin to mt. Gox, they are putting it into a Company Controlled wallet so they can resolve trades. Somebody wants to sell bitcoin for dollars, they pull out of that. They want to buy it, they pull out of that. First of all, you need to know exactly what wallet addresses that mt. Gox was using. So far they are not talking. This would have to start with the Company Making a goodfaith effort to figure this out. There have been questions about the viability of bitcoins ever since their inception and even more questions raised because of what has happened in mt. Gox. Not just for mt. Gox, but what is the next move in the bitcoin world as a result of all of this . Do we see more regulation attempted in some places . We have already seen the prices fall. What is the next thing . The next thing is already underway, a massive effort at damage control and proving that other Bitcoin Companies do not suffer from the same problems that mt. Gox did. That will include things like security aduits, where Companies Make them public. They will attempt to cauterize the damage. It is safe to say that this is the end of the kind of amateur hour of a couple of guys working on computer code, pulling a few all nighters and setting up an exchange. At the end of the day, it is a currency. A currency needs to be regulated because people need to know if they can trust it. Yesterdayr yellen say that she did not think it needs to be regulated they were looking into it. Doesnt need to happen, carter . And thereds to happen is no regulator who does not think that Consumer Protection is the main focus of this. Bloombergs carter dougherty, thanks so much. , and yourup next money get out from under the governments umbrella . Penny stock or billion Dollar Company . When it comes to fannie mae, not quite sure. As of right now, fanny has to fork over all its profits to uncle sam. Bill ackman and Bruce Berkowitz are making a bit bet that that will soon change. Will shareholders get their hands on the profits . We are joined by a banking analyst. Josh, brick it down here. Bill ackman and Bruce Berkowitz thinking here that at some point the money will get return to shareholders and theyre going to get out from under the governments thumb. At some point we have to recognize that the companies have functionally paid the government back. Income into the government coffers does not really make sense. So long as the government is on the hook for having to bail them out. On the hook for bailing out a large number of institutions. All of them had the opportunity to pay back. We have said fannie and freddie cannot pay back. At the end of the day where watching these crazy machinations in washington, focused on restructuring the Mortgage Finance system and talking about dismantling the cornerstone. That would be having a fannie and freddie that were not actually governmentsponsored entities. There would be no government involved at all, which would thatif you default on mortgage, if you are the bank holding it, no one is there to guarantee. Right. I would go further. We are watching the legislative process, with these wonderful are attemptsthat to suggest we can create a fully private market. Why cant we . Europe did. At the end of the day we want a 30year fixed mortgage. Do we . Trillion mutual fund supporting and 8 trillion market. The government will be on a catastrophic pace on the hook. The goal is to structure the market to minimize that risk. The bets these Hedge Fund Guys are making ackman and berkowitz are on opposite sides of the trade because ackman owes the common stock and berkowitz owns the preferred stock. I getting too much i think it getting too much can we have a Housing Market that is healthy and sustainable without Government Intervention . Part of the market supported by the private except her, there is no subprime mortgage. Its difficult to get any mortgage beyond the amount that. Annie or freddie backs up thats the problem. We are saying we have the government propping up our housing industry. Or you need a system i wrote a book that was specifically about fannie and freddie. I have been one of the biggest gse credits. The problem with fannie and freddie were not their function, it was the fact that they were undercapitalized, the credit box was not commensurate with the risk they were taking. Telling them youve got to lend. Right. If we fix those aspects we could have a different conversation. The problem is the terms. We keep referring to the gses. Areof our utilities ultimately governmentsponsored enterprises, where the catastrophic risk is backed by the government. Its different. You have people putting their entire life savings into a home and making a bet. Housing is still a bet. Be a good thing to get the government out of this equation because then you would have a more natural there ishs point, realistically what can happen. We had more of a private market before the creation of fannie mae where most people could only get five your mortgage is that had a balloon at the end. When it came time to refi, they had to pay off the whole thing or find another lender, which in the time of reduced liquidity became impossible. Mortgaged a secondary market which functioned very well from 1939 until this crisis, with a few exceptions. The problem was capital and credit risk pricing. Is not just that. Its a syndication market. The fees that fannie is charging and the gses in general, how do you feel about it now . They have tightened their lending standards. Probably too much. Pricing, buterly if you want more private market, it continues to rise. Capital, we should be fixing it. We should be creating real capital standards and risk pricing standards and paying the gses with no portfolio would be very different gses. If you dont have gses, what happens to the syndication market . It goes away. Whats wrong with that . We see there is no market outside of government supported. We had the privatelabel market which ultimately went off the rails because there were no standards, and the gses failure became they were competing by sliding into the primary market. Limit them, you would have them is what they were intended to be, countercyclical utilities to make sure that when liquidity evaporated from the mortgage market, banks could sell mortgages to an insurer. Instead we have washington trying to dismantle something and replace it with something that is essentially the same thing. Could you dismantle it all together and not replace it with anything . You would see a severe crash in housing prices and a complete lack of access. That isnly counter to we have gotten ourselves so far into this. Maybe there is no turning back at this point because it would be a housing crash. However, you look at markets like canada where they dont have systems like this and they have had more stability in housing. They also have a lot more down payment requirements. You cannot just walk out. In washington wants higher down payments. If you want a system or people are building up equity through their lives so they can fund their own retirement, you need to consider the fact that gses served this well until they were poorly overseen. Thank you so much, josh rosner. Tony crescenzi sticking with us. Coming up, some of Silicon Valleys biggest names. We will talk to a vc firm. Billionaire entrepreneur, these are some of the words associated with the google cofounder. What about adding ultimate frisbee player to that list . . Firm announced it will be sponsoring a semipro ultimate frisbee team called the san jose spiders. Is the connection between this sport and Silicon Valley . A partner at lightspeed spearheaded this sponsorship and he is joining us now from san francisco. People talkeard about ultimate frisbee in a long time. I guess it is a hot sport in Silicon Valley. With you guys sponsoring it, what is the visibility of the and what do you hope to gain by sponsorship . Ultimate is a fast growing sport. There is over 5 Million People in the u. S. But play. That is more than our players of rugby and lacrosse combined. All ages from high school up to people like me who are heading towards 50 years old, a lot of passion around the sport. In regards to why ultimate and the spiders, it turns out that at least the ultimate teams out here, about half of the people in ultimate work in hightech. We thought it was a great way to get our name out there into the hightech world. You mentioned the names like the founder of google and whatsapp, solar city who is the nephew of elon musk, the founder of tesla and space x. There is a Strong Community of hightech people out here and how it overlaps with ultimate frisbee. Is there something about the sport that makes it more appealing than lacrosse or rugby or soccer or football or basketball, etc. . Is there something about it intrinsically that is appealing to tech people . One, its incredibly dynamic. Of change that happens rapidly on the field in that dynamic nature appeals to people in the highTech Industry, given how a dynamic the Tech Industry is. You have to be good at strategy and execute extremely well. You have to play with a lot of passion to win. Elements are very appealing to people who work in hightech. All these people in hightech, all playing ultimate frisbee together. There has been a lot of criticism as of late, specifically from carl icahn, on the ebay paypal front about the incestuous nature of Silicon Valley and in his particular case hes pointing to the Board Members that have had investments in what he considers competitors, ebay and paypal. Knowing all these guys get together and play frisbee together and they are on boards any truth tothere the criticism that Silicon Valley is just too tight a club . I think the club here is probably too close of a word. Things that is compelling about Silicon Valley on the strength of Silicon Valley is because of how open it actually is. At my Silicon Valley has thrived, its because there is a constant influx of folks. Indian entrepreneurs is an example, who are nonexistent in the valley just 15 or 20 years ago. Now look at the indian entrepreneurs and the successes they have had in the valley. Or ukrainians. Whatsapp. What do you think of that valuation, 19 billion . It is mind blowing. Technology is a lot more pervasive in our lives. I think the valuations that companies are getting, part of it is welldeserved. I think we are also perhaps heading into a bubble or certainly in one now. Now or heading into a bubble in tech . As we look at the leader stage rounds, some of these valuations are really heading up into nosebleed land. Peter nieh, thanks so much. Weve got to get to breaking news on riverbed tech. Alix steel has the details. Riverbed Technology Getting interest from private equity firms kkr and silver lake. This sets up a bidding war, perhaps, for riverbed. Elliott management just this week raised its bid for the technology company, 3. 36 billion. To 21 a share. The company was not happy with the bid. Kkrrtedly, silver lake and are interested in riverbed and that there will be interest above that 21 a share. We are seeing riverbed technology, to a session high. We will be right back with more. Welcome back to street smart. Tweeted,s recently yellen pivots to inflation. Hike, maybe 2016. The deflator is important and the fed is pivoting because the Unemployment Rate is reaching what the fed wanted to. If they get here, we might raise rates. Now it is almost here. Had 1. 1 year over year, the core pc deflator. It is the personal consumption. It is like taking a bunch of things and saying, what do i have to do to these things to deflate their prices so they are the same as they were at some other period. Its the best measure in inflation statistically available. The lowest since recordkeeping began is. 9. The fed wanted to stay at two. The fed has been telling us, we would not mind inflation getting to 2. 5. If it is four years and one half, why not have for years at 2. 5 . Until the fed gets worried about inflation, it will not worry about rates. Let me ask you about another issue. Grossd elerian and will s, the wall street journal reporting, saying it came to a head last summer. What is your response to that . Mohamed sent me a note and said good luck. Last three months i was a rotating member on the investment committee. I was in the room. There was tremendous deference to each other, each relying on each other to make decisions. That is how it has been at pimco , relying on each other to make decisions in the interest of the client. What does it mean that mohamed is still there . It is a wind down. Hodge, already got doug including a lot of the duties that mohamed would be doing. He is in winddown . I cannot tell you technically what that means, but it involves the new members you have heard about. Im also on the investment committee. I have the great honor of serving clients on the committee to help making decisions. All of us nerds on the trade floor trying to find the best trade ideas. Tony crescenzi, thanks. If you missed everything that happened, we will get you caught up right now. Top 10 stocks. Number 10, monster beverage. That beatrter sales analystss to mitts. Results seem to validate the companys recent efforts to combat the assault on its drink and marketing practices. Number nine, up half a percent, raising its ratings to mutual from negative. Trip advisor will benefit from a growing trend that Online Travel agents are taking more shared from the smaller players. Falling six percent today. The Cloud Computing companys net loss widened during the Fourth Quarter as progressive spending pressured margins. Its cfo will retire in march of next year after holding the job since 2008. Seven, tier one imports. One says lowered guidance is due to recent adverse weather which resulted in considerably softer store traffic as well as store closing. One bright spot in retail came from the gap, just a fraction. The ceo working to maintain sales growth as apparel retailers have been cutting prices in an attempt to keep shoppers coming into malls. Saying he will open its First Old Navy store in china on march 1. Systems up one percent after the company protected its revenue would hit 1 billion by next year, up from 513 million this year. 3d printers stocks have been on the rise since midjanuary after market leaders guided estimates downwards, saying significant R D Investments in marketing costs. Revenue is up 52 . This stock down year to date. You would have to have a strong stomach to invest in 3d stocks. They have been so volatile. Citigroup. Down half a percent. Unit getsan banking about 20 of its revenue from latin america and has stumbled. We will see how it makes it out of this one. Three, united. A benchmark revenue gauge will decline this quarter due to severe weather. Blame it on the weather like everyone else. Winter storms are forcing cancellations of more than 22,000 flights at united. The weather will catch up with people. Gained twobank percent. The retailer agreed to meet with mens wearhouse to discuss a potential merger. The prospect of talks marks the latest twist in a fivemonth takeover battle between the two purveyors of discount suits. It started with jos. A. Bank offering a takeover bid. Its incredible how this saga is playing out, all for some suits. Number one, deckard. Dropping 12 today after forecasting unexpected fourthquarter loss. Analysts had estimated a profit of . 10 a share. Here we are at the close of trading. Closing out the day in positive territory. Earlier in the hour nasdaq closing in the red just a touch. The s p closing at a record for the second day, 1859 on the s p. In the face of negative economic news. Gdp coming in for the Fourth Quarter at 2. 4 , far less than the initial estimate of 3. 2 . Nonetheless, investors cheering the market on today, up on the dow. Looks like most sectors were trading higher. Talking, evenbeen though there is skepticism about what is going on with the economy and how much it may or may not improve, at least the market and a lot of economist commentary, people are looking ahead, looking at improvement later in the year. The market is a discounting mechanism, always looking ahead rather than looking back. I guess theyre hoping that as soon as the weather clears people will be out there spending and things will be good again. Otherwise, youre dealing with a disconnect between the economy and stock valuation. Nonfarm payrolls at the beginning of every month, always a key metric. This much more important than ever. The last two months we have had such week job numbers. Philadelphia fed president on surveillance today. The economy would grow at 3 . Down at 2. 4 today. We are thrilled to have with view columnist, john, and olivia. Olivia, you get the first. Grub hub filing for an ipo. They want to list themselves as grub on the nyse. They made 1. 3 billion on food sales in one 813, or a 67 increase. The average number of orders per day total orders last year were 100,000. Some of them. Since they bought seem less in august. Seamless we are talking about a relatively small ipo. Revenues of 137 million last year. It is not a huge one, but it is an interesting one. If the lightspeed Vice President we spoke to earlier was right, a lot of the tech firms try to strike when the iron is hot and when valuations are high. We were talking to a venture capitalist earlier from lightspeed. Whatsapphim about the valuation being pretty insane. We are near a bubble in tech stocks. Online food delivery, kind of a tech stock. Not like anyone else can get into the business, come up with a website that would help you get food. In 2000 you had investors, perfectly sane investors selling Good Companies to buy really horrible companies at maximum valuations. The gallon the nasdaq going straight up. It is not quite there, but it is reminiscent in some ways. There are pockets of bubbles. The very big pockets of bubbles. The most common expression you hear about whatsapp is, i dont understand this. I dont know anyone aside from Mark Zuckerberg who purports to understand it. I dont understand it, either. Basically they have that sort of already, right . The Facebook Messenger . I am not an expert, but it seems Like Technology that could easily leapfrog over. I am putting myself in the shoes of the people at whatsapp. They have to be thinking, your stock is incredibly overvalued. So i won five times more of that. As long as i am selling, i am happy. Something not overvalued these days, metropolitan opera tickets. They are proposing cutting compensation for union workers, which would be a first for the opera. Attempting to rebuild its endowment, which has been struggling. The move comes after the operas board said donors were not willing to cover costs of declining ticket sales. I love going to the opera because i feel so darn young. [laughter] i am the only person here under 80. I love it. They are not only discussing a cut in pay for union workers, but are talking about limiting show production. They come out with seven shows a year. Not just any show, like a broadway show. We are talking about a super production. In aida there are actual horses onstage. It costs a lot of money. You are spending more on the horses and so flowers and sets than on the pay. Just reading up on this. This looks like it is Standard Union battle. That you have do you need unions in the arts . They have one, so i guess they need one. If you are the conductor the average chorus member, the pay is 200,000. Not bad. And you only have to work at night. It is not huge pay every single show. Hold that thought, as long as i love talking about opera. We have breaking news and contests. We want to get to alix steel. Comcasts quest to take over time warner cable. The question has been what to do with 3 million subscribers. Part of the deal in merging time warner and comcast is to offload 3 million subscribers. Perhaps to sell it to other companies, Charter Communications has been interested. Perhaps bright house networks. Now we hear from people familiar with the matter saying that comcast would also be willing to spin off these 3 million subscribers into its own business. That would create the fourthlargest cable company. People familiar with the matter say regulators might prefer this deal. The company would provide more competition within the cable ace. If they spun off the 3 million subscribers into their own independent company, it would be the fourthlargest cable company. Regulators might be interested in that, which would help improve the deal between comcast and time warner cable. John still on said with us. The antitrust issues two companies talk about a merger and they can decide who gets to be their own competitor by creating it. That is a little funny, intuitively. Comcast and time warner are basically the worstrated Cable Companies as far as consumer satisfaction. I think cablevision is worse. I have had comcast. Cable in general. But here you are in a situation other concerns about monopolies . There are. Is this enough . To your point, when you are effectively choosing your competitor . Shareholders love when companies they invest in get so big and so dominant that they have a much Better Business than when they were young and had competitors. This is what companies naturally do unless there is a check by government. If it was a sports team, you would not let the coach pick the rival team from their own players. We are going to carve out a new competitor for ourselves so we can act like it is a competitive marketplace by taking 3 million subscribers. It sound like some theyll stood, and by the subscribers, one of the existing competitors. The Bloomberg News story says it is to create a fourth company. We will hear about this for the next six months. All of this is very preliminary, how this will all look. What region each company will have. They just dont want the fcc saying you can do this because you will be too big4 another two big. Another deal. Mattel has agreed to buy mega brands. The Worlds Largest toy maker acquired its biggest challenger to lego. This fills a product avoid. Mattel did not have a toy construction line. They are coming off of a lackluster season. The biggest quarterly drop in sales since 2009. The last acquisition was thomas the tank in 2012, before that fisherprice in 1993. The female business has been stronger. That was the bright spot in the numbers. Barbie it is trying to solidify its boy offering. Heres the thing. What are they called, mega . It does not pay to be second. I have three kids. If there is anyone who should know what mega blocks are, it is me. They are not going to go see the mega movie. Thehis is like, secondbiggest competitor. Comparing nehi to coke. A Company Whose stock was over 500 a share in 2005, now down to 17 a share. Funny seven times earnings. They are no lego. It is not nothing. It is the brand, the brand is not lego is not trembling, but that is not the point. Mattel is trying to get some piece of this. I think that mattel will have its work cut out for them in terms of launching serious competition. Megabody is going to blocks land. Lego sales are up fourfold in the last nine years. Moving on to seaworld, speaking of things children like. Under fire after the release of that documentary, blackfish. Now they are striking back. They say one of the federal workplace inspectors allegedly leaked confidential information to the documentary producers. The seaworld asked the Labor Department investor general to investigate the officer. The documentary has become a rallying point against those using whales and other animals entertainment. In other an unrelated incident, a dolphin apparently bit a girl at a seaworld in texas. This is from the occupied Occupational Safety and health administration. A Compliance Officer turned up on the red carpet with the cast and crew of blackfish. Her state was paid for at sundance. Posting strong reviews of the movie on social media. The director defended it and said that was after the fact, after the movie was made. But it does look a little incriminating. It looks biased if you are on the red carpet for a documentary that slams a company you are supposed to be investigating. You dont know mega blocks. Do your kids go to sea world . We go to the aquarium in florida. I have never been to seaworld. Remember, there is an employee at seaworld who died and an osha investigation. There was an employee at seaworld who died. That happened. That is the real story that happened here. I dont know what the woman at obviously it is not bright for somebody investigating to go out and say, take that, seaworld. But at the same time if im seaworld, now a public company, hiring lawyers to my private investigators, anybody who can dig up anything about anyone who is going to be attacking my brand and try to smear that person, regardless of the consequences. All they care about is promoting their own brand and protecting their own brand, and we have to keep that conscious every time a piece of information is dug up by the company. Always a pleasure. Thanks for joining us. , another, another day data breach. We tell you what retailer may be vulnerable. New documents from the clinton administration, but it is not built we are looking at. Next. The u. S. Secret service is investigating a possible Security Breach at sears according to a person familiar with the matter. Foundsays they have not anything, have not been notified about a breach. If it was discovered, it would not be the first breach in the retail sector. Neiman marcus, target, verizon, all retailers that have shown weak links in the system. Joining us with more is joe feldman, an analyst. If this is what is going on at sears, you having someone while they are down. Sears is a deeply troubled retailer already. What effect could Something Like this have . It is just more caution from consumers. I would think it is another reason to avoid shopping at sears. You do see an initial hit to the retailer when this happens. People stop shopping for a little while, maybe take some time. But we have seen them come back. Even target this week when they reported Quarterly Earnings said in the last couple weeks they have seen traffic picking up again. Neiman marcus reported 5. 5 comp. Sales, a do people almost become blaee about this . We know there are privacy concerns with facebook, yet facebook still has millions and millions of users. As a gateway point in retail where this is something you expect to happen and be defensive about it, and still shop where you would shop anyway . That is what we believe. I have heard all sides of this. Im sorry, joe. Come on. You really think someone wants to willingly shop at target right now . Look at the sales slump in the latest quarter. I know i would think twice about going into target. Why wouldnt i think twice about sears or Neiman Marcus . It is hard to say, i will just ignore these headlines. But every time you pull out their credit card and viewing use it, on amazon or anyone else, it is just as much at risk. I agree. The problem is amazon has not had the issue. It didnt happen at walmart, didnt happen in other places. If it does, sure, a consumer will think was about shopping at those retailers. To isnt as damaging to a companys brand . Damagingitial hit is financially, right away. The Brand Reputation is how you deal with that. Do you provide more security . Do you provide discounts . Do you provide free credit isitoring, like target doing . That is how you can kind of recover. I definitely agree. Target has taken a hit and it will take time, but the good news is it is starting to ease with time. It is one of those things people forget over time and make an adjustment and go back to normal behavior. Again, i have had plenty of people, investors that i speak to, clients on a daytoday basis they, i have had my data stolen before. Real quickly here, what has does sears or target need to be doing better . Will we see expense increases . You will see more expense going towards technology over the next year or two. It has been going that way anyway because of ecommerce, building up that infrastructure. We need those smartcards. We do. Thank you, joe feldman. Appreciate it. We will be right back. The National Archives have made public more than 4000 documents detailing the inner workings of the bill clinton administration. Bill wes not theyll are focusing on, it is hillary. These papers may play a role in her potential 2016 president ial run. Joining us is the author of state secrets and the rebirth of hillary clinton. What in terms of these documents sticks out the most to you . What we see is a clinton operation, their strategy for how to Court Members of congress using hillary clinton. Trying to get the Health Care Legislation done in 1993. How she lobbied members of congress. Inside theeal peek clinton operation at that time. The book has a more recent peek inside how they went after other politicians. Lets get to that. I have a memo that came from these documents sent by Chris Jennings to others in the clinton administration. They write, we have begun a file on every member. They include a wide array of information on the members. Added to these files will be information and research obtained by the dnc and intergovernmental affairs. Tell us the significance of this. You specifically pointed to this as being something to reference. There are a lot of people who would be uncomfortable with the idea that the white house is integrating the work of the health and Human Services apartment and the office of intergovernmental affairs. The Democratic National committee, the Partys National arm, using both to figure out how to work on lawmakers. The dnc is fundraising, that is not something the white house people like to see cooperating with the white house. In a time of security concerns surrounding the nsa and how much they know about all of us. With this information coming to light, is this going to be a problem for her in 2016 . Members,g track of the i dont think that in particular is a problem. The Computer Systems they have back then were like commodore 64s. I do think people will look at how they operate, how they work people, how she works people, as part of the idea of how she would make decisions, how she would govern. Is she running in 2016 . I think so. 99. 99 . 99. 99 . There you go. Jonathan allen, thank you very much. Between tesla, so the city, and spacex, elon musk stays busy. Coming up, we talk etfs. Elon musk is on top of the world. The entrepreneur made 1. 1 billion dollars this week as shares of does the tesla gained 16 on higher sales and plans for a new factory. Here with three etfs the billionaire might be bringing higher. A lot of them have to do with alternative energy. No shocker. First of all, if you are looking at etfs, the plainvanilla ones dont have any exposure to elon Musk Companies. You have to go to the niche area. One example is the market vectors Global Alternative energy. It has 18 exposure to elon Musk Companies, 14 in tesla, 4 in solarcity. It is up 12 yeartodate. Of the 12 , elon musk is personally responsible for a. 5 . It is rare to see one person have such an effect on an etf holding 40 stocks. Another example is the first trust green energy etf. This one is focused on u. S. Companies. Elon Musk Companies are about 18 . Very heavy with elon Musk Companies. This one is up 16 . The third one is the globalx etf. I can imagine that is heavily traded. Lithium goes into batteries, right . This announcement of the Worlds Largest battery factory, this popped on that. Volumes up over 100,000 shares. It is growing. A very niche etf, only tracking 20 companies. The top 10 account for 80 of the portfolio. Due to this announcement, and smart phones and iphones using lithium, it is pretty wellpositioned for the future. Looking like a decent value play and starting to get momentum. I would imagine overall these alternative energy etfs, there must be a lot of volatility. You see volatility in solar stocks. Tan is a solar etf. Even though you might be trying to ride the mosque wave musk wave, it is a little cautionary. Tesla itself is volatile. Maybe a little caution is warranted with these . Absolutely. I refer to using niche etfs as cooking with spices. This is to put on the outer there. On like the story, put it there, except that you can participate in Something Like elon musks magic. Once these Companies Get bigger, they are going to return last. Then they will be in the big indices. T is when a lot of people if you want to participate in the early growth spurts you have to go to the niche etfs. Lets get to the taker of the week, mna. It has been a busy time for m a. The most since 2007. Iq mergere index arbitrage etf. Literally a hedgefind replication etf. It does long the target companies and shorts out other indices to isolate the price from the time the announcement is made to the time the deal is done. By doing that, it doesnt kill it, it doesnt outperform the s p, but it gives you 3 return yeartodate, 9 the past year, but with less than half the volatility of the s p. It is a good equity diversifier. The correlation, it is the same it is designed to mimic a hedge fund. Taking a competition prior strategy and packaging it for the masses. It is way cheaper than a hedge fund, which is two and 20 typically. The return, 9 over the past year, is double the average mergerarbitrage hedge fund. Town of a poor mans hedge fund etf. Eric balchunas, nice dating digging on that one. That is it for etf friday. Talking about smart stuff. Your phone, your watch, your car. A company is taking that technology and applying it to your health. The worlds first realtime map of human illness. At a time when we have seen outbreaks of diseases like illness the measles, even a mysterious disease that resembles polio in california, we may need this more than ever. The ceo joins us now with a look at this product. You gave me one of these monitors and told me i could plug it into my phone. How does this work . You plug it in the headphone jack. You take your temperature as you normally would. You have to have the app downloaded, which i dont have. It is freely available. You just pay for the thermometer. What does that do for me . Not only is it a better thermometer, it does things other thermometers can do. Gives you a indication of accuracy. If it slips out of place, it tells you. The Software Reads temperature much half faster than the average thermometer. It does things other thermometers can do, but then take the next up. It answers the questions through Software Features that you have. Answers questions, what do i have, what do i do . You put in your symptoms. I have a runny nose, a fever, a temperature and a cough. And it basically comes back, which you can do on web m. D. As well, right . Tells you what you might have. How does this take it a step further. With a few simple tasks, you can track family symptoms over time. Current thermometers keep a history of fever, but you never have your thermometer when you go to the doctor. Now you can pull this out when you go to the doctor and show how your childs fever and symptoms have progressed and get a better diagnosis. We also have crowd sourcing features. A way to seeup for the level of illness, what bonuses are going around your childs school. This healthmapping capability. My question, not only can you sign up with a group, you can see the progression of illnesses geographically. What is the Critical Mass you need to get to . That is only valuable if enough people sign up for the app that you can get an accurate read of how illness may be moving around the community or the country. Absolutely. We believe the Critical Mass is 0. 25 to 0. 5 of the population to draw meaningful insight. We are providing a unique set of data, realtime geolocated medically accurate data of symptoms and illness. We are commenting that was existing data from health care, social media, behavioral data. Just a littleg is bit of realtime geolocated medically accurate data. That is where we come in. Are doctors using this already . Our hospitals using it . Or are you targeting consumers . We are still in beta. We have not launched. We launch online april 1, start selling retail in the fall. We are excited that a number of childrens hospitals and retailers and Health Brands are out there supporting. In general has really embraced technology. You can only anticipate it will continue to grow. Thank you so much. I do want to point out to everyone, we do have some news. President obama is going to be speaking on the conflict in the ukraine. Coming up live at 4 45 p. M. We will take that speech for you. President obama speaking and ukraine and 4 45 p. M. We will be right back. I want to remind everyone, you were looking at a live picture. We are awaiting president obama making a statement on ukraine. The ongoing conflict there. We anticipate that will happen at 4 45. We will bring that statement as soon as he is there. In the meantime, talking about fun stuff. Awards showbiggest is this sunday, and there is big business behind all the oscar glamour. Here to explain how awards season became the super bowl for women in america, and the companies that market to them, we are talking to the publisher of People Magazine. Good to be here. Thank you so much. People put together this exclusive study about the red carpet. How important it is of a brand. Shows and red carpets, we wanted to dive in and understand more. Who is the red carpet enthusiast . Why is she so fascinated by the red carpet . We found interesting things. It is the super bowl for women. Andof all women are engaged love the red carpet. It is a huge marketing is this market this weekend, or the red carpet in general . In general. It is this fantasy, and unbelievably inspirational and social moment for all women. E took a deeper dive into that do you remember how old you were when you watched the red carpet . Im not sure they showed the red carpets. It focus on the red carpet, has gained a lot of prominence, but it did not have that even 20 years ago. We asked people, and they said they were 16. That makes sense. This is when she is establishing her style, who she is. To us, the marketing implication, this is a millennial moment as well. The millennials are coming into themselves and watching the red carpet and looking for cues. The red carpet is a perfect stage. Hair, makeup, clothes. Beautiful, powerful, strong women. A lot of takeaways for the millennial audience. For us as people, the way we tell stories. Everything has to be shareable and there has to be a focus on the best hair or best makeup in real time. There is a Value Proposition here. Every single one of those photographs has some branding behind it. Women, people in general, in general love to look through your magazine and look at these pictures. They see these celebrities on the bed carpet and behind them is some branding. What is that worth to companies today . It is enormous. We have a bag with us today there are brands that are small and emerging, and brands that are established. Any brand by participating in s, have an opportunity to reach out and touch a celebrity. A swag bag, the celebrities get them when they go to the award shows, go to the parties. Because you have this culture, if a picture is taken and happens to land in people of the celebrity using the product, that is guerrilla marketing. Absolutely. The research showed us the red carpet is a celebration, and aspiration. The hair andut makeup it is about consumers achieving that. Sometimes it is just about seeing products they use in their everyday life. They can take a piece of that home, a grand opportunity. This is a big issue for you guys. The oscars issue we put out next week is probably the biggest we have had in 10 years. Typically the day of and the day after the oscars is one of our biggest moments of the year, digitally as well. Any inside information on who might win best picture . Keeping to the red carpet pita, we all want to see what she is wearing. She was on the cover. She had the fabulous loop dress. What is blue dress. What is she wearing . You are getting into the awards show yourself. Talk to us about the people awards. It is our 40th birthday this year. A big year of celebration for us. After we get through the oscars, we are planning the People Magazine awards show. It will be at the end of the summer. Roundupslways done the of the best actresses, sexiest man alive. This is a great opportunity for us to celebrate, to bring the whole thing to life. You are seeing a real demand and interest in award shows right now. It is a Live Television moment that lives online as well. On twitter and in the social space. It is an opportunity for you guys. It absolutely is. Bringing us back to sunday, the way we approach sunday, the day live feeds,s, it is twitter parties, creating the utilize moment huge live moment. Thank you so much. We look forward to reading. And we will all be watching on sunday. We have breaking news on j. Crew. Alix steel is at our news desk. Breaking news on j. Crew, in talks perhaps to call it self to japans fast retailing. Fast retailing owns Companies Like uniqlo. J. Crew was bought in 2007 by tbg. It is owned by private equity. There had been reports j. Crew might go public, but now we learn it might be selling itself instead. J. Crew coming out and saying it has received early interest from other buyers as well. J. Crew looking to sell itself, perhaps to japans fast retailing, and receiving early interest from other buyers as well. Back to you. Be back withng to president obama speaking on ukraine, right after this. We are awaiting president obama, who will deliver a statement on the situation in ukraine from the white house. Our chief washington correspondent, peter cook, joins us now. Any expectation on what we will hear minutes from now . Likely a reiteration of what we heard from jay carney earlier today, expressing deep concern about the reports of russian intervention in the ukraine, specifically in crimea. And a warning from this administration that any russian action in ukraine, any violation of ukraines sovereignty would be a grave mistake. I think what we will see most likely is the president stepping up his rhetoric. Fromve not heard directly the president on this since he was in mexico a few days ago. We have heard from other u. S. Officials. Secretary kerry using tougher language. This is an effort by the white house to ratchet things up one more notch. They see things in ukraine and crimea specifically that they do not like right now. Whether the lines what are the lines of communication going on since the change in leadership in ukraine, between the white house and the fledgling leadership there . The primary points of contact our u. S. Diplomats, who have regular communications with opposition leaders for days now. It has been the Vice President , joe biden, who has had the most direct indication with some of the interim leaders who are now in place in the ukraine. Not the president himself. He has been in touch with vladimir putin. They spoke directly on this. The Vice President we are awaiting the president s statement on ukraine. We will have that for you right after this. Bloomberg television is on the markets that lets get you caught up on where markets ended today. The s p closing at another record. Toward thet steam close of trading. The nasdaq closed in negative territory. Escalating tensions between russia and ukraine. Ukraines acting president said russia had invaded crimea to control airports and other facilities, and accused russia of trying to provoke conflict. The s p traded into negative territory, traders not wanting to take on that risk heading into the weekend. But stocks wind up closing higher. We also want to take a quick look on treasuries. Investors were seeking some kind of safety in the market. They yield ending him was flat after rallying for the first time in four days. Investors taking on a little safety into the weekend. On this final trading day of the month, i am joined by Bloomberg News stocks editor michael reagan. He takes a look back at how the markets fared in this cold and snowy february. Was there a theme that happened in the markets . Since the first time july, we had global stocks, global bonds, and the entire commodity complex rises simultaneously. Not something thats a big we happens. If investors are going into bonds they are rotating out of stocks, and vice versa. It was unusual. The weather was very much in focus. What does that tell you . A lot of it is chalked up to havoc oner wreaking models. In the stock market, we had data point after data point that was weaker than expected. If you look at the Bloomberg Economics surprise index, which takes the data as it comes in sd compares it to economist estimates, that index fell to the lowest since 2011 in february, which gives you a sense of how much havoc this weather played on a economists models. The weather it is like you gave a mulligan. Weather was a big impact. If it gets colder or if there is a drought you see commodities react. A big story. While we were freezing here, in brazil they had one of the worst drought in a century. Sugar prices when skyrocketing, copy prices went up. That was a big part of the commodities rally. Does that mean we see all the trolleys assets trading on fundamentals now . If you look at earnings, it was a pretty good earnings season. Earnings per share grew about 8. 5 , compared to a 5 growth analysts expected. Better than expected across the board. Takeovers in the stock market were a big deal. Buybacks. And in that sense, fundamentals did play a role for sure this month. Also, the market looked like it was in a nosedive at the end of january. All the emerging market concern in relation to the fed tapering. Argentina devaluing their currency. Those concerns kind of went away. Now you can say the s p is sitting at a record. Headlines are coming out about russian soldiers and ukraine, and but still buy the dip, that theme regardless of downward revisions we saw. Very fascinating month. Thank you so much, michael, for helping us break it down. I am alix steel. This is taking stock for friday, february 28