>> welcome to "lunch money," where we tie together the best stories and videos in business news. i'm adam johnson. here's a we got today in tech. google dishes fiber. this search giant wants to replace the cable guy and will do it one city at a time. and building manhattan's brand-new neighborhood. and in motors, tesla's road to efficiency with a plan to create the largest battery factory in the world. we will take you there. and in sports, the tar heels. how some of the athletes at university of north carolina never had to open a book. and brick by brick, lego. it's more than just toys.

more tension in the ukraine. curiously, it's not in kiev. that is the scene in front of the parliament building in the ukrainian peninsula of crimea. overnight, 120 militants took over the parliament building and raise the russian flag. the group is allowing deputies to enter the legislature for a possible vote on the status of crimea. the peninsula is in the south of ukraine, population 1.9 million. grammy is part of the country, but governs itself as a semi autonomous state. it is also home to russia's black sea fleet. >> we are dedicated to the integrity of my country, and we will do everything we can, everything possible, and we will use all tools and legal means in

order to civilize ukraine. >> that is the new prime minister. he wants $35 billion in aid. we caught up with him this morning. >> we will do everything not to default. we have enough resources and if we get financial support on the united states, the european union, the imf, we will do it. >> ok, $35 billion. the imf says it is ready to respond to ukraine's request. the u.s. thus far has pledged $1 billion in loan guarantees. $1 billion down, 34 billion dollars to go. ukraine's money problems, together with the situation in crimea, are shaking of the regional markets. the russian ruble fell to record lows against the u.s. dollar. ukrainian stocks also fell.

it does not help that russia is flexing its military muscle. russia has put fighter jets on alert given what is happening in crimea. that on top of military drills that president vladimir putin ordered yesterday. >> i think the russian angle is what has people worried right now. they have signal that they will try to protect people in crimea. no one expects russian intervention right now, but with the military exercises yesterday, what happened in georgia is always in the back of people's minds to my that you could get some kind of russian reaction. >> u.s. defense secretary chuck hagel is concerned as well. he spoke yesterday to a group of ministers in belgium. >> we expect other nations to expect ukraine's sovereignty and avoid provocative actions. that is why i am closely watching russia's military exercises along the ukrainian border, which they announced as you know, yesterday. i expect russia to be transparent about these activities and i urge them not to take any steps that could be misinterpreted or lead to miscalculation during a very

delicate time. >> would this fall into the category of steps that could be misinterpreted? this is a russian warship docked in habana, cuba yesterday -- havana, cuba yesterday. it went into service in the black sea back in 1988 before it was transferred seven years later to the northern fleet. this is according to russian media sources. neither cuban authorities, nor state media have mentioned the ships visit, unlike on previous tours by russian ships. does it, cold war? secretary john kerry said yesterday, "this is not rocky iv." don't you love that face? seriously, that seems to be the international response. >> this is something everyone was very concerned about in

terms of the russian speaking population. it was part of russia until about 1954 come of the soviet union. and the concern is with ninkovich on, where will you have the russian speaking population feeling under siege? as you mentioned, they are saying they want to rejoin russia. >> we were talking over the break about the sphere of influence that russia is trying to protect. and that has been a long-term story. there was an interesting claim about syria. >> this goes back to international relations. are we trying to redo the soviet bloc? is it just as simple as putin wanting a russian bloc? >> if you look at what has happened with the expansion of nato, they very much believe there is a western effort and a nato-led effort to break apart

its sphere of influence. >> can i ask a dumb question? why is no oil moved? >> there is really no oil in the story. many are concerned about the gas pipeline inc. cut off. so much of europe's gas goes through ukraine. there was a concern that with a shakeup in ukraine, would russia shut off the flow of gas? they have done it before. but this time, no one is thinking that is going to be the russian play. it is not in their interest to do this. they are not worried about this right now. but that is something you always have to watch.

>> and i would say that is the weapon they are likely to use. >> who would likely use it? the russians? >> the russians shutting off the gas pipeline at some point. i worked in georgia in the 1990's doing privatization and that is exactly what they did. several times we worked in the dark. >> is there a georgia-crimea equivalent here? >> that is what is the back of people's minds. that is why you have john kerry basically telling the russians to stand down will stop in fact, reminding them of what the russians said about libya. you told us not to go into libya. you should stand out on this situation. >> as for former president viktor yanukovych, he has been on the run. yesterday, moscow granted him protection "on the territory of russia" courting to russian news agencies. in one report, he was seen in a moscow hotel and was now seen in this kremlin sanatorium just outside the city. gm coming under fire for waiting 10 years to recall faulty cars. first cars, phones, now we are seeing google fiber. we will tie you how it is doing in its latest location, provo, utah.

and as we had to break, a video advertising drone delivery. amazon, you've got competition. ♪

>> this is "lunch money" on bloomberg television. we are also streaming live on bloomberg.com, your smart phone and tablet. at&t has new competition in broadband. it turns out google fiber promises speeds 100 times faster. what is google fiber? orie johnson explains. >> google fiber is an attempt to

jumpstart internet service and them unprecedented speed. google fiber, 1000 megabits per second. it is 100 times faster than cable modem. it is faster than verizon's bios 300 megabits per second. it is faster than at&t's experimental 300 megabits per second offering. other competitors google is living in the dust, time warner cable. it started in kansas city in 2012 and now is in provo, utah, and will soon be coming to austin, texas. and it just announced service coming to 34 more cities. how does it work echo cutting out the set-top boxes and routers and modems. it will bring cable right into each customer's home. it could cost as much as $900 per household, up to $3 billion per year. but if google builds it, will customers come? as many as 20 million broadband

customers are estimated to come, giving google fiber nearly as big a customer base as comcast at 24 million. >> cory johnson is in provo, utah today. it is one of only two cities were google fiber is currently available. google is installing the technology at no cost to the homeowners. additional services are competitively priced and in some cases, lower than the competition. >> the city is papered with advertising. the newspaper everyday has got it. and the other cable providers are here as well, trying to up their games. comcast has lower their prices and increase the speed of delivery of service here. there's a big change being driven by this google fiber project. >> how many homes do you think it could really reach and when? what is the target one small town at a time? >> the analysts writing about this and they will reach as many

homes as they can get. we had some people at the diner today saying they are spending months waiting to get this installed in their homes. there is clearly some demand. >> provo mayor john curtis says the people of the city are excited. >> almost every discussion ends with a conversation about google. the buzz is incredible. and then beyond that, the actual application. provo is a city that loves technology, that loves startups. it is a perfect match for google and the speed and the fiber into every home. it seems to be a perfect match. our schools are having dialogue about what it means to have fiber in every home. and how do we take the next step so that people understand how to use it and have the equipment to use it? >> do you feel like you had to give up -- what have you had to give up to google to make the development?

>> our deal was so different because we had already put the fiber into the ground. we gave them that fiber. in return, what they gave us far outweighs what our initial investment was. it's not even close. our residents have free internet and the hook up is only $30. that $30 hookup used to cost the city thousands of dollars. >> high-speed internet, i get it. how much bandwidth does one person actually need? >> i got google fiber two weeks ago. the main way i would describe google fiber is the jump between dial-up and dsl. it is just so fast you don't notice loading times anymore. i got the gigabit plus tv plan and it was $100 a month and i did not have any installation fees. when it comes to gaming, connecting to friends, joining into parties, it's pretty instantaneous now. one of the things i wish google fiber had was more apps for the

tv. i wish it had things like youtube and other ways to browse media online. from the tablet, i can see my entire guide for all of the normal stations. if i want to pull up something from my dvr, say i want to watch an old episode of "supernatural," i hit play and bring it up. let's see how fast something loads. the only thing i don't like about google fiber right now is how much time i spent sitting on the couch watching tv. >> don't get too excited for google fiber. right now, it's only available in provo and kansas city. austin is in the works. there are talks with nine other metro areas, according to google. new york city, however not one of them. is there anything google cannot do? now you can visit the church in manitoba on the street view. it is the polar bear capital in the world. they teamed up with a specially

designed tundra buggy with an emphasis on how climate change is affecting the polar bear population. some parts of canada has seen a 22% decline in population in recent years. coming up, behind of new york's massive hudson redevelopment. and the largest loading crane in the world. we will tell you what it's doing here in new york after the break. as for nasa, it hit the planetary jackpot. the space agency discovered 715 new planets, thanks to the kepler space telescope. it almost doubles the number of planets we know about. nasa says four of the new planets are in what's called the habitable zone of the stars they orbit. that means they might actually be able to support life. ♪

>> this is "lunch money" on bloomberg television. we are also streaming live at bloomberg.com. i'm adam johnson. all week, we are introducing you to the most innovative thinkers taking part in bloomberg businessweek's second annual design conference. jay cross is planning the nearly 30 acre hudson yard government here in new york city. >> hudson yards is aimed lively neighborhood that allows for people to both live and work and play. my role is to be the maestro.

we have multiple buildings going on at one time. we have artists and engineers and my job is to make sure to the best of my ability that we are producing music, not a cacophony. designing is a very important part of how we envision hudson yards. it is not often you get to design basically a whole city. because we are going over the railroad tracks, we are building our own land, streets, sidewalks, plots, gardens. half of the ground had to be open to the sky. that is free unusual. take any city block, is half the block a park? no, but with the nature of the zoning, the buildings are twice as big as you might think is normal because you have so much open space. what we did not fully

appreciated how big the buildings are. one challenge is just the sheer magnitude of construction. trillions of dollars of construction underway at any given moment. and it requires a lot of money. there are not too many veins making $500 million loans, and that is what we need. we need a series of them. the challenge is making sure that we create a great sense of place. i've always wanted to do a big commercial development in new york city. i don't think you can get any bigger than this one. the churchill phrase that all my life has been preparation for this moment, we will see how i pull it off over the long haul. >> bloomberg businessweek is hosting its second annual design conference in san francisco. for more information, just go to bloomberg.com. relief is friendly on the way.

this is thanks to a new $3.9 billion replacement bridge. what is going to make it possible? the world's largest floating crane. here is a look at this monster and how it is actually getting to new york. ♪

>> tesla is going to need some cranes for its new lithium factory. musk is hoping it will be the world's biggest. that is next. ♪

>> this is "lunch money" on bloomberg television. i'm adam johnson. today's moving pictures now, where the video is the story. arizona governor jan brewer shoots down the bill that was seen as anti-gay. it allowed business owners to refuse service based on their own religious beliefs. opponents said it would have allowed her discrimination against gays, and companies from apple to intel had lined up against it. brewer issued the veto last night. and smog in beijing dropped to very unhealthy. it is the city's biggest

challenge. the topic will be front and center when china's leaders gather next week for a meeting of the national legislature. and copies of "diary of anne frank" have been delivered to tokyo. 300 copies had been vandalized in the last few months. tokyo police have created a task force to investigate that vandalism. gm motors is in the hot seat. regulators want to know why the largest automaker what took years to recall 1.6 million cars that have been linked to 13 deaths. >> if your key chain was too heavy, or bounce the wrong way after you hit a speed bump, it was switched off. that is incredibly dangerous because you lose your power steering, power brakes, and more importantly, your air back. general motors identified this problem, the old gm, in 2004. it is 10 years later that they

started to recall some of these cars. they issued a service bulletin in the middle of the last decade, which is sort of one step below a recall. they fixed something like 700 cars. a couple of pontiacs, a couple of saturns, a chevy cobalt -- those two brands, pontiac and saturn, don't even exist anymore. >> what are we talking about here? >> $35 million is the most the national highway safety administration is allowed to fine. >> would it really hit $35 million? >> the most has been $17 million. this is a company that makes almost $7 billion per year. >> on to tesla. the electric carmaker has plans to build the world's largest battery factory. it is exploring vocations in texas, nevada, arizona, and new mexico for a 10 million square foot facility. elon musk spoke with betty liu

about this last week. >> if we want the factory done in three years, we probably would need to raise some capital. >> what is the impact this giga factory will have on the auto industry? >> it is pretty amazing for the car industry, because at a time when beijing is being drowned in toxic smog, maybe we will see the biggest car market in the world make a huge push for electric cars. but it will also be interesting for everything. because he will have the ability -- and i'm talking about elon musk here -- to power all of our stuff. and this combined with our supercharger stations, which will be strategically placed around the most important urban areas in the country, will give elon musk the power to run america beyond just building

cars. >> staying with cars for a second, he looking to produce half a million. >> he said this would produce enough batteries to make half a million. he's not saying he will produce half a million cars. he's just giving you an idea of the scale of the giga factory. >> is that the same mass market if it is 10 million cars a year? >> it would still be a mass market if it was the 90,000 car class. >> according to some analysts, that number has the potential to reach 27% by 2017. lithium today is mostly used in our smart phones and smart tablets. coming up, the building blocks of success. coming back from the brink of bankruptcy. and exposing how the university of north carolina is failing its athletes. ♪ >> this is "lunch money" on

>> this is "lunch money" on bloomberg television. we are also streaming live. i'm adam johnson. today in sports, the tar heels take it with only nine seconds left in overtime. markets page sealed the deal. unc chapel hill winning 85-84. the team is now on a 10 game winning streak emma but it turns out not all is well in tar heel land. we are talking about people who are being cheated. just ask murray william, learning specialist for the athletic department at unc. her story and that of the unc athletes is on the cover of this week's bloomberg businessweek. >> it is not an easy job to be a truth teller. and as a matter of fact, my last

five weeks, i think my hair has accelerated into gray. my name is mary willingham. i worked at the university of north carolina chapel hill. when i started working at the university, i worked in the academic support program for student athletes. i saw pretty quickly that athletes were not getting the same access to a real education like all of the other students. their writing levels were so low -- and i'm talking second or third grade maybe -- we needed to work out letters and sounds. but they told me they had never written a paragraph before. for many, many years, close to two decades, we had a paper class system where athletes would never have to go to class. they would at some point in the semester begins in a prompt to

read a paper. and nine times out of 10 they did not really right that paper. it was a recycled paper. and the papers were almost always graded a's or b's. but everyday learning still took place. that is how i reckoned all of this fraud. i helped them along. it just doesn't seem right to me anymore. my title was taken from me. i was moved to the basement and all of these things that happened to the snowblowers, kind of classic. i really believe the university would do the right thing to fix the problem now that it was out in the open. we are still not doing the right thing for these guys. we are not teaching them in remedial classes on this campus because we say that they don't need them. but they do need them. you cannot teach students up at this level when they are down at this level.

it doesn't work. if we're going to connect a college sport to academies of higher learning, then we need to make sure that these students are getting the real education we are promising them. i think that the games are spectacular and it is part of our culture here. we've got to figure out how to do the right thing and still have the entertainment that we enjoy on saturday. >> paul barrett authored the businessweek article. he joined the surveillance team this morning. >> what is going on in unc is just one slice of life in the ncaa, incorporated more broadly. it explains how this $16 billion industry operates. the problem is, you are taking

people who are very talented athlete, bringing them to these university campuses come and they don't necessarily have the academic skills to match their athleticism. >> i go to casablanca and i'm shocked. round up the usual suspects. is anyone shocked by your cover story? >> people should not be shocked. university of north carolina is one of our most prestigious public institutions. if you are not shocked, then you are not in tune to what is going on. >> and you share some of the most egregious examples of what is happening behind the scenes? >> there have been many scandals over the year, as we point out in our article. unc is not unique. you had tutors writing papers for football players. you had people taking tests for basketball players. what you had a unc was the

corruption of an entire academic department, which was offering fake classes, classes that were supposed to be lecture classes, which in fact never met. what is really poignant here is that this was the black studies department. the department that was corrupted was the department that was devoted to the study of african-american and african culture and history. the students that were being channeled into this were disproportionately varsity basketball and football players. >> you can read the full story in this week's bloomberg businessweek, which hits newsstands tomorrow. it's available for download tonight. someone who is earning top marks, lego. we will hear from the man behind the big tour makers big him back. and we will look at the fascinating history of this 82-year-old brand. ♪

>> lego annual sales jumped 10%

to $4.6 billion and its first feature film is dominating the box office, a long way from a decade ago teetering on bankruptcy. here is a look at the company we have come to know. >> let me show you the lego history. today, the lego group is known for the lego brick, but it started out in 1932 with the production of wooden toys. the founder started playing with the two danish words, which means play well. he brought them together into lego. in 1960, we had a fire in the factory. we made the decision to stop making toys from wood. we focus solely on the lego brick. i have six bricks with the tubes in the same color. i can combine these in 915,103,765 different ways.

we started to lose faith in the lego brick and the construction toys and we started to spread our vocus in various areas of the business. we wanted to open up new legoland around the world. it's a huge task. it takes a lot of focus away from our core business. our core will always be the brick and the construction toys. that is what we need to focus on, because that is what we are experts in. the last seven or eight years we've had double-digit growth

every year. that is mind blowing. >> this is the man currently leading lego. david caught up with him. >> i'm expecting in some of the western developed markets we are reaching a penetration where healthy single-digit growth rates is the name of the game. and we are getting into other markets and we are extremely grateful for it. five percent of a lot is still more than 50% of the developing country. organic growth is still likely to be in the high single digits rather than double-digit growth. >> will it always be organic? >> we have determined not to make and ask physician. we think there is something quite unique about this company, its culture, the engagement with the consumer.

it is very much tied to the lego name and brand. >> is that one of your other companies? >> that is me, with a lot more hair. >> are you a fan of lego? you have company. >> 10,000 people on the roof. it is not a music concert or a football match. it is a lego-fest. a fan event that spans the ages. the grown-ups here are adult fans of lego. this is what is inspiring lego designers. >> this tile has a smooth surface. my motors can run freely. >> it has not a we've been like this. and the great ideas do not always come either. >> they welcomed it with open arms. so much actually, that they have a special community for fans. >> martin is in the netherlands. his team works on the mind storms legos.

some of them can be programmed. they have to upload the motors on this powering conveyer belt. understanding the technology is is as important to these fans as developing it. >> we look at what lego did and we look inside and then we try to figure out how they did that. you look at some other brands, they are very closed. they don't want you to look inside. lego opens it up and says, here is the whole thing. here is how we build it. >> lego has even started employing them. his creations impressed so much that lego gave him a job. >> we have gone around the world showing off inventions.

at this point, showing how big you can think with lego. there is really no limit. you can do what you want if you have the imagination and the patients. >> perhaps the biggest problem lego has with its fans is that it just cannot hire them all. >> and today's mystery meat, how is this for building blocks? they are sugar cubes. this took place at the ulster museum in belfast. 5000 people build it with 500,000 sugar cubes. they are raising funds on kickstart to bring it to new york, specifically harlem's sugar district. ♪

>> it is 56 past the hour, which means bloomberg television is on the market. i will get you caught up on where the markets are trading right now. record id in the 47th

closed. pretty incredible. she said she will consider changing the face of the team room the economy you a -- you are the picks of the taper if the economy deteriorates. joining me now to explain what this means for the markets is the managing director at the volatility group. he joins me now from the cboe. percent and weix have now erased our losses from the year. you think volatility has come down consistently while the market has rallied? >> like you said, the market is moving to new highs and breaking through the 1815 area is pretty significant or may psychological

and technical standpoint. the fix is coming in based on the fact that we have seen them recovering from the lows we've seen in january. you still see some uncertainty in the few months out. they are still holding around this 14 level. >> what is your outlook down why yo? >> the is putting in a higher floor because there are a few things the market is still trying to wrap its mind around. number one was the fed moving forward. would they continue to taper or not? said chairman janet yellen clarified in the market reacted positively but that is something still in the cards moving forward. also look to on overseas is s well and how the fix will respond. >> you mentioned what's going on overseas and everyone's eyes are on the crisis in ukraine.

>> right now it seems to be somewhat isolated. the market just factored that in and not putting a whole lot of weight on it right now. that could change quickly if it continues to escalate. >> would you buy the fix at these levels? >> if i'm walking out of the house, i still see some storm clouds out in the distance. i would be grabbing my umbrella and look to go long on the vix as a protection. >> you said we are beginning to see a higher floor. >> it's a function of realized volatility which is low. fix pops up towards 20 and we stand the range we saw in the last month and i think that's probably the top of where it can go. if we break the low, we've seen it before how high it can go all the way to 80.

>> it looks like the markets seemed to like yellen now that she has been sworn in. to volatility traders like her? plays youre different can initiate. you are seeing a fair amount of selling based on what the markets are realizing and what is being priced in. it's actually a little high. that gives you some opportunity there. you're seeing a lot of different types of plays out there. moving forward, you can goingtely see it probably higher. >> dan, thanks for joining us. for "on the markets," i'm olivia sterns. ♪