welcome to "lunch money," where we tie the best in business news. take a look at the menu today. talk clark -- blackrock's chief explains why. another exchange from the virtual currency. in the fed, we have the new boss, the taper, this is a bloomberg exclusive. batcave, and in sports, shaun white is grounded. the u.s. loses its best hope for gold. is this in washington,

incredible. the house found another way to kick the debt ceiling can down the road. janet yellen has passed her initiation. what i really want to know is what was for dinner last night of the white house. >> there was ribeye for the main course. of potatoesety around the country. >> i like it. a dozen variety of potatoes, seven wines, must be a very important dinner. ah, but of course, a state dinner. president obama welcoming a solo french president françois hollande. state dinners do not happen very often. the number has fallen off, look at that, maybe it has to do with the price tag. click cbs found out these

dinners can cost about $500,000. i got the information through the freedom of information act. >> that is enough to buy a house in virginia. this must infuriate the deficit hawks. >> paul ryan was there after he had voted against raising the debt ceiling. he stayed until the very end. >> paul ryan closing down the white house. you go. who could blame him? this is a state lewis. gillian wee dreyfus and her cooper, mary j. blige, stephen co. bear, jj abrams, and mary j got to sing.

i must be dreaming ♪ star ♪e my wish upon a ♪ come on! yeah, kicking it on the south lawn. i like it. there were some big names in business on the guest list, you chenos,chain -- jim just to name a few, united under the banner of franco-american relations. >> the americans have grown to love all things french, the films, the food, the wine, especially the wine. but most of all we love our french friends because we have stood together for freedom for more than 200 years. through all of the -- to all of

our friends from france here , and longe la france live the alliance between our great nations. cheers. honor ofe my glass in the united states of america, of obama,sident barack michelle, long life to the united states, viva la france and estais unis. >> dinner is done. time to get to business in the house of representatives. >> if they pass this clean debt ceiling, this moves this until march 15 of next year. of 2015. that is more than a year from now. clean house, passing a bill was something they said

they would never do last year when congress was trying to pass the ledger. >> i doubt if the house or the senate is willing to give the president a clean debt ceiling increase every time the president asks us to do it. that is a good time to try to achieve something important for the country. >> sometimes things change. the last time we had this debate, people were debating john boehner's future but clearly not the case this time. strengtheneder is by this. the fact he brought this bill to the floor gives you a sense of how confident he feels in his own position right now and he basically has gone the conservatives and the tea party folks, he has given them a break, if you will. they are not going to blame for another crisis situation and it needs the prospects for republicans doing better in the midterm improved. there is no crisis they will be blamed for. they get to focus on obamacare. this is a net plus for john boehner. >> so now the bill has to go to

the senate. want a 60 vote majority to pass the increase rather than the simple 50 vote majority. will stand like the brand,ative, you know, if you will in the republican party. it means a small number of senators today, most likely later this week, bright friday, they are going to have to join democrats to pass this. it is going to happen. conservative republicans can vote no and say held my ground and they are not blamed for a crisis. it is probably the best of both worlds for ted cruz as well. larry finkk's chief is going to give us his outlook for 2014. and we will hear from sally on the big opportunity she sees and financial services. we will be right back. ♪

this is "lunch money," we are also streaming on bloomberg.com, your tablet and smartphone. i am adam johnson. larry fink has a unique perspective on the economy having visited 20 countries over the last four months alone. he shared his outlook for the year ahead- for the with charlie rose. andhe world has many issues i do believe 2014 is going to be rier architecture and we will have more volatility but i believe the outcome of 2014 will be higher markets. for most of our investors in the world, we should not pay attention to these intermittent men's because if you are --

inner movements because if you are focusing on 30 or 40 years, these gyrations should not impact your overall need to protect your retirement and builds an outcome that will give you the nest egg. and'm coming to retirement just a moment. are we seeing a shift from equities to bonds? >> we saw it in the fourth quarter. profitsade such huge and equities, they rebalanced into fixed income. we saw that in the fourth quarter and a little bit in the first quarter. a process.is you are a large pension fund and you have an allocation of 50% of equities and 30% of alternatives . equities rallied so much, you needed to rebalance. unless you wanted to keep a higher equity balance, you needed to do that. we saw quite a bit of it in the fourth quarter. this is why we were not

surprised that the market crunch. what is surprising everybody is how attitudes have changed toward china and the emerging world. as i said, the developed markets more than doubled. the developing markets are down in the last few years. we have had a real change in prospects for the the developing world and the opportunities. >> why it is a good time to invest in emerging markets? companieslook at the within those countries, they are trading at relative to the potential growth rate, they are inexpensive. they are lower p/e ratios than what is happening in the united states. and we have memories of what happened in 1998, when you have a revaluation, you had with mexico, this is a different world of emerging markets. watch the full

interview on charlie rose at 8:00 and 10:00 p.m. eastern tonight. sting with altered, a former ceo of mary lynch -- merrill lynch is one of the highest ranking women and is now the head of 85 brought helping other women follow her path. matt miller and stephanie ruhle spoke with her on wall street. >> it is not that we have gone sideways, we have gone backwards. this is what happens during crisis. and what i saw when i was on wall street is that it is not, let's get rid of people who are different from us, it is more, the numbers around diversity and diversity adds to results, in theory. but we are in a crisis mode and i need that person who i can trust today. >> they will have an african-american ceo. an indianhave

american. they understand the advantages of diversity. iness it comes to gender, which case it is off the table. >> the numbers speak for themselves. i do not know it is off the table, what i have seen a lot of, i have to have this person in this job because it is so important. what we find, when we are under stress, that person who you feel like i see how that person can do the job is typically somebody who looks like you. >> every bank has women on wall street, this diversity committee, this initiative, all of them asked sallie krawcheck to be the keynote speaker at their conferences. are they bunch of bull? >> i would not go that far. i think there is a genuine understanding of the importance of diversity. when i think things are going to is one of the industry recognizes the market opportunity and women.

responsible for 100% of the change in income over the past decade. women are going to college and graduating from college at a greater rate than men. women are starting businesses at a greater rate than men and women are unhappy with a financial services industry. we were talking earlier, stephanie, there is a stunning number, when women, husbands die and we live longer than you gentlemen, i am sorry to tell you. of reasons for it, but we women leave our financial advisors 70% of the time. >> because you're not happy with the job they are doing. why wouldn't they have changed before their husband died? >> because the two of them have the financial advisor. when i have done research on the twoe will feel like of them are talking to each other and she feels she is outside of the circle.

there is an enormous opportunity and financial services, speaking to and solving problems for women. >> more with sallie krawcheck, including what she did with her first paycheck, go to bloomberg.com or our tablet app, boomer tv plus. bitcoin biting it. we will discuss related yardage -- the latest outage. a secret room where you can channel your inner batman. i am serious. how is this for a trap door? fridge in the olympic village. we have plenty of beer but only one catch, you have to have a canadian passport. here is how the good folks actually built it. >> it is very simple. flap.based ring loaded spring loaded flap.

there is a switch. , and i'ms the computer using this modified webcam. ♪

," this is "lunch money streaming live on bloomberg.com, your tablet in smartphone. i am adam johnson. in wild, at bad week for bitcoin got worse. the company says balances are safe and no funds were lost. andlamed programming issues denied any service attacks but this follows a similar problem a few weeks ago that sent prices down 30%. what is going on with these exchanges? loop" sat down with adam waters. is more of an implementation issue. a lot of the businesses that operate with bitcoin have ized software. sometimes that does not flush o specs and reference

implementation. this is something that has existed since 2011. this issue we are talking about. it is now coming to ahead. they have been working on it for a while. they are working on some changes to adjust it. it is more of a hiccup than it is a bug. because of these websites have had to go down -- >> does it concern you as far as the future of bitcoin? is it a problem to worry about? >> i don't think so. we see this before. usually it is fixed in a day or two. a ton of people will jump on it and fix it. a community thing. it is a cool moment. >> do you feel like people in the broader markets care about bitcoin or is it for this tiny universe of bitcoin.enthusiasts s? with geeks.rong my impression is people are interested.

they don't think they understand it yet and are wondering if this is the next big thing. what are you hearing from regulators? there is a lot of learning curve with bitcoin. we have been down to d.c. and that the state hearings, and since 2012, it has gotten better. there is a lot better understanding, the regulatory issues that go with operating the business, and businesses are becoming educated as far as this is not a traditional tech company. this is tech finance. there is greater implications as far as regulation and legality. is a graphical incidence governments are outlawing bitcoin? freak out when they can. >> i think there is a lot of posturing as far as their political leaning toward going. i think there is a lot of public statements where people are very pro-bitcoin.

as a bargaining chip, it is early stages. >> let's say you have a few bitcoin, the extra bitcoin shop can help. started by nasa engineers. they realized it is great to have a currency, but if you can spend it, what is the point? bitcoin as a mean of speculation is not what we believe in. what we believe, if you have a currency that can be spent on goods and services, then you can do something. the advantage of having to acquire these bitcoins and then go to a specific location on the internet in order to buy products? built convenience will be over time. right now you can with a digital wallet on your phone, you can and pay forde something that way, with your phone. because it is a global currency,

you can go to another country and buy a cup of coffee. and moretores companies except bitcoin, it will be more widely accepted. idea, therewith the are no products you can buy, so we have over 140,000 on our website. if you want to buy a flatscreen tv, you can do that on our website. >> the bitcoin shop is small but it is growing. 106stration joined from cents september. the president of the st. louis fed on janet yellen. a bloomberg exclusive, next. and why pimco is bullish on housing. that is coming up in property. ♪

>> let's get you caught up on the action. it is a mixed picture right now. this after the s&p posted its biggest winning streak in more than one year. the s&p is pretty much flat. is up by about 2/10 of one percent after the nasdaq erased its loss for the year yesterday. we are also watching a couple of individual stocks, home depot is planning to add 80,000 seasonal employees, that matches last year's edition no hires for the busiest season, spring is when homeowners try to fix up their

homes. we are also watching shares in on the risey are this morning, which will be released tomorrow. we will be back again in 30 minutes. more "lunch money" after the break. ♪

>> this is "lunch money" on bloomberg television. i am adam johnson. today's moving pictures where the video is the story. carrying members of the mountains. there are conflicting reports as to how many were killed. one says there was just one survivor out of 103 believed to be on board. the defense ministry is blaming bad weather. protesters in yemen are calling for the resignation of the government only a decision to divide the country into six states. the demonstration coincides with

the third anniversary of the revolution, an uprising that forced the president from power. thousands are without power in the south as a strong winter storm world toward the east coast. the storm is forecast to leave ice parts -- to leave across parts of georgia. be careful out there. in property, mortgage applications in the u.s. fell two percent. refinance applications also fell. online, higher rates are making borrowing more expensive. our we going to go from here? the ceo of the mortgagors association earlier this morning. >> we are seeing household formations coming back to the million mark on an annualized basis. we are not sing the buyers on the low end. first-time homebuyers are well below the normalized marco level, which is about 40% of the market. a lot of this is due to credit conditions, lack of down

payment, lack of wealth in the marketplace. so we know there is great demand in the multi family area and in rental, and the question is, how do we get first-time home buyers back into the marketplace? >> so many mortgages are underwater. we have some data showing that, just how bad it is. there are a lot of people that are underwater. their mortgages are underwater. what is the carried for them? what is going to make it better? >> jobs is the story behind all of this. we look at housing is three legs of the stool, interest rates, housing stock and supply and then we look at jobs. if you look in negative equity in terms of where we were just a few years ago, it is better. we are halfway back from the peaks pre-recession in terms of overall home prices. nine percent below, not even across all markets, so if you go into nevada, you have impact. underwater.ver 70%

they are down about half of all homes underwater. the inland empire, those markets are hurting but as you know, other markets in the country, there is a lack of inventory. >> the ideas that households with negative equity are following, we are halfway back, will aim to be more willing to lend or has too much changed? >> the answer is the regulatory framework makes it difficult for banks to take the kind of credit risk they did in times past. so i actually believe that is going tompact last a longer in this recovery then we may have seen in previous markets and the regulatory regime makes it such it is difficult. was one man who actually predicted the housing bubble and he took action. in 2006 he sold his home and became a renter and in 2012 he

took the plunge and bought again, figures he saved himself 30%. now he is bullish on housing. >> inventories are at 13 years lows. the fed came out yesterday and said now only one in a quarter in underwater versus one eight, verses one and a quarter. as home equity rises, people have more incentive to remodel and you are only building one million housing units. so there is a significant recovery. >> as the housing market improves, here is one option -- >> when i started this, there was no buddy. there was nothing. i googled secret door, hidden not get one.ld there was no anywhere that could build on.

not like what i had seen in the movies. that is when i started thinking, i could do this. people would, he and say i want something just like i saw in "goonies." i did not realize how many movies had a secret passageway. it is like half of all movies. them are for some sort of security application, either a panic room or a place where they can store valuables. i do occasionally have ethical ancerns, like, can i have secret door that is so good the cops won't find it? iery so often somebody says want a shakespeare bust from the original batman show to be my triggering device. so what are ways have a few shakespeare busts on hand ready to be converted into secret switches.

when i started the business, i talked to one of my professors. one thing he told me was, it is not scalable. you're never going to become a billionaire. he shrugged it off. i started the business anyway, but he was right. these are not mass producible products. every project has to be a unique , custom, one-of-a-kind project, which means it takes a great deal of time and attention to detail. i consider myself somewhat of an artist. i would want this business to be a factory. of loveject is a labor for me and i want every project is a stevethat humble original secret passageway. no secret escaped members of

bullard talks about janet yellen and the taper. this is a bloomberg exclusive and we will bring it to you next. don't park your corvette at the national corvette museum. eight cars were swallowed up in a sinkhole inside of the museum. six of the cars were donated by private donors, two were owned by gm. this is inside the museum. i can't even imagine. ♪

" on as is "lunch money bloomberg television, streaming on your tablet and your smart phone. we are everywhere you are.

i am adam johnson. made her first appearance as the fed chairman in front of congress. that happened yesterday. eveneaction was positive, from those who have been critical. today we decided to speak with the president of the st. louis fed. stephanie ruhle on "market makers" earlier. >> i think she had it just right. we are buying a lot of bonds. not quite as many as in december, but we are buying a lot. the economy is improving. things are getting better. if you look at fourth quarter jobs, about 195 thousand a month, including the bad december report. the six pointown six percent. gdp growth in the second half of last year, 3.5% on average. you know, i think we are looking at a stronger economy. i think we have momentum for 2014. i have not seen anything to dissuade me. to look at the

jobs number as a good data point when it is not factored in? beenbor force has declining but that is mostly demographic factors. yellen was grilled on that in her testimony. i think she gave a balanced view of that. of this isot demographic factors. if you look at the long-term picture on labor force participation, 70's, 80's, 90's, going up, 2000's, coming down. you have to have a very that is going to give you the hump shape and the demographics is the best area. -- the best theory. would cause you to change your mind on tapering, either the pace of it or the direction? i do not have a model but i have to think it is partly the weather. >> really?

isn't it always cold in the winter? >> here is the thing, we are deseaonalized data. out of seasonal stuff the data. it is always adjusted seasonally. in some sense you should never be referring to the weather, but we are. i think that is because it is sensitive to exactly where the weather is, exactly what parts of gdp, what kinds of shopping are affected. all of this stuff is sensitive to the weather. and we know that. have a big impact on some of the numbers. couldis the weather, you think of that is being noise in the data. that will all come out. >> there is nothing that would tell you you would want to change your mind or change at least the pace of tapering? >> i think we are on a good course right now. we have been reducing it.

we can make a decision as we need going forward. it is not a preset course. we can adjust. i think if we did i just -- adj ust in either direction, it would be a powerful signal. for that reason, we want to be careful about using that tool. but we can, if we have to and i reserve the right to take that up, if the data comes in either way. >> you can watch the full interview with the st. louis fed president on bloomberg.com/tv or on our tablet app. shaun white's rough ride is the u.s.low to medal count. and the handler behind the handlers. meet the unsung heroes of the westminster dog show. that is coming up next. ♪

sports, the olympic snowboard competition turned into a shocker. white wase -- shaun the favorite, but he did not even get a medal. he was attempting a trick called for you onlyrt live once, a crazy move. so you have to do two vertical flips and 300 60 degree rotations. last night, it was not pretty. he completely missed the landing and then to get back in the groove, it he attempted another trick but that went worse. painful. you have to admire the effort, but it was ugly to watch. he was fourth, ipod took the gold. the outing did not help the u.s. medal count. norway leads with a total of 12.

the u.s. has seven. here is matt miller on the money behind the metals. >> norway is winning but they have a gdp of 274 billion dollars. this is a small gdp in comparison to ours, but they hardly have any people. gdp per capita in norway is massive. i would have thought the u.s. would win because we have so much money. here, we have the rockies, but all time, norway dominates as well. then the u.s. beingy, austria are not norway at alpine sports even though the alps are there. the soviet union, which used to tower, when it was the true witht union, has crumbled the follow-up communism. maybe communism was good for one thing. >> and at the westminster dog show, a little guy with a big attitude took the crown, beating

out six other breeds. his name is sky. this is the 14th time a fox terrier has claimed the top prize. , now for every winning dog, there is a handler and even a handler needs a handler. vendor. this pet supply it something breaks, it could be a calm, they lose something, whatever it is, many of them have counseled less. they will grab the stuff and come back later. >> they have added an agility test as part of westminster. tell people what that is. >> agility is a growing area. many of these events are sponsored by the american kennel club. that allows for all dogs to participate. not only the purebred, but also mixed breed are able to

participate. it is various courses, you have something on the backscreen. it is exciting and brings a different type of event to the dog show. >> people spending on grooming. any trends you have been able to spot? there isot know spending trends, but i think people are spending anywhere to $150. brush, $20 >> is there any big difference? >> there are big differences. the finer brushes are made out of rasputin's -- brass pins. it does not conduct static lectures city. pins are on the higher end. >> are there other details you can reveal about the grooming habits and patterns of these animals?

some of them look like they have been printing several hours. >> some take even longer. poodles take a lot of work. there is a lot of scissoring involved. a nice trick is we have a product that is a silky product when they do not want to hear to fly. they put that on the coat and then the hair will not fly. meet, a's mystery falling go pro makes a happy landing and finds a friend. ♪

bloomberg television is on the markets. i am olivia sterns. it lets you chu caught up on the markets. it is a mixed picture. -- let yet you caught up on the markets. picture.ixed this comes after the s&p posted its biggest winning streak in

more than a year. the dow yesterday rose almost 200 points as janet yellen gave her first testimony before ofgress and the chairwoman the central reserve, the nasdaq erased its loss from meister. this morning on "in the loop," somebody was asked what she took away from the testimony yesterday and how that has impacted her strategy. very positive testimony janet yellen gave us yesterday really assures the forward guidance for the fed. fundamentally driven markets can be subject to changes in sentiment. we have to be mindful that any forward-looking data flow could be very choppy. we areou show recovering, which is why you have gone back to neutral. >> yes, we have seen debtor beta flow from the

economy. we are positive there is a global recovery going on for 2014 that will be better than the one in 2013. we know there could be some choppiness. >> commodities are rounding on the fed's outlook as well. let's take a look at what is happening to oil. this is also after we had a report that showed inventories in oklahoma fell a little bit. so west texas trading higher right now, above $100 a barrel. let's show you to what is happening to gold, strengthening a little bit. futures are up almost at $1300 perhaps on speculation the u.s. will continue its stimulus program after janet yellen said the recovery is far from complete. let's show you what is happening to the dollar. the dollar is strengthening ever so slightly on the back of her comments. speaking of the dollar, adam johnson did some investigating whether or not cash is king and he joins me now with today's

insight in action. cash is king, provided you put it to work. we had a conversation yesterday with a man yesterday, the ceo of rbc wealth management. he said if you deploy cash wisely, stocks will perform. if you are paying down the debt, if you're growing the dividend, he said you tend to outperform. so we actually wanted to put that to the test. these,en for all of paying down debt, 10% reduction of your debt as total capital and growing the dividend over the past three years. as it turns out, he was right. a look at this. 19 companies doing exactly that in over the past year, these companies are up 30 6.6%, double the s&p 500. it tos king, if you put work. here are 10 of the companies. they are companies we know,

capital one, dow chemical, hasbro, t.j. maxx, etc. quickly. through them i have posted all of them on twitter. cash is king if you put it to work. >> thanks so much, adam johnson. you can follow him on twitter to find out which stocks are putting their cash to work. we will be back again in 30 minutes. "bloomberg west" is next. ♪ . .

♪ >> live from pier three in san francisco, welcome to bloomberg west where we cover the technology and media companies that are reshaping our world. our focus is on innovation, technology and the future of business. a few big stories today -- number one, alibaba is launching a u.s. e-commerce site. they have been buying up stocks and now they are launching a fashion or jewelry eme