>> work in progress. ukraine may now not get a government until thursday. this according to the interim president. another blow to bitcoin. gox,op exchange, mt. suspends trading over an apparent theft. and the $19 billion bargain. facebook's founder says he got a great deal on whatsapp. deutsche telekom seeks an alliance with its latest acquisition. good morning, everybody. welcome to "the pulse."

bloomberge from european headquarters in london. francine lacqua is off today. privacying up, putting first. we test out the world most secure smartphones. is it really nsa-proof? we begin with the crisis in the ukraine. there could be a delay to the vote for a new government. remains onpresident the run with a warrant out for his arrest. bloomberg's -- managing editor is on the ground in key ever with the latest. what is the latest? with the latest. what is the latest? >> what we have seen over the last few days, the situation in central kiev is very disciplined. that more remember than 60 people died last week. unarmedal, the mostly citizens militia seems to be

keeping control in the city. still no sign of the official police anywhere. >> can you give us an update on what is happening in the south of the country? a more pro-russian part of the ukraine. there seems to be a different view of the situation down there. >> yes. [no audio] >> it sounds like we have just lost our connection to kiev. we will continue the conversation. you have a fast-developing situation in the ukraine. ryan chilcote is sitting next to me. he has been watching the latest coming out of the acting president. we thought we would get a vote today from parliament. it now looks like that will be delayed till thursday. the acting president and speaker of the parliament set the deadline of today, saying he wanted to see a government in place today, meaning that the

government would have to be composed and the parliament would have to vote on it. at the end of the day, the country is in a financial crisis. in the last 20 minutes, he has come out and say the new deadline is the day after tomorrow, that the country tank go on with the interim government that they have now with him at the helm as the acting president until thursday. >> people will be looking at how the russians will react to this. there has been some fairly belligerent commentary out. brov making slightly more moderated comments. >> the russian security council met this morning and just after that, the foreign minister gave a press conference. i think it is still underway. he said that russia will not intervene or has no plan to intervene in the ukraine. you were talking about the belligerent comment from the prime minister. yesterday, he said that russia's interests are under threat. ethnic russians may be under threat in the ukraine,

suggesting that perhaps intervention was possibly in the cards. today, the foreign minister downplaying that. in russia, if you're looking at comments, it is important to look at which ones are coming from the prime minister and which ones are coming from vladimir putin, the president. a lot of analysts will tell you that there seems to be the realization in moscow that soft power might be the best way to go when it comes to ukraine. lot you think about it, a of people in ukraine have a certain affinity for russia. they want cordial relations, at a minimum, with russia. let's not forget the russians offered the ukrainians $15 billion in aid when no one was willing to give them any money. maybe they would provide more. is interesting because it looks like the european union would like russia to be part of this big aid program they put together. its gasine gets half of from russia. it is getting it at a discount right now.

will that discount continue if the poor relations between the two countries -- there are a lot of ways for russia to influence events on the ground without introducing military. to thehis a reaction very diplomatic overtures that have been coming from the eu? , ith has made it very clear has picked up very quickly in europe to try to get a hold of moscow, to try to maybe provide an outcome that is similar to the one you are talking about. >> every time someone talks about the former soviet republics like ukraine, like the baltics, like georgia -- >> the buffer zone. >> you hear western politicians and the likes of merkel say it is not a zero-sum game. dictate orhe west to russia to dictate, we can both agree to cooperate in these places for the better of those countries and the better of our

own interests. feel thatk they often sometimes they leave the russians on the sidelines. and then they get the kind of reaction they do not want to get out of russia. you could say this peace deal on friday that we had between the then-ukrainian president and the opposition was brokered by the eu, the russians listened to what they had to say and they left. they did not sign the deal. there is a realization in western european capitals that it is best to have vladimir putin on board if possible to at least hate him that deference, if you will, because, in the long run, it will make life easier for everybody. >> we will catch up a little bit later. ryan chilcote on the latest coming out of the ukraine. let's change gears completely. top tech execs from around the world are gathered in barcelona. we have seen plenty of new gadget unveilings so far,

including the new smart phone from samsung. and updated wearable devices. what kind of reception have we seen to these new gadgets? caroline hyde has tried them out and joins us with the details. anything to get excited about here? >> not much. it has to be said. nothing was very groundbreaking from samsung. in thed the stampede conference center after mark zuckerberg's beach across town. the unveilingwhy was not as sensational. quite often, they did not unveil these sorts of products at the mobile world congress. they did it on their own in madison square garden in new york. this time, good, nice feature updates, but nothing that exciting. a good, improved camera, better looking. one, you can drop it in

water for up to 30 minutes. nice power saving technology and they have the fingerprint technology. they updated the galaxy gear as well. the camera is now embedded in the watch, not in the strap. i really like the new galaxy gear fit. this is the new bracelet that you can monitor your exercise and count your calories, against the likes of nike fuelband. overall, no one getting that excited. we spoke to an executive and he says it is all about improving the consumer experience. >> i hope that everybody takes into account that it is not just about features anymore. it is about what people use. it is about people-inspired innovation and helping them do new things with their smartphones. i am going to love the ultra power saving mode feature, which, when the battery is less than 10%, i can turn on the

power saving mode and get another 24 hours out of the phone. speaking, the director of samsung europe. that making these improvements, a lot of consumers will like them, but it is just around the edges. no huge innovation, perhaps a little underwhelming. need toeasons they really focus on getting some of these core things right is that others are coming out, the chinese in particular. >> you are right. i was just speaking to lenovo. this is a company with huge ambitions. the chief financial officer spoke to me. this is the guy who orchestrated the acquisition of motorola mobility just after they bought out ibm's server business. they really want to scale up. their ambitions are skyhigh. they say they want to be not first -- not third, not second,

but the number one smartphone maker in the world. they say motorola can help them do that. they are focusing on driving up revenues. for google, motorola mobility was lost-making. they say they are focused on driving revenues and innovation. he was very bullish on what they can do with motorola mobility. i unveiled wearable technology and new smart phones as well. the chinese are really tackling samsung where it hurts. back to you guys. >> caroline hyde joining us from barcelona. let's stay in the sector. deutsche telekom is considering an alliance with whatsapp. they hope to partner with the messaging startup in some markets, though not its home market. matt campbell joins us now. can i draw a line between the takeover and what they are trying to do or is this already in train?

>> this theme has been going on for some time. we are seeing other manifestations of it as well. there was a bloomberg story overnight about softbank, a very -- a very large japanese carrier, making a competing messaging service in each stage of. the mobile carriers realize they need to get ahead of this messaging trend. text message is one of the dirty little secrets of the mobile world, that text messages were basically free for the mobile carriers to provide. they were a source of immense revenue as people send thousands of them every month and year. that is now going completely away. this traffic migrates onto my forms like whatsapp. toriers are looking for ways not be completely left out of that transition. >> they must be nervous as whatsapp looks to voice as well. >> the lines are definitely blurred between over-the-top services, these data-driven services like whatsapp and

traditional television -- and traditional voice calling. whatsapp says they will offer a traditional voice calling like skype to offer a branded mobile subscription. we are seeing the carriers' traditional turf, the one thing they could hang onto, if you want to make a voice call when you are out on the street, you do it through us, now potentially eroded through facebook who now has behind them. one of the questions that has been going on, will they just become terriers themselves? there were feverish rumors that apple was about to start its own mobile offering or maybe by t-mobile in the u.s. or something outlandish like that. we have not seen anything of that level. clearly telecom and mobility is

where the future is. oh the carriers need to watch out for this and the silicon valley giants are very aware of wishing hard in that direction. -- pushing hard in that direction. >> the latest on the whatsapp /dt/everybody else story. tot will be fascinating watch. eric schmidt has been talking to charlie rose. he talks about the revelations from the former nsa contractor edward snowden. documents, which appeared to be true, they figured out a way to get between our computer systems as they traffic information. you have no evidence that information was misused, but when we saw that and we saw our protocols, we immediately closed those loops. >> you can see the full interview a little bit later on. din is expanding in china.

the website will comply with state censorship rules. the news comes after more than a decade of having its english and which website in the country. ,t. gox has gone off-line directing users to a blank white page. it comes amid allegations of a $350 million hack. this will gauge how big a threat this is to the future of the digital currency. also coming up, a picture of risk. ukraine's currency is one of the worst performing this year. we will discuss the embattled country's financial situation with the sack so bankhead of fx strategy. ♪

>> good morning, everybody. welcome back. let's get back to the ukraine. we have been expecting lawmakers to vote on forming a new government today. it now looks as if that will happen on thursday. this according to the interim president. clearly face a daunting prospect, $35 billion is what the country now needs in financial aid. we do have some positive developments. the russians may be taking a more pragmatic, positive view on the situation. this is the currency. this is what has happened to the currency over the last few days. you can see the depreciation is

very obvious on the screen. what happens next? joining us is john hardy. betweenolitical mood russia, the eu, and tf -- and kiev starts to improve, are we likely to see a short-term pop in the currency despite the long-term prognosis? >> i think that is quite possible. the government signed the political stability and emergency loans, it makes it looks like -- it makes it look like we can see the eu roll over some of this debt and get financing in the short term. i am sure we could see the currency consolidating a little bit. it does not solve the alarming long-term backdrop in structural balances. a current account deficit of 9% ofgdp in the second half 2013. these are long-term concerns for the currency. not to mention the geopolitical applications here. -- implications here.

bankere is some talk of runs. concern about capital flight. any thoughts as to whether or not we will see capital control in the short term? getting your money out is a critical factor here. >> when we have a situation like this, household demand for foreign cash spikes. this becomes a tremendous problem. it is a very fluid situation. you cannot be surprised to see almost anything in the near term just to stem these emergency outflows from the currency. in january, the month before the worst of the crisis, we had central bankers dropping by 2.5 billion, a very large chunk of the remaining reserve, down to about 10% of gdp. these measures might have to be reset to stem the risk from panic outflows. how are real money account going to play? the brewery, a big

position in the ukraine, massive footprint. how does a company like that deal with a situation like this? >> that is a very good question. they are sort of sitting back and hoping that the sales continue. not exposedhey are beyond a possible loss of sales because the currency is devaluing. that means domestic inflation and less purchasing power for their products. they are hoping that things will blow over and sales can pick up again. it is more for the domestic ukrainian base. the institution has to worry about foreign-denominated debts that is in a pinch. >> what size or scale of devaluation would be necessary to provide some degree of stability from a macroeconomic point of view? >> you need to see some structural reforms. even the backdrop, you are looking at eight 10%-15% further

evaluation on a one-year basis, even assuming we get relative lyrical stability and some move to stabilize the situation and get the debt funded. read across into the ruble? ofi need to see some sort linkage between what is happening in the ukraine and with the ruble? what is your short-term to medium outlook for the ruble? >> the only instance in which the ruble is affected, there are factors that are affecting the ruble to the weak side already, but if we get some international confrontation going on, a really dramatic escalation, which, we have not seen yet. russia would like to see it slowly devalued. russia's growth coming in much slower and they are facing structural problems of their own. too much reliance on oil. a weaker currency they would see

theelping to improve competitiveness of domestic industries and economic activity. i see some downside risk for the ruble. not for emergency reasons, but just reasons that the russians would like to see it weaker as well. >> always a pleasure. >> as much as a problem as it has been in the past. >> nice to see you. thank you very much indeed. we will take another look at the situation in the ukraine with citigroup's senior global political analyst. we will be back after this break to talk more tech. ♪

>> good morning, everybody. welcome back. the you are watching "the pulse ." we are streaming on your tablet, your phone, and bloomberg.com. how are the markets opening this morning? jonathan ferro at the touch screen with more. >> a pullback this morning. about .3%. no notable pieces of data. german gdp came out in line. unlikely to shock many of you out there. that wein, the level are at, the s&p 500 touching record highs yesterday. the ftse 100 in london touching highs that we have not been at

since december of 1999. if you look at year to date figures for the s&p 500, we are dead flat. if you look at the stoxx 600, up a mere -- the bulls will not be popping champagne as of yet. the data is missing forecasts. is it a weak economy? is it bad weather? is it just bad forecasts? we will not know for sure until the weather gets better. happenslly hope that soon, to be honest. it would be nice. putting privacy first. we will test out the world's most secure smartphone. is it really nsa-proof? and as we head into break, it is time for the pulse number. that is how many signatures the petition to deport justin bieber from the united states has gathered. at makes it one of the most

popular petitions in the history of the white house website. should america really be kicking him out? we will talk about that later. ♪

>> good morning. welcome back. you are watching "the pulse." i am guy johnson. these are the top headlines. the ukraine's acting president says a vote on a unity government has been delayed. he is an opposition politician elected harlan -- parliament speaker. he wants to move quickly so they can seek economic aid package. minister has won a

confidence vote in the senate. this is the first indication of his new government winning the backing of parliament. he presented his government and laid out his priorities. german exports surged the most in three years in the fourth quarter boosting expansion in europe's largest economy. are.ose 0.4% it was stronger than anticipated. now, black phone is a smartphone for the edward snowden air. it was developed in direct response to the nsa spy revelations. it runs free of carrier and vendors. it allows callers to make and receive calls left the fear of being spied on. >> attica snowden case has

ofvated everyone's awareness what we live in. have- a future we surveillance, the snowden documents have revealed to us that it is worse than we ever imagined. we have to push back against this. black point is a smartphone that has been created for protecting the users privacy. to protect your online activity. of your phone calls is encrypted so no one can wiretap you. no one can listen to the phone call except the two people that are on the phone call. criminals have access to the same technology as the rest of us. the 9/11 hijackers had gps receivers to guide their airplanes to their targets. technology developed by

the pentagon. what are we supposed to do? stop selling gps receivers? we designed them in such a way that we hope -- we have reason to think major governments cannot break them by cryptanalysis. there are so many other ways to break in of those. technology back with like black phone. we're going to need to do more than that. we have to push back in policy. we have to change the laws. of ethicale a lot questions being raised as a result of what we are seeing. let's stay with security and cryptography. let's get back to bitcoin. maybe on the verge of a crisis. will it bring down the entire currency? how much influence do

they have? hans nichols has more from berlin. it is been an interesting 24 hours for this business. interesting 24 hours if you're trying to retrieve your bitcoins. they were not secure. hackers may have figured out a way to withdraw currency more than once. they kept hemming back and draining that account. site went dark last night. average to reach them were fruitless. theceo resigned from bitcoin foundation. this is the overall group that is the evangelists. they are talking about the importance of bitcoin. if you would've the number of bitcoin center in circulation, 12.4 million. what may have been withdrawn was 740 4000.

this is not a small amount. the price has plummeted. other bitcoin proponents have been withering in their criticism of the way mt. gox has done their security. here's one quote for you. this violation of the trust of users resulted in one companies actions and does not reflect bitcoin and the digital currency industry. in way, it does. if bitcoin is not secure, than the entire currency loses value. you've seen that in its fluctuation. question, are these crypto coins secure? or you find a way to make manufacture them and beat the system? >> i was stunned when i read the

comments coming out from the evangelists saying it is a good thing that we now will have a stronger system because of what is happening. ox next?pens to mt. g it it been so damaged that can no longer continue? can it be restarted? they're been three or four different incarnations recently. chance tohas up restart, people need to be able to contact it and go there. it is totally dark. if you had coins you had been trading, there is no way to know where they are at right now. before you to the crucial the currencyan survive, people have to be able .o get in contact with mt. gox otherwise, you're just going to a blank webpage. you see regulators in china and russia and the u.s. talking

about its legality. is this crypto currency used to circumvent laws so people can do illegal things. there is a terrorism concern on it as well. it is just another challenge. much, hansu very nichols joining us from berlin. from bitcoin to justin bieber. deporting him has become one of the most important and popular petitions in the united states. richard gray takes a look at what could happen if he is convicted. >> justin bieber is the 19-year-old canadian pop star. he has started a debate about immigration law. he is on a bad behavior rampage. , hend his neighbors house

was arrested in florida for driving under the influence and has an assault charge in toronto. this has people wondering, what does justin bieber have to do to get deported? more than 250,000 people have asking thetition obama administration to revoke his green card and deport him. that is enough to get an official response. it is not like we have not deported famous singers before. anystevens, boy george, and winehouse were all denied admission. in the 1970's, nixon tried to deport john lennon. hundreds of thousands of foreign nationals are deported every year. theo1 visa like justin bieber. authorities are unlikely to unless he is

convicted. such ae really be in rush to be in such a rush to take them out. millionerts grossed 177 dollars last year. he is sold more than 5 million albums. in u.s.vesting startups. feelegardless of how you about his music, unless his bad behavior continues and he is convicted of more serious crimes, you can believe he will be around for a while. fans are delighted by that. we have done bitcoin and justin a new release today. we have the details.

this is not exactly the bet that he was hoping for. >> not a stellar year. it the known unknown. there is a lot of buzz about will recall crack cocaine. this is what critics call the terminals inside the bookcase. this the stuff or you can lose hundreds and hundreds of pounds in a matter of a minute. could lead to a big crackdown in this country. we have brought based cross market support. there is the issue for the bookie tom other 30,000 of these machines. half the cashor they make on the street. is one that is more exposed lab brookes. scenario.est case we do not know what regulations are going to look like. you could see next year a 30%

s.t for the likes oflabrooke there try to preempt it. this elegant space for them right now. they're going to link executive problemtion to tackling gambling. there will be a broad committee dedicated to the topic. we will formalize responsible gambling measures into executive regulation. how do you do that? we want details. the presentation is happening now and i'm sure we will get some detail. it is building up to be a massive thing you next year. we will find out how they plan to tackle in the coming months. >> i can we do here with the results of this meeting this morning is. dash, italy's new

prime minister won his first vote of confidence. he foes is another -- faces another this evening. on "thecoming next pulse." ♪

>> welcome back, you're watching "the pulse." the italian premise or his one his first test.

renzi is gearing up for another vote today. join us is our bureau chief. it was tighter than i expected it would be. essentially, his main problem is within his own party. members whoour voted against him. dissidents pocket of he ransent the fact that through his leadership in the party. it measured collective in the vote. -- that is reflective in the vote. they will be starting their own confidence debate this evening. it is a much larger majority there in the chamber. it is pretty much guaranteed that he will win that vote here. >> it is interesting that you

look at how his first speech was received. i was expecting it to be something people would be excited about. it did not get that kind of feedback. is today going to be any different? has very little amount of time to get things right there in you wonder how quickly he will get things and learn. >> he may make some tweaks in the speech. yesterday, it was 75 minutes of him speaking off-the-cuff and not following a script. senate thatng the he hopes it is the last time he will face a confidence vote in that chamber. he wants to reform that branch of armament and turn it into a regional affair.

they would not be giving him a standing ovation yesterday. is thatthe significance ambitious program for 100 days. he will have to go back for a confidence vote. this freak only happens in italy. he will try to ram through these programs. with a four vote majority, it is not going to be easy. >> thank you very much for the update. him --g in teed up for tina for them. the majority is tied to the upper house. how do you rate your chances of delivering what he is promising and a country that has delivered very little over the last two years? >> he is raising the bar very

high on expectations. he is invoking john f. kennedy. he is trying to transform the country. this is a country that comes out of its worst recession with industrial reduction down 25%. it will not be easy. >> he is going to have a number of big battles with entrenched interests. he is going to have to go back to parliament and using confidence votes. story. a very binary do you think that is the only way he is going to make this work? negotiating in back rooms will be difficult on that timeline. entrenchedallenging interests. not just across parties but in his own party. representand dynamism karen up the old order and social contracts. that is important to voters who

support the five-star movement. we see that is a generational reaction. that means it is not going to be that easy for him to get support in the parliament. >> what does he need to do? can he get more wiggle room out of brussels or out of berlin? there has been a lot of talk about the physical story in italy. -- physical story in italy. story in italy. do you think there are european sick and make his life easier? >> he has made some controversial comments. in that situation, he may not be able to deliver on his promise. the other countries that have seen a relaxation have done more on austerity than italy. in this case, it may be something that he needs to say to the constituency to show that

he is standing up to brussels. >> he has 100 days. if he can deliver a significant mayrm, do you think that change some of the views of all swear. >> i think on electoral reform, which is a think needs to do the most urgently, i think he can succeed. makeis why he was able to an alliance. on labor market reform, this is what italy needs. the last two minutes is the tried to reform it, or assassinated. back in the 1990's. >> that is an extreme and game. >> we are talking about a yield that looks very relaxed. the market seems unperturbed by what has happened. >> that is one of the remarkable

changes to the last time was on change in italy. , this has more to do thandriving and omp anything in the political outlook. little itk to us a later about what is happening in their k -- the ukraine? >> up next, general electric looks to have a greener future. we will hear from its ceo. that is coming next. ♪

>> good morning. it will come back. we are on bloomberg tv. and general electric says it plans to invest $10 billion in clean technology research in the moment by 2020. the ceo spoke with stephanie ruhle about their commitment to

the alternatives. >> where you going to put that money? >> it starts with making our product more efficient. a lot can be done with the environment. a lot can be done with power just by driving the science around energy efficiency. place where there is a big installed base of turbines. it the new ones are 60% had 2625% efficiency. all of our technology goes to that. systems that have batteries and are noble power -- renewable power. that is in the new and infant phase. all of armadas asian of gas. modernization of gas.

sensors andr technology that was just mentioned by our speaker. and clean water. those five areas will take a lot of the capital that we are putting into research and development going forward. >> five areas, gives you a feeling of the scale that they occupy in this space. he was speaking about the potential for his business going forward from here. it will be interesting to see what they do and don't do. they have a huge history of innovation. next ont word is up bloomberg radio. come up, we will talk about the the newand the vote for government. we believe that will happen on thursday. we will go back to barcelona to talk tech.

joined the program in the next hour. politics and technology, that is the focus. we will see you in a moment.

>> work in progress. ukraine might not get a government until thursday. we are watching the situation develop quite quickly this morning. the latest throughout the hour. another blow to the point. the top exchange suspended trading after theft from mt. gox. the $90 million argan, facebook's -- the $90 million million-- the $19 bargain, facebook's latest acquisition. good morning to our viewers in europe, good evening to those in asia, and a very warm welcome to those just waking up in the u.s.

i am guy johnson, francine lacqua is off today. this is "the pulse," live from bloomberg's european headquarters here in london. a busy show for you today. talking about privacy. world'stest out the most secure smartphone. can the nsa hack this phone? we will find out later. let's get to our top story, a key vote to form a new government might be delayed until thursday and ukraine according to the acting president. the former president, yanukovych remains on the run. there is a warrant for his arrest. ryan chilcote has the latest. a lot of moving parts and focus this morning. the situation inside ukraine -- what is happening with russia. walk us through the story inside. >> starting with you ternium withics -- starting ukrainian politics.

the parliament speaker who is the acting president would like to see a vote today. an hour ago, he changed his tune and said thursday is all right. but thursday is the last day. he wants to see the government in place because they need to start negotiating with the imf, it is not so easy. the opposition going in and seizing power is not a monolithic group. they have their differences. moreg things even complicated, you still have a number of people out there on independence square. you see them right there. protesters, not too many, we are looking there. hundreds of people still there. they are looking at the politicians, the opposition politicians that have now taken over in parliament. they are saying gray, do your stuff. but we still want to be able to into theer goes government.

you have two power centers. the opposition politicians who are again in power trying to form this government. and you have the people they whom existence to, many of were very militant and would like to see radical change still out there. we have an opposition politician and the acting finance minister openly saying we have been meeting with protesters on maidan going through people we would like to have in the government to make sure they are ok with it. it is not supposed environment for government -- it is not a simple environment for g overning. thank you very much, ryan. let's go to john, bloomberg news managing editor. he joins us on the phone. it is interesting to hear from your point of view about what is happening in terms of that move.

is it optimistic? is there a sense things are going to get better from here? or are we still figuring out what is going to happen next and that makes people nervous. >> probably more the second. is very here in kiev somber. people are mourning the 60 people killed last week. if you go to the square, there are ceremonies commemorating the dead. people streaming into the square every morning and laying flowers. there is still a transitional mood. when you talk to the volunteer militia who are running kiev at the moment. renewal. political even when you talk to them, there is little concrete sense of what specific direction they want the country to go in. they do not want yanukovych and his cronies running the place. beyond that, they cannot give you that much concrete about what they want. >> at sense of fear about

what russia does? >> in kiev there is a clear sense that putin will try to act mistress on whatever government evolves -- try to act misc hief on whatever government evolves. there is suspicion about the damage he could do. >> any reaction to the we haveian protests been seeing in this out of the country? is one of the big fears, that the more extreme sides become, the bigger the chances of a breakup of the country. and in terms of fear to personal areasty in kiev or the around us, there is no worry. it is interesting what is going

on and pro-russian parts of the country. reports in eastern ukraine that there are crowds milling around the statues of lenin, protecting them against anti-russian factions. we are hearing reports from the crimea, where the russian black there areis based, rallies calling on prudent to lend support. that gives you the sense of the mood. >> thank you very much indeed. john joining us from the ukraine, bloomberg news posture fee managing editor. let's get more on what is happening in the telecom world. let's go to barcelona, tech titans are gathered for one of the biggest mobile industry events of the year. we have seen new gadgets including a new smartphone from samsung and a wearable device receptionwhat kind of

have they received? caroline hyde joins us. 10?s out of >> i'd give it a 6 on good looks. is it style over substance? samsung unveiled three products. the s5, and updated galaxy smartwatch, and also a smart bracelet. theyare nice products and are good-looking. there is not that much innovation. nothing groundbreaking. they did unveil a better camera on the smartphone. in water,y to drop it that is a personal favorite. our sitting techniques as well. savingu are -- power techniques as well. when you are running out of

battery, it will give you another 24 hours. fingerprint technology with the ability to make payments via paypal. not really leapfrogging apple and potentially not that much innovation. many feeling these are underwhelming. hear about your phone disasters when it comes to water. we will have to leave that for another day. talk about the competitive landscape. these guys are facing some strong challenges, particularly from the chinese. you are right, we have had huawei unveiling wearable technology. i spoke to lenovo's cfo earlier. he is very bullish. lenovo has been blazing through acquisitions, now taking hold of motorola mobility. they say theynit,

can make it profitable by innovating. they went to become number one. we started with a smart phone business in china. become number two and grow out from china to emerging markets with the opportunity of motorola, that will give us a good platform for us to grow outside china into emerging markets. he is saying give us china, we will leverage that, we will grow there. he would not give me an exact timeframe for when he can leap frog samsung and apple. he says we will do it, motorola mobility used to be one of the best phone makers in the world, we will make it the best again. seems to be about emerging market growth. heels of samsung which has been losing market

share. back to you. >> think you very much, caroline hyde at the mobile world congress in barcelona. let's stay with mobile technology. budget telecom considering -- utschea dome -- de telekom considering an analysis with whatsapp. you have got to wonder if this has to do with the facebook acquisition. why is a telco dealing with a company -- this sounds cannibalistic. >> it is reflective of the fact that the big telecom carriers -- it is not one of the most troubled in europe. while a $16 billion to $19 billion deal for a startup with no revenue has a way of focusing

the mind, this is a trend that has been going on for a while. telcos worrying about what is coming out from whatsapp and skype. these are increasingly useful as we spend more time on our cell phones. the telcos realize they have lost the pace of digital innovation. theears ago, the theory was telcos would be content providers. if you wanted games or music, you would get it from vodafone. they desperately do not want to be left out of the next step, which seems to be messaging and alternate forms of communication. >> what does what's that mean for the bottom line to a big telco? mean fordoes whatsapp the bottom line to a big telco? what is the financial footprint? inthere is a big problem

terms of text messaging revenue. there are estimates of the lost revenue from text messages the big carriers are facing. they are in the many billions worldwide. that is one element, text messaging traditionally cost carriers nothing to deliver and they could charge $.10 for a text message, that was 90% profit in many cases. that is completely gone. then, how do they monetize this new opportunity and a partnership with someone like whatsapp? whatsapp does not have any revenue of its own, there is nothing to be shared with the telco carriers. the theory becomes it will help drive traffic and get people hooked on our network as they are chatting to each other on whatsapp and sending each other video messages. it is a bit of a fuzzy argument. world, they talk

about analog dollars and digital pennies. thatght be something like for the carriers in this transition. >> interesting thank you very much. our bloomberg deals reporter, matt campbell. more trouble for bitcoin exchange mt. gox, it might be on the verge of collapse. will it bring down the entire currency? hans nichols has more. if we can call it a currency, that is. goxf you can call it -- mt. is down, it went dark and off-line. no one can find the ceo. media attempts to find anyone are unsuccessful. you do not know what is happening. , a very is plummeting real plummeting for a virtual currency. ofn to $450 after a high $1200. the report is that mt. gox lost 700,000 bitcoins.

there are about 2.5 million almosts in circulation, 5% of the currency wiped out. can that be recovered? where is the entire currency in peril? we will talk more later on. >> looking forward to it. thank you very much. talking of currencies that are ukrainianblems, the currency under pressure. this as we see a delay in the formation of the government. that will not likely take place until thursday. more on this and the financial risk of this country faces, coming up after the break. ♪

you're watching "the pulse." one currency on the move this morning is the ukrainian hryvnia . the reasons for the latest spike higher in the dollar versus the ukrainian currency appears to be the delay we now have an forming a government. that has been delayed until thursday. a fairlyeen extending germanic move against that currency over the last few days. let's get more, ryan chilcote joins us. he has been covering this story. with us as well, tina fordham, citigroup's chief global political analyst. the lastvelopments in two hours. we were expecting to get a government this afternoon.

the parliament was supposed to vote on it. that is not going to happen until thursday. that suggests protracted maybe divisions within the opposition. we have heard from the russian foreign minister, he has said despite russia not liking what is going on, it will not intervene. >> tina, let's bring you in. ies reacting negatively to the news we are getting a government on thursday. reading between the lines, ryan says we are seeing horsetrading. what should i -- how should i interpret what we are seeing? >> in the short term it will be difficult. nextis a scenario for the few days. one thing i am wary about is a replay of the tournament we have seen another protest countries like thailand or egypt. different elements can come together to overthrow an elected government but then there is great difficulty afterward and filling the vacuum.

we do not have offices and figures with great credibility of the moment. the ones involved in the street protests have retained their working relationship. to mission go -- you live to tymoshenko-- yulia is not the answer. >> are there two centers of power? acting finance minister and one of the leaders of the oppositions, they have moved into the parliament. yet both of them have said they are trying to talk to protesters on independence square, giving them the opportunity to vet them. in many cases, people gave their lives. is that an effective way to govern? it will become wicked. >> they need a popular election.

the reason markets are worried is you need an interim government for a bailout package. ukraine's economic outlook is deteriorating by the minute. an inner government -- an interim government needs to come in, needs to do something about financing. there needs to be new elections. will beng this period crucial, but then getting legitimacy for a new elected government will be the make or break outcome that will carry the country forward. >> looking at what happens next -- financing and how the russians play it. interlinked. talk to me about how -- give me a glass half-full, glass half empty scenario surrounding finances. perspective,itical i am not an economist.

to see a replay of the kind of financing across the big powers to help support ukraine through this difficult period. >> this will focus minds. if we get a default on the currency keep stephen what it is doing, the politics are going to focus on that. >> you need cooperation, there are real questions for the eu. it has imposed tough conditionality on the eight it aid it is -- on the giving two countries in the periphery. ukraine has different problems in terms of its dear strategic position. >> this time last year, we were talking about a bailout for cyprus. it took the eu a long time to gather the support for that. in this case, as you pointed out , there is not really an emerging market spill over danger here. this is a geopolitical story.

do you think the likes of germany will cough up enough? when it comes to cash, will they come through? >> it is understood in world capitals that this is a crucial moment for ukraine. there was an opportunity for the country to accept the eu trade agreement. that is what's barge at these protests. the other point is. although ukraine has geostrategic significance, it has problems nobody wants to own or solve. that is why a multilateral solution is going to be the best way forward. i think the whole dynamic has exposed something important. the limitations russia has. a lot of stories in the last few putin as the most powerful world, this is not what putin wanted to see on the back of the sochi olympics. there is too much faith that

countries can force outcomes. we need to build a bridge and the people of ukraine have to take a decision. >> thank you very much indeed. tina fordham, global political analyst at citigroup. we will be back in a couple minutes. ♪

>> welcome back him you are

watching "the pulse." gailey's new prime minister italy's new prime minister matteo renzi is gearing up for a vote of confidence. dan liefgreen joins us. walk us through the vote yesterday. >> then made issue there is that have anparty does not absolute majority in that branch of parliament. in the chamber of deputies, which is holding the debate now, they do. he had to attract support from the opposition, from moderates on the center-right such as his rty.rior minister's part political pals with silvio berlusconi. to pull inmanage dissidents from his own party, there were four dissections there, that explains the narrow

majority. thank you, dan liefgreen joining us from italy. we will be back in a couple minutes. see you then. ♪

>> good morning, welcome back. you are watching "the pulse," live from bloomberg's european headquarters in london. these are the top headlines. ukraine's acting president says a vote on a national unity government has been delayed. was an opposition politician elected parliament speaker last saturday, he is now interim president. his challenge is to fill a government vacuum so officials can seek an economic aid package needed to fend off a default. we think it will happen

thursday. german exports surged in the fourth quarter the most in three years, boosting an expansion and europe's largest economy. the german gdp rose 0.4%, supported by stronger investment. mt. gox is off-line, efforts to reach they bitcoin exchange site are directing users to a blank page. amid allegations of a $350 million hack of the site. let's say with security, meet the super secure black phone. the big question everyone is asking, can the nsa get inside? first toe phone is the run free as a carrier, they do not have vendors attached apart from its maker. some people say that will reduce the risk of spine. will it work? has think the snowden case elevated awareness of the panopticon we live in.

i have been riding for years about a future where we have surveillance. the snowden documents have revealed it is worse than we imagined. we have to push back against this. >> a black phone is a smart phone that has been created for the purpose of protecting user'' privacy. it protects your online activity from observation by others. the content of your phone calls is encrypted. no one can wiretap you. no one else can listen to the phone call except the two people on the phone call. criminals have access to the same technology as the rest of us. the 9/11 hijackers purchased gps receivers to guide airplanes. gps is a technology developed by the pentagon to guide weapons. what are we supposed to do? stop selling gps receivers? the cryptographic because we are

using that we designed in silent thate, we hope and think major governments cannot break them by pure crypto analysis. there are other ways to break into phones. we can push back against this with technology tools like black phone and silent circle. we are going to need to do more and push back in policy. we have to change laws. amazingnating products, how much has changed. almost 200 israeli tech companies are out at the mobile world congress this week. the country brought you waze and viber, a big player in mobile technology. let's join elliott gotkine. elliott? hebrew is the third language after chinese and english in the mobile world.

one man who knows a lot about this is investor and entrepreneur, jon medved, ceo and founder of ourcrowd. you. to have a lot of talk at the mobile world congress about whatsapp, the $19 billion facebook page for it israel invented the q.ssaging platform with icw >> it is wonderful, the $19 billion. we have our own small version, viber wason, bought by a japanese country. israel is aws startup nation. we have lots of venture capital. there is always a dig against israel that we sold our companies too early. that is not true, $5 billion exits -- five $1 billion exits

in the last months. israel is vibrant. last month, there were 80 activities,ch m&a the average price was $83 million. >> is 2014 going to be any better? nasdaq expected about the same numbers of ipos this year. >> my guess is we will see between 10 to 15 new israeli offers. i think we will see between 80 and 100 different tech m&a transactions. we are seeing a huge influx of foreign capital from new places like asia and russia. we are seeing investors joining the traditional silicon valley gang. greati deals have technology and are powering much of the u.s. tech giants. whether it is microsoft, cisco,

or google. you are finding blue and white technology from israel. >> where is the next big thing? what is getting you excited? area, movingile mobile technology into enterprise. we have a company that is whatsapp for business. mobile gaming, a huge area just getting started, large and asia. we have a company that got 50 million users in its first year. ofis not the 500 million whatsapp, these are companies to take a look at. is your company, ourcrowd, which allows individuals to invest more than $10,000 in revenues. -- in companies. there have been some voices saying things are great in israel, there are fewer computer scientists, the government is putting less money in. >> we always have warning signs to deal with.

we have to make sure our universities are top-notch. in the last year, there were to0 million gifts made israel universities. in particular. we will get more engineers. we have to make sure our tech economy stays vibrant. if you throw a rock and hit someone from the tel aviv stock exchange, they are involved in a startup. it is healthy and growing. companies thatar are the next billion-dollar exit in israel? there are a bunch of them. we have a company that lets doctors pre-live their neurosurgery. we have a company that is inting energy costs

air-conditioning installations. we have companies and cyber security, where israel leads. there is nowhere to look in terms of security software other than israel. it is the place to go. >> jon medved, ceo and founder of ourcrowd. a bit of an evangelist for israel's high-tech sector. >> i got that feeling. thank you very much. monitoring a press conference taking place between netanyahu and merkel in israel as we speak. ," minutes until "surveillance tom keene joins us from new york. bitcoin? >> we will look at bitcoin. down.ng, mt. gox shutting the headline for so many in support of bitcoin. and many that have been suspect. we will talk about that. will join us from

citigroup, talking about equity markets. this market is unloved. dow, nobody is on board. a little caution on the equity markets. we will talk to jared cohen of google on the digital world. in our 7:00 hour, we will focus on digital security. >> some great stories around that subject at the moment. thank you very much, tom keene coming up with "surveillance." back to europe, how are the markets? let's find out. manus cranny at the touchscreen. what tomicking up on said, these markets are coming off pretty heavy levels. look at the london market, up at a 14 year high yesterday. at aeally are looking driver. exports coming out of germany,

confidence there. of ataking a little bit pause. mortgages in the u.k. up at a six-year high. we have the political issue down in italy, matteo renzi going to go for his second photo. darling costs touching low costs. -- borrowing touching low levels. at the moment.wn case-shiller will come out, is it a bubble? that was being debated yesterday on twitter. along with consumer confidence in the u.s. that will play through. in europe, one of the lead stories is about vivendi. what is vivendi going to be? they want to be a media asset. what are they going to do about telecoms business? moot point out there.

capital return to shareholders, nothing authoritative. down 4.875%. last year was all about spain. it is very fully valued this year. this year will be where the thee lies further right on yield curve. the markets are sure about the next three years to four years, but beyond five years it begins to look more interesting. go to my twitter page @manu scranny and get the interview. >> think you very much. another blow to bitcoin. mt. gox goes off-line after an apparent hack. how big a threat is this to the future of the digital currency? ♪

we start with our smart phone business in china. in one or two years, we become number two. we grow out from china to emerging markets with the opportunity of motorola. that will give us a good platform to grow outside china and in emerging markets. >> htc, 2014 is going to be a great year. htc one is the best model in the

world. >> the scale is about volume. made very many purchases, but these are very large numbers. is you have been listening to throughout the morning brought together. incredible interviews at the mobile world congress in barcelona. one,s been an amazing underlying the scale of this industry and the influence it has. let's stay with tech and security. a big theme running through barcelona and the bitcoin world over last 24 hours. feels under threat, a major exchange for the digital currency, mt. gox, going off-line last night. a day after its chief executive resigned from an advocacy group

for bitcoin. what does this signal for the currency? downfall or regeneration? hans nichols has more from berlin. what has been happening at mt. gox? >> mt. gox has gone totally dark. if you try to load their website, you will not find anything. mt. karpeles, ceo of gox, one of the biggest exchanges. he cannot be found. he has resigned from the parent bitcoin foundation. the question is -- do people who have bitcoin in mt. gox, are they totally lost? it is estimated that 700 bitcoin -- 700,000 bitcoin have been hacked. of around 12l million. you put that in perspective, about 6% of bitcoin.

the entire currency, that has gone missing. the argument for the probe to point -- the argument for the pro bitcoin crowd, once you will bet. gox, bitcoin more stable. it is bad if you had your bitcoin stored at mt. gox. >> this seems to be building. what has been the impact on valuations? >> they have plummeted. down 15% yesterday. this is what is so interesting, it is so sustainable -- it is so susceptible to an exogenous threat. december was around $1100. $464. we will see what it does as everyone wakes up and has questions about the security of

their points. hackers were able to withdraw multiple times, they kept going back. they found a glitch in the system and exploited it and got away with a lot of bitcoin. >> you were keeping your bitcoin at mt. gox, you cannot keep them in your own personal wallet. are we going to see bank runs on other exchanges as people fear what has happened to mt. gox could happen elsewhere? >> the problem with that analogy -- if you have a bank run, you can take out a physical asset and store it. where are you going to store your crypto key to your bitcoin? if not on an exchange. we remember the story a couple months ago about the man who had it on his hard drive, through the hard drive away and was looking for his hard drive in a landfill. the nature of this is not something you can store under

your mattress. it is a challenge of virtual currency. is one of the limitations. thank you very much indeed, hans nichols. news.company the billionaire investor carl icahn is flouting ebay for what he calls lapses in corporate governance. >> i can promise you one thing. if i had been on that board, andreasen would not have bought skype. that $4 billion, we would have done a thorough search as we did at forest. he is urging investors to vote for a split between paypal and ebay. he says paypal might be uncompetitive in three years to four years. samsung has unveiled a galaxy s5 smartphone with a fingerprint reader and a bigger screen. it was shown at the mobile world congress in barcelona. the water resistant foam will go on sale april 11.

struggling to find buyers for 11 of its earliest 787 three minors after two -- 787 dreamliners after two airlines dropped orders. the jets are heavier than the and had a shorter range. valued at $1.1 billion. down, one to go. italy's new prime minister won his first vote of confidence and faces another. renzi's reform agenda and his chances of achieving change. time for the pulse number. 262,945, the number of deportres a petition to justin bieber has gathered. why so many people are keen to beat out bieber even though he

means big business in the u.s. ♪

back.d morning, welcome you're watching "the pulse." let's talk about the currency markets. the situation in ukraine, hryvnia has been under pressure for a while. this is a two-day chart. there is a delay in forming the interim government. that will take place on

thursday. that delay is part of the story behind but we have seen this morning. another drop in the value of this currency as the dollar-ukrainian hryvnia is now 9.8. concern about the economic edgeok for ukraine, on the of a default. what will happen in terms of the rescue package that could come from the eu or russia? not sure how i segue out of that into this. the decision to deport justin bieber from the u.s. has become one of the most popular in the history of the white house website. hundreds of thousands of signatures have been collected was arrested for drag racing and driving under the influence. rachel crane takes a look at what could happen if he is convicted. bieber, the 19-year-old canadian pop star sparked a debate about immigration law. reports have him on a bad

behavior rampage, egging his neighbors house, drugs found in his home, jiving under the influence, an assault charge in toronto. it has people wondering -- what does bieber have to do to get deported? more than 250,000 people signed a petition asking the obama administration to revoke bieber 's green card and deport him. that is enough to get an official response. it is not like we have not deported or denied entrance to singers before. in the 1970's, richard nixon tried to deport john lennon. the circumstances of those are different from bieber's. of foreign thousands nationals are deported every year, few, if any are here on the 01 visa like bieber.

it requires extraordinary international acclaim. authorities are unlikely to revoke the 01 unless he is convicted of a violent crime or sentenced to more than a year in prison. should we really be in such a rush to kick bieber out? his concert grossed $77 million last year, 2/3 of those shows were in the u.s.. he is investing millions in u.s. startups like tinychat. much you feelhow about his music, unless his bad behavior continues and he is convicted of more serious crimes, you can believe he will be around for a while. >> let's talk to our own bad boy bieber fan, hans nichols. what are you watching? at what happens in italian politics. matteo renzi got through the

senate. he had a few votes less than his predecessor, he is going through. >> thank you. that is it for "the pulse." "surveillance" is next. ♪

>> this is bloomberg "surveillance." markets climb walls of worry amid tepid economic growth. is not just down.

enthusiasts regroup. a challenge for retail. good morning, everyone. live from bloomberg world headquarters in new york. i am tom keene. joining me is adam johnson and alix steel. scarlet fu off today. the coin.never had >> i have never had bitcoin, and i never wanted it. >> time for morning briefing. stocks dropping the most in five months. humbling to the lowest level in more than three years. exports rising, the most in three years in the fourth quarter. we have economic data. 9:00 the case shiller home price index. 10:00 consumer confidence index in