>> from bloomberg world headquarters in new york, i mark dump-in. this is "bottom line." -- i'm mark crumpton. the european union agrees on targeted sanctions against ukraine. severe drought is hurting its economy. a new computer mapping tool could help save the world's rain forests. to our viewers in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines. erik schatzker reports on the california drought.

megan hughes looks at google's high-tech way to monitor the forest. and peter cook is following the response to the violence in ukraine. we'll get to all three in just a moment. reporter, bloomberg's joins us in kiev. a truce was announced yesterday, but it lasted only a few ours. what happened? true one really knows the story. the government claims that it was a provocation by the and theators demonstrators say, no, we were trapped. we don't know what exactly happened. in the early hours of the day, around 7:00 a.m., skirmishes broke out. a lot of demonstrators were killed by sniper fire.

we don't have an exact body count. way more than 60 people got killed. in some hotel lobbies, near the square, there were pictures circulating of dead bodies on the square. it was very, very bad. ministrye's interior reports that mr. does have police officers hostage. is there any information on the release? >> not at all. what we are focusing on right now are the european union foreign ministers who had very long talks with the president in the afternoon that lasted almost six hours and was initially only scheduled for about 2.5 hours. there was a break in between putinthe president called

to run things by him. at the moment, the european union foreign ministers have met with the opposition reporters waiting for them to come out and tell them what happened. we began by letting folks know that the european union had agreed on those targeted sanctions against ukraine. is there anything you can add to that? are tryingthink they to squeeze the pressure on the government while trying to keep the communication lines open. our good sanctions means they assets and deny them travel visas to make movement difficult. it is mostly targeted at government officials that are tied to the violence. >> he has been joining us this

week from kiev. the site of that violence between the government military and the protesters in independent square. thank you. the white house is expressing outrage over the violence in ukraine and calling on the government to a draw -- withdraw its forces from downtown kiev. peter cook is with me in studio with more on the administration's reaction. upwards from the white house. >> tough words indeed. tougher than what we have heard, even from some of the europeans. in terms of on the ground or changes in policy, nothing yet so far. it is clear that they are assessing what is happening in the ukraine and wondering if things are about to ratchet up here. could the military get involved? that would be a pretty big line for this president right now. he talks about it in mexico. the consequences for the notinian government

acting here. fair to say that a range of options has been considered at the white house. i don't have any specific things -- specific decisions about those options to relate to you now. that late do know is yesterday there was this effort by the administration to again put travel visa bans in place for top ukrainian officials. we don't have the exact the man's. -- civilian leadership there we don't know if they are going to follow the lead of the european union. what can the, demonstration do? is there anything that they have left in their arsenal gekko >> their tools are limited for sure. the most likely thing would be following the european union's lead. hands with blood on their

, targeting their actions in being, freezing them from able to move those assets. we're not talking about blanket economic sanctions against the ukraine. that would have a limited impact. it would have unintended consequences on the people of ukraine. trade between the united states and ukraine, pretty limited. >> it is clear that the president is being backed by the kremlin. ofs this raise the specter increased tensions between washington and moscow ? >> we see that already. the rhetoric is getting tougher. at theisis is happening olympics are playing out and the u.s. is working with russia over syria and iran. this is a new crisis in the midst of these other issues. only compensates thanks.

every step the united states makes in the ukraine coming up have to imagine that it is raising tensions with the russians. peter cook joining me here in new york. thank you. up next, the first-hand look at the job in california -- drought in california. erik schatzker is live. mark, the white house is busy responding to the ukraine. last week, the president was here in california visiting with -- dealing with domestic issues. he was investigating california's worst drought in more than a century. i have been here all week and i spent time talking to all types of people across the state. including one farmer who met with the president. stay with us. ♪

>> today, the u.s. department of agriculture released its first production forecast for 2014.

on the phone from crystal city, virginia. alan, what does the usda say? what they said is that farmers this year are taking flight from risk. you are seeing koran down 3.5%. and a 3.9% increase in soybeans. see the usda reducing its profit forecast and commodity prices starting to go down, you're beginning to see a supply response as well. farmers don't want to take on the same sort of risk that they get from foreign. for consumers, that means moderation. two .5%-3.5% this year. livestock prices are going to record highs. soybeans should help alice let out -- help balance that out. >> you know that the agriculture

department also reported that the average age of farmers in america has increased while the number of farms has declined. set the scene for us. what exact we does that mean? trend that see is a is going on for three years in which the average air of u.s. farmer continues to get older. the rest of the u.s. population is getting older as well. just like you see issues in the workplace with the baby boom generation, farmers are going to start retiring. what is interesting is when you begin to the data, there's an increase in the number of farmers under 35, which means growersre could be some with some opportunity in the next few years. whatever happens to generation x, who knows? numbers keep going down. the oldest farmers and the uptake among younger producers. >> we have been covering the drought in california. we'll get to erik schatzker in

just a moment. the drought does continue. how does that impact thanks? >> is a wildcard for food prices this year. the vegetable income is about 15% of the farm crop economy. with gary also being a big part of the california -- with g dairy also being a big part of the california economy. >> 2013 marked the driest year in california's history. erik schatzker has been traveling around the state this week, checking out how the severe drought is affecting california's businesses. he joins us now from california. you mentioned president obama's trip there last week. >> president obama was here in , central california, because the worst drought in more than a century is fast becoming an agricultural and

soon to be economic disaster. we are talking about a potential loss of billions of dollars. i went to see a farmer who spoke with president obama. the white asse team singled him out somebody the president needed to see. joe was among the more respected farmers in fresno county. he has about 2000 acres. most of which you farms in a good year. this is not a good year. jill has also been very outspoken about access to water. i want you to hear what joe and i were talking about, especially as it concerns the president's visit and his efforts to raise attention to the drought here in washington. >> we have been asking the president for five years to come and give attention to the situation. we have gone through some dry years and wet years. five years ago, in 2009, it was a difficult year.

we had a 10% water supply. i idled 900 acres that year. from normal was about $1 million less than normal. -- that isen this horrendous. not counting all the other things that these crops generate for the local community. it was a terrible year in 2009. so we're looking at the same thing again this year. congressmenp of our and senators, come out here. we see this thing coming. we saw coming a year ago. it is here. >> joe calls the situation horrendous. he is absolutely right. it is. the state is getting no rain or snow. there'll be no water available, the summer months.

as you know, the president announced last week and effort to create a climate change fund. asked if that will help him. he said, no. the only thing that will help us more water. the unique thing to central valley as it gets almost no rain. agriculture in the central valley of california is a man-made phenomenon. it is completely reliant on a very complex and sometimes controversial water supply system. the water originates in the far north of california where the snow falls on the upper sierra and flows down to the sacramento delta and is then diverted using pumps through irrigation channels and aqueducts and ultimately more reservoirs. joe told me that the only thing that could possibly help him is a federal decision to release more water. that puts them in competition with other farmers and conservationists. it is a divisive issue here in california. erik schatzker joining us

from california where he has been following the drought this week. thanks so much. coming up, we will take a global look at the financial markets and find out why our next guest it earlyay still be a to invest in emerging markets. ♪

>> we turn our focus now to global investment. dan is a global investment .trategist at tiaa-cref studio. me now here in welcome back to bottom line. good to see you again. the fed -- it seems to be backing away from that commitment where they would consider raising interest rates if the unemployment rate fell below 6.5%.

regard thedoes not threshold, how will the markets react? i guess it's a question of whether people really thought that was credible in the first place. people understood that they were going to evaluate what the conditions were and what the strength of the economy was and based on that. -- and base it on that. ofwe have had a series weaker than expected economic reports recently. is this an aberration or a sign of slower growth? >> you also have something similar in china. we are asking ourselves, is this something that will be temporary? if we look at the longer term drivers for the economy overall in terms of improving implement rates and wages, we think it is going to turn out to be an aberration. i think it really should be a wait and see deal.

we have been seeing recently volatility in emerging markets and now that is causing a ripple effect around the globe. how long will this last gekko is there a possibility it could destabilize global markets? >> we don't think it will be that severe. certainly challenges for emerging markets. papering is a big part of that. it corresponds with underperformance in equity. >> can we show that chart again? it was dropping. down 11%. spikes, those rises going on there. it is now the time that investors should be gauging emerging markets? >> people should be thinking about increasing their allocations. with the understanding that there are certainly chance that it will continue to underperform

for a while. it is relative to the u.s. emerging markets are better than that. when you take tapering, that will be a challenge. if you look at earnings growth, it has not turned around yet. it may be premature to move in in a big way. people should keep an eye on it. if they see a bigger selloff, we think that will be -- >> there are some opportunities. will things get cheaper? >> they may. how many months do we have to play out in terms of tapering echo it is having a big effect on the currency. a lot of economies aren't really ready and prepared for that. i think it could happen in the near future. >> earning season here in the good.was really he noted that guidance was disappointing and that forward estimates were coming down. how does that play into what you call the earning season gain? >> on one hand come if you look at the earnings, you say,

companies are, so everything is ok. just surprising that in the end they do find extra. even if they had recently big numbers for the fourth quarter, they are not seeing the growth that we perhaps would like to see through the rest of the year. the changes and they'll look that up in a more negative than positive. >> how long will it take for investors to become acclimated to the fed's tapering schedule ?ecko have the >> this is all new to everybody. we are on the way to the end of tapering carried it will be several more months. we expect for the first half of the year, a decent amount of volatility. we try to interpret what the fed is saying that they may or may not do. that'll make things for the first part of the year, what

investors will have more confidence. ceos will have more confidence and perhaps will start to invest in their own capacity. >> let's take a look at sector growth. what looks good right now? where should investors proceed with caution? >> it is still a typical market. since it has been such a low rate, we think there is a lot more room for two broke. industrials, technology will be attractive and have some dental -- some potential. don't think there is a new to be moving into defensive sectors right now. it won't be so significant in terms of downturns in the market that it warrants a defensive sector. joining us here in studio, it is good to see you again.

>> likewise. thank you. >> it is 26 past the hour. that means bloomberg is on the markets. julie hyman is in the newsroom with the details. >> good afternoon. let's take a look at where stocks are trading at this hour. we have had a rally throughout the session. bouncing back from yesterday. right now, we're just at the highest of the session with the 115.etting the most of a couple better than economic reports were hoping. in terms of individual stocks that we are watching, first am big news intact. facebook announced it is acquiring whatsapp for $19 billion. that means that facebook could eyeball. $21 per we have been watching the ship throughout the day. we've seen them fall and now rising more than one percent. shares of blackberry -- evaluators of the phone maker, the shares were

driven higher. the potential value of blackberry messaging coincide with that. more bottom line is next. ♪

welcome back to the second half-hour of bottom line on bloomberg television. i'm mark crumpton. eggs worst thing with us. -- thanks for being with us. thanork crude is down more .1%, finishing the day at 103.2. natural gas fell almost 1.5%. fierce street battles and ukraine have left dozens dead and others wounded.

in the capitalng of tf. government snipers shot back. in the meantime, the european union says it will impose targeted sanctions against ukrainian government officials. the german chancellor called president obama and russian .resident vladimir putin they agreed on the need to stop the bloodshed in ukraine. u.s. officials are warning airlines to be on the lookout for possible shoe bombs. it is the second time in less than three weeks that the government has issued a warning to airlines about explosives. the department of homeland security declined to discuss the specifics of the potential threat. ofther twist in the battle the keystone xl pipeline. a nebraska judge throughout legislation that would lead to government approved pipeline to the state. they will now have to seek approval from nebraska's public

service commission. that is a look at the top stories in the news at this hour. google is using it now us at big data analytics to try to save the rain forest grade the new .apping tool i the new tool is being revealed today. they help companies like walmart , nestlé and target to avoid a pr disaster. megan hughes has the details. almost 900,000 square miles of force have been cleared since 2000. environmentalists and corporations alike, it has been difficult to track the devastation. google is hoping to change all that. put computing power behind the first real-time deforestation map. requiresbig data that big analysis and represents an information gap.

no one has ever been able to look. >> with one click on the map, we open up -- >> he has been working with google and 40 other organizations. he explained that the map will update every month, using data from nasa satellites processed in the google cloud. >> you can now see month by month where forests are being cleared across the island of borneo. >> in 2010, greenpeace targeted nestlé for using oil sourced from rain forests. a viral youtube video graphically showed someone fingeran orangutan's instead of a kick at our. a allies like nestlé have made pledges to provide better sourcing. the world's largest palm oil trader followed suit. by 2015, even girl scout cookies will only use palm oil certified t a sustainable. >> it is much harder to actually

check that that is actually the case to make sure that is happening. overlaid with palm oil and logging licenses for each country so you see what companies are in charge. in real timee whether or not that suppliers actually doing what they promised. >> it is almost like a nanny cam. what is google bringing to the table here? >> google turbocharge is this entire system. >> it would've taken 300 years on a single computer to make that forced global map. because we ran on 10,000 computers on the google cloud, we can do that in a couple of days. see. now everyone can the google team created something just for this roger.

you've heard of google maps and google earth. this is google earth and gin. they had a team working full-time come if you'r. >> did google get paid for this project? toruvell donated that team work on this. they donated the services. a number of countries also helped to fund the spirit the norwegian government, dk government, the u.s. government had a hand in this as well is a number of environment will groups. >> will the countries be able to use this tool for anything? >> the companies that made pledges to stop these for station -- countries have gotten too.ved, result and indonesia made pledges. they will be able to use this tool to help them track and get down to the nitty-gritty and get the companies. singapore actually just

yesterday announced a proposal -- they are looking at being able to prosecute companies for haze.border this tool tosing go after some of those companies. >> megan hughes joining us. thank you. is cripplings brazil. the drought -- the entire brazilian coffee belt is suffering from extremely dry weather. hurting the production and quality of its coffee. the price of a rabbit a copy is soaring. arabica coffee is soaring. >> good afternoon. ,> you said of the drought that "we don't have a playbook to follow in the situation." how severe is the damage echo

what will that mean for consumers? looking at anywhere from 10%-30% of the crop being damaged. if you look at the board, we from theied about 65% lows we put in november. this will mean we may not see it immediately, but higher prices for coffee down the road. it looks like this will be how things are for a while now. your research goes back several decades. were you able to find an instance where things were this bad? >> we did not find an instance where he drought occurred during the reproductive system of the coffee market. we are at the spot where the bean is producing within the cherry. a drought has never occurred during this time frame. >> is it possible to assess the amount of damage before harvest?

only sporadically. the coffee area in brazil is quite large. they don't really have the manpower and techniques that we have your in the west to really go and look at it. it there will be surprises coming as they start to harvest these crops in may. the damage is going to be quite heavy. diminishhe droughts the quality of the copy ? inside the cracks cherry when it gets dry. that destroys the flavor. it can still be used, but you lose a lot of the flavor, which is what you want from the coffee. happent that that will is the copy chair he actually falls from the tree. you have a total loss. >> you mentioned arabica coffee watches. what type of price ranges are using for each being? >> prices eased off a bit today,

but they came back unchanged, which is a sign of a good, bullish market. overuld easily take prices two dollars a pound if we see further damage. we will not see any rain down there for at least 10 more days. further damage come we can take prices easily over two dollars. if we see a 30% loss of the crop , over three dollars a pound is not out of question for the beans. there aren't any problems with robust production right now. that does not mean we will see perfect weather in vietnam. >> it is not an understatement to say that for some in brazil in the copy region, these losses could be catastrophic. they could be out of business. -- copy region. region >. >> if your harm has a complete and total loss, it is going to

be a tragedy. >> the severity of the drought is expected to cut into next year's coffee production as well. how much do companies react? that certainly is going to grow everyday. we begin to see how much harvest we get out of this crop, it will be easier to tell whether our stocks will fall into a deficit. most likely we will and consume or copy this year than we grow. that will force companies to raise prices. producers prune the trees very heavily this year due to the low prices we saw earlier in the season. that regrowth is not happening. next year's crop will be small as well. there is a two-year growth cycle in the coffee market. we are and what is supposed to be the higher your production. next year we will be in a year that is inherently lower anyway. even if the price goes up, mayor consumers like their copy.

they will probably pay for it. correct? >> absolutely. copy is a very interesting market in that way. is a very interesting market in that way. there is plenty of latitude for prices to go higher. strategist atty city. thanks for your time and expertise on this issue. >> anytime. weekend thatthis will have bidders looking up in the sky to say, it's a bird, it's a plane. if you know the rest, then you know what item is up for sale. details, next.

, there aregramming many ways to watch boomer tel boomer tv.

the year was 1939. superman was here to save the day. action comics number 15 featured the man of steel rescuing a submarine. the original cover art is going on the auction block. senior west coast correspondent joins us with that story. how much could this cover art be worth? >> there has been discussions about possibly in the $200,000 range. maybe even more. tags thatee the price are put up tied to these options, it is a reminder that comic book art as a market is for the superrich in the same way that car .ollectibles or rare wines are ways for the wealthy to diversify their holdings. i would say there are a couple of factors that do drive prices. one is the scarcity value to the fewer examples of this rare art.

is, theer two factor power of superheroes. it just keeps getting bigger thanks to many of these blockbuster franchises that remain in movie theaters around the globe. whether it is superman or batman or spiderman, there is huge pop-culture value. that brings others into the market. maybe from around the world beenight not have interested in recollect holstein to this industry. >> the old comic books that you have gathering dust in the basement or attic could be worth something. >> they could. but, do some price checking. are thecs themselves trouble spots compared to this rare comic book art. and demand thing. there are some in a more comics better out there it in a market that is determined, i already have those comics. that is the bigger challenge. will dig outle di

the old comic books elections and try to get top dollar for them only to find out that they are not is worth -- not worth as much as they thought. >> could it be a bad investment t? >> yes. there are some well told stories in the industry about some of the art that does not have the same kind of value that superman or batman or spiderman might have. there is one story of one investor who bought from the archie comic estate a lot of archie comic art in the hopes they would be able to hold some of it and sell the rest come only to find out that the demand for that specific art tight archie was not a strong is what they had hoped for. batman and superman have more staying power when it comes to the specific market. in loserlichman an angeles. it is the year of the horse.

a sneak peak into equine bonds. ♪

>> be sure to check out the latest edition of bloomberg businessweek. hits newsstands and your tablet today. it is time now for hotshots. a look at some of the most compelling images of the day. down it went. thousands of people gathered in city to see an iconic brick chimney come falling down. it stood 22 stories high and was drop-down in a controlled explosion. it had be removed to make room for newer developments. over in miami, another kind of destruction.

a local artist visiting the art museum picked up a vase worth $1 million and smashed it. -- awas part of chinese chinese artist's exhibit. he was protesting when he felt favoritism for international rather than local art. he faces criminal charges. dog stars. heard of resources are getting the ultimate equine treatment. ofis in preparation pedicures and massages. -- some race horses. another check on the market is on the other side of the break. bottom line returns in just a moment. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet and on bloomberg.com. that does it for this edition of bottom line on bloomberg television. i'm mark crumpton reporting from new york. thank you for joining us. let's get you caught up on where stocks are trading. if you look at averages, they

are in the green today. they happen for premature all the session as we head into the last hour of trading. we had a report on many factoring from markets this ad of estimates. in terms of individual movers, we are watching shares of home away. they reported fourth-quarter earnings that fell short of wall street estimates. --dance was much harder higher than estimated. the company did not provide earnings guidance for 2014 because it says the business is in transition. speaking of retail, we are watching walmart. the biggest of them all reporting fourth-quarter earnings that beat analyst estimates. trendspany says economic and higher health-care costs will continue to hurt its u.s. business. walmart is not alone.

could health care costs weigh on a lot of retailers going forward. joining me for a look at the retail sector is scott. walmart -- such an interesting situation. has a lot of blame to go around. whether it's the reduction in snap benefits or higher health care costs, all of these things seem to be out of their control. what can it do to improve its business? -- they areficult not the only company sing that. if you look at market share in the core staples business, we actually think their stores are losing market share to people like kroger. we think they have lost a lot to their competitors based on prices. it has been going away for a while. that was oks report -- there's more to come. >> how can this be happening when walmart's whole proposition

about -- is about value? they let it happen to a degree. you had them investing in international businesses and the been pouringy have into. the e-commerce business is eating up over $1 billion right now. that puts enormous pressure on walmart usa to produce numbers. they have done a good job in one sense but their margins have gone up. --y have let competitors with media and entertainment it has begun to lag. shares to losing grocery stores like kroger because they are doubling down on their grocery store business. is that the right strategy echo >? >> we don't think so. they're super center business is their core business. they are opening up small boxes

which disenfranchises their core supercenter business. we think it is a bit of a mistake. >> do you think there is any take away from walmart to the rest of retail and what we are going to hear for the coming quarter? >> it's not that strong. we look at something called real disposable income, which has been falling since october. the consumer is just not as strong as we would like them to be. >> thanks for coming in. we will have more on the markets in 30 minutes. ♪

♪ >> hello. i am trish regan. you are watching the most important hour of the session. we have 59 minutes ago on the closing bell. in $19 billion deal. poised to close out the day in the green. trade is today and a first-rate of tomorrow. bit was chattering a little . client is good. a good day.