Headlines today. Sue keenan follows matthew martone. It the Global Response to the crisis in ukraine. Thats coming up in a moment. Order in, restoring the ukraine. When region that threatens to spiral out of control is crimea. Saysnes acting president Russian Troops are directly involved in the growing conflict on the ground. The countrys newly appointed secretary of National Security and defense counsel. We asked him about the growing tensions with russia. Yes, i am. Im worried about it, for sure. Also, the capture of the government and crimea by units which in my opinion were sent from russia from moscow. We see a very aggressive method of carrying out politics towards ukraine. We could serve their attempts to divide ukraine or at least take crimea. With all the tension and crimea, would you call for native support across against russia for wire . Yes, for sure. Guarantee of safety in the black sea region. Of course we are sure about nato and it has already been announced that they have their own vision and it will not allow the Russian Federation to create conflict. My colleague joins us now live from kiev. Describe the security situation in the capital today. Are things improving from your perspective . It has been pretty calm today in the city. Tias around. I theres not much of a problem despite the huge numbers. You can hear some protests going on behind me on the streets. It has been pretty calm. What kind of fact are we seeing on businesses in tf . Are things returning to normal . Just a week ago, we saw very violent protests. Hotels and cafes and markets are very active. Across from here is a huge Shopping Mall loaded with customers. The only concern seems to be kievs residence and banks. They are not allowing large withdrawals. I will ask you to stand by because we want to get a view on the crisis in the ukraine from washington. Foreignpolicy correspondent joins us now. There are financial stresses on the government in tf. It is the imf bailing them out . The agency has been burned twice in 2008 and 2010 by ukraine. The question. The imf chief has said that a team will be going from the imf to kiev to do some investigation about what is needed. The government has said first that it needs 35 billion for a twoyear bailout. Then they came back and more recently said we actually need 15 billion. They have asked them to not talk about figures because its just confusing for everyone. Thats not forget that all of this began with the russians back at the end of last year promising the Ukrainian Government the 15 billion bailout at that time. That was part of what ignited the protests. Those democratic minded, liberal minded ukrainians who wanted more of an alliance with the eu and association that wouldve allowed them to eventually get European Union membership. At this point, the imf will have to look at the history. 2008 they have had to stop loans to the ukraine because they were unable to keep their promises. What i think is interesting is that the current acting Prime Minister has said that he is willing to do the austerity and willing to cut the gas subsidies he admits it will kamikaze. Al, coz im wondering what sense you are getting from people on the ground in kiev. What do they think of the new leadership . She just mentioned the idea mission. A kamikaze people are hoping that this will be a government of national immunity. I heard some young people talking today about the fact that all the politicians here should be banned. They have a term for it. They are requiring politicians to Work Together with the imf. Speaking of working together, what about economic support from they believe that yannick kovacic is the duly elected president of ukraine. At this point, the u. S. Is watching this very carefully. They dont know which way rush is going to go. We have seen the Russian Military exercises over the last few days. The ap has reported that some journalists saw some Russian Troops. Others have said that it will be done more under the radar by russian or people in crimea planning a takeover. They said, dont do anything. Remember what you warn us about not interfering in libya and syria. Where yourney mouth is and not interfere in ukraine. We were talking last week with the former u. S. Ambassador to the European Union. I will ask you the same question. Competingt these interests between the u. S. And eu on one hand and brushed on the other hand a lot of people talking about shays of the cold war. And russia on the other hand. The answer depends on the lens through which you are looking. Weve seen in the editorial pages of the wall street proclaimingple crammin this the new cold war. You see the Obama Administration trying to get away from this perspective. They know that they need rush on so many other issues like syria and ironic and north korea russia on so many other issues. This is not rocky for. Rocky . 4. Are they sensing cold war tensions . They were talking about 1991 and mentioning the fact that ukraine gave up its nuclear weapons. The west owes this new generation of leaders. Youre on the ground in kiev. What is next for you . Im heading to geneva tomorrow morning. At this point, where do you see the tensions between some of the residents there and the new government . Given toare loans ukraine that are forthcoming, there is going to be some pain for average day ukrainians. The new Prime Minister telling us the other day that there will be a problem. Be the moste will despised Prime Minister in the history of ukraine. We will see. The expresident was not a beloved character here. We visited one of his palaces today. Some startling imagery thereof the amount of wealth. That idea that leadership was not part of the people that wealth gap between the leadership in the ordinary people. Something that the new leadership will try to avoid. The Prime Minister did tell o joining us from independent squaring tf. Independent square in tf. The u. S. Economy may be stabilizing. We will explore reports released they about the out look of year ahead. Youre watching bottom line on Bloomberg Television. We will be right back. The u. S. Economic expansion appears to be losing some momentum. Gross mistake product for the Fourth Quarter grew at a rate of 2. 4 . Slower than expected. Joining me now to discuss the theook for the economy, and aeconomist at kmpg fellow at the Peterson Institute for economics. Me start with you as we mentioned. We did learn today that gdp expanding at a slower rate than initially estimated in the Fourth Quarter. Weather is believed to have played role. What is the rest of the story . Asthat estimate fell as well consumption. Whether played some role. Played some role. The service rate of gdp has been growing faster than in recent quarters. Services grew at 2. 2 . Underve been growing at one percent for the last couple of years. They actually make up the largest consumption. They are 70 of consumption. 50 growth is actually from services. Sing the services growing at a 2. 2 rate is actually quite a good underlying place for the economy to be. The market seem to struggle hrug off that gdp news because janet yellen indicated on thursday that policymakers are not stuck to a firm reduction of monthly asset purchases. Why do you think in tumor confidence increased in december . What will it mean for future there is often a lag in the effect of the house prices and the housing additions and stock prices on consumers. There has been a gradual improvement in the labor market which also has a lag effect. These things just build over time. Im not surprised. I think the fed is optimistic for a good reason because we dont have big tax increases and spending cuts like we did last year. It creates a much better climate. As the fed has pointed out, this bill engages in very loose monetary policy. Theyre taking away the extraordinary measures. They are not raising rates. Theyre been very clear that rate raising is going to be starting untilot 2015. How quickly can policymakers make that pivot . There are two ways they could change the paper. It they could slow the amount of tapering from 10 million to 5 billion zero. Or they could actually reverse it and start adding. They can do this whenever they want. They can have an inner meaning of vent even. They can do it whenever they have a meeting. Whenever they want. Although i really think they wont do an inner meeting group. They might do one. That said taper strategy it is interesting to note that although the fed is a ,arket and have similar views the fed is more optimistic about the economy. If the economy does weekend and it turns out not to be just eather, you could see a halt in the taper. What effect might that have on mainstream thaen . The fed is not on the game yet. The economy needs to start to come back. In december, you wrote. N oped for usa today for the fifth time in less than five years the fed has jumped the gun and starting to scale back its support of economic recovery. Inflation still below target and unemployment is still falling. Yeah. Would not have done with the fed did in december. I wouldve wanted to have solid data in hand. Todays report only confirms that. I think it was a bit premature. They are moving slowly. I remain optimistic about the underlying economy as constant said. Constance said. To see. You also wrote something as well. You wrote about this inflation. He likened it to kryptonite to central bankers. What is the main disinflation warning sign . Is kryptonite because it is not something they have that much power to do much about. We are seeing lower price increases month over month and thats what we tend to call disinflation. All of our trading partners have very low levels of inflation. If you look at europe, we are under 1 . Canada under 1 . s level toust got it just over two percent. Wrote about the changing Economic Forecast coming out of the congressional budget office. The cbo forecast that they had seen enough of a slow economy to begin to think that we should get used to sluggishness. Expressed concern. Cbos forecast shake and what happens washington. On cbosour take assumptions and their models that they use to reach their conclusions . They are very mainstream. Ofre is some evidence potential growth of the u. S. Economy that will be slower going forward. I dont think by much. But by some. We have seen a 30 year decline in where Interest Rates are, especially in real terms. I dont think its going away. I think the new normal will be lower Interest Rates and lower growth. I will give you the last word. Im expecting the report be fairly weak. In large part due to the weather affect. Chief economist of alternate investments at kpmg. And the senior fellow at the Peterson Institute for international economics. Thanks to both of you. Next up, Matthew Martin toma asks a judge to toss his conviction. Why he claims prosecutors failed to make a case against him. That story when bottomline continuous in just a moment. Former sec fund manager maki martone is asking a judge to throw out his conviction for insider trading. His attorneys argued that media urt his case. D his does he advocate . No. They say its a long shot. Its his version of a hail mary pass. An appeal is a very different issue. Distinctionmportant because of the insidertrading cases that have gone to trial, this one did have weaknesses. Mark, plus lawyers argued that the government failed to prove the information was nonpublic. The issue had been previously published. They say the government failed to prove previous criminal intent. There were no emails about s or taperecorded phone calls. His team also argues that pretrial publicity, that he was kicked out of harvard for making funny transcripts, got biased the jury. With the judge right and allowing that in for mission out there . How might the appeal differ from this latest motion . It gets into potential errors by the court. The former Prosecutor Says that given the highly technical nature of insider trading, it is hard to prove. There are many would like to see this appeal addressed. He says the question of whether the trade was a direct result of the information is a great appellate issue. Even if he passed along insider information, if the trade had nothing to do with the information and was not based on the information, then it is not a crime. Technicallying is built on proof. Prisonerving 11 years in , one of the largest for this crime. Mark, faces 20 years. Many think youll get life. Haveppeal could really some traction here. Thank you so much. When he six minutes past the hour. That means that Bloomberg Television is on the markets. Alec steele is in the newsroom with the details. Good afternoon. We are still looking at a rally underway for stocks. Specifically the s p session. Up by almost 10 points. Youre looking at consumer staples, energy and utilities really moving. We are seeing the nasdaq pretty much flat. Racing earlier gains that we saw in the session. Youre racing earlier gains that we saw in the session. We are watching individual stocks that we do want to highlight. The first this years. The secret service has said to be investigating a possible Security Breach at the retailer. Somebodycording to a summar familiar with the investigation. Sears says it has no information that reaches actually occurring. We are watching apple. At the Worlds Largest company having its annual Shareholders Meeting where they have approved the. Ompanys proposal they will have an update on cash policy. We are on the market again in 30 minutes. Welcome back to the second halfhour of bottomline on Bloomberg Television. It takes for sting with us. Lets check some of the top stories were following for you at this hour. Ukraine is accusing russia of a military occupation. Theyre saying Russian Troops took up positions around the coast guard bases and two airports in crimea. The former president says he will fight for the countrys future. Mt. Gox filed for bankruptcy protection. 850,000 in bitcoins several hundred Million Dollars are unaccounted for. The ceo has appeared before a tv cast and is bowing deeply. He says a weakness was behind that massive loss. The winning bid for the pink that she cannot pay. It sold for just over 83 million. The diamond has been acquired by the auction house after the buyer defaulted. Year, hundreds of thousands of americans apply for National Service positions. The majority get turned away because there just arent enough slots. Expandinguest says opportunities could boost the economy. Jason is the director of the franklin project. He joins me in studio. Welcome to bottomline. How many people are currently participating in the service . There are 80,000 people participating. Only half of those positions are fulltime. You could actually expanded to about one million. What about the cost echo who pays for . Its a publicprivate cooperation. One Million People per year 23d cost about 2 billion. It has a return on investment. Whats the reaction when you say people in National Service . Young people are volunteering in record numbers. Imou surprised by that . Not. In a recent study i saw, 71 appreciatey meaningfulness over anything else in a career. Actually think that millennials are excited about service opportunities. What were looking to do is engage the existing enthusiasm of young people. When we talk about National Service. What are we talking about . There are 2. 3 million nonprofits in the nine states. We already identified that people are trying to volunteer in record numbers. What we have now is the technology that allows you to meet and bring together the people who want to serve any organizations that could host them. We have huge partners step up with cisco who create Technology Exchanges where young people and organizations can get matched up. The economic benefits to the nation how might this have an impact on high unemployment, particularly among young people . It is skyhigh. So much more than the national average. What this could actually do is make young people more employable. You get someone who serves come you get a leader. Someone who understands the context of the world around them. Look at this graph. 1619, the Unemployment Rate at 23 . 2024, 12. 8 . That is staggering. At least if they are getting involved in the scum are they getting the skills they need to then make the leap into a position with big into the workforce . Absolutely. This is where the private sector can be a huge boom to the franklin project. Hoping us to envision a way that we could credential National Service. What would you say to a young person who has tuition loans piling up an essay, i would like to serve what i really need to get the student loan people off my back. I have to get a job and pay down these loans. If you do americorps, you are eligible for an educational word. Educational award. They would be stipend at a moderate level. You would be able to get paid as youre doing your service. Talk about the tiein to the server america app that was sponsored by ted kennedy and signed into law back in 2009. There is legislation on the books promising 250,000 americorps positions by 2015. We are not on track to meet that. What we are looking to do is meet that goal and expand upon it. Not through government alone but leveraging all of society. You have highprofile support, including stanley mcchrystal. What is his role and how is he helping to get the word out . He is the chairman of our leadership council. Allowed citizenship to degrade to