Bloombergs European Headquarters in london. I am francine lacqua. Guy johnson is off today. Lets start with our top story, the crisis in ukraine. Russian foreign minister sergey laparotomy is in geneva with Foreign Ministers from ukraine, the u. S. And the eu. Russia, president putin hosts his annual q a with the public. Ryan chilcote is in geneva following the meetings. They are due to meet in about 10 minutes. That is right. Unrest continues in Eastern Ukraine, the interior minister reporting that they have killed three prorussian activists at a military base that was being attacked in the east of the country, diplomacy is getting underway in geneva. The u. S. Secretary of state just met with catherine ashton. He is now meeting with the Ukrainian Foreign minister. Sit down of them will with the Russian Foreign minister, Sergey Lavrov in about 10 minutes. The first real talks between ukraine and russia this time accompanied by the u. S. And the eu. Contours of a deal, we know what the russians want. They want to cd centralization of power in ukraine. They want the east and south to have more power over the decisions that are made in ukraine. They also want ukraine to agree in writing to be a nonallying state, to never join nato. For the west it is pretty clear. Russian they want forces east of the Ukrainian Border to withdraw. Aty also want russia to stop a minimum supporting nonstate militia east of the country. The west and ukraine have accused Ukrainian Special forces of directing prorussian activist attacks against ukrainian installations there. Those are the contours of the deal. Gas could be an issue as well. Looking forpe is guarantees that there wont be any interruption of russian gas to western europe. Also, the question of how much ukraine will have to pay for gas. Those are issues that could come up as well. Of course, president putin televised annual questionandanswer session this hour. I always expect it to be very long. A that is right. We can expect the russian president to talk about ukraine at least a little. That will be perhaps as important as these talks. If these talks are unsuccessful, have. S. And western europe already made it clear that they intend to go further with sanctions. Early aspossibly as tomorrow, possibly sanctioning another russian bank and widening the partials sanctions against russian businessmen. The eu, their Foreign Ministers could meet next week to further the sanctions they have already introduced against russia. So far, they appear to be divided about exactly how far they want to go when it comes to sanctions against russia. Ryan, thank you so much. We will be following this very closely. Those talks due to start any minute now. We are also watching the live q a from russia. Lets turn to a couple stocks that are on the move. Diageo and remy cointreau, two of the biggest outliners liners on the stoxx 600. Manus cranny has been pouring over the numbers. It is tough to be a drink maker nowadays. It is. You have got to bang huge issues. One, emergingmarket currencies that are moving against you. Two, what is going on in china socially. , theyointreaus numbers have warned again. They are saying things are not going to get much better. Profits are going to fall. China is doing their darndest to clamp down in terms of how you act socially, how you act as a businessman. The backdrop is really crippling remy cointreau. To give you an example, in china, authorities have clamped 2400 hostess or karaoke bars, places of booze, pleasure and entertainment. That could challenge remy. Other side, fx volatility is going to be a huge issue for them. You are seeing flat activity. Vodka is not doing very well for them. In china we had some pressure. Asia pacific off by over nine percent. What about the emergingmarket currencies . What the ceo has been telling us. Think about the political instability in thailand. One or two of the reports that i have been reading say maybe we need to start looking through some of those fx volatility is and perhaps there might be a little bit of light at the end of that tunnel. About dealmaking . I think this is going to be the critical issue. We talked to the comp are a ceo yesterday. He said it is very disparate. Aftere seen diageo go united spirits. This could be the busiest year for dealmaking in the booth space since 2008. Net deal between united and diageo, to give you perspective on what that means, that would give diageo 10 of the spirits market. You have got suntory going after beam. Is that there are more deals to be done. It is a question of valuations and whether you have the cash and capacity to snap up the deals when they, along. Thank you so much. Diageo down 3. 8 . Chinese twitter rival weibo will make its trading debut in new york today. Microblogging service was priced at the low end of its ipo range. Google shares lost about 3 after the Search Engine failed to meet estimates. After the broader tech selloff, some trends are worrying the market. Here with more, Caroline Hyde. Google sounding alarms. It is not easy to become profitable on mobile. Is that having an effect on valuations . It is. It sent a little bit of a shiver down investors spines. A company that is still able to sell a lot of advertising space. They are seeing volumes up 26 . They cant charge as much. You cant charge as much for mobile adverts as you can for desktop adverts because they are smaller. You are getting less bang for your buck. They have got to persuade companies to realize that advertising on mobile candy that are more targeted because the mobile user has a destination. You can see where they are, what apps they are using. Eventually, google thats that mobile advertising will be more expensive than desktop. There is some concerning trends that google isnt managing to monetize mobile quite as quickly as they hoped. They are spending an awful lot on pretty speculative bets. They are betting on drones. They are betting on robots, they ,re betting on hardware, nest they bought for your inhouse use. You can connect your smoke alarm, your thermostat. Google wants to be everywhere with you, on your tv as well. They are not quite hitting the bottom line yet. It is really the discussion on mobile. It is a chinese company. Weibo follower that we havent even heard of here. There is a problem with, how do you make this Company Money . How do you monetize it . The comparisons to twitter will keep being made. They are similar, they are microblogging sites but twitter is much bigger. Both in the user base and the amount of revenue that twitter can generate. The similarity, they both dont make any money. Carolyn talked about advertising. That is going to be a big challenge for weibo. You get all these chinese consumers transferring to pcs, to tablets, to mobile. Twitter was a mobile first device. It was a nap made for mobile. Weibo is very different in that sense. They are behind we chat on the mobile. That is a competitor. It is going to be difficult to generate ad revenue in china. It comparable to twitter . In that sense it is. Where twitter has the edge on them, yes twitter and facebook are not in china, but because they are in china, the likes of weibo, they have to adhere to the censorship rules. What are you going to do if you want to expand outside of china . If you have a decision as a consumer to make, are you going to go on weibo are twitter . As an outsider, you are much more likely to sign up with twitter. It is fascinating, these trends. It is when they are not getting ahead of the curve quickly enough. Ibm selling off in afterhours trading. They are not getting on the cloud quickly enough. Same as smp today. Kidswe have got these new on the block that are very much betting on the move to mobile. On are taking big bets growth and profitability. Fast internet growing companies, they are growing fast, they are losing money fast. We just realized in the last six months. Bad timing. Bad luck for weibo. At the moment doesnt seem like it was the best time. Thank you so much. Here is a look at what else is on our radar. European card sales jumped 10 in march. That is the seventh straight monthly gain as consumers replaced aging vehicles. Renaults chief executive says he sees a big recovery coming in europe. More on this story later. Hertte yellen has given first major Monetary Policy framework speech. The fed chair assured investors that she is committed to keeping rates low. The shortfall of employment or inflation from their respective objectives and the slower the projected progress toward those objectives, the longer the current target range for the federal refunds rate is likely to name maintained. South korea is investigating the captain of the ferry that sunk going at least nine people. Allegations that the ship deviated from its scheduled route. 287 people are still missing. Most of the passengers were high school students. Coming up, ukraine, russia and the west come together for russia for talks in geneva. Can they reach a diplomatic resolution to the crisis . As we head to the break you are king at life preachers pictures from russian president putins annual televised q a. He claims there are no Russian Forces in the east of ukraine. The russian president Vladimir Putin just began his annual televised q a. He says there are no Russian Forces in the east of ukraine. Foreign ministers of the u. S. , eu, russia and ukraine are meeting in geneva amid escalating tensions. We are joined by Ryan Chilcote in geneva. Thank you so much for joining us. Then walk, let me start with you. This is symptomatic of what we saw for the last four weeks. We have people on the ground saying things, Vladimir Putin saying other things. There were sanctions imposed by the eu and u. S. Vladimir putin seemingly not caring. How is this going to pan out . Does the eu need to be tougher . I would say so. What we are trying to do here is to minimize escalation risks. That means perhaps a stronger response to make sure that russia doesnt intervene directly. That is what we want to avoid here. A crimea scenario to be replicated in Eastern Ukraine. How important is it that the message is clear today . At the moment, we are dancing around the issue. A lot of businessmen saying this needs to be resolved peacefully. They are concerned about their bottom line. A lot of german ceos are concerned about the bottom line. What is the Business Community loses sight of what is at play . It is not very easy because there are a lot of games being played. The message Vladimir Putin delivers and the message that is delivered right now towards his population maybe those two messages may not be aligned. Meanwhile, the sanctions business is not easy to put out either. , the alignment challenges between various parties. I am not seeing a proper escalation of this crisis. Take a step back. Four weeks ago, we thought it was going to be a catastrophe. We are not there yet. The ruble is the ultimate barometer of how we think about this crisis. I am not panicking right now. Here is ryan. , the russian president continuing to talk tough in that address. He has just said that the ukrainian Central Government used tanks and fighter jets against his own people. That may not be hardening his line but it is not a softening of the line. Us exactly how this crisis is played out in terms of investment and enthusiasm in investing in emerging markets. And how you see that changing. Do you see all the money going out of emerging markets . I am talking about all the other emerging markets, notably turkey. Have got some good news on that front. From what i can see from the market perspective, this crisis is not a Global Emerging Markets crisis. We are seeing massive inflows back into em despite this crisis. It as a risk to watch. I watch the risk of escalation. This is not altering my bullish view on emerging markets. I am going to be tempted to view this crisis as a buying opportunity. It is a bit too soon right now but the valuation is there. We just need normalization of the situation. Give us three opportunities. It is pretty clear that this is a confusing situation playing out in Eastern Ukraine. Presumably some people are misreading it. You think that there are opportunities out there. Give us three. , looking at russia assets lets take a step back. Remember, the central bank had to hike its rate in a very aggressive fashion. It was an emergency financial crisis prevention measure. If the headline risk subsides. Guess what, the central bank is going to have to unwind this emergency measure. That is going to promote a fantastically Friendly Market environment for fixed income in russia. This is really the opportunity i am watching. For ukraine itself, much more complicated. I am going to stay away from that. In terms of russia, there are some opportunities popping up. I just want to ask a question to ryan. As we are trying to lay out, over the last four weeks since we have had the sanctions from the u. S. And eu on russia, Vladimir Putin decided to jack up the prices on gas for ukraine. Rhetoric of more him camping up. What do you make of what is going to happen today . What will we get from the talks . A tougher stance or a surrogate lavrov that will try to be more reconciliatory . Say that ilike to think they are going to accomplish a lot. In fairness, the ukrainian and russian Foreign Ministers are meeting here today, that is an accomplishment in a diplomatic sense. If you remember about four weeks ago, they were supposed to meet in paris. When the Russian Foreign minister was asked if he had seen the Ukrainian Foreign minister, he said, who is that . That is because the russian government still doesnt recognize the Central Government in ukraine. The fact that they are sitting down gives more you legitimacy to the ukrainians. Are they going to agree on the russian proposal . Are we going to see a deescalation in the east of the country where we have protesters in almost a dozen different cities having seized buildings with armed men inside . That is a bit ambitious. We will have plenty more from Ryan Chilcote on the ground in geneva. And ouro benoit anne reporter on the field. We are back in just a couple of minutes. Welcome back. Lets see how the european markets are trading. Manus cranny has your asset check. It is booze and tech that are the worrying aspects. The bigger issue is this, how much risk if you are a shortterm trader would you leave on the table this weekend . How much risk would you really want to take . Market reacted, the equity markets rose and the janet the dollar dropped. The dollar still coming lower as yellen makes the point, we have shortfalls in employment and jobless rates. The overall dollar complex came a little bit lower. I mentioned booze and i have spoken to you about remy and sap. We are all going to the cloud. Lets make sure you dont cannibalize the real business. Be facing a similar year 2000. O the back to you. Thank you, manus cranny with the latest. As we had to break it is time for todays pulse number. 47 million. That is how many easter eggs cadbury makes at its factory here in the u k every year. Its bestseller over easter is the creme egg. What does it take to make the sweet treat . We find out next. Welcome back to the pulse live from bloombergs European Headquarters in london. I am francine lacqua. Here are bloombergs top headlines. Russian president Vladimir Putin is getting his annualized televised q a right now. He says he is sure that russia will raise an agreement with ukraine. He says there are no Russian Forces in the east of ukraine. Six highfrequency trading firms have been sent subpoenas from new yorks attorney general. He is seeking information about special arrangements that the firms have with exchanges. Other u. S. Authorities including the fbi are investigating whether the firms act on nonpublic information. First Quarter Sales are up more than 2 . The advertising giant beat growth estimates. I spoke to the chief executive on the phone. He told me the business landscape in europe is still fragile. The situation is quite fragile. We should look at this with glasses which are a little bit more optimistic. What we see, and improvement in greece, which was one of the most troubled situations in europe, where we had 30 down in investment, in italy, spain, portugal, we are posting positive numbers which is something which we have not in the last three years. How much do you worry about the situation between ukraine and russia dustin mark ukraine and russia . Boots on the. Ground, will that have an impact on the psychology of europeans and russia and what does that mean to publiciss bottom line . Operation in ukraine is close to zero. It is not a big problem for us. More whatm is much would be the impact on the Global Economy and how people would see this and if they will see an impact on the rest of the world. We fear that this tension may contaminate relationships or the financial situation all over the world. You are still awaiting approval from chinese regulators on the merger with omnicom. Is that going to come in the next couple of weeks . We hope so. We dont see any major hurdle. It is only a lengthy process and something which is taking more time than we expected. We dont see any major problem with chinese authorities. In all the questions they have put to us, we dont see anything that could come in the way of an agreement. You never know when it comes to that. You are right. But we are confident. Confident thatly we will get the authorization from the antitrust authorities of china. Maurice levy really wanting to make that last point. A lot hinges on the approval from the chinese authorities. European car sales up for a seventh straight month. The trouble in ukraine has yet to undermine confidence among european consumers. David tweed is in berlin. Is there a real tangible pattern of this recovery . Consumerseally about swapping their older cars which they have been holding onto for quite some time, for new cars. You can see that it is sort of the cheaper cars which are doing better. Renault up 29 . That was led by their low cost division. Peugeot up 11 . We heard from peugeot just last week. They are going to cut by half the number of brands they have got out there. Writing on a cushion of air. The w sales, they were up vw sales, they were up 8. 4 . Performancenomenal during the months. The americans did pretty well. Ford up 14 . We caught up with fords chief operating officer at the new york car show yesterday. Like germany,kets very competitive market, our share in the First Quarter was up a point. We added more production for our festiva. The other big american carmaker, general motors. 7 . T was led by a 15 gain what about individual countries . Are sales also a tell story . Spain has been doing relatively well. Spain has been doing well. This is a bout a recovery in the medium segment. Spain up 10 . Italy up 5 . Germany up about 5. 4 . More subdued. The one that stood out, it is the u. K. Up nearly 18 . That is going to be a reflection of the fact that the economy is recovering. Wealthhat about the effect from those house price increases . Watch out for those price increases. David, thank you so much. David tweed from berlin. Cadbury, the brand is set for one of its biggest weekends thanks to easter. Its bestselling chocolate for the holiday is the creme egg. What does it take to make . We went to find out. Easter is an incredibly exciting time. It is also very important for us. It is one of the biggest selling seasons. We need to get easter right. We are making 47 million easter eggs. Year, we have about 30 of the chocolate market. At easter time, we have about 50 . The bestseller for us is the cadbury creme egg. We make about 1. 2 million every single day. At and egg is solid inside that you have fund and. It replicates what an egg looks like. They will just slam the two together and it closes. Like most chocolate manufacturing these days, most is automated. The easter eggs you will be eating and enjoying were made in the last could have been the last few weeks but it could have been the last few months as well. Here we are at easter 2014. Is pretty much put to bed in terms of planning. We are now working on easter 2016. A lot of people think the creme egg is on sale all year round. It isnt. To me, the creme egg is a little ray of spring sunshine in the dark days of winter. There is a debate in the newsroom on whether it is too sweet, not too sweet, whether you put it in the fridge. If you havent had one, you really should. As we had to break, president putin is giving his annual q a right now. This is symptomatic of what we have seen over the last couple of weeks. He says people in crimea will feel the benefits of joining russia. The presenter of this q a session started off by saying that they had 2 million requests but they were all very simple. It was basically thank you notes for crimea. This is very different to how we are interpreting things in the west. He says there are no troops in the east of ukraine. That is not what we are seeing on the ground. To make sense of all this, we will toss back to Ryan Chilcote. Geneva talksng the between russia, ukraine, the u. S. And the eu. We will try to make sense of all this. We are back in just a couple of minutes. Drink bankers are drowning their sorrows today. Diageo and remy cointreau are two of the worstperforming stocks in europe. Even though diageo is the Worlds Largest distiller, it doesnt manufacture the best selling spirits. It does just sneak into the top three. Lets take a look at the rankings. The drinks business is big business. The industry is now worth more than 1. 4 trillion. Some of the biggest sellers may surprise you. These are the top three according to drinks international. Number three, when you will have heard of, smirnov. The vodka is owned by diageo and sold almost 234 million liters according to the 2013 report. Number two, forget remi martin. This one comes from the philippines. It is called an parador. Is perhaps seller one of the most specific. It is called jin roh. Seen here performing gangland style. Jinro. Form of soju. Orm of the figures are staggering. Anything that performs gangnam style gets thumbsup from us. With millions of people sipping jinro cocktails, should diageo be worried . Lets ask a senior alcoholic drinks analyst, probably not the best choice of words. Of course, manus cranny. Talk us through the emerging markets. Is the bestselling drink in the notd that, then why it is in the hands of one of the big giants . That doesnt mean that it is not going to be in their hands at some point. Many of the manufacturers have realized the potential of these local drinks over the years. Diageo has some acquisitions there. There were some plans to start expanding because there would be some sales there. It is a gradual process. Some say you have to try a job about 50 times before you get used to the taste. It, we used to call it westernization. Trying to emulate western drinking habits in emerging markets. We are gradually moving to a more interactive approach. Has that play been overdone . The whole story that we have been telling for the past couple of years has been about all these companies building their presence in emerging markets. Now it seems you are saying diverse. While emerging nations are extremely aspirational, trying to emulate western habits, the opposite is true in the west. Millennials, much more experimental, much more adventurous. They like something more exotic. Problem with trying to standardize and globalized taste . Conversation we have with a lot of luxury clothes manufacturers. Do we need to become much more local in our thinking . Some of us will become more exotic and adventurous. Overall, do we just need to cater to the local taste and that is where you make the big bucks . It is probably a much more complicated approach than that. Localization is extremely important. As we see the trends across the world, a month of neighborhoods in london, these things are popping up after hundreds of years. Whiskey distillerys within the confines of london after a couple hundred years. This return to localization is true. To be ableinterested to follow through and know where the products are coming from and support their local economy. Elegiac a nostalgia retro appeal. Where are we going to go with marketing these drinks . Gangnam style. I saw that and thought of you but i didnt want to go there. Marketing these niche brands, they have got to come up with Big Marketing budgets. Is that going to be a critical point in terms of who wins the war for scale . Experienceg in my and after years of working in the industry, i cannot believe that the flavor profiles in our palate change as fast as drinking habits. There is Something Else driving it. For example i always mention the madman affect. What happened after the series came out and everybody started drinking bourbon and how important burden was. Before,having the chat my favorite drink, it is oldfashioned. Perhapsfashioned unconsciously. It is something beyond economics, gdp growth, profiles. This little niche pop culture reference could potentially give us the direction. What you put that next to you said at the beginning, some of our taste goes back to what we were drinking or what our grandparents were drinking, then it would mean there is almost a fashion cycle for these drinks. Remy cointreau could come back in full force 10 years from now. Campari and the fact that it was fashionable years ago. Now it is being seen as the next big thing. It is a very cyclical process. [laughter] go on. You are correct. It is not actually what our parents used to drink, it is what our grandparents used to drink. That is perhaps why i can see vodka facing some severe problems. It has been going really well for quite a while. Our parents used to drink it. It was very versatile, very neutral. After a point, people needed something different. One of the big themes i touched on through the morning is china. We were almost blew in the face talking about the new regime in china. The risk is that you get radical social change by the government and people move away from the premium end of the market and they dont come back. And are first to trade down away from that beautiful remy cointreau special bottle. They just dont come back. Is that a trend that concerns you . I believe the concept of infinite growth in any sector has its problems. There has been a lot of complacency from any of these Countries Companies focusing on the higher end of the market. It did have some potential. It does still have some potential. The initial rates of skyrocketing growth i dont think will be seen for a while again. Thank you so much for now. As we had to break, president putin is giving his annual q and a right now. He just said that the revolution in ukraine was foolish. He said that ukraines ousted leader didnt flee the country but was forced to leave. He said that he is sure russia will reach an agreement with ukraine. Lets see whether this means that we will get something when the geneva talks get into action. I think they started about 20 minutes ago. Ryan chilcote is on the ground. We will keep you updated on the significance of Vladimir Putins words for the west, we for ukraine and also for the u. S. The expectation that the achievement of our economic objectives will likely require low real Interest Rates for some time is again not confined to the United States but is shared broadly across many advanced economies. Course, this guidance is a forecast and will evolve as we gain further evidence of the economy operating in the wake of the crisis and ensuing recession. Was fed chair janet yellen speaking at her first major Monetary Policy framework speech. She says the economic recovery will require Central Banks to keep rates low. We are joined by markets. Com chief economist bill. What did you make of her comments . I think she is brilliant. Ever since the moment she took over, it has been clarity, clarity, clarity. We go back to last march when the market got confused. I am going to show my age. Webably 40 years ago when had the fed chairman mr. Greenspan, he made a comment to the Bond Market Association in the central bank. He said, basically we just react. Theas the market tell us right levels, we just adjust our rates accordingly. A lot of central bankers would disagree with that. What are you expecting Interest Rates to go up in the states . Is this a story for 2015 or beyond . It is a question of probably mid2015 and beyond. The key is going to the the nonfarm payroll numbers and inflation. Inflation is not a problem. We have to get nonfarm payrolls to average a minimum of 236,000 for a threemonth period for the market to really show. Yes, we have a nice employment picture in the states, a better employment picture here in the u k, but we have 4. 5 Million People in the u. K. That are entrepreneurs. Underemployment. This is going to be the problem. One of the things where people are probably upset with janet yellen i wont mention that sort of odd market fun on the west coast of the United States we are struggling now at 2. 65. The bond market says Interest Rate are not going to go up. The dollar bulls are saying that Interest Rates are not going up well into at least mid2015 or later. It is going to be data dependent. The data in the u. S. Is improving. Thank you so much. For those listening on bloomberg radio, the first word is up next. For our viewers, a second hour of the pulse is coming up. First of all, how do you produce music sex sells . We talk to Tarik Azzougarh wutang clans producer Tarik Azzougarh,. Then, ukraine and crisis. Directors. Managing we also have our live report are, Ryan Chilcote on the ground in geneva. We will discuss what it means for the future, next. Putin speaks. Russias president says he will expedite the switch to rubles in crimea as top diplomats meet in geneva for the First Time Since lashes erupted in ukraine. Googles weak numbers highlight the challenge of the shift to mobile for weibo. Wutang is selling a hiphop record with all the rights. It will go to the highest bidder for millions. Were live with wutang clans roducer. So good morning to our viewers in europe. Good evening to nose asia. Welcome to those just waking up in the United States. Im francine lacqua. Guy johnson is off today. This is the pulse live from bloombergs European Headquarters here in london. Lets start with the crisis in the ukraine. Back in russia, president putins televised q a with the public is underway where he claims ukraine used force against its civilians. It seems that we have two sides talking to each other but not really understanding each other. There is a lot of domestic politics when putin speaks and the west is seeing it entirely differently. Thats exactly right. President putins comment there during that televised address that the ukrainian Central Government used tanks and fighter jets against its own people suggests a hardening of his line or a lax lack of flexibility going into these talks just as these talks get junt way. Some other things too. There are no Russian Forces in the east of the ukraine. Of course ukraine says there are. He said thank god that the ukrainians agreed to discuss decentralizeation. That is of course one of the russian governments demands going into this. It is important to keep in context that primarily president putin here, although were all listening is speaking to a domestic audience. The events in crimea and the seapt events taking place in the Eastern Ukraine have done wonders for the russian president s popularity. He is going to be mindful of that and explain what russia is doing in the ukraine. What is the latest on the ukraine talks in geneva . Will the u. S. Ratchet up sanctions . Good question. Well learn the answer, i think, about whether well see a ratcheting up of sanctions in the next four or five hours. That is when secretary kerry is supposed to give a press conference here. Clearly he will give a suggestion as to how he thought the talks went. We understand if the u. S. Doesnt think they were successful or useful they could introduce further sanctions as early as tomorrow, possibly we understand sanctioning another russian bank, possibly going after more businessmen in president putins inner circle. The e. U. , the Foreign Ministers may meet next week. Now it is just the talks. We have russia, the ukraine. The first time those Foreign Ministers sat down together. Just months ago the Russian Foreign minister joked that he had seen the Russian Foreign minister at a meeting in paris. In some ways, the u. S. Thinks that the fact these talks are taking someplace a step forward in a diplomatic sense, but the russians have very serious retirements for this meeting. Ey want a did he have lucian it is going to be very difficult for you crane to agree to some of the conditions. Well have to watch, francine. Yeah, well have to watch and see how the talks progress. Ryan chilcote will be on the ground following those talks very, very closely. Well keep an eye on the q a session going on now. Googles weak numbers highlight the challenge of the shift to mobile. Well hear more with Caroline Hyde and jonathan ferro. Lets talk about google. This is symptomatic of whats happening in the tech world. There was a lot of hype about mobile and we use it a lot and in terms of translating it into advertising dollars, it is tough. It is tough because you dont pay as much when you advertise on mobile devices versus a desktop. Google says you should be able to charge the same if not more for mobile than desktop. Larry paige, the chief executive at google is selling more but notting as much. So Many Companies want to target us on the mobile device. It is the problem that facebook had to begin with, monetizing mobile. At the same time, they are also struggling to ramp up, to convert the amount they are spending on some speculative deals. Thats why we have seen a selloff in the technology stock. You have google diversifying with drones. People are suddenly realizing how are they going to make money . Mobile is a tough environment. There are two aspeblets to this. When you go aspects to this. Hopefully the evaluations are good, you go into it. You list. Tech stocks have been absolutely hammered. The highs were in march. It is hardly great timing for them to see a biggings big selloff. Am i surprised at expectations being so low for the first days trading . Certainly not. What is the difference between twitter and weibo . Twitter far more users. You look at revenue. Youre looking at 2. 76 at twitter. 1. 46. O, the issue is look at where the users are. The users for weibo are in china, the overwhelming majority are in china. That is an opportunity because you get to get that advertising revenue from these companies that want exposure to china. Think about it. Everybody wants exposure to china. Not Everybody Knows this market. That is a big, big issue going forward. I love this fact. Indicate my perry, how many followers . 52 million. Chen kun. Most people are never heard of. Caroline and i obviously know he is an actor and that is ecause he told us. They kind of built a mini conglomerate so it is a natural hedge. I think this is what is fascinating in the earnings season. Yesterday we had i. B. M. It disappointeded in numbers not shifting to the cloud quickly enough. We have the old guard really giving us their numbers. Basically they are disappointing or just beating expectations. None have beaten. Next week we get the new guard. Facebook, twitter. If we see the new numbers betting on Growth Potential rather than bang for your buck profitability, ill give you an example, a Security SoftwareCompany Last Week gave numbers and fell to 42 because it disappoint. It is going to be a testing time this quarter to see whether we see evaluations falling further prrl i cant wait to hear more about the chinese. People queue up in changing rooms to snap their new they do that here, francine. Do they . Ill look into that. Im not sure they do. John ferro will test it out for us. Now later bloomberg speaks to the chairman of the company that also watching shares of emy quantityo and diago. Quantity row. Is it a social change . The chinese are going after people who drink highend cognac. They closed 200 entertainment centers. Karaoke bars. Remy has missed on all it is under pressure saying get ready. Or a drop in our operating is remy going to turn into a victim of takeovers . Well come back to that in a moment. Diagio, tough time in thailand. They have to sell more vodka. They are not selling enough vodka. Flat in america. China slowing down for them. Thailand. Those are the big issues. Fran . You tusmed on some of the big themes. What about deal makers . Are they going to counter this and buy more local drinks that sell better . Where are i think that is the conversation we just had from the analysts saying the small niche brands with individual personalities so to speak are what the booze companies, the big beasts are going to want to buy. Youre seeing diageo go after united spirits. That is going to give them 10 of the Global Spirits market. So when they go to do a big deal it is about scale. The next step is more deals. Acquisitions. That is going to be the theme. I like bloomberg industries. They help me a lot. This year it could be the biggest deal of the year in the spirits business. You have beam and conti. Look for the niche. Look for the niche. Irish what . Is it alcohol . Rocket fuel. Something to look out for. Maybe not try it but look out for it. Thank you so much. Ranian the latest. Manus cranny with the latest n remy continue row. The f. B. I. And other u. S. Authorities are investigating whether the firms act on nonpublic information to gain an edge over a competitor. South korea is investigating the captain of a ferry that sunk killing at least nine people. There are allegations that the ferry deviated from its route. South koreas president has promised severe punishment for those responsible. Janet yellen is looking at wages for signs of inflationary pressure. She said pay rates proceed at a slow pace. She was speaking at her first Monetary Policy framework speech. My response to changing kirks, policy can be most effective at reducing uncertainty about the course of inflation and unemployment. Now coming up ahead, wutangs one copy son sent. Concept. They will release just one copy of the newest album. It will go to the highest bidder. Were live with the groups producer and rapper later this hour. Welcome back. Lets check in on the currency markets. Jonathan ferro has more. Jon . Thank you, francine. Euro dollar 1. 4838. Janet yellen, dovish. Who would have thought it . The french finance minister calling for a e. U. Meeting on the strength of the euro. Jon, thank you, jon ferro there with the euro check. Talks have just begun in geneva on the crisis in the ukraine. Were joined by the managing director of a company that specializes in sovereign credit risk. Thank you so much for joinings. Thank you. When you look at the situation, it seems that russia has largely ignored the sanctions. We have had a hit on the ruble but overall it has gone ahead with what its exceptions were. I think it is clear that both sides have been pretty much daggers drawn since day one. Russias objective has been crystal clear. It is seeking to destabilize, to undermine and to discredit the ukrainian state with ensuring that it does not it is not drawn into the western fold. This is this has been russias overriding aim. The west, though was thinking that the sanctions would hurt the markets and hurt some of the guys closest to putin. It would put an end or discourage or slow down anything that he would do in the ukraine. That hasnt really happened. Do they have to ratchet up sanctions today . It is eep unclear they ratchet up sanctions if that is going to change russias aim here. The real key here, obviously is Eastern Ukraine. This is the core of russias insurance policy against a westernoriented ukraine. This is the area. This is the part of the country in which russia is best positioned to exploit these longstanding political and economic weaknesses and that is exactly what russia is doing and federalizeation, as you well know, is very much very much core to this strategy. You seem to suggest that actually so even if we do ratchet up sanctions, it is a little bit too late. Putin was speaking about Eastern Ukraine saying he is not seeing much on the ground. Were observing other things on the ground. He says there are no troops in Eastern Ukraine. Is this going to be a huge Market Correction . Is there a chance of u. S. Boots on the ground . I dont think there is any chance whatsoever of u. S. Boots on the ground and i i even doubt whether in fact classical russian boots on the ground are likely. Russia is pulling a number of very sensitive levers. Very insidious ones, by the way, in order to destabilize the ukraine. Insnt need to send to the cavalry. It is not going to be going in all guns blazing because that would obviously trigger much sharper sanctions. It is basically using, like i said, fairly insidious ways to destabilize the ukraine. How do you see it ending up . Are we going to see no escalation . The end game here is that basically you will have a centrally a very weakened and diminished ukrainian state, which is going to make it very difficult for the west to basically draw it in to the western fold. It is clear now the west is putting more pressure on kiev to grant federalizeation and autonomy. That is basically a russian trojan horse. Federalizeation is basically a russian trojan horse in order to weaken and to destabilize the ukrainian state. We all know there obviously needs to be more more autonomy, a degree of autonomy to these eastern regions, but this is not about the rights of ethnic russians. All right, thank you so much for all of that. The managing director at spiro sovereign strategy. Coming up, the wutang clan album that is six years in the making, there is only one copy for sale. Were live with the producer after the break. Welcome back to the pulse live on Bloomberg Television and streaming on the ipad and bloomberg. Com. The ford mustang turns 50 today. To celebrate, the company is unveiling a new 2015 model on top of the empire state building. It is not the first time they pulled off that feat. In 1955 the first model was displayed on top of the skyscraper. What does it take to hoist a car more than 1,000 feet into the air . More than you think. Here is a completely new reed of car. A car to go almost verywhere. Wow. But look at that. It is all worth it for a shot like that right at the end. Time for todays the pulse number. How many easter eggs cadbury makes every year. Its best selling is the cream egg. They were making around 1. 2 million eggs a day. That is pretty impressive. That is a lot of chocolate you could be eating. Coming up next, fans have been waiting for the latest wutang clan album for years. Well speak with their producer to find out why they are selling just one album and what that means for the future of music. Welcome back to the pulse live from bloombergs European Headquarters here in london. Im francine lacqua. Guy johnson is off today. Here are bloombergs top headlines. President putin has been giving his annual q a. He says that people in peninsula will soon feel the benefits of joining russia. Meanwhile talks have just begun in geneva. The meeting is the first since clashes erupted in Eastern Ukraine. Face. Says russia will increasing penalties. Twitter will begin trading on nasdaq today. Weibo is begin trading on asdaq today. The c. E. O. Will speak with bloomberg later at 6 00 p. M. London time. 1 00 p. M. In new york. Now lets stay on tech with a look at photo sharing apps. Who would go up against facebook, instagram and snap chat . An israeli startup is launching an app designed to help parents share pictures of their kids while still keeping them private. Elliott gotkine spoke with the founder. After talking with a lot of israeli and american parents, we are sure there is a painful problem for a lot of parents. Im a parent too. Also im a cofounder and we take so many photos and sharing them in a high quality way is a pain for us and so many other parents. Actually persuaded potential backers to invest in your company. The thing is it is more suitable for gadgets and things that cost money. We planned for it to be free. The question is how are we going to get funded without asking for money. What we did is to ask that by seeing that investors are looking for demands and products and then to invest in them. We made a way to show demand for our product before launching it and it worked. How many people . More than 50,000 people with zero marketing budget. Went totally viral. How did that translate into money raised . You needed money to make it for apple and now android. That is something we had to figure out. Yeah, it basically worked. We already have two different investors putting money in the company. Were launching it on july. It is successful. It is too early to start thinking about how many people are going to be using this. We have a thousand people on our program and it is going quite well. How do you think youre going to make money because youre going up against some of the biggest, deepest pocketted Technology Companies in the world. Well, i think the thing about having a product that is focused on a specific target aught audience like parents is that for parents, there is a real usage pattern. They print photos and they do you see companies in the nasdaq worth billions doing just printing. We think there is an opportunity to disrupt the mobile printing industry. Thats how we plan to make money. We have a few other neat ideas in mind. What is next . Video . Sure. Mainly to get the experience right. In mobile, the experience, the product is king. You have just got to have it so fast, so fun to use. Something that people will raef about. That is what were rave about. Thats what were working on now. Now we can unfriend our mothers from facebook because we can share our photos with them by yoovi instead. Maybe something to look forward to. Up in 35 minutes, surveillance tom keene. We have Ryan Chilcote on the ground in geneva following your secretary of state very closely. Of course this, francine, after, i guess i call aid civil war overnight. It was amazing to see francine out on twitter the reporters reporting from Eastern Ukraine and around that, the different tweets from the propaganda side of those from kiev in support of kiev and those in support of the pro russians. Richard haas will join us, the former ambassador, president of council of foreign relations. Well talk about where we go through the weekend and particularly in geneva and then we turn to the banking business hours. Well touch on High Frequency trading as well. Looking forward to your conversation on high frequently trading. Very quietly, the European Union has put steps in place to deal with it here in europe following that Michael Lewis book. What has changed is finally the government is getting involved. We see that with six subpoenas by the attorney general of new york state. I believe we saw that yesterday. But what is also important over the weekend, francine, here is your reading for the long weekend, and that would be Joseph Stiglitzs very important paper on High Frequency trading. It is the talk of economics this morning. This is the paper from the Federal Reserve bank of atlanta where stiglitz goes back to what he won the nobel prize on. Yeah, there you go. The eastern weekend reading book by tom keene. When does baby george come back from new zealand . He will have an aussie accents. That can take years. I think it is in 10 days. Im not a royal watcher, tom. Im the official bloomberg royal watcher. Absolutely. There you go. Well get you a little hat. Tom keene there with surveillance in 20 minutes from now. Lets take a look at how european markets are trading. Manus cranny has more. If you were trading markets and you were looking at the weekend ahead, how much risk, if you had the opportunity to take risk off the equity table, off the currency table, would you . Probably. That is what is going on. Equity markets in europe are up by 1 3 of 1 . Janet yellen made her position very, very clear. That is there is a lead time, approximately two years is what she said it is going to take to get employment back to where it was. Janet yellen keeps her eye in terms of what is going on in the. S. Economy. The c. E. O. Of sat, he missed on all of his metrix. Sales. A whole wave of them. Down 3. 29 . Basically what he said is yeah, i can see correlations between whats happening now and what happened back in 2000. There are a number of companies, not all companies that, have top line growth but are not producing profit. If anybody is not familiar with what happened in 2000, have a look at a couple of charts. A little bit of a change in direction. U. S. Equity futures, tom keene, royal watcher extraordinary on bloomberg keeps an eye on whats happening with baby george and the duke and duchess of cambridge. Down. 25 . Those are the key issues, francine. Back to you. With the royal correspondent appointment, we really have all of our goals covered on bloomberg tv. There you go. Coming up, wutangs one copy concept. The hiphop group is selling a single secret record to the highest bidder. Were live with the producer behind it all after the break. Welcome back to the pulse live from london on bloomberg tv. Now there can only be one. That is what u. S. Hiphop group the wutang clan is betting on with the release of their new secret album. The group has topped charts since the 1990s, but for their newest album, they are trying something different. Something else. Only one copy will be made and they hope to auction it for million s of dollars. Joining me now behind the concept is the rapper and wutang producer Tarik Azzougarh, also known as cilvaringz. You decide were going to have a new album. Were just going to release one copy and the buyer can do whatever they want with it. Will this change radically the way that music operates . I think this is an approach you can only use once. We never presented this as a solution to the problem. Will it change music . I hope it will inspire people to pay more attention to the way they present their music as a part of music in this current climate. I think presenting and supplies it now is equally as important as the music itself if not more important. This is to inspire debate and to bring music back to what it was, a work of art. We have to value ourselves first before it is valued by the consumer and the market. It is a lot of things. It is a statement, an inspiring thing. Will it change it . It kind of has already. The debate is ongoing. We talk about it so much. I love what it stand for. The principles make so much sense. We actually lose money on it. How much are you expecting to fetch from this one single album . I have no idea. It has never been about numbers for us. Thats why were not looking at whether we lose money on this. The consumer industry or consumerism . It is part of the Music Industry. The market. Just the way music is perceived in todays world. The evaluation of music is, you know, it is there. It is evident. We hope we were taking matters back into our own hands and decided we change music. Lets not let the market decide. Lets make that decision ourselves. Thats what we did. Tarik, some of the figures, i know you dont want to talk about money. This could go for 5 million to 7 million. Would you want it to be released to the public . Lets say im a lucky and weggeti individual and get to wealthy individual and i get to buy this album and i have one copy with all the rights to it. Would you rather me sell it or not sell it but put it out there or keep it for me as a secret . I hope it will never be commercialized. I hope it maintains itself as an art piece. How do you justify that to the fans . Why do we have to justify it to the fans . This is not for the fans, really. This is for the greater good. For the benefit of music. The current model is unsustainable. This is a sacrifice. We knew that from the minute we took this idea on. The minute we brought this idea to the table, we knew this was going to be something bigger than the fans. This is for everyone. This is for the benefit of music. This could have been Lenny Kravitz or sting doing it. It would have the samefect in the media. Can we do something for the greater good . Youre a producer and also a very well respected hiphop singer. Talk to me a little bit about is there an anger issue you have with the Music Industry . We saw jay z releasing his latest album through social media. We saw the same with beyonce going straight do itunes. How do you see the fight with the big tech giants . Were looking for different ways to explore music and making it interesting. Were following in their footsteps. This is not a race to come up with the craziest story. Youre listening to songs and updating your facebook and twitter feed and not really connecting with the work of art that has been given to you, it devalues and gets to a point where, you know, you dont feel that connection with it anymore and i think the artists now themselves dont value themselves as artists anymore. We have become a single based nation where everyday there is 50 new songs. The Attention Span really short and it is a pool of supply. A movement against big studios as well or would that be unfair . No. This is not a movement against studios or against anyone. We just said we made this. Were going to decide what to do with this. We create this. Everyone around, the record labels, radio, tv, dictates what happens to your art. They tell you what happens with it. How many songs can you release submit the which song will you release . Why not decide that for yourself . Youre the one that created it. Why not say you want to listen to this record, come to the museum. Im tell you how the experience it because i know how i want you to experience it. We talk about tech trends every day here on bloomberg. Of course the new thing, we dont really know, everybody is embracing it but we dont know impact it has on business or culture or art. How has it impacted the music world and is it all positive or not so much . It is, you know, it depends on from which angle you look at it. Or the little guy, it is both. Record a song in the basement and it becomes viral. Exactly. If you know how the present it to people. Youre in a pool of millions of artists. It is made easier and more difficult at the same time. It depends on how you look at it. For the established artists, it probably made it easier for them. The other ones, it is really difficult on a case to case basis. Tarik, thank you so much. It was great to speak to you. When is this going on sale . Im going to get you back to find out how much it sold for if youll tell us. That is being discussed now. A couple of months . Sooner than that. Tarik azzougarh. Also known as cilvaringz. He is wutang clans producer. Well be back in just a couple of minutes. Welcome back. Just to get a quick look at the fx market for you. Euro dollar. Last week draghi came out and said this could require further monetary easing. I can tell you after a week, were almost back to exactly where we were before he spoke. The key takeaway, the e. C. B. Is struggling to drive the euro much lower. Thanks, jon. Have you ever heard of a foldable house . Meet the company that makes prefabricated homes that fold up in the factory for shipping and open up on site. They are bolted on to a foundation in a day. We went to visit the factory. This is our factory. Ll of our homes are made here. We have a structural steel frame that we use as the start of the house. It allows us to build a house completely in the factory. Fold it to a width of 8 1 2 feet so it can transport on a standard truck and ship it anywhere in the country. This section right here, we take the steel frame and do the inlays for the floor. You can see in the middle section, the hinges, this is where the floor will fold. We seal all of the joints. All the walls are wired and plummed. Anyone will see a completed kitchen, all the cabinets, the range, everything is finished. The structure is so strong by the time we fold it down, we dont have any breakage on our windows and doors. They ride on the truck. The crane picks it up off the truck and puts it on to the foundation. The house unfolds like an origami. As as customer, you design the home with our architects and eventually they create a 3d model. It helps with the floor, the plumbing, the structuring, all that. The demand is very high and growing two to three times a year. What we have seen before, they could not ship really high Quality Homes very far from the factory. They had height restrictions for shipping. Now we can deliver really high end high quality indoor, outdoor living. Glass if you look at your phone and car, it is precision built n the factory. Pretty nice looking homes. For a look at what were watching for the rest of the day, were joined by Ryan Chilcote in geneva and ryan, of course, youre watching these talks on ukraine. Yes, i am. Well flern just a few hours whether these talks were successful. But i have to say they are like a bit of a side show. President puten in his televised address really stealing the show. He said it is not up to russia and the United States to resolve the crisis in ukraine. So much for these talks. He also said putin he said he hopes he wont have to send troops into Eastern Ukraine. An indirect reference that perhaps he may feel he has to. He also said he has the right to send russias military anywhere he wants. And that the Ukrainian Government has used tanks and fighter jets. His accusation against his own people, perhaps justification for using russian force. And one final thing. Remember how the kremlin insisted during the crimea crisis there were no Russian Forces actually in crimea, today he said there were standing right behind the crimean militia. Some dramatic comments coming from the russian president just within the last hour to make these talks somewhat irrelevant. Or certainly difficult because it is going to be very difficult to see how it all pans out. Ryan live from general eve it a throughout the day. And jon, were watching weibo, the chinese twitter. It goes public in the United States. It is set to start trading. Massive tech selloff in the United States. Who on earth would want to go public on today of all days. They are at the bottom of the range. Nobody is expecting that big first day pop that we saw from the likes of twitter. Their challenge is to grow outside of china and that is going to be difficult. Jon, thank you so much. Well focus on weibo. Thats it for the pulse. Surveillance sup next live from new york. This is bloomberg surveillance. God ukraine discusses decentralization. Russia militants are killed and ukraine. Diplomats will meet in geneva. Janet, no slack in the american economy. Paul krugman notes a need for immediate stimulus. Forget drones any tools who wear cool glasses. Google misses on mobile. Good morning, everyone. This is bloomberg surveillance. Were live from our world headquarters. I am tom. Joining me adam johnson. Olivia sterns event for scarlet fu this morning. Very important, incredibly busy day. Lets get right to the brave. The brief is brief because overnight we learn that japans Consumer Confidence joined to drops to the lowest level. That is your only economic number overnight, but that is plenty inave america. 9 45, homework consumer comfort index, 1