States. This is the pulse. We are live from bloombergs european headquarters. Guy johnson is on assignment. We will continue our series and took part in it. Let us start with the missing airplane. Sources say that just cap flying. We are joined with the latest. New questionss about whether foul play was involved. Absolutely. Will we know is that the missing jet was going west with its it off flying after it dropped of the controllers aircrafts creams. They send radar and it balances. They know where it is. You can still track and play by sending a radar added. It is more difficult to track it that way. Foul play, another way of reading that would be hijacking, you is Officials Say that they think that this could have been a criminal act and no one is talking about that this may have been an explosion. Were are not hearing that anymore. Looking at the evidence, they now say the plane went west over malaysia and was supposed to go northeast in beijing. It went west over malaysia and it kept going for four hours. They wouldve had to of flown low not to be picked up by radar. That is right. It suggests an intentional act where the plane flies low and the transponder is all. Enoughve a range and fuel to make it to beijing. What about the search . We have not found anything and the search is expanding to other areas. But we learned that india has joined the search. Countries are looking for the plane. It is west of malaysia and north the moloch is straight Malacca Strait. It expanded and now it has expanded further still to north. Amazing that we have no news. Inwe are expecting to hear about half an hour. Will tune into that. Thank you with the very latest on the missing Malaysia Airlines plane. Andas trailed estimates manus joins us with the details. Points towards this. This is significant data. There are pieces on the chessboard. Hard landing and soft landing. It is lows in 13 years. You look through the fact that you have the Lunar New Year and is the lowest since 2004. Again, theduction, slowest growth rate that weve seen since 2009. The question is this. Is the fastest deceleration. What will be tolerated . Will the banks be allowed to reduce the reserve requirements . What is the tolerance level of the premiership to tolerate these levels question mark in terms of the other things that we have been hearing from the today, who is beginning what are the highlights of these 7. 5 and the u. S. Guesses that every time they come in, what will be tolerated . There is no specific number. Minister, we know that he said that growth to be around 7. 2 and that will be around 7. 5 and at a whole new level. There are issues here. It is about. One that and ensuring social control. That is against the Financial Risks that there are in the system in china. There isrtainly certainly an openness to change. It is about social control. That is the sentiment i got. Growth is not the absolute goal for the administration. What are the goals . New metrics, francine. Midlevel bureaucratic coming in at this gathering and air quality, social stability, environment overgrowth, it is about coming with new metrics for governors and supreme leaders. They have stopped any kind of product test test protest in the area and they are classring the new middle and their needs. It is about making sure that you do not have social unrest. It is pollution persist growth and employment. The very latest on the china story. Violence erupted in turkey, following the funeral of someone who died. Two people were killed. Reporting from istanbul is the producer from bloomberg turkey. There is anger and grief on the streets of turkey and tens of thousands of people to the streets. As you said, there are two jets deaths. One was a protester and the other was a police officer. The protest that we saw last Police Used Tear Gas and water cannons. People are angry and they want action by the government. Do we know about the mounting pressure on the Prime Minister . It certainly does. The Prime Minister and his government is facing a corruption probe. This happened in december of last year when three ministers had to resign and the Prime Minister was implicated in the scandal. The managing director of Political Risk that theand he said protests have the potential to seriously damage his political ambitions three weeks ahead of the local elections. Francine, the elections would be a key test of his popularity. They certainly will. Thank you very much. Heres what else is on the radar. Selling more than 10 we vehicles in 2014 that was four years earlier. There are concerns that they have improved the bank and the Company Raised a cash component of the offer of more than 11 billion euros. This offer is since the cash portion. Morrison shares dropped the most since 2008. Profits will plunge this year. Up, tensions as moscow prepares for impending sanctions. Well bring you the latest on the standoff and well we will show you how the market are reacting next. Welcome back to the polls. Were straddling on welcome pulse. Te he the move comes after obama met with ukrainian Prime Minister. Is speaking to the bundestag a couple of hours ago. Merkel just finished her address a short while ago and she said that the European Union must stand up to russia and the ukraine. Why that is interesting is because it is germany that is the least likely country to get serious about russia. They get a third of their natural gas from russia and 6200 german businesses export billions of dollars of goods to russia. It is a disincentive for a trade war. Nonetheless, they say that if russia does not stand down and does not return their troops to their garrisons, sanctions are unavoidable. Itself like russia is taking this seriously. Yes. Taking this seriously is not mean changing the results. We understand from people who are part of this program to prepare russia that they are preparing for a ronstyle sanctions. That means that the Central Bank Reserves will be frozen and banking assets will be frozen. That means lending to russian corporations could be cut off and the people who are familiar with the talks taking place inside of the kremlin and with the oligarchs and ceos of a lot of controlled Companies Say that they think that these sanctions are the least likely option and they are preparing for them. The feeling we get from the Business Executives is that they are not too concerned about them just yet. Thank you very much for the latest on the ukraine and russia. We go to the ongoing standoff with turkey that we were just hearing. We are joined with the very latest. It is great to have you in the program. And we haveical western leaders ratcheting up and try to convince russia not to go through with the referendum in the crimea. At the moment, it seemed like it is going to go through. The message seems to be that if russia moves to annex crimea there will be sanctions. U. S. Isear and the serious about reining russia and. It is lining up all of the sanctions that will have a significant affect on the russian economy. Russias position is that they understand that stations are coming and they will hurt. How do you see them panning out . Were at the most serious time in russia in the last 25 years. This is important stuff and there is a 1994 memorandum that guaranteed number of elation nonproliferation. From the u. S. Perspective, if you go to iran and you get a deal that provides guarantees, why would they believe anything you say when you go to the ukraine. It is important. There has been a decisive shift in opinion to take vladimir could not. These are very serious and significant and i do not think russia can withstand that. Had is that play out . What happens . It would have sanctions on russia and just wait . Thise russian response to is that we will go back to the negotiation table and we will see sanctions. They will be devastating on the russian economy and significant sanctions will be imposed. What is clear is that there is and ittite from the u. S. Is still possible that you could see some kind of conflict on the ground between the ukraine and russia that is in the heart of europe with big countries. Important countries. Talk to me about turkey. We have been covering what we saw overnight with the protests. They are escalating their. Theyre trying to put pressure on the Prime Minister. The local elections that are coming up are critical for hole onnd a key popularity says in turkey, they do this time around. He has get more than 40 . If he does better than that, i think that, given all the noise around corruption, he will think that he is ripping it off and the underlying popularity will sustain him. I think he could see an internal power battle. See . Do you see . I find it difficult to write him off and he is a great campaigner. He is a Strong Political leader and many appreciate that. I would not bet against him to beat expectations in the polls. They have been mixed and they do not show the poor collapsing. How worried are you about emerging markets . You have losses in india coming up. A lot of emerging markets seem a little more fragile. Are seeing worrying and the scurrying discouraging signs coming from venezuela. There was tapering and impact on emerging markets. Tapering. About it is all about emerging stories on a casebycase races. You mentioned venezuela and thailand. Russia had been perceived as a safe haven. I do not think it is now. Markets and investors are investing in russia. Challenge for emerging markets. What does it mean for investors . We have more of an idea of what happens in each of these countries forfive months down the line . Going andmportant and kicking tires. Europe, there are countries that are still pretty good. Point is looking ok. Are coming elections and they can be transformational. They are quite transformational. Are prettynditions resilient and a lot of america is pretty resilient. A lot of big dominant emerging markets have challenges. You could argue that too much money comes into emerging markets. The policy maker did not look enough at reform. You cannot blame everything on quantitative easing at the end of the day. Inmate european policy makers thinking that they were better than they were when they can borrow so cheaply. It is not having your own house in order. The impulse is they should have been focusing on a great opportunity to reform. They missed it. Thank you. The chief of the chief economist for emerging markets. New details in the search for the missing Malaysia Airlines flight. The search enters its sixth day. We are back in a few. Welcome back. We are live on bloomberg tv and radio. It is time for a look at hot shots. Page, a cycle race on tuesday. The Yellow Jersey will stay with a british cyclist. One dozen boats took advantage of the chili weather. They had speeds the top 40 miles an hour on a frozen step stretch of the hudson river. There were icy conditions. And stayedn the race atop the leaderboard. Took a tumble and skidded off the course. Lets go to the markets editor look at thes with a equities. They are trying to make up their mind. Some big issues. Europe,ine, russia, and what will they do next . Lets have a look at the equity futures. It is retail sales day. A will get to some movers in moment. It is retail sales in the united states. U. S. Equity futures and he percent quarter of one for those listening on radio. The jobless claims were what the market was expecting. They did not raise the rates. Other than Corporate News that it isen a focus since out, retailers. Theyre going to invest over the next three years. Are we going to see a price war between some of the biggest retailers . Go hard andgoing to heavy to catch up with the others. Also selling up to one billion pounds worth of property as part of the news flow. They really want to see a market drop. There she went. It is back to basics now. They are carrying through on the others. Those of a look at some of the currency. New zealand saul rates rise. It is coming out the dollar and catching up. It is turned a little bit a moment at the moment. These are the dominant themes. Andilers are under pressure equity markets around europe are just getting up off of a onemonth low. Go to the state for the data and sentiment of the market. Coming up later this morning, a reminder that there are details into the bundesbank. We will sit down with hans nichols and we will bring you that interview. Just a reminder that you can follow me on twitter and guy johnson is on their. Welcome back to the pulse. Here are bloombergs top headlines. The russian government officials are said to be per for iranian style sanctions and retaliation over the ukrainian crisis. German chancellor is a merkel says russia risks damage if it doesnt deescalate conflict. Chinas premier says around the nations growth target of 7. 5 , did not specify how much of a slowdown leaders will tolerate. Chinas timber to february industrial output rose from a year earlier, missing estimates. The italian Prime Minister has announced Economic Reforms that he says lay the groundwork for bigger structural changes to come. There are more than 1500 official government cars according to our spending review. Some are rentals. The turning point is, starting from arch 26, roll in, roll in. Some cars will be auctioned. We will start with the first 100. If possible, we will advertise the name of the ministers who used them. There you go. They are selling off some cars that option for the italian government. An update from malaysian authorities on the missing plane. What is the latest . Malaysian the missing jet is said to have flown west with its beacon off. In other words, it kept flying after he dropped off the radar of the Traffic Controllers. How can network . The plane has a transponder. The idea is that it was off. There were not getting direct radar from the plane, but they were getting indirectly signals coming back from the plane. That suggests foul play. When we say foul play, what u. S. Officials are telling us is they are suspecting this was a criminal act, possibly a hijacking. What theyre not saying is this some kind of mechanical failure are catastrophic explosion anymore. Aviation specialist looking at the evidence of this claim plane went west over malaysia. The flight path was from malaysia, beijing to the north, maybe northeast. Definitely not to the west. It is now clear that the plane may have been tracked as far as four hours west of malaysia. The press conference, the News Conference is just starting. We will keep a close eye on any breaking headlines. We may listen and in a couple of minutes. Talk us through the search. Quite widened considerably. It gets bigger every day. Originally, we were looking in the gulf of thailand and it expanded to the South China Sea a strait. Alacc we now have more than 10 countries looking for this plane. They are looking north of the Malacca Strait, suggesting perhaps new information they have says it went that far. Lets have a listen into this News Conference. It really has everyone poked hooked. I would like to report to the support suggesting the aircraft [indiscernible] the last transmission from the 07 thatt was that 01 indicated everything was numeral. Was normal. Whenever there are new details, they must be corroborated. [indiscernible] on the chinese satellite imagery [indiscernible] we have contacted the chinese confirms images were released by mistake. The third issue to clarify, the aircraft was fully serviced and fit to fly according to maintenance records. All checks were in order. Review was in february. On the radar signals, it is suggested was a possibility the over the Malacca Straits. We owe it to the families to follow up on every lead. [indiscernible] we are working closely with the faa and the ntsb on the issue [indiscernible] the faa and ntsb [indiscernible] the fifth issue is about raw data. Ordinarily release raw data, but in this case, we up at the search effort about. Ur National Security we will share our data with our International Partners including the u. S. And china to help with the search efforts. Six, the investigation into the pilots. That the homes of the crew were searched is not true. Finally, malaysias response. First, the situation is unprecedented. Went completely silent while there were over the middle of the ocean. Search involving many countries and 40 more than 80 ships and aircraft. It is a complex operation and has not always been easy. We are focusing our energy to the task at hand. I want to be very clear, our focus has been on finding the aircraft. We have not done anything to jeopardize the search effort. There have been at times we have not been able to reveal information. Requires analysis by other entities before it is released. To release such information before it was ready could have compromised the investigation or the search efforts, and that anguish to the relatives. Malaysia has nothing to hide. We have spared no expense and no one were been involved with our neighboring countries and accepted all international offers to help. Protocol sinced the incident began. Much has been made about the expansion of the search area. We have intensified the search. Let me be clear, there is no for situation right thi like. It is our duty to follow every lead and we owe it to our families. Trust me when i say, we will not give up. Questions . [indiscernible] was the acting transport minister in malaysia giving us a fairly detailed breakdown of what we know and dont know. Lets get back with brian who has been following the story closely. Said, first of all, we dont have anything confirmed saying the flight to go off route. It is unclear to me if you are saying it is not true or it is inaccurate to say the plane flew for five hours or a flew for anything at all. If we take him at his word, because i think he was choosing his words carefully, he said it is inaccurate reports that the plane continued to fly after he from aired from radar Traffic Controllers radar. He said those reports are inaccurate. He also said reports that it flew for five hours after disappearing from air Traffic Controllers radar are inaccurate. He then said at the end of that, malaysia has nothing to hide. Obviously, more and more questions are being asked of malaysian authorities because the plot thickens. We are on day six of the search. He did say they have been basically sharing radar data with china and the u. S. , some maybe that is what he was saying hoping to dispel the concerns. In a global effort to understand what is going on. Weve been speaking to people who have access to that information and they are saying there is reason to believe in fact the transponder on the plane was turned off and this plane, flight 370, continued to fly. Whether it flew for four hours or not, no one really seems to know. People looking at the evidence are saying it looks clear the play did fly west over malaysia to the Malacca Strait and perhaps beyond. We have confirmation that teams are on the ground from boeing and rollsroyce that makes the engine for the planes. The storybe on top of in any breaking news we get from the News Conference, we will bring it straight to you. From volkswagen. The carmaker may sell more than 10 million vehicles in 2014. That is four years earlier than planned. David tweed joins us. They set themselves a target and theyre way ahead of schedule. How are they going to be up to do this . There was a volkswagen annual conference and it is all about introducing new models. 100 new models will be introduced to the Volkswagen Group between this year and next year. It is quite an achievement. Saying the chances are good we will even exceed the mark of 10 million deliveries this year. Year, 2013, they overtook General Motors and became the secondbiggest carmaker in the world. Theyre chasing after toyota at the moment. Millionr they made 9. 7 in vehicle sales. The extra 300,000 would represent about three weeks of sales. With these new models, you would expect them to build a do that. But the real achievement goes back to the fiveyear plan. They come in a comp is come out with their fiveyear plans and just sort of miss their targets. Volkswagen is absolutely hitting them. Made 6. 2francine, they million car sales. If they achieve their target of more than 10 million cars this year, that means that in the equivalent of adding a carmaker the size of Fiat Chrysler to their production. Quite extraordinary. What new models are they looking to introduce, david . There are new models coming right across the range. The notable ones have the vw audi, the new pisat sedan. We will have several variants on the audis. Macan compacte suv shows being rolled out and theyre counting on that being a big seller. Audi just became the biggest luxury car sales carmaker in the world, overtaking b w. Bmwi. Another one for volkswagen. Coming up, the gaming industrys big night. What does winning a trophy mean for game creators . We will discuss with the chairman coming up next. Welcome back to the pulse. The zombie thriller one best gameat the 2014 bafta awards. The gaming industry is worth 93 billion. Donna then pharaoh has more on the big Players Behind the games. Jonathan ferro has more on the big tires behind the games. This year this industry could surpass 100 billion. Grand theft auto post quote millionheft auto 800 in the first 24 hours of sales. It is bigger than the movie industry. That is why the bafta themselves are recognizing industry. Rockstar took on the fellowship award. This really is an industry ascending. Where it is mobile gaming fit in all of these elements . Very interesting. If you look at the likes of zynga and farmville, theyre cheaper to make and buy an highly, highly addictive. You see the likes of nintendo by some investors being pushed for this particular sector of the industry. Maker of candyhe crush. Given a valuation of 7. 5 billion. Ive seen great tweets on that. More valuable than more since morrisons. Future. Et this is the thank you, jonathan ferro, with the latest on the bafta giving awards. For more new words, the chair of the games committee. Reagan have you on the program, harvey. Give us the scope. 93 billion for the gaming industry. This seems incredible. How much will it increase because of mobile . We are always on our devices. This means you could potentially all day everywhere. That is the key. Mobile phones are amazing these days and performance has grown so much. Were finding people are playing 24 7 that is scary. , it happens. There are games that capture people in such a way you have no choice but to put more time into it. What makes a successful game . Can you spot one before it comes out . I love seeing films. Can i spot the one that will win a bafta . Not always. Not on my own, but i can find spot games that resonate with me. Games that make me want to put more more time into it. It captures my imagination in a way that it has never before. Once you win, does it translate into sales or more of an industry recognition . Both. It helps sales because bafta is at a high profile event in gaming. It puts the nominees and winners. It is a phenomenal event that makes a real difference. Many times we talk about gaming and the need to curb violence in these games. Is this something you talk about . Is it close to your heart . It is being addressed. Andme it is about ratings age classifications and informing parents and guardians about what the age rating means. I think we still make mistakes thinking games are for kids. They are, but not just for kids and nanny filtering. Fun Party Last Night . What was the highlight . For me, sing the rockstar guys and taking the fellowship. Really well deserved. Fabulous team. Some really nice independence. Thank you so much. 93 billion is what the gaming industry is worth. Harvey elliott there, chair of the bafta games committee. Coming up, guy johnson feels to go what it is like from zero to 60 in under 3 seconds. We will take a spin after the break. The caterham is not for the faint hearted. There is no traction control. There are no driver aids. Well, that is not entirely true. This particular 620r comes with a special extra. Going to show me what this thing can do. Listen to that noise. [indiscernible] the engine just sounds brutal. One is much faster, this car has a lot the emotion im feeling. Johnsonnever seen guy quite so happy. For a look at what else were , were just been briefed on what we know with malaysian air. In the last two hours we have learned that flight 370 cap flying after he dropped off controllers radar was adjusting your cell play. And we heard from the transport minister about 20 minutes ago saying those reports were inaccurate at the search continues. We will just be waiting for the next word from malaysia. That is one of our main focuses today. With a great interview coming up. I in about five minutes time, will have some real news for you here on just what the bundesbank did in 2013. The laws of journalism, physics, the new laws prevent me from saying anything. We will have some news for you and five minutes. In that interview where we will press them on omt, currency rates, a variety of issues. You dont want to mess with their laws. We will just wait. You can give us all the low down in about 10 minutes from now. It up next,ers, surveillance with tom keene from new york. This is bloomberg surveillance. Investigators turned to boeing for data on the final moments of Malaysia Airlines flight 370. The search continues for the airplane. Tensions mount as crimea moves toward a referendum. Ukraine asks for United Nations assistance. General motors tries to recall a failed recall. It may stretch back 13 years. Good morning, everyone. This is bloomberg surveillance this is bloomberg surveillance. Live from World Headquarters in new york. Im tom keene and with me are scarlet fu and adam johnson. Morning brief. Chinas industrial output, investment, and retail group less than estimated in january and february. Signaling an economic slowdown. On a better note, australia boosting fulltime payrolls in february by the most in 20 two years. Also in the region, new zealand raised its key interest rate, the first developed nation to exit record low borrowing costs this year. In the u. K. , home prices growing