♪ >> welcome to "lunch money." let's take a look at the menu -- ande got google vision -- mobile, blackberry, is it back? theceo has a pitch of meeting in barcelona. the pros and cons of a smaller military. david rubenstein talks dealmaking and 2014. -- in 2014. meet the robots that help

gravity in our weeklong design series. we are kicking off with a big reveal -- twitter -- surfers have enjoyed the clever musings of@gs elevator. there were comments on the goldman sachs elevator such as -- there is no way your guess is as good as mine. the appeal came from the mystery, who is this mystery goldman sachs employee? we know. "the new york times" reported it was not an employee at all and was never in a goldman sachs elevator. he is a 44-year-old x bond executive. he started the account is a joke. month, he sold the book

about wall street culture based on thosetweets for six figures. the goldman sachs response was that -- nice to see everyone has a sense of humor here. get on withcan the business of making money and that comes at a price. jpmorgan chase it would eliminate 8000 jobs at its consumer and mortgage banking units this year because falling demand for mortgage refinancing. the reductions would bring the staffing cuts to 24 thousand 500 into two divisions since the start of 2013. banks have been the goto place for hundreds of years. then came the digital currencies --itcoin.t coin b it turns out the recent rise of bitcoin shows the digital currency has growing up to do. >> the exchange site went off-line this morning.

a bug in their system allowed users to withdraw more bitcoin than allowed. it comes one day after the ceo stepped down from the bitcoin foundation. and advocacy group. >> this is the world's largest and most, bitcoin exchange. if you try to log onto the website, it would come up wind. bitcoin made it so that plunged in value. it was higher than 1100 back in december. gox has been plagued with issues with his customers for years and suffered major security vulnerabilities and support issues for customers. it had a very tarnished reputation for a long time. it took emerging companies that growing, they welcome what

looks to be the ultimate undermining and failure of that entity. bitcoin faces challenges like government regulation, reputation that it is used to launder money and convincing the public that it is a legitimate way to buy stuff. buycan use bitcoin to tickets for the sacramento kings but most real people are steering clear. the national retail federation said they were not familiar with this on the horizon for any major retailers. this is a very big week for retail chains like target, jcpenney and gap reporting earnings today. it is still rough out there. >> it's very tough and it's just not whether because christmas was lousy. it had nothing to do with whether. the consumer is in a major slowdown. retail veteran howard

davidovich. wait until you hear how he really feels. >> look at the department store business. sears is in the and jcpenney's 's is in the. kohl >> jcpenney is out tomorrow, and it ought be under previous comments? >> you cannot go from $19 billion-$13 billion and have the same number of stores and be in business. hello? i said to sell jcpenney stock a long time ago. i don't know why people were buying it. they set -- they had a ceo that went completely nuts and completely destroyed the company and everything he did was insane. he was supported by bill ackman. that's what happened, goodbye

company. >> he is not the only guest who comes on bloomberg talking like that. theyey compete with us and said it is a little overlapping. we just bought braintree. who is he fully when they write these letters? it is not just a little bit of overlap. >> he spoke with trish regan yesterday. he wants ebay to spin off paypal. he was referring to scott cook. and markit in for him andreessen. he called them out in a letter to the ebay board saying they are not working in the companies test interest. >> i have never seen one as blatant as this. we have seen a lot of them. weren't sad it would be funny.

it's all about corporate governance in this company. it is sort of dysfunctional. mark andreessen on the board of and scott cook are two of the most respected and accomplished and value driven leaders in silicon valley. i agree. i think they are respected and the compass and agree mostly their value as leaders. the trouble is, value driven leaders for themselves but not for ebay or the shareholders. notcahn two complementary about ceo tom donahoe. was going to be sold by donahoe. he is eithernaive or asleep at the switch. i will say this now -- if i had been on the board, mark andreessen would not have boughtskype. >> mr. donahoe spoke with us

last week in an interview and here's what he had to say. we are not working at odds with them. the board and i have been looking at these alternatives every year for the last five years. the criteria we use is what will enable us to compete in the market more successfully. paypal to growe more quickly and expand globally and to ultimately be more successful? that is the criteria we use. to date, we believe that is with the company together. trying to appoint two members to the keyboard board. -- to the ebay board. google executive chairman eric schmidt is donating $1 million to solve some of the world's biggest problems. that is coming up next. the defense department is cutting back on spending and we have reaction to the proposed budget. biden played defense during seth night."debut on "late

>> i was planning on making an announcement tonight but i decided that tonight is your night. i hope you will invite me back. >> and 2016 plans? >> i'm going to run for president. ♪

>> this is "lunch money," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. i am adam johnson. google executive chairman eric schmidt donated $1 million of his own money to provide grants for organizations fighting local challenges. the idea came out of his best-selling book. it is entitled "the new digital age." charlie rose spoke with the authors. , the many revolutions

disclosures from snowden and the crises governments are facing -- we think that a lot of this is anticipated in the book. you judge but the important thing is the technology revolution is real and the power of citizens has importance. >> i want to talk about both of those things but also, you suggest we have not seen nothing yet when we think about how important the internet will be in medicine and education. i will start with education. you ask what's new. the vast majority of the world children have historically learned through rote memorization and access to mobile devices and conductivity will change the game and arm them with the device that will allow them to fight rote mark -- memorization with critical thinking. >> when you go to the doctor, you're given an average, a male or female, and age group --

wouldn't you rather have individualized medicine where you have a sequence of your skin and sequence it and they know precisely what drug will fix the problem? that is possible within a few years. >> you talk about genomics and medicine. when we talk about the potential of what is available for humankind, how far off is the kind of personalized medicine that will make a difference with enough data available so that we really know what error risks are and how we can address them? >> it is happening now and in five years, it will be pretty universal in the developed world. it takes that long because we have to get the data into the sequences. genetic sequencing is falling from $1000 to $100 in the next few years which means it when you go to the doctor, a sequence will be done with you right then and there with your permission and that information will be stored to help you solve your problems. there is a lot of startups that are now using phones for normal

monitoring. pointerally get to the where it can say something changed in your body and i am calling the dr. for you. >> the whole world of sensors is changing dramatically. >> this is what we think will define the future which is what happens to autocracy's? we took a trip to north korea a year ago. when you go to north korea, you are struck in the absence of doubt. it's the last cult of personality, totalitarian society despite the fact that it is a dire situation, the silver lining is slightly more optimistic and that is that there will never be a cult of personality society again because of the internet. -- internet has literally will eliminate it like we illuminated smallpox. >> you can see the full interview on charlie rose tonight at 8:00 and at 10:00 p.m. eastern time only on bloomberg television.

we continue the conversation this morning on quote surveillance." thee have more insight into play-by-play in terms of what is happening on the ground than at any other time in history. the challenge that comes with that is as we are more engaged, we cannot afford to lose sight of the deep historical roots of the divide that exists within ukrainian society. what's interesting about this dynamic is marketing matters in a modern-day geopolitical context for it >> how do you define digital marketing? >> the ability to shape opinion digitally. leansis a society that toward the east and a society that leans toward the west. >> there is a deeper divide between republicans and democrats. have you seen change behavior by politicians over the digital world? >> there is certainly more transparency. >> the republicans are trying to

catch up with the democrats. >> i think everybody is trying to catch up with connected constituents. going back to the ukraine example, part of what has accelerated this revolution in ukraine -- compare it to the russian intervention in georgia in august, 2008 -- many more people killed, a much less attention. more con activity has shown a huge spotlight on what has happened and what is also vich begang is yanuko to bleed supporters as soon as he lost the conductivity. there is a challenge that goes back to the marketing that he or she who can best capture their cause at 140 characters has a better chance of getting the general public around the world behind them. >> what about the images? the images have been so powerful. isn't that almost bigger than the words themselves? >> the images are powerful in terms of creating demand for action.

shining that spotlight on what's happening. look at syria -- you have 140,000 people dead and there is no shortage of horrific videos. it doesn't make a difference at all. day,e end of the technology can create that demand and at transparency but it still requires the will of government and leaders and in on the ground movement to affect change. >> getting connected is only getting more and more high-tech. we are off to the mobile world ence next. we will also introduce you to a robot that helps make the hit movie "gravity." ♪

>> this is "lunch money," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. is blackberry back? last week when ford chose blackberry to power its in car technology system. is sticking with its bread-and-butter as well, launching new phones at the mobile world conference in barcelona. >> we announced a phone today and it's working and doing great. it's under $200. it came out in indonesia and we will load on good software. pleased with the

fact that it only took us 3-4 months to get a phone done and into the hands of the consumer. that is fast. >> that is fast. this new $200 phone is code-named jakarta. it will be sold as the z-3. >> it will have the same keyboard. we will return the hardware built to it which is the trackpad. everyone loves it because productivity is great. it has a little larger screen. it will be 3.5 in choose. it has a fast internet accessibility. i think we are building the best of the old and the new. i call it a classic. chen took over blackberry at the beginning of the year and has been very busy. >> i have my hands full with a number of things to do. we have to get the device don't

properly and the service business growing and i've got to get the bbm scaling. x where the connected car is, we need to win more design. >> he is busy. does blackberry have anything else in the pipeline? >> we have three or four different services and capabilities we are working on an over the course of the next 12 months, they will be announced. it will help productivity and collaboration and we are very excited about that. potential which is tied to our enterprise focus will be huge. until we get to the point where we can showcase that potential, it's too early to think about getting $19 billion. the $19 billion

facebook purchase of whatsapp. >> running a public company, anything to help our shareholders, i need to take a serious look at. today, i think we need to build a power base and build up the engagement model. >> secretary chuck hagel is trying to sell the department's new budget proposal and we will hear some of the reaction to major military cuts at the pentagon. the military may be cutting back but facebook is expanding. we will have comments from david rubenstein on the deal to buy whats app. ♪

>> bloomberg television is "on the markets." fluctuation some between negative and positive throughout the session. the s&p 500 and the dow are on the green. in other words, very little change overall. we sought data showing slower growth in home prices. we had better than ever estimated earnings reports. let's look at individual movers. v the first up isivus cut to neutral at jpmorgan. not see says it does evidence of a significant strategy shift and there are no signs that the weight loss drug will see an uptick in prescriptions. we are also watching macy's.

it announced fourth-quarter earnings that topped analyst estimates as it struggled against cold weather. they had a belt-tightening effort that included 2500 job cuts. we will have more "on the markets" in 30 minutes.

>> this is "lunch money," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. with a moving pictures video that is the story. in ukraine, a vote in parliament on selecting a new government has been delayed until thursday. the acting resident is working to win support of the protest leaders. bands of protesters and venezuela skirmished and caracas. they are protesting shortages of basic goods and skyhigh inflation. they have battled police and government troops for the past two weeks. the venezuelan president has called for a peace conference tomorrow after the opposition leader rejected a call for talks.

the three women held captive for a decade in a cleveland house were honored by ohio governor john kasich. he gave them the annual courage award in an emotional ceremony. >> they rescued themselves, first by staying strong and by sticking together and then by literally breaking out into freedom. [applause] amandaberry, gina, and michelle, three extraordinary women rose above. when onemen were freed of them was able to push through a door and go for help. an incredible story. a new five-year pentagon audit is out of many in congress are not happy. defense secretary chuck hagel's plan cuts army forces to fewer than before the terrorist attacks in 2011. 01.

congressionalwith limits -- these are the numbers. also proposed is the benefit changes for current and retired members of the military. secretary hagel defended the budget yesterday at the pentagon. >> these recommendations will adapt our defense enterprise a we can continue to protect this nation's security in an era of unprecedented uncertainty and change. if we continue on the current course without making his modest adjustments now, the choices will only grow more difficult and more painful down the road. we chose further reductions in troop strength and more structure in every military service, active and reserve, in order to sustain our readiness and technological superiority and to protect critical

capabilities like special operations forces and cyber resources. sequestration requires cuts so deep and so abrupt that we cannot shrink the size of our military fast enough. under sequestration, spending levels, we would be gambling that our military will not be required to respond to multiple major contingencies at the same time. recognizesudget that the reality of the magnitude of our fiscal challenges, the danger of the world we live in, and the american military's unique and indispensable role in the security of this country and in today's volatile world. robert levinson this morning and he said we should not be surprised by these numbers. >> the numbers were agreed to in the budget control act and modified a little why the ryan-murray budget deal so it is not much of a surprise. the defense budget is coming down after a decade where the defense budget kind of double.

d. the industry has to adapt to this and the big primes like people like lockheed and general dynamics maintain their profits although the revenues have come down a bit so it's an adjustment but not something people did not see coming. >> the plan is being met with resistance by many at congress. >> they are. tryingto make some tough choices it will be the job of congress to step in and move those numbers up. the world is not safer and this is not the time to begin to retreat and not the time to cut our military. >> while the budget may be getting some pushback, some lawmakers say is time to downsize. >> we can trim the budget when it comes in the military, we just have to be responsible. the world is constantly changing every single day. at the same time, we can still do the job we promised to do for the world and still do the job to protect tomography in america. hesecretary hagel's plan was

sent to congress next month as part of the obama opposed budget and congress will no doubt make its changes. we can also expect to see some changes in emerging markets. when we return we will hear from david rubenstein of the carlyle group who sees emerging markets and some major growth. later on, the automobiles that changed history. ♪

>> this is "lunch money," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. carlyle group cofounder david rubenstein joined other leaders at the super return international conference in berlin. cristina alesci sat down with

him and he said he did not know about whatsapp before the sale. >> i spent 26 years building carlyle and whether lower market via bemis company which is only three years old. i thought i was in the wrong business i wish i had started whatsapp but i did not know the company. i'm a little out of it with respect to text messaging. it shows what is great about america and capitalism. people can start a company with a good idea and quickly they can get economic reward whether it is the right price or not, time will tell. the facebook buyer seems happy with the price. i would say they are probably more robust than they were a few years ago. time will tell whether you overpay for something. given what facebook's valuation is, roughly 10 times the price a pay for this company, and given the fact that this company has 450 million users, i think it's probably a reasonable price. i don't really know the details.

it does not strike me as the same thing as paying $1 billion or so for a company that has virtually no revenue and no earnings and hardly any employees. opportunity.t of it wasn't very profitable yet because that's not their main concern but they have a lot of users so it may turn out to be a great acquisition. remember when google bought youtube for $1.5 billion, people laughed. the company had no revenue and that seemed like a cheap price. if you are dealing with companies that have revenue and earnings, you can use traditional measurements to find out what you are paying. that was an unusual situation. sometimes you have to be bold and while i'm not a facebook user or shareholder, i have no connection with it really, i don't think they made a big mistake. if that rice had not been paid by facebook, it would have been paid by google or someone else. >> rubenstein hit on the

importance of the emerging markets. >> that's a misleading phrase. 85% of the people on the globe live in the emerging markets. 55% -- >> i could save minority markets. >> 55% of the gdp of the world is in emerging markets. you cannot ignore them because they are small little countries. these are countries that are gigantic powerhouses like china. our view is that there will be ups and downs and the fluctuations might be greater in some emerging markets but the greatest growth will be in the emerging markets and the greatest opportunities will be there and if you avoid them, i think you will be left with relatively little areas to invest in. china is an important place to invest. i think india has great potential and brazil is still an attractive laced to invest. then you have korea, indonesia, south africa, nigeria and other

countries in sub-saharan africa like tanzania. these are companies with -- these are countries with great potential and their growth rate will be high but you have very little equity penetration. 1/20 ofe is probably the united states. high growth rates in young populations and growing the middle class, these factors make emerging markets attractive. i would not say put all your money there but don't take all your money and put it in the developed markets either because i think you will miss opportunities. the emerging markets -- people overreacted who invested their. that overreaction is behind us. when the tapering actually began, people were much more modulated in their views. it has had some impact. there is no doubt that some currencies had to be adjusted and no doubt that some emerging markets have had some dislocation. i think it's a much better thing in the end that i don't see

panic in the streets for economic reasons. the ukraine is a more difficult situation but for economic reasons, i don't see hannah in the streets in emerging markets. i think they are doing ok. we cannot solve all the problems of the world with monetary policy from the fed but there is no doubt that the emerging markets benefited from low interest rates and they are still very low. it's not like we have ratcheted up interest rates around the world. they are slightly higher than they were before but not dramatically. >> that was david rubenstein from carlisle group. we'll introduce you to robots that are building the future and making films. speaking of movies, the company working to turn soldiers into real-life iron man is next. ♪

and youu like cars

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come together on march 10 for the second annual bloomberg businessweek design conference and one of them is tobias kinnebrew. a studio that specializes in automation, robotics, and filmmaking >> what is design? i think i will take a pass at answering that. discipline, it's an approach for a methodology. powerful design thinking can be applied in different areas we don't often think about design. design studioive and engineering and robotics studio. what we do is the result of a unique culture where we intertwine the artist and the engineer or it it becomes a very powerful thing to generate

innovative, creative and experienced ideas that people have never seen before. we have done a lot of commercial work and a lot of work and some. we were involved in the film him cope gravity." our robots were responsible for the motion control. we build a lot of things here. we don't build the robots you see behind me. these are industrial or manufacturing robots that we constantly ask to do things that they were never designed to do. working in a place like this is inherently challenging. part of the job is to imagine things that are not really possible and then find ways to bring them into reality. >> that is cool stuff.

bloomberg businessweek is hosting the second annual design conference at the san francisco center for the arts on march 10. go to bloomberg businessweek design.com for tickets. is turning men into robots . >> this latest innovation from bae systems could be the future of modern warfare. design for troops on the ground, the warrior is attached to a soldier's helmet and the technology is more advanced than that used by fighter pilots. real-time data is transmitted onto a glass eyed peas allowing its user to see the battlefield and digital targets. the designers say this could give the soldier wearing a crucial information and hostile situations.

that includes being able to differentiate between enemies and friendly forces, route mapping, and video from reconnaissance drones. designed and built in southern england, it is being tested by the american military. but here isiron man the mystery meat. this is an inspired look for winter. ♪

>> bloomberg television is "on the markets." we are about halfway through the trading session. we have had a mixed picture today. the major indices are very little change. the s&p 500 became within a hairs breath of closing at a

record yesterday. we have seen a lot of fluctuation during today's session. let's get your daily dose of insight. adam johnson is looking at the state of the american consumer. we will just slow down and check the side view mirror and figure out what is happening. let me show you some of the speed homes we had to go over today. l brothers lowered their top end the sales by four percent. it is not catastrophic. macy's, sales fell two percent despite deep discounts. got that result from the eightgs and jpmorgan, thousand more jobs cuts. a little bit of a speed on by many to be aware of what is happening. this is how tobias left of its -- lefkovich sees it.

that is what speed bumps look like. you don't say sell everything but you have signals to be careful. consumer a lot of companies that will beat reporting earnings over the next couple of weeks the analysts have started to lower the numbers. dollar tree, jcpenney and others will report tomorrow. at least three analysts have lowered estimates on all five of those companies. same story the next day. children'seek, the place, costco, and petsmart. if you look at retail over the past year versus the s&p 500, it has finally started to lose steam. retail was the big story but you can connect these signposts. you realize it's time to take a little bit of a pause and get through earnings season before we get back into retail. >> many of these retailers are

optimistic coming out of this cold weather. let's take a look at individual stocks. you cannot ignore it tesla. that stock is surging, bringing the market cap above $30 billion. the company's car was the top car in consumer reports and morgan stanley doubled its projected price target for the stock setting it at $320 per share. they are confident tesla could disrupt the car market as it plans to make its own batteries. betty liu had a chance to talk to you on my last week about his company's plans for agigafactory to make the battery. >> it is a long-term development over the next three years and it deserves its own call. we will answer questions as much as we can next week. there is a likelihood that panasonic would be part of it but that's not 100% confirmed.

they are our main supplier now, i that seems like a good likelihood. if we could pay for the giga factory in more than three pay for it if we allowed the time to extend beyond three years. if we want the factory done three years, we would probably need to raise capital. " again in 30rkets minutes. "bloomberg west" is next. ♪

"bloomberg west welcome to "bloomberg west" -- welcome to "bloomberg west". the future of bitcoin is in question today. goxamount gox -- mt. exchange went dark overnight. thieves may have made off with millions. we will talk about that later.