Releases its minutes. This is Ben Bernankes last meeting. We will see if they had champagne. Maybe they had a party, we will find out. Its about the handoff. What happened inside the fed and what was the conversation as chairman bernanke he was handing off to janet yellen . What else do we have . We have earnings before the ball from carlisle and him jim resorts and six flags. After the bell, tesla along with marriott and avis. President obama is traveling to mexico for trade talks with the leaders of mexico and canada. Treasury secretary jack lew will speak today on the economy in San Francisco. Its a very busy day. Lets do a data check we have elevated hydrocarbons. The next screen shows us Foreign Exchange. Golub will join us with a hugely bullish call in this hour. R. On the bloomberg terminal, its the ruble basket. The 2008 with a weaker ruble and this is good news for Vladimir Putin and this weakness of the ruble is really breaking out to a new level after a 2 billion transaction over the ukraine. What is so curious about this chart is you realize this is the ruble in dollar terms, you are getting more rubles for the dollar you look at the spike to 2009. Look where we are now, we are back to the same amount of stress. Never did go back down. We never exhaled. We will talk again to ian bremmer in moments. Overnight, the president of the ukraine threatened to crackdown on antigovernment protests and this was the worst night of violence. At least 25 people have been killed. Is a shot ofseeing the central scare in kiev where the protesters built eric hayes and let the barricades on fire to protect themselves built barricades and let them on fire to protect themselves. Two months ago, the president today trade do with russia rather than that was four plus three equals 7 billion. Billiongot a recent 2 russian purchase of ukrainian debt which brought the story forward and created the start of these protests. Russia is a big money to the ukraine and the west does not know how to handle this as well as how to fight with russia. Everybody is commenting this willng butolanda france talk about the eu response. The fed approves new standards for foreign banks requiring the biggest banks to hold more capital in the u. S. This is to wall off the u. S. Units of those foreign bank designed to prevent taxpayers from having to bail them out and case there is another crisis. It is 50 billion in assets on the original fresh old had 10 billion of they are trying to be more they said we will give them a year to comply. This year is the year where we actually do something about new regulation and new laws and rules. They have to be stress tested. This comes with a lot of oversight. American oversight of nonus banks which is why you are seeing return on equity in the banks drop. Lets say single digits. A new report from the congressional Budget Office, the cbo, says that raising the minimum wage would lead to a minimum of 500,000 job cuts in 2016. It may left 900,000 americans out of poverty. President obama by mandates said all Government Contractors will be a new 10. 10 minimum wage and he wants to extend that to the country. Be theill really Hospitality Industry that will be affected in a positive way. Dont forget, bloomberg koisssweek peter fabulous article on the minimum wage. Look for that article. It is just super. We covered a lot of ground but that is your front page summary. John scully is with us, the former ceo of apple. Also joining us this morning is peter cook. When you look at the minimum wage and the cbo, it seems like there was something for everybody . Much like the report they did recently on the president S Health Care law and the impact on employment, this is a mixed report. There is enough in here negatively that headline number about the people who would lose their jobs by late 2016 that republicans seized on immediately. If there was any chance for the president to get a minimum wage hike this year, this killed it off. There is enough in here for republicans to say hold the phone. How did this play in washington . When a bombshell like this comes out, how is it handled . The congressional Budget Office, we never know something is coming from them. We get a heads up that these reports Frank Underwood got a heads up for it maybe he did but this was dropped by the cbo and everybody says theres something in here for me. There is something for each side of the political debate. The cbo has become more controversial than the nsa and the fed. That is hard to do. Almost one Million People lifted out of poverty so why are theirspin and at republicans are so good . They did not want a repeat over the Health Care Numbers last time and the First Response i got was democrats seizing on those numbers, lifting 900,000 families out of poverty. That will not be the take away. It is harder to tell that story that gives a 500,000 people will lose their jobs. Talking about the ukraine, what will be the response . There is only so many photo ops you can do. There are only so my options for the United States in the sticky situation. There was a statement from the secretary of state and there are limited options for the United States. There is pressure but when the u. S. Says maximum restraint and others are saying the same thing, yanukovich is under pressure. If he goes too far, we will say this get worse fast. Joe biden called the president of the ukraine and said you have to deescalate and the exact opposite happened. John scully, long time chairman at apple who worked with steve jobs, a lot of what has happened around the world whether its ukraine or thailand, its all on the phone. As you are at apple and saw that, did you think it would be technology that would ultimately lead to social change . Weing up on quite honestly, could not imagine that back in the 1980s. There were no digital cell phones in that era and we were still using snail mail. Until 1994. No, we really did not know. In egypt, you could triangulate the bullets into Tahrir Square off of twitter. Ukraine is a different debate because of the technology that steve jobs and others did. You are right, the Technology Today is all about communications. Its not about computations and devices. Communications has dramatically changed because you can literally, in a matter of days, have hundreds of millions of people aware of things that was not possible couple of decades ago. Bremmer will join us in a moment. Itgeot gets a lifeline is being rescued by the chinese motor group and the french government will put up 1 billion in return for a 14 stakes in the company. The investments are part of a broader restructuring. The peugeot founding family will give up control of the family if the deal is approved. Gm is going aluminum. The automakers ramping up efforts to have a pickup truck made mostly of aluminum by late 2018. Gm is under pressure from federal fuel efficiency standards and rival ford. The automaker recently launched a contract to supply the metal. Net lex shakes off the sting of its price i. The Consumer Satisfaction rating has soared to a threeyear high. Rating saw aion price hike back in 2011. Its all about house of cards. Arentld not get into is the new black. Coming up, we have been talking about 25 People Killed in the ukraine and thats a live shot in the square in kiev. You have protesters on one side of the flames and police on the other. We will be joined by ian bremmer founder of the Eurasia Group coming up on bloomberg surveillance, on bloomberg television, streaming on your phone, your tablet, and bloomberg. Com. Up, hank greenberg, the man who ran aig is now chairman and ceo of Starr International emil joined that he in the loop at 8 00 a. M. Good morning, bloomberg surveillance. Let me show you that markets are on the move and you see this off the ukraine. This is the russian ruble basket. This is a weaker ruble and this is Vladimir Putins headache. We have gone to new russian weakness moments ago. Protests have become riots in at least 25h, killed. The people of the ukraine are split between europe and russia. Mer joins us now from new york city. Good morning. Overstep hisputin bounds with recent meetings at the saatchi olympics with the ukraine leadership and with that 2 billion traunch to buy government bonds . Did he reach too far . Not from his perspective. Many people would have believed that he wouldve waited to up untilessure on yanukovich after the olympics but those are people who care about the international response. That is not the case with mr. Putin. He has Edward Snowden in moscow and has no problem with that. That she has been waiting to give that 2 billion directly to yanukovich and there were strings attached. He said to get his house in order. He did not know the next day you have the hardline response from the Ukrainian Government and you have 25 and counting dead. Vladimir putin is prepared to have force used on the ground to that the to ensure ukraine is leaning in the right direction. He is trying to create a new bloc around the ukraine. Who should respond within europe . We are in search of an institution in europe to lead the response. Who is that . The european foreign entirelyis not that, too weak, and you dont have coherence in europe. So far, the Swedish Foreign minister has been the most outspoken. They dont have any influence. The german resident and the German Foreign minister have recently spoken up and said more must be done. The germans have been more outspoken in saying that sanctions will need to be levied than the americans have. The americans have responded with general condemnation. I think there is a good chance that sanctions are levied by the europeans of some form led by the germans against ukraine. In theieve thatanukovich last 24 hours has gone beyond the brink. There is no returning for him. He either has to call early not seem which he does ready to do or he has to continue with some very serious bloodshed. Let me bring in peter cook. What is your take on the administrations response . What else can they do at this point given the fact they are and syriath russia and iran. This is a difficult moment for joe biden and john kerry and the president to get more engaged. The russian relations are completely broken. You have probably seen the leak from victoria newland saying fthe european union. It does not help. I think the americans could have provided much more support for the imf and coordinate with the eu before we get to this point if they had wanted to create a bailout package for the ukraine. No one wanted to do that. Ukraine was considered insufficiently important to put together a major package. The same conversation we are having on syria. Why would the u. S. Have Vice President biden call president xch rather than president obama himself . Maybe he was playing golf. If this was important for obama and considered a matter of a level importance to national security, he would be on the phone. The fact that it is biden sends a clear message. It is not about american jobs. Thank you so much. Up, venture capitalistmo koisman will join us on the relentless move to online consumption. This is bloomberg surveillance, on bloomberg television, streaming on your phone, your tablet, and bloomberg. Com. Good morning, bloomberg surveillance. Lets get to a busy morning of top headlines. The surprise rise in unemployment in the u. K. , the jobless rate rose to 7. 2 in the Fourth Quarter. The rate was expected to have been not change and it was a first increase in almost one year. China, it cut its holdings of u. S. Treasury debt in december by the most in two years per the country reduced its position in u. S. Government bonds by almost or the 8 billion or 3. 6 of total holdings. The reduction came as the Federal Reserve announced plans to reduce its bond purchases. The number of teenagers in the plunged to ae record low, one in three teens were either working or looking for work last month which is the lowest level since the Labor Department began tracking this back in 1948. This comes as more teenagers are focusing on getting into college and those looking for jobs are often competing with older and a skilled workers. Thanks so much. Have you played . Candy crush . I spent like 15 on this. I was lectured on this. Coffee toffee, i have no idea what im saying. The idea here is that you go public when you need the money to grow. Crush is already minting money so why is it going public . What do you think . Its called payday. The investors in the company see a chance to take caps off the table. Look atfrom history, the zynga, that these games can have an amazing rise. Are up to 1. 8 billion. This is timing to probably take cash out the table. Would you buy into the ipo for the shortterm . I wouldnt. How do the bankers sell this ipo . What does the roadshow look like . It makes money. Is very profitable and its all about timing. Can you get in and get out . Where is the sustained ibita you mentioned . How do you sustain that . Ofyou go to the history these Online Gaming companies and i dont know if they have a sustained revenue. Zynga is a great story there. For the time being, it is hot but who knows what the next thing will be two years from now . Candy crush. Coming up, the fight over spectrum and we will speak to a technologist that may have found a solution. Our twitter question of the day is coming right up. Good morning, everyone. Haas will join us in the next hour on kiev and the ukraine. I mentioned of the ruble has eight new weakness and you see that 10year yield. That tension is off of what we saw overnight in the ukraine. Hydrocarbons elevate. Lets look at the gainers and losers. Teslaant to highlight closing above 200 for the first time on speculation the company is reporting after the bell today, reportedly met with the head of apple m a. Weight watchers is getting pummeled over the last few days. Its at the lowest level since 2009 and was downgraded barclays. If you went to weight watchers, it would do well. Thats not right. That was understood. After valentines day, it just disappears. Imagine this you are at a crowded starbucks and you down for a netflix movie no more dropped calls. Wireless and Telecom Companies are in a head heat over spectrum but a simple transmitter could eliminate congestion and dead zones. The inventor will be demonstrating pcell at columbia university. Microsoft bought his webtv start up for half 1 billion. John scully is a believer and an investor. Does this have the potential to put at t and verizon out of business . Um lets give them a couple of years. Not today. Seriously, im not joking blackberry was too big to fail, tight . Yes, i will say affirmatively to that question. If another powerful party, not necessarily a carrier, potentially a platform like the google or an apple, if they took this technology and came to new york and said youll never have a dropped call and have high speed rock band and you dont even highspeed broadband, how many people would say no . This is the toy. We are honored to have you here, the inventor. Do you have a question about this . I have an observation. I have been hanging around Silicon Valley for 30 years. I saw the first moonshot when steve jobs showed me the prototype of the mac. This is a genuine moonshot. This is one of those tubes to transistor moments. It fundamentally changes the ground rules for mobile wireless. How does it work . We turn the whole thing around. Since the invention of wireless, all the way back to the first things, we have been trying to avoid interference between different people transmitting. Theyu take cell phones, cover several city blocks and they are trying to avoid interference. Everyone is sharing the spectrum within those cells. What we do is the opposite, we create interference. Way to haveut a radio signals coming together and where they intersect around your phone is synthesized. Its a personal cell just for you one centimeter in size. As you move your phone around, the cell follows you. In times where you can never get service. Every person in time square can be using skype or facebook. They have a private connection. You still need to make the connection and take that little cell and get it up to a tower and onto a broader network. You still have to work with an existing infrastructure, dont you . I have worked with enough companies that you can come up with the best idea the world and the large incumbents can have something you rely upon. This time around, i said lets get it right. We will we work with existing lt phones. All, if they want to give us spectrum and let us use it, groovy. If they dont, we can use unlicensed spectrum. There are many people sharing the same spectrum. The third thing is we made it so it is very inexpensive to deploy infrastructure. We dont need towers. We have serendipitous deployment. We dont have to have our towers in a certain location as the cell system does. We can put them wherever we want so we find why wouldnt verizon or at t or all of them say we like this technology and we will buy them and deploy them within cities . Why wouldnt they do that . Um so i wont say that they have not. Whats interesting is what we did is open up the door for non incumbents to come in there. These guys dont move very fast. The existing wireless players the folks in Silicon Valley like blackberry, they could not move fast enough. Physics of antennas are very complex. I took a course in college and this is a complexity issue. Steve has salted and he has been working on it for 10 years. Heself funded it because made money in other ventures to be able to do that. He has over 100 patents and applications around the world. This is not a science project. He has figured out the complexity of the science. You talk about unlicensed spectrum, to what extent do you need government approval for locating these devices . Do you also solve the policy issue of Net Neutrality here . This e fcc in braces embraces this and says this is a public resource, thou shalt use spectrum officially and you shall not have dropped calls in new york city. If they say that, this is everything the fcc said was their goal. Did you just blow up the whole idea of the government spectrum options . You just solve the spectrum issue. We have in a way. . Hy not have spectrum we had a business meeting yesterday where we brought different phones. They did not work so we asked for a landline. He helped me through half my presentation. If you take the spectrum that is there that they have to auction, we can use them for more significant things like opening up a whole new world. Did the microprocessor ruin the world . No, look at where it took us. This is that moment. One thing we have seen in technology is that the leader who has a monopoly in a previous era like intel and microsoft with personal computers, they are not necessarily the leaders in the next disruptive era. This goes to Clay Christiansen 101. What has been the response of at t and verizon . Do they want to embrace this . I cannot speak about any of them specifically. Notthe major operators, just the u. S. , there is a nondisclosure agreement. Let me talk about them broadly. They love this. The reason they love this is because they are dieting. A good way to they are dying. Said we cannoty serve the demands that we have in new york, chicago, San Francisco, dallas. There is a physical limit. In terms of congestion when do i get it . When can i buy it . Thats the smartest question ive heard. In one block of San Francisco around our lab, there is unlimited lt capacity. We are growing out from there. It depends on who we partner with. It can be available as soon as the Fourth Quarter of 2014. Thank you so much, it was a pleasure with such amazing technology. Thank you so much. Lambda square this is our twitter question of the day. What is your biggest complaint about cell service . We will get thousands of responses. We may have solve it right there. We will take a look at the live shot in independent square in kiev, the capital of the ukraine and this is global turmoil across the world. It is also thailand and venezuela and we are talking about what is happening around the world. We will be right back. Good morning, everyone bloomberg surveillance. The focus today is on kiev, the ukraine. Us aboutaase will join the 25 killed overnight. Reserve tightens the rules on foreign banks they approved new standards of banks operating in the u. S. To hold more capital protecting against loan losses. The banks said this would raise the cost of doing business in the u. S. The president traveled to mexico for trade talks with mexico and canada to build stronger trade between the three countries. The trip comes as Democratic Party leaders on capitol hill about to oppose the president s average to negotiate trade deals. America borrowed at the highest rate in the Third Quarter since the recession. It was the biggest quarterly increase in debt since the Third Quarter of 2007. Photographs onme there has been a lot of olympics. Comeese three top photos from the governmental opposition in all corners of the world. Number three in venezuela, fires are lazing outside the military base in the capital city of caracas following the detainment of the opposition leader. He led demonstrations against the socialist president. The violent protests are continuing their. Number two, thailand, Police Used Tear Gas during clashes with antigovernment protesters in bangkok are in reportedly 60 people were injured during the crackdown. Do they want a pacific pivot in the white house . They dont like to use that word. The new focus on asia, they are certainly this complicates think but it shows you that the ukraine, venezuela this is a time when the administration is trying to solve the problems in syria with iran and middle east peace. We had the secretary of state dealing with that issue. These other issues complicate life for this white house at a time when they have a whole host of issues out there. It does not make light easier. Pivot andd the word you almost have to. Where the problems have been in the middle east for decades, it seems to be quieting down and now you have these other issues. There is collapse of the washington and european consensus. Are number one photo comes from kiev and the ukraine, engulfed in flames. The protests are becoming deadlier and the clashes have claimed 25 lives and the injuries are above 200. That is a live shot and you can see the smoke from the square. This is independent square near two of the hotels that have been the central location. This is a little bit away from the famed soccer stadium. Was i noticed in davos people from europe show a massive contrast between the ukraine and russia. They are two decidedly separate worlds. Vladimir putin is trying to support this president. It is a bridge. You look at a map of the ukraine and you see russia one side and poland on the other hand belarus in there. Can see it and you is trying to get into europe. This is what mr. Putin wants. He wants a new russian bloc. He would like it for economic purposes. He would like to show russianclout and that includes having influenced the on the russian borders. That is the challenge for all of those former eastern bloc countries that are trying to reach into europe and maintain ties with russia at the same time. We will talk about the markets coming up next. We will talk to one man who thinks the s p 500 could hit over 2000 by the end of this year. We will have that conversation coming up next on louvered surveillance, on bloomberg television, streaming on your phone, your tablet, and bloomberg. Com. Good morning, everyone. Futures are dirt carrier rating are deteriorating. Lets get to company news. His lannettne puts emotion he is having ceos at Discovery Communications and Liberty Global the right to buy stakes in his company if he decides to sell. He also said he would stay active with both companies. Fonic has a bid for royal kpn. It plans to merge the german units of two companies which would reduce the mobile operators in germany from 4 to 3. The European Commission is concerned how the deal would affect competition. A feud between netflix and verizon has led to a video slow down. Netflix says its average primetime speeds on verizon fiberoptic service fell 14 last month. The drop comes as broadband providers battle netflix over how much streaming content they will carry without being paid additional fees. That is todays company news. Thats a huge deal. Humbled. Have been most strategists are optimistic. Look at the crisis we have on february 3. Jonathan golub is with rbc and suggests the s p 500 could vault to above 2000. Store heels him in the amount of cash. It is great to have you here and this is a new research report. You directly link the janet yellen animal spirit and gdp into your world of equities. First of all, when most analysts and gdp will go up one percent this year, they think maybe earnings will go up 1. 5 or so. The actual multiplier is about six times and that goes in both directions. If the economy disappoints, it is also six times worse. You have more of an optimistic view on the economy. That leads to your significant 17,000 call . You have better earnings and the Multiplier Effect in the second thing you have is the issue of multiple earnings. It will be a big surprise how good they are this year. A killer single best chart. Take a look at this this effectively compares the flows in and out of bond funds for stocks. You see that plunging yellow line because people were pulling their money out. The world is coming to an end they want safety. You have seen that flow go to an extreme. This is way too complicated. Get that spite down and stocks go up. Its an incredibly important observation of this relationship between one percent gdp increase and the impact it has as a multiplier on profits. Think about what that would mean if the government actually got out of the way of growing the economy and the amount of cash flow that would come out to the economy and jobs that could be created. It is incredible. What did the bears get wrong . It was like two weeks ago before we bought roses. It was total gloom. What they got wrong was that emerging markets are the tail that wags the dog. It is not that way. We have the largest economy in the world and of things are its not here, emerging markets that causes the u. S. Default. What about margins . Not peaking. Eally the government that has profit data but it does not look like corporate profits. It doesnt use the same accounting. If you look at profits it looks more like midcycle than it does up her cycle. Than it does up her cycle. Upper cycle. You have a one percent increase in gdp and earnings go up 6. 5 . Mostsector is leverage . The biggest one is the financial sector. Bank profitability goes up when people pay their loans. Energy and materials and industrials are next. They have heavy infrastructures and they get the leverage effect. What about the tech sector . The good ands but bad of technology does not use as much capital. If you have an Industrial Company that has a ton of fixed costs, one extra unit makes a bigger impact but also has a downside. Lets talk to john scully about this. Your world is seeing revenue bill but also costcutting. Everybody is rationalizing. Can that be a longterm strategy . Whats important is dissing growth. Growth comes from less regulation which is hurting growth of smaller businesses. If you get the cash flow, flowing into those small businesses, the kind of insight that jonathan has, this is a wakeup call for politicians to rethink the regulations they are pressing down on small businesses. Years, the last several businesses have put more labor per unit of capital than capital per unit of labor. That is a bad thing. Businesses are not confident on the future. If you get that confidence back, that will launch the economy. Report, we protect the copyright of all of our guests. Thank you, thank you, thank you. How about a four x report . Sterling is under one dollar 67 but there is a ruble basket with new weakness on unrest in kiev. Fman will be, mo koy here to talk about online consumption next. Kiev in the ukraine you reps into riot and death. Erupts into riot and death. At least 25 dead. Is it just like 1999 . Facebook, twitter, and huber are not turnofthecentury. Overpriced kale salads. Good morning, everyone. This is bloomberg surveillance. Is wednesday, february 19th. I am tom keene. Joining me, the always trendy adam johnson. Even trendier alix steel. Our best toast is mo koyfman. Guest host is mo koyfman we do have some Economic Data in the u. S. Mortgage applications following about 4 . At 8 30 a. M. S on those Housing Starts are a real thermometer of what is going on. We do have some earnings before the bell. After the bell, everyone is looking at tesla. Is it a car company or a tech company . By the way, given the multiple on tesla shares, it better be a tech company. It trades like a tech company. President obama traveling to mexico with trade talks. Treasury secretary jack lew will speak on the economy in San Francisco. A very busy day. Here we go. Pugeot gets a lifeline. It is being rescued. These investments are part of a broader restructuring. The founding family will give up control of the company of the company if the deal is approved. Gm is going to aluminum. It is ramping up efforts to have a pickup truck made of mostly aluminum by 2018. They are under pressure i federal fuel efficiency standards and rival ford. Recently lost and contracts locked in the contracts to supply the metal. Consumer Satisfaction rating has soared to a high. That is your company news. Futures are deteriorating through this morning. The russian ruble basket. Death in kiev. D kiev unravels. You see independence square. Eight hours ahead of us. Haas, we have seen putin what would you expect next from him . What i would expect next is essentially whatever it takes. He will continue to offer economic help. The only condition he will attach is as far as you get from the imf. ,t will be to Viktor Yanukovych to keep control. Putin sees this as the future of iraine, but in many ways, believe he sees this in some ways as the future of russia. He, in no way, once the liberal virus to infect ukraine because his fear would be that it would become a demonstration effect for his own country. I am fascinated by this. With the russian fleet in the black sea off of odessa and the rest of southern ukraine, how does america and how does europe respond . It has become a naval action as well. There is not a lot the u. S. And europe can do. Normally we would provide economic help. Only with strings attached. People are not going to provide 20 billion of help without certain types of political and economic condition i would a. Viktor exactly what yanukovych is not going to agree to when he is under siege. We do not want to throw good money after a bad situation. We almost up to see where things come out. If he prevails, then we can introduce help with conditionality. If there is a new government, we can provide a lot of help. When is this move from an uprising into a civil war . When does that happen . That is a question of whether it grows. We had the first serious show of force by the government in 24 hours. When youre talking about syria or paris in the middle of the 19th century, it is now a battle of nerve. Does the government and Security Forces keep its nerve . Are the protesters prepared to continue to put their lives at jeopardy in the hopes of overthrowing the government . That is the dynamic. Vicebassador haass, President Biden called Viktor Yanukovych to ask for him to deescalate. 25 people were killed overnight. What is the likely next series of events over the next 48 hours . I would expect he would have more of the same. The u. S. Can call for restraint, but we do not have ways to. Nforce it or incentivize that i think the critical dynamic is will the government and the Security Forces remain willing to kill the wrong people if thats what it takes . If thats what it takes, the regime is likely to survive. Were a long way from kissingers classic diplomacy. I do not know what the new Foreign Policy is. Americasd be International Relations one we feel so useless with ukraine . More broadly, i would say two things. You have the president going to mexico today. It is against it backdrop of no move at home on immigration and increasing questions over whether we could ever give the trade Promotion Authority he will need to negotiate trade accords. The biggest foreignpolicy challenge begins continues to be the domestic one. The United States has been overly invested in the middle east. We have not been paying event attention to events in thailand, ukraine, venezuela. I would simply say that we need to rebalance our foreignpolicy away from this over fascination and emphasis on the middle east and take into account more asia and the rest of the world. Where should we look in europe for leadership . Which institution in europe will get this done . Europen leadership and leadership are oxymorons. The bottom line is you do not have europe as a collective entity when it comes to being a foreignpolicy actor. The answer is you cannot look to europe for leadership. That is an advantage that putin has. He is a single, lone operator. Alix . Breaking news. Sales will be buying the for 21 a share in cash. A 41 premium to the last close. Jpmorgan. S advised by we should point out that zale 1 . Sales of flat up the expectation was for a decrease in sales. Struggling in the jewelry industry. Ukraine, front and center this morning. Our guest this morning is mo partner ofneral spark capital. What is the new new this year . Facebook debacle. Then we had twitter. When you wake up, what is the news for you . I have been watching two things. One on the social media side and one on the commerce side. On the social media side, a move toward anonymous or semianonymous networks. There has been a reaction to some of the public nature of facebook. The rise of snapchat. One example. There is a new app called secret. There was one called wut. That are of apps rebelling against the notion of putting everything out there and embracing the notion of communication in a different context. The other side is i think we are moving more and more for the bridging of offline and online commerce and taking some of the infrastructural elements of local commerce and local delivery of goods and services and making them far more efficient. Integration of brickandmortar with the internet. Correct. Little busy today. Very busy. The growing investment in healthy foods. Toms favorite kale. You know what salad is, right, tom . Good morning, everyone. Bloomberg surveillance. Mo koyfman is with spark capital. Holiday season was a game changer. The relentless move to online consumption. It will forever change retail. Everybody caught up on this trend. I would say was not even predicted. It was a titanic move, wasnt it . People have been talking about the shift to online. It 510 yearll overnight success. The world wakes up and thinks this happened overnight. What do brick and mortar do . It is interesting. I am seeing a resurgence of local commerce. The malls is one issue. You have to pull up to a macro trend. More and more people in the United States are moving to cities as moving to urban environments. We are seeing a lot of mobile First Services and webbased services that are helping enable local commerce to thrive in that environment. We Just Announced investment in a new company. It is effectively a local delivery service. Days ofemember the old services that were going to bring you anything, ondemand in your city. Those services were early for their time. Today, we are seeing the emergence of Companies Like postmates. They will bring you what ever you want from local retailers. While the trend is moving to online and ecommerce, you are seeing services take it vantage of the mobile phone and connectedness. We talked about samsung and the rumble about iphone 6. Does the next generation of smart phones ramp this up even further . Or is it incremental . It will be the same thing. It will get better and better, smarter and smarter, more sophisticated. We will be having this discussion five years from now and he will ask the same question. It is a steady stream. Building more and more capability of services and to the phone that allow the consumer to really be on the network at any time and that opens up all sorts of possibilities. I have like 14 more questions. Thank you so much. The us is critically important. Steve chase, the serial entrepreneur, he listened to adam johnson and he went out and found a highpriced salad called sweet green. K entire control room eats kale three times a day. Kale next onabout bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. Are twitter question of the day. I got the mystery bill from davos. How big is that . I went to the bahamas for 2. 5 days. My bill was 500. What did you do . Apparently too much. 17 movies on your phone . Adam has top headlines. A surprise rise in unemployment over the u. K. 7. 2 iness rate rose to the Fourth Quarter. The rate was expected to have been unchanged. The first increase in almost a year. Recent gains in the labor market have lost momentum. President obama travels to mexico for trade talks with leaders of mexico and canada in an effort to build stronger trade ties between the free countries three countries. The number of teenagers and the u. S. Workforce plunges to a record low. Just one in three teens was either working or looking for work last month. That is the lowest level since the Labor Department began tracking the data back in 1948. Moore teenagers focus on getting into college. Those looking for jobs are often competing with other skilled workers for the same positions. In ukraine, the situation continues to unravel. We just saw the russian ruble absolutely deteriorate. We see that with stronger yen. Using Foreign Exchange is a litmus paper, you can see some real significant tension at this moment as we look at independence square. For those of us who get up at 2 30 in the u. S. , it is almost lunchtime. I will take my salad with shredded kale. Eating healthy is more than just a trend. It is an investment. I have to go all the way to suite greens in chelsea. Sweet green in chelsea. Now. Ounder joins us for lunch. Everyday for me, there is a lot of competition. How do you keep me coming to your store and not 47 other salad places . I think we have the best product in town. Healthy, transparent, and. You wanted to taste good. What made you want to invest . You are a tech guy. We also invest in great entrepreneurs with big ideas. The Restaurant Industry is ripe for disruption around healthier trends. Competitive in the margins can be difficult. It is a competitive business, but if you had asked me whether a copy shop in seattle will be worth coffee shop in seattle would be worth as much as it is, you can build a Company Based on differentiated products. A salad is a salad. What is the single thing in your store that could differentiate . Freshness . Execution . Planning . Music . Were doing scratch cooking in fast food. You dont find that a lot. Where we are sourcing it from. The way we use technology as part of the experience. What did you use learn from chipotle . We learned a lot. Consistency. I want to jump in on the technology side. We order every monday for our partner meeting, that sweetgreens day. Thank you for your support. [laughter] was that a shameless plug . No. It was a terrific log. Plug. They have thought about the. Nd to End Experience it starts with the ingredients and it ends with the consumer. They have taken the web and the mobile experience to really new heights. Does that mean that it is easier to order online . It is just a better experience. They launched a mobile up not too long ago that 20 of the people will not be using it. You will be able to order on it soon. That will be one of the technologies that those disrupt the Restaurant Industry. There is no reason to stand of mine when you know what you already want, particularly when you are busy. Technology can help disrupt, but ultimately it is about taking on a huge Restaurant Industry and encouraging people to make healthier choices, which then implicates our health care system. Ale. Om, that means k keyou said that one of the things that is happening, one of the big themes in technology is the integration marrying online with brickandmortar seamlessly so that there is no distinction between the two. I did not think it was a set up. I think sweetgreen is a great example. Food servicese business, but they are delivering an experience that people come to expect. We remember the starbucks stumble three years ago. How do you deal with labor and management . Anthe focus is building Incredible Team. At the end of the day, it is the service. People interact with employees. Building an Incredible Team that believes in the purpose and can create that it spearheads. Experience. Do you throw away a third of a head of lettuce . We try to have an efficient subsystem. Prep system. Kale come from . We get are from new jersey. New jersey kale. Local farming. We are coming back. We will be right back. Good morning, everyone. Bloomberg surveillance. With me this morning, alix steel and adam johnson. Alix steel has a company news. Broke in thehat last hour, a deal in the jewelry business. Signet is buying zales. The offer represents about a 41 premium over where zales closed yesterday. Golden gate capital old estate and is holds a stake and is backing the deal. The amount is double what Google Capital had last year. Google capital is putting 40 million 40 million into Renaissance Learning and plans to do five or six more deals this year. The u. S. Government is asking on information and 35,000 User Accounts last year. Emails, text messages. Under thets fall foreign Intelligence Surveillance act. 35,000. Staggering. You want to stream netflix on your smart phone . The bigger question is, who should pay for all that bandwidth . And mo koyfman join us. Steve, you are the original internet guy. Who pays . Where to succumb from . Does it come from . Have you allocate some of the cost . Consumers will pick up a lot of it, directly or indirectly. There will be a battle. As we have seen in a variety of different transitions. Where people draw the line. The people owning the channels, telephone, broadband. They will always try to figure out ways to get as much as they can for that utility. It is going to be a few years of a battle. Within that battle, does the consumer have any power . Does the consumer, through their choice, have power in the battle . They do. Basically consumers have chosen netflix in this case. Netflix has a lot of customers and a lot of power in the industry, including getting rights. That power can be used to try to negotiate from a position of strength with the major providers. When you are looking at the new Technology Landscape when it comes to spectrum, what do you see . On this point, i think consumers do have the power on one level. On another level, on the spectrum landscape, it is pretty concentrated. Given the way the cable business in this country has developed, i think the fear amongst folks that promote Net Neutrality is that consumers will lose the power. For the benefit of people who do not know the term, Net Neutrality. Justify not. Just define that. The Cable Companies not being able to charge Internet Service promoters or internet businesses for more to getting advantaged access to consumers. It is trying to protect consumers from having to pay more for the services that they want through the cable or broadband provider. , it isin this discussion important that we get your comment on this proposed merger of comcast with time warner cable. It is a dominant transaction. It is for the concentration in that sector. Is that thepositive competition is intensifying. People are not as wedded to their televisions. I buy it in part. There is definitely more competition. That does not mean the merger should be approved. There is more competition. There is a generation that is rejecting the traditional way to View Television and cannot imagine not doing it through the internet. They really cant more about the broadband connection than they do the package of Television Services that have historically been bundled with a broadband connection. This battle will heat up over the next decade. Going back to Net Neutrality and the deal, if comcast does by time warner cable, the condition extend net they will neutrality in essence . That is not what we have been seeing from the courts and the legislature or the courts, really. I hope that will be the case. To the point, as you move more toward the home and luster the delivery of Television Services less toward the delivery of Television Services, the concentration of broadband access, it does matter. Whether we are getting a cable tv or just Internet Services, at the end of the day, comcast owns the pipe into the home and we need to understand what that means. Thank you so much. I will try kale. Adam . Findts do a data check to out where futures and various assets are trading. The s p down 0. 25 . The 10year yield has dropped a few bits. People are concerned about violence around the world. Buying bonds for safety. Good morning, everyone. Bloomberg surveillance. Bluebird television, bloomberg radio. A television, bloomberg radio. I am tom keene. Scarlet fu is off this week to read mo koyfman with us from spark capital. We are looking at academics. We are all probably happy that we do not have a kid in college because tuition costs are up 500 since 1985. Great chart. Unbelievable rise. Some students are starting to push back. From harvard to dartmouth, freshman applications are down for the Upcoming School year. World over,ons the the tuition cost at elite online one answer is and open, less expensive education. Couch thermodynamics. Wonderful to have you with us, professor. As you look at what you have learned the last couple of years, how are you going to get online, elite academics to be the same as what you get in the brickandmortar campuses . Lets understand one thing. The online experience is never going to be identical to the campus experience. The two are different. There are a large number of students all over the u. S. And the world who do not have access to a quality education. Online learning can traumatically improve access to education dramatically improve access to education and by marrying technology and Online Education with campus education, we can improve campus learning at the same time. Online learning can be viewed like a rising tide that can lift all boats. The university of london has been way out in front on this over the last many number of decades. What is the best practice you can learn from london that you can bring over to the United States . A number of universities, whether in the United States or in the u. K. , and so on, that have been offering education through various other means. For example, distance education. In the u. S. , we have had various forms of correspondence courses. Any of these have been going on for a long time. One of the challenges has been that the quality has not been the same as campus education. With Technology Advancing dramatically and improving the quality of education, for. Org,le if you go to edx the Online Learning where you can get top classes, the quality of education is Getting Better and better. It is not the same as it used to be. The quality is beginning to approach campus education. There is one catch. The quality may be Getting Better, but it is not good enough. 95 of people in online courses are dropping out. How do we keep those people involved . Youre really comparing apples and oranges here. If you take a campus like m. I. T. Or harvard, they admit only about five percent or 10 of the students that apply. Once they are admitted, most of them graduate. With all my learning, it is a completely different ballgame. What your matter religion, geography, economic status. You can come in and take these courses. Your respective of background. There is no admissions process. Our courses are extremely rigorous. These are virtually of the same rigor as campus courses at m. I. T. It is not surprising that when you pass the course, you have on the order of 5 to 10 of the learners. We are looking at a number of other ways that we can engage the students better. Connect them with more materials. Figure so much. Great to have your perspective. From sparkjoining us capital. Google capitol announcing 40 million to education software. We have made a number of investments in education. That needs toing be thought about is whether delivering the traditional, university. S. , Education Online is the way to engage a broader audience of people. I am of the mind that we need to rethink how we are educating people and provide them with really useful tools in their daytoday life. Useful tools. Speaking of, tesla useful tools. We will be talking about earnings coming out later. Good morning, everyone. Bloomberg surveillance. Futures, 7. Foreign exchange shows the unrest. In the ukraine, in thailand, in venezuela, as well. A stronger yen. Decidedly, a much weaker russian ruble in the last six hours. In the loop with betty liu 8 00 a. M. This morning. A lot of deals coming out in the last 24 hours. Hank greenberg has, with his own deal come out with his own deal. Despite his criticism of the Obama Administration is betting big on health care reform. We will talk to him about that. Mosque, one of our favorite ceos , is going to be elon musk one of our favorite ceos, is going to be joining us exclusively. Very good. Betty liu. I looking forward particularly to mr. Musk. The earnings would be the earnings are inconsequential. It is a story. Where were you at 15 to say shut up and buy it . What do we got . We got to look at zales. Signet is buying the company. A 41 premium from yesterdays closing price. To add toects earnings in the full first year. The deal valued sales at about 7. 4 . Already the largest array chain in the u. S. And the keeps on getting bigger. That is a fine looking ring, alix. Im sure there is a man out there who needs to buy a ring. Doublede china sales come a meanwhile sales for the company as a whole up 20 . This is a big deal. 69. 69. Off the alltime high, but it is up this much. Bill ackman keeps being wrong on this. Mo koyfman with us. Aw two different tech deals. Facebook and then a completely different process from twitter. What is the younger tech world learn from going public when they learned looked at twitter . They learned the lesson that many Public Companies have learned. You have to underpromise and over deliver. That is simply what they have done. I was stunned by the Conference Call. The whole digital extravaganza. Everything you do, every touch point you have as a company, whether it is with the consumer, the street, investors it has to reflect your brand. I think the Conference Call is just another part of that. We will be talking about the ukraine coming up next. The morning, everyone. Bloomberg surveillance. Scarlet fu is off this week. Of guest host is mo koyfman spark capital. Company news. John malone putting his plans into motion. The billionaire is getting the companys stakes in the if he decides to sell. He will stay active with both companies. May face objections by the european union. They plan to merge a german unit the german units of the company. The European Commission is affected is concerned about how the deal will affect cognition. A video slow down. The feud between verizon and netflix. Battle. D providers overnight, 25 people were killed in the ukrainian capital of kiev. Is bloombergs managing editor for Eastern Europe. What is happening right now . I went to the square just an hour ago. At the moment, the situation is relatively peaceful. The opposition groups are rebuilding their camp after this very tense night with fighting all my. All night. People are bringing all sorts of stuff, food. Also, all kinds of supplies. They are rebuilding. The police are keeping quiet for now. The president has threatened to dissolve the camp. For now, the police is not moving any further. How organized are the protesters . It seems every place we go, every geography it is a different story. Brazil, venezuela, thailand. Our organist of the protesters in kiev . How organized are the protesters in kiev . Well organized. They do have a battle plan. They are bringing in fresh people from cities outside of kiev. They seem to have a lot of support from the people who are bringing them supplies. I had one report this morning. A hospital was looking for people to donate blood. An hour later, there was a literal traffic jam in front of the hospital because so many people were trying to help. They seem to be very organized. President Viktor Yanukovych told the opposition leaders to distance themselves from the protesters. What theell us opposition leaders are saying or doing right now . That is quite interesting. Threat fromit of a the Security Forces to them. They said they are looking into whether some of the opposition leaders are involved in a coup detat. Hiding. Oment, they are they are not saying where they are. What happens to these opposition leaders if they are caught . What is at stake . I think they might end up being detained and put in prison. It is hard to tell. What is curious to see is that the police seem to be willing to dissolve the camp, but then did not move any further. Said thatukovych people have crossed the line. His advisers are telling him he should use force. He is always considering the use of force. Toseems still to be willing try to find some sort of compromise. The question is really where he is getting his orders from. I know you are at our news bureau in kiev. We hear the images, we see the images. What is happening in the ukraine outside of kiev . Is there great support for this protest . There certainly is in the western part of the country. We have reports now that in several cities, including in the city of leeds, close to the border of poland, they have also stormed government buildings, Security Forces buildings have been set on fire. The local government has said that it has declared itself independent from the Viktor Yanukovych government. Some people, including the president of poland, are saying that we are seeing the first hours of a civil war, which may lead to a breakup of the country eventually. Is that important praise. Perhaps a civil war. Our managing editor from Eastern Europe reporting from kiev this morning. It is time for the agenda, where we look at all of the stories and issues shaping the day. Minus the markets. You see the move in the russian mine is the markets. You see the move in the russian ruble. Enough about the whipsaw we have seen and sentiment over the last 15 or so days. Connecting the dotted 1 change in gdp equals a 6. 5 change in earnings. There is no buzz on that. There is no buzz on a better bullish market right now. You were going to radio. We will miss you. Here is my agenda. The fed. We will get the minutes at 2 00. This was the last meeting with chairman ben bernanke was chairman. He handed off to janet yellen. I want to find out what actually happened there. What was said . Was there a sense of transition . Only nine voting members, versus the 12 voting members normally. We will see what they said. The Forward Guidance janet yellen was talking about during her testimony. On my agenda, i am looking at tesla. I dont drive. You dont drive . It is a whole thing. I have a permit. We are looking at tesla. It is going to be about Gross Margins and about apple. The reports that elon musk met with apple. Any merger talks there . Mo koyfman joining us. You mentioned that tesla is a car company that trades like a tech company. Tell us more. Fundamentally, they are making cars and they have the margin truck sure of an automobile company. Have you guys ever been in a tesla . I have not. Matt miller has. It will throw your head back. You start to see what a car should look and feel like and act like in the 21st century. I am a huge fan of tesla from a Product Point of view. Should it be rated as a tech company . I have not followed the valuation closely enough to know whether it is overvalued or undervalued. There is a good case to be made that tesla should be falla and more highly than a traditional auto business because they are really changing the way a car looks and feels. Should apple buy it . It would definitely be interesting. Ceo, will be the speaking with betty liu around 6 30 later today. Time to answer the twitter question of the day. The biggest complaint about cell service. Definitely the cost of the service and the need to enter into a new contract when you upgrade your phone. Totally. Another answer. I can never get through to Customer Service to tell them that. For me, it is difficult to download webpages on my phone. Much easier than a blackberry. It is hard. It takes a while. Frustrating. What is the future of mobile communication . Who is going to figure it out and get it done right . From a device point of view . To make it easier for us to download stuff fast . I think that is a network issue. It is not a hardware thing . It is both. Hardware and software and cell towers and low, works. I think it is the cell towers in the local networks. I think the battery life on the phone. You need to make more dances so that you do not have to draw on it too heavy. Thank you for joining us today. Bloomberg surveillance continues on radio. In the loop is next. Good morning. You are in the loop. I am betty liu. The fight against raising the minimum wage. Congressional Budget Office says boosting the minimum wage could lead to up to one million jobs. 900,000 americans could be lifted out of poverty. President obama proposed raising the minimum wage. We will ask a billionaire republican what he thinks of that later in the program. The hero the markets, they indicate stossel open lower today. Just eight points away from the record set last month. In the ukraine, it was the bloodiest yet. At least 25 people were killed off night. The ukraine president warns seventh graders he will crack down if the violence does not and. For more on the rapidly degenerating situation