>> the u.s. economy grows, but at a slower pace than estimated. we will meet the special effects expert who sends cars flying. your viewers here in the united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making

headlines today. sue keenan follows matthew martone. it the global response to the crisis in ukraine. that's coming up in a moment. order in, restoring the ukraine. when region that threatens to spiral out of control is crimea. saysne's acting president russian troops are "directly involved" in the growing conflict on the ground. the country's newly appointed secretary of national security and defense counsel. we asked him about the growing tensions with russia. yes, i am. i'm worried about it, for sure. also, the capture of the government and crimea by units which in my opinion were sent from russia from moscow. we see a very aggressive method

of carrying out politics towards ukraine. we could serve their attempts to divide ukraine or at least take crimea. >> with all the tension and crimea, would you call for native support across -- against russia for wire? >> yes, for sure. guarantee of safety in the black sea region. of course we are sure about nato and it has already been announced that they have their own vision and it will not allow the russian federation to create conflict. my colleague joins us now live from kiev. describe the security situation in the capital today. are things improving from your perspective? it has been pretty calm today in the city. tias around.i

there's not much of a problem despite the huge numbers. you can hear some protests going on behind me on the streets. it has been pretty calm. >> what kind of fact are we seeing on businesses in tf? are things returning to normal? just a week ago, we saw very violent protests. hotels and cafés and markets are very active. across from here is a huge shopping mall loaded with customers. the only concern seems to be kiev's residence and banks. they are not allowing large withdrawals. >> i will ask you to stand by because we want to get a view on the crisis in the ukraine from washington. foreign-policy correspondent joins us now. there are financial stresses on

the government in tf. it is the imf bailing them out? the agency has been burned twice in 2008 and 2010 by ukraine. >> the question. the imf chief has said that a team will be going from the imf to kiev to do some investigation about what is needed. the government has said first that it needs $35 billion for a two-year bailout. then they came back and more recently said we actually need $15 billion. they have asked them to not talk about figures because it's just confusing for everyone. that's not forget that all of this began with the russians back at the end of last year promising the ukrainian government the $15 billion bailout at that time. that was part of what ignited the protests. those democratic minded, liberal minded ukrainians who wanted more of an alliance with the eu and association that would've allowed them to eventually get european union membership.

at this point, the imf will have to look at the history. 2008 they have had to stop loans to the ukraine because they were unable to keep their promises. what i think is interesting is that the current acting prime minister has said that he is willing to do the austerity and willing to cut the gas subsidies -- he admits it will kamikaze.al, coz >> i'm wondering what sense you are getting from people on the ground in kiev. what do they think of the new leadership? >> she just mentioned the idea mission. a kamikaze people are hoping that this will be a government of national immunity. i heard some young people talking today about the fact that all the politicians here should be banned.

they have a term for it. they are requiring politicians to work together with the imf. >> speaking of working together, what about economic support from they believe that yannick kovacic is the duly elected president of ukraine. at this point, the u.s. is watching this very carefully. they don't know which way rush is going to go. we have seen the russian military exercises over the last few days. the ap has reported that some journalists saw some russian troops. others have said that it will be done more under the radar by russian or people in crimea planning a takeover. they said, don't do anything. remember what you warn us about

not interfering in libya and syria. where yourney mouth is and not interfere in ukraine. >> we were talking last week with the former u.s. ambassador to the european union. i will ask you the same question. competingt these interests between the u.s. and eu on one hand and brushed on the other hand a lot of people talking about shays of the cold war. -- and russia on the other hand. >> the answer depends on the lens through which you are looking. we've seen in the editorial pages of the wall street proclaimingple crammin this the new cold war. you see the obama administration trying to get away from this perspective. they know that they need rush on so many other issues like syria and ironic and north korea --

russia on so many other issues. this is not rocky for. -- rocky $. 4. >> are they sensing cold war tensions? they were talking about 1991 and mentioning the fact that ukraine gave up its nuclear weapons. the west owes this new generation of leaders. >> you're on the ground in kiev. what is next for you? >> i'm heading to geneva tomorrow morning. >> at this point, where do you see the tensions between some of the residents there and the new government? given toare loans

ukraine that are forthcoming, there is going to be some pain for average day ukrainians. the new prime minister telling us the other day that there will be a problem. be the moste will despised prime minister in the history of ukraine. we will see. the ex-president was not a beloved character here. we visited one of his palaces today. some startling imagery thereof the amount of wealth. that idea that leadership was not part of the people -- that wealth gap between the leadership in the ordinary people. something that the new leadership will try to avoid. >> the prime minister did tell o -- joining us from independent squaring tf. -- independent square in tf.

the u.s. economy may be stabilizing. we will explore reports released they about the out look of year ahead. you're watching bottom line on bloomberg television. we will be right back. ♪

the u.s. economic expansion appears to be losing some momentum. gross mistake product for the fourth quarter grew at a rate of 2.4%. slower than expected. joining me now to discuss the theook for the economy, and aeconomist at kmpg fellow at the peterson institute for economics. me start with you as we mentioned. we did learn today that gdp expanding at a slower rate than initially estimated in the fourth quarter. weather is believed to have played role. what is the rest of the story? asthat estimate fell as well

consumption. whether played some role. played some role. the service rate of gdp has been growing faster than in recent quarters. services grew at 2.2%. underve been growing at one percent for the last couple of years. they actually make up the largest consumption. they are 70% of consumption. 50% growth is actually from services. sing the services growing at a 2.2% rate is actually quite a good underlying place for the economy to be. >> the market seem to struggle hrug off that gdp news because janet yellen indicated on thursday that policymakers are not stuck to a firm reduction of monthly asset purchases. why do you think in tumor confidence increased in december? what will it mean for future there is often

a lag in the effect of the house prices and the housing additions and stock prices on consumers. there has been a gradual improvement in the labor market which also has a lag effect. these things just build over time. i'm not surprised. i think the fed is optimistic for a good reason because we don't have big tax increases and spending cuts like we did last year. it creates a much better climate. >> as the fed has pointed out, this bill engages in very loose monetary policy. they're taking away the extraordinary measures. they are not raising rates. they're been very clear that rate raising is going to be starting untilot 2015. >> how quickly can policymakers make that pivot? >> there are two ways they could change the paper. it they could slow the amount of tapering from $10 million to $5

billion zero. or they could actually reverse it and start adding. they can do this whenever they want. they can have an inner meaning of vent -- even. they can do it whenever they have a meeting. whenever they want. although i really think they won't do an inner meeting group. they might do one. >> that said taper strategy -- it is interesting to note that although the fed is a ,arket and have similar views the fed is more optimistic about the economy. if the economy does weekend and it turns out not to be just eather, you could see a halt in the taper. what effect might that have on mainstream thaen?

>> the fed is not on the game yet. the economy needs to start to come back. in december, you wrote .n op-ed for usa today "for the fifth time in less than five years the fed has jumped the gun and starting to scale back its support of economic recovery. inflation still below target and unemployment is still falling." >> yeah. would not have done with the fed did in december. i would've wanted to have solid data in hand. today's report only confirms that. i think it was a bit premature. they are moving slowly. i remain optimistic about the underlying economy as constant said. constance said. to see. >> you also wrote something as

well. you wrote about this inflation. he likened it to kryptonite to central bankers. what is the main disinflation warning sign? is kryptonite because it is not something they have that much power to do much about. we are seeing lower price increases month over month and that's what we tend to call disinflation. all of our trading partners have very low levels of inflation. if you look at europe, we are under 1%. canada under 1%. 's level toust got it just over two percent. wrote about the changing economic forecast coming out of the congressional budget office. the cbo forecast that they had seen enough of a slow economy to begin to think that we should get used to sluggishness.

expressed concern. cbo's forecast shake and what happens washington. on cbo'sour take assumptions and their models that they use to reach their conclusions? >> they are very mainstream. ofre is some evidence potential growth of the u.s. economy that will be slower going forward. i don't think by much. but by some. we have seen a 30 year decline in where interest rates are, especially in real terms. i don't think it's going away. i think the new normal will be lower interest rates and lower growth. >> i will give you the last word. i'm expecting the report be fairly weak. in large part due to the weather affect. >> chief economist of alternate investments at kpmg. and the senior fellow at the peterson institute for international economics. thanks to both of you.

next up, matthew martin toma asks a judge to toss his conviction. why he claims prosecutors failed to make a case against him. that story when bottom-line continuous in just a moment. ♪

>> former sec fund manager maki martone is asking a judge to throw out his conviction for insider trading. his attorneys argued that media urt his case.d his does he advocate? >> no. they say it's a long shot. it's his version of a hail mary pass. an appeal is a very different issue.

distinctionmportant because of the insider-trading cases that have gone to trial, this one did have weaknesses. mark, plus lawyers argued that the government failed to prove the information was nonpublic. the issue had been previously published. they say the government failed to prove previous criminal intent. there were no e-mails about s or tape-recorded phone calls. his team also argues that pretrial publicity, that he was kicked out of harvard for making funny transcripts, got biased the jury. with the judge right and allowing that in for mission out there? >> how might the appeal differ from this latest motion? >> it gets into potential errors by the court. the former prosecutor says that given the highly technical nature of insider trading, it is

hard to prove. there are many would like to see this appeal addressed. he says the question of whether the trade was a direct result of the information is a great appellate issue. even if he passed along insider information, if the trade had nothing to do with the information and was not based on the information, then it is not a crime. technicallying is built on proof. prisonerving 11 years in , one of the largest for this crime. mark, faces 20 years. many think you'll get life. haveppeal could really some traction here. thank you so much. when he six minutes past the hour. that means that bloomberg television is on the markets. alec steele is in the newsroom

with the details. >> good afternoon. we are still looking at a rally underway for stocks. specifically the s&p session. up by almost 10 points. you're looking at consumer staples, energy and utilities really moving. we are seeing the nasdaq pretty much flat. racing earlier gains that we saw in the session. -- you're racing earlier gains that we saw in the session. we are watching individual stocks that we do want to highlight. the first this year's. the secret service has said to be investigating a possible security breach at the retailer. somebodycording to a summar familiar with the investigation. sears says it has no information that reaches actually occurring. we are watching apple. at the

world's largest company having its annual shareholders meeting where they have approved the .ompany's proposal they will have an update on cash policy. we are on the market again in 30 minutes. ♪

welcome back to the second half-hour of bottom-line on bloomberg television. it takes for sting with us. let's check some of the top stories we're following for you at this hour. ukraine is accusing russia of a military occupation. they're saying russian troops took up positions around the coast guard bases and two airports in crimea. the former president says he will fight for the country's future. mt. gox filed for bankruptcy protection.

$850,000 in bitcoin's several hundred million dollars are unaccounted for. the ceo has appeared before a tv cast and is bowing deeply. he says a weakness was behind that massive loss. the winning bid for the pink that she cannot pay. it sold for just over $83 million. the diamond has been acquired by the auction house after the buyer defaulted. year, hundreds of thousands of americans apply for national service positions. the majority get turned away because there just aren't enough slots. expandinguest says opportunities could boost the economy. jason is the director of the franklin project. he joins me in studio. welcome to bottom-line. how many people are currently

participating in the service? >> there are 80,000 people participating. only half of those positions are full-time. you could actually expanded to about one million. >> what about the cost echo who pays for? >> it's a public-private cooperation. one million people per year $23d cost about 2 billion. it has a return on investment. >> what's the reaction when you say people in national service? young people are volunteering in record numbers. i'mou surprised by that? >> not. in a recent study i saw, 71% appreciatey meaningfulness over anything else in a career. actually think that

millennials are excited about service opportunities. what were looking to do is engage the existing enthusiasm of young people. >> when we talk about national service. what are we talking about? >> there are 2.3 million nonprofits in the nine states. we already identified that people are trying to volunteer in record numbers. what we have now is the technology that allows you to meet and bring together the people who want to serve any organizations that could host them. we have huge partners step up with cisco who create technology exchanges where young people and organizations can get matched up. >> the economic benefits to the nation -- how might this have an impact on high unemployment, particularly among young people? it is skyhigh. so much more than the national average. >> what this could actually do

is make young people more employable. you get someone who serves come you get a leader. someone who understands the context of the world around them. >> look at this graph. 16-19, the unemployment rate at 23%. 20-24, 12.8%. that is staggering. at least if they are getting involved in the scum are they getting the skills they need to then make the leap into a position with big into the workforce? >> absolutely. this is where the private sector can be a huge boom to the franklin project. hoping us to envision a way that we could credential national service. >> what would you say to a young person who has tuition loans piling up an essay, i would like to serve what i really need to get the student loan people off my back. i have to get a job and pay down these loans. >> if you do americorps, you are eligible for an educational word.

-- educational award. they would be stipend at a moderate level. you would be able to get paid as you're doing your service. >> talk about the tie-in to the server america app that was sponsored by ted kennedy and signed into law back in 2009. >> there is legislation on the books promising 250,000 americorps positions by 2015. we are not on track to meet that. what we are looking to do is meet that goal and expand upon it. not through government alone but leveraging all of society. >> you have high-profile support, including stanley mcchrystal. what is his role and how is he helping to get the word out? >> he is the chairman of our leadership council. allowed citizenship to degrade to a point where serving has become someone else's responsibly. if country just is not work

not everyone is invested in it. if were not invested in it, we don't have confidence in the country or one another. where'd you get financial support? >> we have a number of corporate and philanthropies. cisco has been a huge help working with technology platforms. >> the director of the franklin re a website echo websit >? serve.org. >> the week ahead is next. ♪

>> it is time for our friday feature. we preview the nation's data and analysis for the upcoming week

with the senior economist here in the flesh. the charts out-of-date. you are with us to go through them. let's start with payrolls. how is hiring impacted by this severe weather? >> another substantial impact. it will be another two months before it will be a clean look. 150.e forecast looks for it may be closer to 100 funny. you can see that there is quite a bit of distortion over the last couple of months, specifically in goods producing and services. i would not be surprised due to the extreme weather we did see in february all over the country that we will see lost production. >> a lot of people are talking about the weather. any structural deficiencies as well? >> if you were a policymaker come you are looking at the state and you are right. look right past it. wait until three months to see what's going on. i am one of these economists who thinks that we do have a

structural problem in the labor markets. but to continue looking at the unemployment number. who areer of people wer working part-time and people -- >> hershel impact and spending personal impact and spending. wages -- youer were singing stabilization below two percent for the average increasing wages. if you adjust that for inflation, it's much lower. ,ooking at disposable income well below the 20 year average. this is why we continue to underperform. >> civilian worker wages were seeing a bit of an uptick. >> we picked up there at the end of the year. you don't want to make too much of a big deal if you see uptick at the end of the year. if i went back--

to 1990 and showed you the start, it would be a long way away. >> manufacturing numbers will be up. bloomberg consensus forecasts 51.3.se of is it there? >> we got some significant downside risk. it we had a pretty substantial inventory overhang. specifically in the outer sector, which we will talk about a second. at which point to broader problems in the economy. specifically having to do with the private sector and less hours worked. we will have some sort of weather impact given what we see everywhere else. inventoryng at indicating future production. the top lend index come you saw a turnover last month. a bit of an exaggerated number. you just spoke briefly about

all those total vehicl vehicle . the week wage environment is also a factor here. what is the bloomberg consensus forecast? >> we are expecting a 15.4 million pace of sales. as critical. at the end of january, we had inventory on the market. sustainable set around 65. one of the reasons we had the slowdown in production was not because of the weather. it has to do with the balance of supply. we need to see the pace of sales pick up substantially. my sense here is that the weather will inhibit that. eventually the automakers will have to put in some pretty big extensions to clear those inventories out. imagine, day before march, in april, will that number spike up a little?

when people start getting tax returns back. >> that's what we are expecting. you'll get a little more cash on hand. this is the year many middle-income americans are going to see the tax on their interest reduced. they may get a little less. >> about 30 seconds left. non-manufacturing data. at richmond fed survey, what's a likely to tell us? >> it remains flat. retail is taking it on the chin. at thewill probably stay level. >> a look at the week ahead. have a good weekend. up next, it seems to be in every action film ever made. it's the car flip used during an exciting car chase sequence. the man honored by the economy andin this role. ♪

the academy awards this

sunday. you have probably heard of them. have you ever heard of the cytec awards? they are innovators who dream up cool stuff for films. at this year, they gave a lifetime achievement award to the special effects crews behind the pneumatic car flipper. what is it? put together a show and tell. if you saw paramount's transformers dark of the moon, you might recall a sea of exploding cars. this behind-the-scenes footage come you can see, this ain't cgi. blue cars flipping. red cars flipping. even school buses. it happen that makes is the pneumatic car flipper. oscar winner john fraser helped michael bay when he was shooting armageddon. >> this is his favorite toy. >> here is it works. isars placed on top -- a car

placed on top. it is loaded with high pressure nitrogen. that pushes it into a piston that will throw the car as much as 25 feet. >> you want to get the air into the cylinder as fast as it can. 3, 2, 1. flipper's choice was the canon. >> this is the most economical way to go to flip a static car. it gets expensive. >> if you really want to get fancy with a flipper -- >> wrap the cable around the car . you can get it to 200 feet. u: that high-speed

accelerator. >> what do you do with that car? >> they will go to a record or something. in four more years, they may -- >> losa angeles. >> it is friday. we bring you encore. a look back at the most notable newsmakers from this past week. the pensioners have the best story to tell. it is tragic that they may only truly are what they owed. that is tragic. the resources are not there. -- this is pain shared by everybody. borrowerse rates -- can sit on the sidelines.

they're trying to figure out where mortgage rates are going to settle. a big part of that buyer decision is not going to be that buyers will hold back on buying a home. it it's probably their appetite for a smaller home or a decision that will impact the size of the home. not necessarily whether to buy. >> last year when consumer rated, they gave us their highest rating. it's no surprise that a year later we experience the car being on the road. it continues to prove itself to be a well engineered car. it performs well. >> there is more structural dominance going on. personal income in december was flat. only up 2.8% by 2013. most consumers are not seeing wage gains that sustain increased spending. in decembersions

payroll reports, it will weaken. we are a little hesitant to describe -- prescribe all of this to weather. encore. a check back at some of the notable newsmakers who join us this week on "bottled lime." another check on the market movers is on the other side of the break. ♪

get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet and am bloomberg.com. that does it for this edition of bottom line on bloomberg television. i'm mark rumson reporting from new york. have a great weekend, everybody. i will see one monday on the you on monday. onbloomberg television is the markets. i'm looking at stocks that continue to deteriorate in the last hour. .he nasdaq now down by .5% yes and he was nearing an all-time record and is now only up .2%.

spoke to the wells fargo senior strategist and asked where she thinks the markets are headed this year. marketnticipate that the will end the year where it started the year. tremendously bullish or bearish. what you have to do is pick your spots very carefully. what we have done is allocate two sectors where we do see accelerating earnings and reasonable evaluation. our favorites are tech and health care. >> trish also got the former economist's reaction to gdp reports. loved to .4% ae year ago when we were growing at two percent. %. loved 2.4 >> this is great. washad what we thought

3.2%. kind of hard to take a step back now and say it was not 3.2%. expectations.is they contemplated by that 4.1% number. %. take a step back to 2.4 we are growing at a slightly faster pace. >> how do you leave the market? since been on fire i 2013. the economy is not growing that much. that we our forecast tread water here. we get the upside as the economic numbers start to beat the april time period. the fed is stepping back on the other side of the scale. >> they may be stepping back? you got data that's not necessarily encouraging. is that she knowledge

to the weather as well. we can use the weather as the excuse and continue allowing the path until it is clear. if april comes along and we do not get better data, maybe the fed does reduce the paper. for now, they are on track. >> this morning, tom kean and his team asked charles foster what impact he thinks the weather is having on the economy. data is very noisy right now. extremely noisy. the weather and other things. you have to be a little patient. the economy left the end of the year on a good note. i'm still looking for close to three percent growth in 2014. that will continue to bring down the unemployment rate and continue to allow the economy to grow. >> we are on the markets again in just 30 minutes. streetsmarts is coming up next.

♪ ♪ their third day of gains and we are at an all-time high. welcome to the most important hour of the session. we have 59 minutes till the closing bell. julie hyman joining me today. we are looking through the markets to find your last trade and your -- today first trade of tomorrow. the reports are less than stellar. >> it seems like people are focusing on the future rather than looking back. it is a mixed session. the nasdaq is lower today and the dow and s&p are higher. 1848 with the last record