>> confusion in the crimea. ukraine's acting president accuses russia of being directly involved in the region's conflict. ready to act. new cpi data is released today. we will get some pin codes and the info on what mario draghi should do next week. pimco is coming back into the black. the revamp of iberia continues.

welcome, you are watching "the pulse." i am guy johnson. francine is off today. she will be back next week. inditexp this hour, fashions a tax loophole. we begin with our main subject of the morning. the situation in the ukraine is developing quickly. isted president yanukovych holding a press conference today from russia. the u.s. government tries to pull together international funding to avoid a default. let's go to kiev and our reporter there, ryan chilcote. walk us through what has been happening in the south of the country in the crimea this morning. >> it is certainly seizing headlines.

i am at the ukrainian central bank with the prime minister and the head of central bank are giving a joint briefing about the state of the country's finances. the prime minister left early. i did have a quick conversation with him, one on one, and they are studying the situation in the crimea. they're trying to figure out who these people are. what we're talking about is that at five :00 this morning, another group of armed men -- at 5:00 this morning, another group appeared at anve in the crimea. we have two eyewitness reports that there is a group of somewhere between 50 and 100 armed men that have been there for some time. the acting president of ukraine said that russia is moving its troops within ukraine without

coordination with ukraine itself. the ukrainian parliament has asked for an international monitoring mission to come and look at the events on the ground in crimea. aboutobviously talking the appearance of these armed men at the airport. evidence thatrd these armed men at the airport are russian troops. i want to underscore that they they are not wearing any identifying features. they have not spoken with anyone. but clearly, the acting president of this country thinks that they may be from russia. again, i spoke one-on-one with the country's prime minister. he was on his way to a meeting with foreign ambassadors. he said they are looking at the situation and trying to figure out who these people are. the airport is surrounded by ukrainian forces at the moment.

>> thank you for getting us up to speed. say, the press conference is dominated by the situation in the crimea. nevertheless, ukrainian finance is front and center. >> he has just announced that the country does have enough money to cover its liabilities for the time being. we know those reserves to be at about $15 billion. that is the number that was reported just yesterday. he is suggesting there is no short-term default on the horizon. he also confirmed that the imf will be coming next week and that he does expect financial assistance from the imf third as he put it, also other international organizations. know that the imf is ready to help. we know that ukraine has asked

for $15 billion from the imf. we know that ukraine owes $13 billion over the next 12 months. the vast majority of this is due in june. in the short-term term before the presidential election that is set to take place at the end of may, it would appear they have enough money, particularly if they get international assistance. it all depends on what happens next week in those negotiations between the ukrainian government and the imf. >> we will leave it there. thank you very much, indeed. ryan chilcote from the central bank in the ukraine. will get a take on what those negotiations are likely to look like. it has been a stormy relationship. another story investors are watching closely, euro zone inflation and unemployment figures break within the next hour. jonathan ferro is here with more on the story. the inflation number is something everyone will be

paying attention to. >> the top line from mario the eurozone is not japan. that may turn out to be a complement to japan the way things are going. we are well into a half decade, a lost decade. the low inflation story is not just spain, italy, greece and ireland. you are seeing it in germany as well. today's number at 10 a.m. u.k. time could show 0.7%. that is lower again from december. you see the trend here. lower inflation, disinflation. does the ecb see inflation for 2016? that is two years out. it might be a guessing game. if they see it well below two percent, or member, they have a mandate. you have a target for inflation of two percent. people will be asking about the central banks

credibility. thank you very much, indeed. let's move on to our top corporate story. the owner of iberia says they have returned to profits. aviation reporter rob wall joins us with the details. the numbers are in line with expectations. >> is also about expectations. tremendous run. they made some progress in the last few weeks of labor agreements with unions and highlights for iberia and perhaps investors were looking for more. those agreements are not ratified yet and ground handler still have to agree with terms. maybe it was premature for asic if step up for iag. very clear turnaround, that iberia is taking hold. they will make an operating profit this year. british airways went from strength to strength.

>> is that sustainable? is there a sense that that is something the ba can continue doing? thatere was some concern as things start to get better, all the competitor start piling in. hand, it is really good. it will drive down revenue costs. that will be key for their figures this year. there's always a bit of concern and anxiety about growth. welling has been doing well. it only retained part of the group last april. they're doing well and there's no sign that is changing. >> we will leave it there. we will continue to push on with the ba story. we will have more analysis of the later on. spy scandal is

putting the heat on the u.k. electronic spying agency. hq intercepted and stored images of 1.8 million yahoo! users taken from their arsenal webcams. david tweed has more on this story from berlin. were these people doing anything wrong? that is exactly it, died. they were not doing anything wrong. what happened is that all these images were collected, regardless of who they were. it was bulk election. the guardian talks about a. between 2008 and 2010. in 16-month. in 2008, 1.8 million yahoo! accounts, werem accessed by gc hq. what they did was they took a

photograph of an image of anyone who is having a web chat, every five minutes. they collated all of that together. the interesting thing, one of the interesting side issues of this is to look at how people use webcams, guy. one in 10 of these images that are then collected is someone showing a body part to someone else and it looks as if people are doing their own at home pornography. the program is called optic nerve, the program to collect all these images. it was also done in collaboration with the nsa. yahoo!,eaction from david? furious. is absolutely they had no idea about any of this that was going on. the output out a statement. it has been in "the guardian," as well.

they say it is completely unacceptable, and they call for the world's governments to adjust surveillance laws. you that yahoo! ceo marissa mayer says that yahoo! is working to get all of its products in -- encrypted. this is a story that will not go away. >> this one has legs. it david, thank you very much indeed. our european editor joining us from berlin. how to direct its resources. bloomberg sat down with thompson in an exclusive interview. >> the issue for us is about focus. one of the reasons why we chose sasha renee dela as our new ceo is that she has a strong technology background -- is that

he has a strong technology background. he knows how to move microsoft forward. the dela has significant challenges, as we have been hearing. his company owns proxies such as new york's lazo tells. the us has a stake in india's only formula one racing team. the have to winner for best film >> 2 years a slave," --

>> it wasn't referenced, it wasn't there. investigate.ort of i wanted to find out about that. >> you can watch charlie rose's special tonight. it comes on after 10 p.m. london time. yanukovych claims he is still the ukrainian leader. we will see what the tengion means for investment ricks -- risks surrounding this country. we'll talk about that when we come back in a moment. ♪

>> good morning. you are watching "the pulse." we are streaming on your tablet's, your phone and now windows phones as well. we return to the situation in the ukraine. thatcting president says russia is directly involved in the crimea conflict. armed men have seized at airport in the region's capital. a financialector of institution is with us. it seems like a hands-off situation. what is your advice? >> i think that is what

investors should be and are doing. stakeholders,jor they all haveia, vested interests for the situation to not escalate and to keep territorial integrity of the ukraine. the dynamics on the ground can draw this situation into a different direction. >> in terms of best case and -- t case scenario, the crimeat case is trying to detach itself. there is no imaginary line that goes from north to south in the ukraine. even in the crimea area, there is a huge minority there. not only ukrainian ethnics, but

the tatarar -- ethnicity. we are seeing some stability and a bit more understanding of the financial situation. >> the ukraine is an extreme version of an emerging market. gauging the capital markets there is a tricky exercise. it has a certain amount of capital controls that have been will willce and there controlsy be further put in place. the local equity market is lightly traded. , the look at the eurobonds

23 ukrainian bonds have been stable. we don't know is, what will happen in the next few days. the investigation team will probably take a harsh line. the interim of government being a, cause a government. they have to come in and change a lot of things in a very germanic way. it will be very unpopular as a result of that. try to gauge the stability of this country from a financial threeof view, even over a -- over eight 3-6 basis will be difficult. >> the ukraine does not have much to bargain with very they have a rocky relationship with the imf. that means the imf will come with a series of demands.

the problem is that the current technocratic government is staffed with mostly team a shank oshenkolists -- with tym loyalists. we can't be hugely optimistic on their ability to make tough decisions. >> if i were a holder of -- >> is a very tough one. if you are a shareholder, just wait and see. we have seen the difference between what -- the beauty about the russian assistance is offered them in december, there were very few strings attached.

all stakeholders, including bondholders, will likely be asked to participate in the pain. eventually, the outcome of the negotiation is not heroic enough to try to -- >> you would expect privatet and some sector involvement. >> that is definitely going to be on the table in terms of bargaining power. it does not seem like the bondholders have a lot to bargain with here. i am just wondering under what legislation a lot of these bonds are -- are they under u.k. or ukrainian law? >> i don't have the answer to that. it is usually a large spectrum of judiciaries that are involved in these processes. try to avoide these restructurings as much as possible.

they are costly and likely -- and lengthy. let's get some company news for you now. the pharmaceutical released buyers numbers. fourth quarter earnings fell about three percent. this follows a surprise dalliancen from the -- from the elian's division. division. allianz the messaging application has grown. the application has users pay in games.bears

pulse," a tax loophole it will be discussed. stay with us for details from our bloomberg report on the inditex.mpany of zara, we will look ahead to the pimco deputyhe cio, andrew balls. ♪

>> welcome back. you are watching "the pulse." how the markets are trading. jonathan ferro is here with more. chinese pmi coming over the weekend. equities are boring. the euro-dollar is now trading at 1.37. euro zone inflation numbers coming out in just a half hour. if that messes, the pressure is on the ecb to do more. right now, the euro is just edging lower. .> thank you very much, indeed jonathan ferro, thank you very much. coming up, numbers that could

trigger the ecb to do more on inflation. mario draghi is ready to do more to counter inflation. coming up next, pimco deputy cio andrew balls. that is next on "the pulse." ♪

>> welcome back. you are watching "the pulse." i am guy johnson. russia to has urged respect the sovereignty of the ukraine. to give the new interim government breathing space. russian fighter jets have been moved to patrol the country's border. look to russia with the choices that it makes in the next days for their confirmation

of these statements. words are words. speculation the central bank will widen the trading band. analystsity of surveyed by bloomberg say that china central bank will double the yuan trading bank by the end of june. billion facing a $2.2 lawsuit in germany. it was used to decide priority of calls and mobile networks. the rulings are a blow to the munich-based holding company. gets the final pieces of his data puzzle before next week's policy meeting. here is jon ferro. >> we will call it the data dilemma.

this is not an exhaustive list of what we will be looking at, but it is some of the key pieces. we have had pathetic levels of growth across the eurozone. in maine fore economies have deliver growth since the start of 2011. eli is not painting a lovely picture. -- pmi is not painting a lovely picture. unemployment, lower completion -- low inflation, check out germany. inflation of around 1%. just .7%.at where does the ecb see inflation out as far as 2016? inflation below their target of 2%, people are going to raise the credibility question. draghi spoke yesterday.

listening to him and all of the other ecb speakers out there. they do not seem worried. >> they do not. one line from mario. ofdo not have evidence people postponing their expenditure plans. he said animation -- inflation remaining low is a risk in itself. the ecb will deny deflation to avoid --. risks to deny any avoid creating such behavior. whatever the ecb thinks, if we get a lower number today, .7% could be low enough. i will not guess as to what they can do. jonathan ferro, thank you. joining us, andrew balls. book for a your moment. what are you expecting? .7%, no reason to have much

of a different view. data may becomes a little bit below that. >> greases below 7% this morning. below 7% this morning. drawdy expectation that will have to do a little bit more. the bid is on for some of these bonds. you have negative cycles, more positive cycles. if it were yield -- if a yield is off, it helps to draw investors in. positive viewty in terms of the eurozone outlook. the deflation risk that your colleague was speaking about is important. are the ecb, you will be happy to be talking about macroeconomics rather than

crisis measures. time, we know it is not the same as japan. having inflation week and trending down in the core countries, not just the peripheral countries, it is a challenge for the central bank. >> if we get a .6 read today, is that the smoking gun that mario draghi has been looking for? >> there is what she would do, what they should do absently politics. draghi need surprises in terms of data in order to force through moves or withstand german no votes in terms of how they organize. the margin, if it is a lower reading, they could do something. in the short term, i am not expecting too much. a lot of would have talked about his rearranging the deck chairs. question,ry important

not for next week, but over the next several months. for us, that is the big question for the next six months. runour job is to front that. tell me what you are buying and what you expect to be bought. there's a pretty good chance they will do asset purchases. buying loans from banks, have talked about for a very long time. not easy to do, but it is possible. get assets that you think the outlook is good without ecb action. italy, spain, liquid, the short end of the curve, we like the income that you can generate. that is fine without further ecb action.

>> italy, spain, less liquid, but attractive. the other thing to do is look at the banks and bank capital. look for parts of the -- it is pretty tight. a lot of this is priced in. if you go with the lower parts of the capital structure, bank capital, there is good opportunity core and peripheral countries. >> was the left-field idea you think drawdy could do? >> they can arrange the deck chairs. more effective, trying to weaken the euro currency. in the near term, that would be the left-field surprise. i am not expecting it.

--hink my view will be slower progress towards credit easing. he will need to see not just core's data, but for the as well as the peripheral countries, we need to do asset purchases to avoid inflation expectations. >> let's talk about the u.k.. there is a lot of noise around it. let's pick out one voice. there is a -- in the market. that is likely to keep the selloff a little bit under wraps . we are going to see lower yields over a longer period time. it will be gradual and we will

not get up to precrisis levels. what is your outlook? how do you interpret the noise at the moment? we call it the new normal. it is a different kind of cycle. financial conditions are different to read 2008. there is a lot of bank of england talk. they have accepted the forward rates and have given up on the forward guidance period. now is towant to do try to say, we are not going to march all the way up to 4.5% as in the old normal. the neutral rate to be much lower.

if you start with low levels of you can adapt to lower levels of interest rates. to thing you can march up to a theer rate is possible, but baseline is that they would want to go slower. see how it goes. chatter,of all of this excepting the forward rate, it is trying to guide down expectations of where they might stop. they do not want a big rise in guilt yields. think looks ok. the market is pricing in a high buyback in march of next year. -- our biasengland would be if they go later based upon our macro views.

they have views that they are willing to -- as far as the fed goes. to know how are investors reacting to all of the noise that surrounds her firm right now? >> it has been pretty quiet. we have a competitive environment. it is about generating returns for clients. we have a strong investment process. i think clients have a good understanding of our investment process. we have a very strong bench. great portfolio manager. i am sad to see him go.

i was runner-up in europe. we have a strong bench of people. >> phone calls about the stability of the management team and its ability to deliver return? >> we are always in touch with our clients. clients always have questions. it tends to be about managing the assets and not about the personalities. i think i have done a lot of meetings and we talked about this a little bit. clients want to talk about markets and views. i think we are comfortable with the view that we have a strong process proven over time. we have met other people leave in the past. we have had other people leave in the past. >> thank you very much. andrew balls.

managing director at pimco. will bringole -- we you a report on how the parent company innotech may be achieving me best profit margins and the industry. ♪

>> welcome back. you are watching holstein." -- you are watching the pulse. hans nichols has the next report. dotsra's storefront italy's streets. rounds flagship -- is rome's flagship store. it helps generate 850 million in sales. subsidiary book just four percent profit. fat is tiny compared to the 45% profit margin that the parent company has a attributed to the dutch subsidiary in the

past five years. here in italy, the corporate tax rate is over 30%. the's parent company is world's largest fashion retailer. process -- profits to low tech units, they have saved since 2009. company says it is in full compliance with international tax law. their accountants have worked nearly 20% of the profit to a single dutch subsidiary that employs 1/10 of one percent of their global workforce. accounting keeps the italian taxman from collecting revenues from its countries fashionistas. hans nichols reporting.

joining us is jesse. any defense? playing by the rules, that is probably the most obvious one. man of the most obvious one is that the rules permit them to allocating around the world. what they're saying is that the subsidiary in holland is responsible for licensing me brandon -- licensing the brand name to zara. the people that work there have the expertise in designing the interiors of the stores and window displays. that is a very important part of the company's profitability. >> is there anything different to what we hear about large tech companies? in many ways it is similar. they are attributing lots of

profit to a tiny subsidiary that has a small number of employees. they are saying there's a lot of value that is controlled by this subsidiary. billions ofbutes dollars to a subsidiary in bermuda that controls the rights to all of its intellectual property and software patterns -- patents outside the u.s. the expertise is designing window displays and the interior stores. that raises eyebrows because how valuable can that be? you walk in the store and how it is laid out is important, but it is fairly obvious as you walk around that it is not secret software codes or the formula behind a valuable cancer drug. this is something you can see as you walk around the store. why should so much profit be attributed to a subsidiary whose expertise is that as opposed to more complex software.

>> thank you. jesse drucker joining us on the itek story. one of the best track records in the business. it is a record year. a 22% gain in profit. he is so ingrained within the u.s. economy. he has holdings in energy, infrastructure, trucker and, banks, more than 80 companies. interesting exception, his second-biggest -- coca-cola.

fears about sugar content, where word about our health. that one did not pay such good dividends. what did pay good devin -- dividends is heinz. he has done particularly well 280it seems the company -- billion dollars is what it is worth. it keeps on growing. >> he usually says don't rate me on my share price increase. remy how i do versus the s&p 500 on a dividend basis and over the past five years. tends to be net worth versus the s&p 500. it is not done as well. for 44 straight years he outperform. end of 2008, it has risen 80%.

>> it has been an incredible year. caroline hyde, our european business correspondent. next-generation biofuel. stay tuned. we will tell you about it when i come back. ♪

>> next generation biofuels.

they have been described as bridging the gap between agriculture and advanced materials. with companies like shell opening manufacturing plants, the next big innovation for the renault will section -- sector. walk me through a nexgen bio fuel is. >> gets more renewable energy in the transport system. on food.often based they compete with food. to be subsidized. nexgen biofuels are non-food feels. like wasteng things from your rubbish bin. the cost should be cheaper. ideally, we see them competing

on price. >> 2014 will be a big year? >> hopefully. the last five or six years has not shown us the results. this year, we are saying big commercial facilities, online. we should hope to see about 750 .illion liters of biofuels memo watch the investments role out. >> bloomberg "the first word" is up next. for our viewers, "the pulse" is offering second hour.

a second hour. we're going to speak to the ukraine entities london founder. ♪

>> confusion in russia -- in ukraine. mario draghi says policy makers are fighting inflation. inflation data comes through as 0.8%. that is above expectations. we will be live with the imf head of monetary policy. iag flies back into the black. british airway's parents building a profit.

good morning to our viewers in europe. a warm welcome to those waking up in the united states. i am guy johnson. francine lacqua is off today. this is "the pulse." we have had data across the screen from the eurozone. the data is interesting, to say the least. .8% lead on the inflation number. any people were expecting a weaker number than that area and on them -- then that. unemployment numbers coming in. >> forget unemployment. look at inflation. .6.le calling for the euro has the story of what the market is expecting. they have not gone a week

number. the euro pushing toward the dollar 38. towards $1.38. is it a game changer? probably not. they have been looking through these numbers, looking through and saying that we will see inflation move back towards target. >> it is still way off target. they used to talk about a single needle in the ecb's compass. >> how much has changed in two years? we'rele of years later, talking about what are they going to do to get the inflation numbers back towards target. is beating say it expectations, but this is low. the ecb have got a job to do. the next up will be the forecast. i would not disregard the ecb's actions. is important.

we get the full source -- the first forecast for 2016. --they see inflation balloon below two percent, what does it mean to the ecb's credibility? they have a target of just under 2%. they are well below. twohey stay at well below years out, something is not going right. data is a little weaker than expectations. that may change the margin. >> they have to look at this. this is not just an issue on the periphery. we have seen low inflation and some of the german regions. that is an issue, something they have to look at. they have to take into account for the other countries as well. the bundesbank is putting our ports saying we have a bit of a bubble in germany. we have not got a bubble in housing in the likes of italy

and spain. perhaps they needed to. you see a correction. the ecb -- you have to look at these numbers and take them seriously. >> thank you very much indeed. .8% and 12% are key numbers as morning. armed men have seized an airport in the crimea. ryan chilcote is on the ground in kiev and joins us with the latest. this morning early when eyewitnesses reported seeing a large group of armed men at the airport in the city --. it is a city south of crimea. it was just yesterday morning that a group of armed men

appeared in the legislature. who these men are, we do not know. they are wearing military uniforms, they are armed, but they are not wearing any identifying characteristics beyond that. error --last couple of hours, the airport has been surrounded by ukrainian forces. the acting president has said russia is moving its troops within crimea without coordinating with ukraine. they are accusing russia of being involved in the crisis in the tensions in crimea. they asked that there be some ype of international monitoring force. no one knows who these men are for sure. officials have made it clear that they do believe they are russian troops. this is something we need to watch. there is no hard evidence that

they are. this is the situation that is very much at the forefront of the attention of the new ukrainian government, formed just yesterday. their national security council is meeting. of theef of staff ukrainian armed forces has been fired. an awful lot going on in ukraine. most of it in a crimea. >> you have been talking to policy over the last few days. any sense of how they are prioritizing what they need to do? i ask you this question yesterday, but the situation develops so quickly. what is happening seems to be taking more of the limelight. the financial situation begin -- remains a difficult. this beginning to dominate the agenda? answer.s how i would

i was at the central bank. the prime minister and the head of the central bank were due to give a briefing and the prime minister left early. answer any of the questions that the journalists wanted to talk about crimea. the integrity of this nation is seizing the attention of this government. in terms of the financial matters, we know that the imf is coming. we know that according to ukrainian officials, they do not see any danger of default in the next few months. the majority of the big payments for their liabilities are due, june. there are a lot of liabilities. there are $2 billion over the next 12 months. their first priority is to hold the country together. groups of armed men into different locations of crimea doing what we don't know. tensions on the ground, some scuffling between ethnic russians and other people. this is a predominantly ethnic

russian speaking area. are af the people there bit alarmed about the new government of ukraine. they see them as a more nationalist and pro-ukrainian and they are worried that they could be marginalized. this is the issue that the government wants to focus on. >> we will leave it there. thank you for the updates. ryan chilcote. joining us from kiev. can we think about this is a country anymore? >> ukraine is an independent country with the new government in place. the new government -- its main

it has been branded as a, cause a government. eventspolitical aspect, that we are seeing at the moment are serious. behind this is russia and .resident putin this is one of the biggest defeats on a foreign policy bid for president putin. i think we will see more disturbances coming from russia. ukraine became independent in 1991. it had the third largest nuclear arsenal in the whole world. it was bigger than china, u.k., and france combined. he gave it up voluntarily in exchange for assurances from united kingdom, the united states, and russia. it remains a sovereign state.

i think the country, what will the u.s. andrimea, eu will need to monitor that closely. hard to going to be deal with that, given the agreement that was a made. maybe heant to secede, will recognize them, but you can see a split in this country. with peopleroblems trying to do business with them. them over the last 23 years, these issues have not arisen. there have not been any issues in crimea at all. russia's is putting the pressure on crimea. that is when the issues arise. no external forces are pushing this, the situation will be resolved. reserves are not going to

last that long. iof, a fundill the with a different history with the ukraine, be with this country? >> what we will see is a new economy appearing in europe. the new economy -- the prime minister said that about 70 from theas been stolen country over the course of the last three years. the question is where has that money gone. the future of the ukraine economy right now, what we're seeing now, it is a pro-reform government. there are real reformists. they will drive the country forward. it will be tough. that is why they are being called the, cozzi government.

-- that is why they are being called the kamikazi government. >> what kind of cut in my capital can i expect? >> it depends on what happens next week with the imf. the prime minister says today that they will appear to all imf conditions. >> that should be a novelty. them in terms of gas subsidies, reform. they were focusing on populist measures. thencrease gas prices for population is not a popular move. when you get ready for a theidential election, interesting thing is to see chko, he is not part of

the government. he is standing back and giving support. in the long term, this could be a big economy coming up. >> are we going to see the paying -- is going to be felt by the general public? are bondholders going to have to -- >> in terms of central default, their arturo -- there are talks about that at the moment. they will find a solution to a. the sovereign lending and others, we will see what happens over the next couple of days. -- many of the people in the government are western focused. they are open to investors. >> are bondholders going to have to take haircuts? >> we will see over the next couple of days. the minister of finance, this is

their first day in office. it is difficult to -- >> are the russians gone as a financial force in this country? >> the terms on which they have been or they have been promising the money, the 2 billion that was delivered, i think it is going to be -- some of the russian banks will be around. i think the question is that the terms on which russia provides the money. money and you become a member of the customs union. i think that is out of the window. there is talk about ukraine being ready to sign agreements with the e you moving forward. e.u. movinghe forward. in terms of custom unions, i cannot see that happening. if those were the terms that russia was giving the money, that is not going to happen. it is focusing on the imf and

western lenders. >> thanks for stopping by. the director of the ukrainian institute in london. >> google is arguing that it should not have to face a lawsuit. they are fighting claims that it illegally scanned private e-mail advertisingtarget and build user profiles. softbank is said to be seeking a a tokyo-based messaging application. application lets users pay for teddy bear icons and games. it is worth about $15 billion. >> the issue for us is about focus. one of the reasons we chose

satya nadella is that he has a strong technology background. he understands what it needs to happen to move microsoft forward. thompson -- which resulted in satya nadella getting the job. euro zone inflation rates -- it was a .8 read. we're going to get the take of the imf on this. joe vinals will be joining us shortly. the next generation of mobile phones could look more feminine. we will show the robot dollar could replace your cell phone. -- robot and all that could replace your cell phone. ♪

>> welcome back. you are watching "the pulse." a surprise earlier on. eurozone data stronger than expected. the market was looking for a read of .7. the data came through at .8. many were expecting it to be weaker than the .7. the market reaction has been strong. we are in the 1.38. you can argue it acts as a

deflationary break on what is happening in the eurozone. let's show you what is happening u.s. dollar uah cross rates. the week number is quite dramatic and this currency has been de-pegging. to risels the market significantly. our toplk about corporate stories. the owner of iberia says that shares are falling this morning. we have the details. the outlook, not there. >> they have had such a run of

good news, perhaps people were hoping for more. perhaps there were some folks were thinking that to get lifted. it has not been done yet. the critical agreements with , ground handler talks are still going on. >> how do we break down the individual businesses? >> so much of the focus --. they are performing strongly. they really excel he -- accelerated that. they are doing very well. they still see further improvements possible. is the countrynt

able to continue to maintain strong growth rates? he made his name by restructuring businesses. process areough the they? is there more to do? >> there are more things to come. they only started sub converting those. that will further fuel growth. they have new aircraft. the story is not done. the 380lked about how is helping him and that is performing very well. there is a constant issue on cost. he thinks there is more that the airport could give. >> thank you for joining us. robot doll that

could replace your phone. we will show you what is up with the next generation of cell phones. ♪

>> welcome back. you are watching "the pulse." jonathan ferro is standing by the touchscreen.

>> stocks looking boring in europe. the dax is pretty much flat. let me take you a little bit more exciting. euro-dollar, $1.38. cpi, that was your number of the day. .6.isper of no two ways about it. this is way off the target. it may give them less of a headache when they meet on march 6. that meeting is important. euro-dollar might give them a headache. >> that currency will not come down. thank you. another round of security concerns sparked by edward snowden. why using your webcam may be a risky business. you can follow us on twitter. am@guyjohnsontv.

i colleague is @flacqua. we will be back in a couple of minutes. ♪

>> welcome back. you are watching "the pulse." i'm guy johnson. francine lacqua is off today. seized an airport in the crimea. the acting president aziz duwaik using rush of being involved in tensionlict area and rises.

the company has filed for bankruptcy. they are in the tokyo district. a database says mount gox lost bitcoins owned by users and 100,000 bitcoins of its own. apple has won the dismissal of $2.2 billion in terms of a lawsuit in germany. the ruling is a munich-based patent holding company. latest spy scandal is putting the heat on the u.k. electronic surveillance industry. surveillance agency inspected images taking from

personal webcams. is there any reason they were doing this? or people doing anything wrong? arguing -- they were arguing that they did not do anything wrong. have had their pictures collected, many of them were not doing anything wrong. they were collecting a bulk operation. -- it isappening fascinating to think they could do this. and go to yahoo! accounts all of the circle -- is according to a guardian article. they're taking images of webcam chats every five minutes. it has collected all this. one would imagine the object of

this would be able to match up those accounts with potential terrorist suspects or criminals. what they ended up with is this morass of information and of pictures, 10% of which is pornographic. webcamople are doing chats, one in 10 of those chats has something to do with showing yourself, bits of yourself to somebody else. .his is causing a problem is, they have been going in and taking these pictures of people who have been having web chats. every five minutes and image uploaded without them knowing about it. that yahoo!eiving is reacting strongly towards all this. i think the word to use for

yahoo! is absolutely furious. they have put out statements in the newspaper and they have said that if the report is true, it represents a new level of violation of our user's privacy and it is completely unacceptable and that we call him the world's government to reform surveillance law, consistent with the principles outlined in december. marissa mayer's said that all of yahoo! products will being cryptic. , they are notq commenting on it. they said everything they have done falls within policy framework. >> thank you. in 20 minutes, surveillance will be on air with tom keene. we have a preview. tom, things are moving fast in the ukraine. what else do you have? and talkl go to kiev

about the stability in kiev. i was struck by the footage that you had showing the airports in the crimea. to assert some fed authority. charles plosser will join us. the most of contentious, not polarizing, but disagree members of the fed. he is concerned about what we're doing now and what that will mean for future inflation. we will also talk to charles plosser about labor participation in the united states. michael mckee will join us for that interview. we will look at a number of other topics across shareholder activism and we will take a trip to the oscars. they are this sunday. scarlet fu is ramped up for a. we're going to be looking at getting me tan ready for the

oscars. >> the weather has not been great, you not having a tan that we need. time to get out to the west coast. >> thank you very much. euro zone inflation has held steady at 0.8%. let's get some analysis. we are joined from hong kong. mario draghi is looking at a number this morning that has come through with inflation in the euro zone of .8. taking that as being good news, but it is still a fairly dismal number.

>> i think this number is a reflection of the week economic recovery in europe. it is too low for comfort. the ecb should be ready to do thisver it takes to avoid from getting into real inflation territory at these risks increase in the future. now, we can do nothing. is that the message? >> i think the monetary policy needs to continue being supportive in terms of liquidity low interest rates. --the numbers get worse >> you think mario draghi and the ecb should be concerned about the euro-dollar?

138 is where we are trading right now. >> i think they should be focused on their mandate. this means that these very low rates of inflation is something that is too low for comfort. be ready to do anything that is necessary to avoid this number from getting lower. if he could do something for this number to get higher, it would be better. the mandate of the ecb is to keep inflation below. the numbers are far from this. >> one of the reasons that we're seeing yields in many referral economies is the fact that is now sloshing out. to what extent do you think this

is creating a false sense of security for solace countries? i think emerging markets are going through a process of correction with a bit more volatility. economies, european particularly those that have gone through stresses in the not fall into complacency. they need to continue to pursue the policies of cleaning up the financial systems. that is fundamental. this policy should not be delayed or interrupted. money is coming in, but money may not always be there. you need to improve market this is a key message

for this economy. you about thesk emerging markets? we have seen countries hiking rates over the last few weeks in response to the outflows of money that the countries have faced. has that been the right decision? lowered the growth rate expected from the south african economy. part of that is because we have to see rates going higher. , in thenk central banks case of turkey and brazil, have taken these measures to be andistent with the mandates to keep inflation under control. this is to send a signal to the investors community that the monetary policy in this country this hasredible and

been very supportive of the capital flows, but also of the inflation of these economies. this has been the right attitude. if they had not reacted like that, they probably would have been much larger capital outflows. i think they did the right thing. do you think they have a certain claim on the fact that the fed should be better at communicating? most people will probably say it , but it probably could be a little more effective. >> i think it is true that the fed made mistakes. this led to significant turmoil in emerging markets.

it has achieved something that is quite important. convincing markets that tapering does not mean tightening. i think this has been very useful. at the same time, one should not forget that the impact of the dependingering may be on the quality of the financial fundamentals. it is very important that the fed maintains communication and that emerging markets continue working oncontinue having policies to object to external financial conditions which are going to be associated of thee normalization policy in the united states.

>> cai ask you a few quick questions about the ukraine? that the capital and the country as limited. they have a short amount of time to put the deal together. how quickly can the deal be done with the fun? >> the fund has already responded that we have received a request from the authorities in ukraine and we're going to to assess the economic situation the country. we will make our own assessment .f what is going on we can see if there are policies that can be put in place to support program. andave to follow the steps

we are at the beginning of the process. >> what extent will the history whata part in determining will make the stick and how the measures that could be imposed could be a little harsher than they would've been normally? >> what will happen is not so much on the past, but under the determination of the ukraine authorities to pursue the policies that will be necessary to get the country out of the present situation and put it on a better path. we need to look forward rather than backwards. >> okay. is it fair that everyone will have to share the pain of restructuring the economy,

including bondholders? >> i have no comment on that. >> we will wait and see what happens. we have to take a break. we will be back in a couple of minutes. ♪

>> welcome back.

you are watching "the pulse." this week and will be interesting for warren buffett. set to report 2013 results on saturday. here's more on what we can expect. caroline hyde. analysts expect at least a 22% increase in profits. there goes another record. the record keeps on giving. he is among the best. the reason he has done so well as he made a bet on the u.s. economy. it paid out. ,nfrastructure, trucking insurance, banks. you name it, he owns it. one company did not do so bad -- do so well. that is coca-cola. 16 point $5 billion worth. it did not bear fruit. sugar concerns drag you down a

certain degree. hines was the big winner. one record has been broken. is on target. it does not seem to be hitting for the first time. 44 years, he has always been his own benchmark. he rates his book value of his company. it is the class a shares of berkshire hathaway. not as good as the s&p 500. we will give him that. >> caroline, thank you. caroline hyde, our european business correspondent. the ukraine lays the blame on russia for its recent conflicts in the crimea region. the ousted president repairs to

speak later today from russia. ♪

>> welcome back. you're watching "the washington post." pulse."re watching "the the inflation number -- we got a .8.

some are suggesting that a weaker reading today of inflation could lead to the ecb pulling the trigger on further action next week. the euro is popping on the back of it. 1.3795 is where we are trading. the next generation of mobile phones could look a little more feminine. has hisif danny choo way. he has launched a 3-d printed robot doll that works like your smart phone. a little better looking, some would say. >> there are a lot of lonely folks out there. japan, these dolls will make that they won't be lonely at the same time. i invented her in about 2007.

up until real -- recently, she was an illustration. i wanted something more physical that i could carry around. i was born and raised in the u.k. i discovered japanese culture when i was in the u.k.. i decided i wanted to live and work in japan. my lifelike to share online. that attracted an audience. dad's to make shoes in my studio. he likes her a lot. he has one of home. we ended up working on doll fashion. there are two different versions of the doll. there is an automated version that is robotic. whichis a manual version

is non-robotic and that is powered by your imagination. she functions. at the moment, she is powered by an android device. she can very -- pair up with various apis. depending on what you tell her to do, she will. eventually, i want her to replace your phone. will betic version ready hopefully by the end of the year. she will be able to do everything your mobile phone can do. i think it is perfect for lonely folks. speechless is probably the best description of how i feel right now. we will leave that there. let's move on. let's find out what we can expect for the rest of the trading day.

ukraine is going to dominate events. let's get on the phone with ryan chilcott. morning.en a busy a lot of of developments taking place in the south. walk us through what we need to know right now and what is going to happen for the rest of the day. >> my eyes will remain on crimea. we have at least two groups of armed men. one is at the airport and they appear to have seized the airport and close off the airport from all flights. is in a regional legislature about 40 miles from there. has a base military for the black sea fleet somewhere around there. thank you. we will have more from ryan and a little bit later. former president yanukovych speaking a little bit later. we're going to take a break.

"surveillance" will continue the conversation. we will be focusing on the gdp data out a little bit later. have a great weekend. we will see you monday. ♪

>> this is "bloomberg surveillance." well is called a orchestrated power grab, armed men in control of two airports in crimea. we will have reports from kiev. can there be tax reform?

someone, he actually reformed the tax policy -- and i look a little pink. should i consider spray tanning? this is "bloomberg surveillance ." live from world headquarters in new york. friday before the oscars on sunday. scarlet fu can barely contain herself. joining me are scarlet fu and adam johnson. >> i've got to go by the chips and dip. >> the only problem is you have to be up at 2:00 a.m. monday morning. time for the morning brief. what happened overnight. ecb president mario draghi said policymakers are committed to defending the euro area against inflation. this was in a speech late yesterday in frankfurt. in the u.k., home prices rose as the property market got a boost from low borrowing costs and easier access to mortgages. in ta