ukrainian stocks advance. starbucks invades mcmuffin territory. vital news. good morning, everyone. this is "bloomberg surveillance ." i am tom keene. joining me, scarlet fu. west," torrymberg johnson. it is time for our morning brief. >> a handful of things we are keeping our eye on. 15 years of deflation ending in japan. salaries increased for the first time in almost two years. economic front, no big economic data expected this morning. all eyes will be on the ukraine. >> we have earnings as well, though we? >> before the bell, radioshack,

a fascinating company. >> three decade train wreck? >> they made a big bet on low-cost cell phones and they have really screwed it up. >> they made a big bet 30 years ago and it really has not paid off. >> we also have american apparel and smith & wesson. the 2015 budget this morning. mardi gras today. >> the president will be a mardi gras? [laughter] >> i expect to have a band coming through at any minute now. let's do a data check. look at stocks, bonds, currencies, commodities. the headlines overnight. russia backs off a little. we will go to president putin here in a moment.

futures are up 20. the euro really does not turn much. -- churn much. nymex crude celebrates. yen weaker. 13. futures are down brent crude follows nymex. the papers and the website this morning. here is our front page with scarlet fu. >> ukraine. speaking right now. he says there is no need to send troops to ukraine yet. he says that yanukovych is ukraine's legitimate president. g8 doesn says that if not want to come, do not come. it has sort of a marie antoinette feeling to it.

>> he ended the exercises along the russia-ukraine border. there are other reports -- e u.s. statement called at the g7. >> there is a ramp up with secretary kerry migrating toward kiev. i think it is fabulous. this is great. this is the best signal for vladimir putin. the secretary of state stopping and having a baby. -- hugging a baby. john kerry makes the right decision. striking awork groundbreaking agreement with disney. there was a legal standoff between -- and disney over

dish's skipping technology. >> this is a huge deal. disney is agreeing to go over the top. they are providing content not on the cable box, not on the --, actually on the web. they refused to do that. this is breaking the traditional agreement they have had with cable carriers, especially espn. > my word for 2014 is distribution. >> over the top. this is huge for disney. >> maybe that leads the way toàa la carte programming. the big investment banks bracing for a trading plunge in the first quarter. typically the first quarter is when these banks to the best in trading. dropsays that trading will to the high to mid-teen percentage.

jamie dimon said that revenue from equities and currency commodities down 15% in the period. >> it is not only sluggish trading, but maybe it is trading mistakes. the federal reserve continues to taper its bond purchases in the background and move to normalize interest rates. these are the front page stories. we will keep an eye on citigroup and j.p. morgan revenues story. >> let's go to kiev. like on thes that ground in kiev? putin is speaking at his residence outside of moscow. i am in kiev. i am watching this with all of the people of ukraine. putin is the one calling the shots in ukraine right now. he says he sees no need to send troops to ukraine -- yet.

that is an interesting word. ukraine party believes that he has 16,000 troops in crimea. troops. any more he is not going to add crimea to russia. have got tois, i ask the geography 101 question -- is crimea part of ukraine? >> that is correct. within that and within the discussion, as secretary kerry is scheduled to land at some point, what will secretary kerry say about that partition? >> he has been very vocal already, saying that it is illegal, aggressive, that president putin should not do , that the pretext that russia has sent troops into ukraine's crimea is hokey.

i think we can expect more of the same, though, i bet, as mr. prepares to make comments, he will think about what putin is saying right now. putin is saying that he is not going to add remi a to russia. -- crimea to russia. he also made comments about victor yanukovych. and you give us an update on where he is? >> he is in russia. he gave a press conference over the weekend. presidenticance of putin saying that president yanukovych is the only legitimate president of ukraine and not the people in power now basically, just yesterday, the russians in the

security council and the u.n. said that yanukovych had asked putin to intervene militarily in the ukraine. president putin saying that yanukovych is the legitimate president of the ukraine and also the russians have said that the legitimate president of the ukraine has asked us to send troops in. it is justifying what they have already done. >> does this suggest that ,hatever putin is going to do that russia may continue to go forward? >> i think you have hit the nail on the head. he said he did not meet to send troops intoend ukraine yet, he would only do that in an extreme case. he does not see the situation as extreme yet, that being the suggestion. will the strips go from crimea to eastern ukraine and

potentially prompting civil war in the country? most ukrainians have written off crimea already. they have resigned themselves to russia's presence there. gothe russian forces were to into eastern ukraine, that would be a different matter. the tone we are getting from putin right now that he is not going to do that right now. they will watch a things play out. >> thank you so much. secretary kerry scheduled to arrive at some point. pimco'sfor the hour is global strategic advisor. -- our guest host as well as glenn kelman. professor, we look at all that is going on. it is about monetary theory. i had to bring it up.

within this, what will this mean for the real economy of europe? and for the real economy in the united states? , iwith regard to europe think the inflection point in europe was going to happen. europe is growing. group on europe. i don't see the train derailing. i don't see any effective western nato response to this. we are not going to get military action involving the u.s. >> we saw prices dropping in russia. people see those market moves. why won't they come over to the united states? >> we are seeing a rebound today. --hink it will depend obviously it is a tragedy from the ukrainian people, but from a

larger geopolitical sense, i don't see this derailing u.s. or europe. >> we're going to talk real estate in the next hour on "bloomberg surveillance." but that the company news. >> before we get to that, another headline from vladimir putin. he said that victor yanukovych has no political future. moving on to company news. pay fortells bp to claims related to the gulf of mexico oil spill. an appeals court says the settlement agreement does read choir -- require payment. not even warren buffett can avoid the decline of newspapers. readership fell at 26 of the 20th publications buffett owns.

nissan posted a 16% jump in sales in the u.s. in february. toyota's u.s. sales tumbled 4%. the toyota ultima has surpassed the camry. has surpassedma the toyota camry in sales. >> we will look at one of the hottest new supercars on the market. we will have the ceo on to talk about the car. very cool stuff. "bloomberg surveillance" streaming. ♪

>> good morning, everyone.

it is a snow blanketed washington, d.c. five inches of snow yesterday. your government shutdown. that would never have happened in austin, massachusetts or new york city as well. they have a budget today as well. an important interview on the equity markets. linking ukraine and equity investors. i am tom keene. with me, scarlet fu and cory johnson. >> the housing market made a big comeback. of an advertising war going on right now between the zillow and its competitors. perspective, zillow plans to spend up to $65 million.

that is equivalent to a third of its revenue. will spend $35 million. these are big, big numbers. investors did not like the news. deutsche bank says that these are shockingly large amounts of money spent on advertising. it is to differentiate themselves. >> i find the battle extraordinary. >> we have with us this morning an online real estate company. $40you guys spending million on advertising? >> no. we have a different business model. those are media companies. their goals are to sell ads to real estate agents. is a real estate

brokerage. our goal is to use technology to change the whole game in the consumer's favor. that gives us different margins and a different business model. not invested in advertising because traffic too our web and mobile tools are growing so fast. >> you guys are looking for a new marketer to ramp up presence. >> the company is growing for a fast. one of those folks is a branding and advertising person that we are going to hire. we're are not going to advertise on that scale. one of the most revelatory things was the room where the cold calling was happening. it felt so energetic. , i didare a pro on this not know this distinction. the morning, up in your competition is century 21 and coldwell banker. >> exactly.

>> versus trulia. >> yes. >> what will be your distinction? >> i think there are a whole bunch of ways it could be better. you have a real estate agent who is really on your side. is.hat a new concept that why is this rossa so painful? --ross us so painful? process so painful? >> it is a very traditional industry. >> you are doing a really intriguingly, dramatically different model. explain. >> a bonus based on customer satisfaction. we use technology to make the whole process, the tour, inspection, escrow process really easy and we save people about $10,000 and real estate fees. >> and folks, that was your

tuesday fantasy. we are going to come back and talk about this. what he just said is like disney. >> "frozen"? "let it go." [laughter] >> coming up on surveillance, we will talk about privacy. there is a cost in terms of privacy and that brings us to our twitter question of the day. on which mobile device do you feel the least safe and the most safe? "his is "bloomberg surveillance on bloomberg television. ♪

>> good morning, everyone. "bloomberg surveillance." corey johnson from bloomberg west is with us today. he has a top headlines. >> yes, tom. yes i do. salaries rose in japan for the first time in over two years. it is the first gain in 22 months. companies boosted pay. the number of airline flights canceled or delayed since december 1 has topped one million. chaos has caused passengers more than $5 billion in lost productivity and cost for meals and hotels. a record-setting night for lebron james. he scored 61 points last night.

it is the most lebron has ever scored and the most that any heat player has ever scored. more than shaq. i could go on. the glorious history in miami. ricethan the 60 that glen dropped against cleveland. do you remember glen rice loss shot? -- glen rice's shot? >> how come you know some much about basketball? >> i'm a big fan. >> basketball with cory johnson. here is scarlet fu with the maureen a must-read -- morning must-read. >> has privacy become a luxury good? "the new york times" published an op-ed by the author of "dragnet nation."

there is that intriguing idea that if you do not want to be part of the facebook phishing for your information and selling all over the place, you will be willing to pay the premium. >> facebook has taken this model of you give us your information and we will tailor ads to you. we will specifically target you. it is an intriguing idea that some people will pay to be off the grid. >> will you pay extra so that google does not pay -- go through your e-mails? >> i already do. i am already paying to keep some things off-line. >> effort, hassle, money. we also want to highlight that coming up, president obama is

unveiling the 2015 budget today. he has a lot on his plate. is more gridlock to follow? improve, futures are up 20. 10-year yield. a better town. -- tone. the russian president saying he does not want your with call -- to recall his ambassador from the u.s. >> we will be right back on "bloomberg surveillance." ♪ .

>> good morning. "bloomberg surveillance." it is a gorgeous day in new york. it is also as cold as the arctic tundra. be careful.

it is gorgeous but chilly here in new york. this is "bloomberg surveillance." i am tom keene. looking at stocks, bonds, currencies, commodities, euro is flat. is flat.dxy nymex crude does better. a little bit of a turnaround this morning. that was the case with some of the big gainers and users yesterday -- losers yesterday. jcpenney up 9.3%. this is a company that began reporting monthly sales figures last year so we could highlight its turnaround effort, the ongoing effort. it is going to abandon the practice this year because the comeback plan is starting to take hold. details to show you we're are turning around, but now that we are -- all of garden.

-- olive garden. >> reservations required. president obama scheduled to release its fiscal 2015 budget today. political gridlock led to a government shutdown in october. you remember that. we wonder whether the president will be able to accomplish his budgetary goals. our white house correspondent joins us from washington with the details. is this going to be dead on arrival? >> it really kind of is. it is not because of the gridlock, it is because of the one area where they were able to reach agreement. they have topline budget numbers. in december last year, they reached budget agreements at set numbers for the next two fiscal years. this used to be the day in washington where they released christmas. no major surprises or tosses

over to the republicans to try to get them in for agreement. basically, we have a lot of ideas that we have seen before from the administration and a few new ones will stop an expansion of the earned income credit. but this is not going to be something that lawmakers are using as the baseline for anything going forward. >> thinking big, i can see. what about entitlements? >> that is the big me sing peace. -- that is the big missing piece. they indexed social security and away that did not appeal, to say the least, to their own party. what the house and senate democrats in election-year requested china seems, basically, administration officials not include that in the budget. they say it will always be on the table. but we're not going to put it in our budget because we tried it last year and we got the crap kicked out of us and did not get any feedback from republicans. that is gone. the budget issue right now,

deficit, debt, from the ministrations point of view, it is not something are focusing on right now. >> take you for setting the scene. -- thank you for setting the scene. york, our guest host, we have the chart of earlier. it is a massive victory lap. can we get back to a surplus? can we get back to that surplus? >> that is certainly not on the near-term horizon. what is important to note, three years ago the deficit was 10% of tdp and this year, 3%. it wasn't pretty. it didn't look like the civics textbooks, but we have a lot of deficit reduction. we had the ryan murphy agreement. it basically takes fiscal policy off the table for the next two years.

barring a dramatic or election outcome in november, the administration will be status quo for 2017. >> are you willing to say austerity in the u.s. worked while austerity in europe did not work question mark -- work? able to register economic growth. it has been sluggish. europe has not been able to pull it off and a big impact of the fed he been the economy supported. >> the former fed governor, wonderful textbook, i don't there is in the textbook. how do you respond to the political debate that it is morally good to have less of a deficit? how does an economist respond to that ancient thought? >> the big picture is, if you're going to be borrowing money as a government, you need to put it to a good purpose either enhancing productivity or

providing defense or essential services. the u.s. has the advantage of being a reserve currency country. we can issue treasuries at low interest rates. that is essentially what supports our fiscal -- >> we could talk all morning about fiscal multipliers. unfortunately, mr. putin is speaking in russia. i believe he is in his residence. he is looking casual this morning. >> you can't beat some of these headlines -- >> he has his shirt on. >> that is an exclusive. clarida takes a shot at putin. >> a tie and jacket for mr. putin. bc is he met with the d'amico meth and he -- he says he with viktor yanukovich and he is alive. he has no sympathy for him. take a look at the features. your cohorts in crime suggest, do we just ignore all of this ukraine chat?

>> the reality is, there is no serious prospect of the u.s. or nato escalating this. as tragic as it is for the ukrainian people, it looks as though it is now not going to become a larger geopolitical impact. that is why you see the markets rebounding. >> it is a cultural issue. i thought david brooks was good this morning talking about the history back to peter the great and beyond, of the russian character. it is my morning must read this morning. does that capture the image. >> i wonder because a kremlin aide said russia would stop repaying debt to u.s. banks and abandon the dollar in the event of economic sanctions. is that likely or even possible? >> that was a little saber rattling. ,r either of those to happen

especially failing to pay back the banks, that was certainly get on everyone's radar screen. thethreats about dropping dollar, i don't think a big, big picture issue right now. >> we saw vladimir putin walk away that press conference and we see futures jump of 20, now up 22, dow futures up 182. the markets breathing a sigh of relief. >> are some specific equities affected by this. i wonder if you think we will see a big turnaround? a software company were most of their business or much of it is based in ukraine, the stock was down 23% yesterday. do you think we will see a quick turnaround? >> i would not pretend to be a geopolitical expert and he can be a challenging period for ukraine. i was speaking more broadly. the real issue is, ukraine essential from getting the gas to the rest of europe. >> how coordinated our central

banks in a crisis like this? does yellen speak to druggie who speaks to carney? in past episodes, they've been very coordinated with phone calls and communications, absolutely. >> you know exactly what is going on. >> as he mentioned that the markets moving, the ruble has rebounded a bit that trading a record low against the dollar. do you see money out of russia, out of ukraine many to safer havens like u.s. real estate? >> i think it is too soon to say it is driving russia money and a florida or elsewhere, that we have seen over the past two years, huge amount of money coming from russia, venezuela, and other places with high oil places. -- high oil rises. >> thank you. we will discuss the state of u.s. housing next.

we also went to bring up starbucks. it is heating up the battle for your breakfast dollar. a look at the new breakfast menu items and a frightening map for those who can't do without their cup of joe in the morning. we will be right back. ♪

>> good morning. i am tom keene. >> the pentagon proposed budget calls for $25 billion less to buy weapons than forecast year ago, part of a $45 billion savings plan the defense department had to come up to meet budget caps put in place late last year. new number one when it comes to the world most expensive cities, singapore grabbing the top spot according to ranking. rising cost and stronger currency push the city up from number five last year. tokyo was first, falling to 6th in the new survey. two of the classic corvettes swallowed by a kentucky sinkhole have been recovered. the first was a 2009 blue corvette, showing only minor damage. the 1993 vette suffered worst damage. inotal of eight cars tumbled

a deep hole underneath the museum. at least it was the 1962. that would've been a national tragedy. >> do you remember the rich get in the high school with the corvette? >> where is he now, tom? we went different years. >> different eras. the was right after internal combustion. >> there was a guy who had a 1974 yellow stingray. >> you are killing me. >> do you remember this? >> no, all cars were black when . lived time for the single best chart. scarlet fu will save us. >> let's talk about caffeine. there are a lot of starbucks. here's a map that shows, highlights all the locations in the continental u.s.

my single best chart this .orning is from james davenport he compares starbucks locations to the 2010 u.s. census to create a chart that basically shows how well centered it is in u.s. populace. more than 30% of the population lives within one mile of a starbucks. about 250 nine people, live within 20 miles of a starbucks. not happy. are still they are still tweaking stuff. get over here. look at this. >> they are offering some new breakfast options. >> it is a slow roasted ham and swiss. ,> and it is 490 calories $4.45, which is more than that been done at eggs benedict sandwich, if you're so inclined. i know you're partial to dunkin' donuts. >> no, i am partial to taco bell. >> the waffle taco.

i don't know how much it is, but that is 460 calories. this is the strategy for a lot of these quick service restaurants. books now i need breakfast. >> i'm not getting anywhere near that stuff. me the bread and the sugar? not happening. >> and we have photos this morning. >> or we can look at carnival. our number three photo of the oly, members of a samba scho in rio de janeiro, brazil. performing, writing the floats resembling soccer shoes. >> how far away are we? june? >> 100 days. >> number two, revelers throwing cum powder.der -- tal

all kinds of fun there. the number one photo, a figure of putin seen during the rose monday parade in düsseldorf yesterday, the highlight of the carnival season in the region. a tradition since 1823 celebrating their making before the start of lent. >> what people don't know about is you truly are an expert on german culture. tell me about germany and the images we see their. the historic relationship of germany and russia? do that't know if i can in 30 seconds. it is quite a complicated one. obviously, the inflection point was the end of the cold war. >> we americans don't get it. >> you have an entire generation now for all the cold war and the

conflict. world war ii is a distant memory. i think europe is changing on that score and really, generational change. >> do your hydrocarbon experts feel there is going to be tension between russia, ukraine, and germany with a flow of energy? >> that is really the threat point that russia has in all of this, is europe is crucially dependent on natural gas, most of which comes from russia. that is always the -- obviously, russia needs to sell the natural gas, too. so far, that is why it has been stable. >> there's a terrific book "command and control" about the u.s. history and the disturbing -- clearly still on the minds of germans. >> casting a long shadow of the history. we will be back and talk about real estate. how can a real estate company survive commission-free? that is coming up next on "bloomberg surveillance." ♪

>> this is "bloomberg surveillance." let's get you some company news. a hiring spree in asia.

they have hired hundreds of engineers and supply chain managers in china and taiwan. triesring comes as apple to speed product development and introduce a wider range of devices. ebay director firing back at carl icahn saying he recused himself from deal talks when ebay sold skype to a group of investors that included his venture firm. carl icahn has accused him of benefiting from the deal at the expense of ebay and its shareholders. to sell new ads that will appear in old shows quote threecis post days after they're broadcast to generate revenue from audience to watch shows on a delayed basis. that is today's company news. cory johnson, with your perspective on bloomberg west in the west coast, how was carl icahn perceived on the west coast? it is different than your, isn't it? new york orpeak for

i suppose silicon valley, but i think companies think he is a jerk. they're upset when he becomes involved in the companies. they look at his demanding things for wall street. this is my whole thing with bloomberg west. we try to focus on what businesses do, not the reaction of stocks. i think in this case, the tail is carl icahn when he is getting involved in companies -- >> why shouldn't he go after ebay to advance shareholder value? >> i believe he absolutely should. he can raise these issues. if he is got validity, i mean, full disclosure, i have been on the same site as and when i was in the hedge fund world. >> he is reason all of the company's going public today to a bank,n you talk they say you needed to do because carl icahn will, and your border may make you do silly things.

>> when you have these companies controlling, he is the reason. >> let's get to real estate. >> we have a bit of a shameless plug. -- they're ins will be on tomorrow. >> how are we doing on real estate? >> higher housing prices expected to entice homeowners to sell their homes. one company that has a lot at stake is redfin. is paid on customer satisfaction, not commission. is our guestdfin host for the hour. we still can't get over this that someone is paid not on commission but customer satisfaction. how do you measure that? >> we survey our customers. we need all of our customers does meet all of our customers through our mobile app and website. we know when an agent is competitive on an offer, when they're late for a tour.

we just ask our customers, are you glad you bought the house we helped you by? if they aren't, the agent is a really earn a bonus. box with the housing market the way it is, i've seen some soft eta for january, it looks like the weather has been a factor. -- soft data for january, it looks like the weather has been a factor. was thereal estate engine of the u.s. economy. now that engine is sputtering. just inome buyers not frozen states, but across the u.s. stepping back from high prices. salesory is down 10%, down about 15%. february numbers are not going to be better than january. >> you can't get anywhere in new york city, can you? talking about commissions? real estate typically 6%, you don't. what do your brokers get on commission? >> they don't earn a commission. they earn between -- >> this is baloney.

you're undercutting the realtors? >> our agents are more productive. they earn a 30% to 40% margin on the business, but we're still able to refund about $10,000 to the consumer when he buys and sells a home with us. the major difference is the customers are happier. websiteked up on the and in cupertino, something that cory could afford, five bedroom, 2.6 minghella property. a traditional broker, 6%? >> yes. >> $120,000. >> maybe 2.5% because it is a higher price property. the fees are the same us and we wanted to do is -- >> where you gaining traction? >> almost everywhere. every quarter we have ever been in business we have grown. 100% never going to be growth business, but we grow 50% to 60%. the secret is not only the customer experience hated by the

customers often, but the realtors make -- they have horrible careers, short careers. most people go to the real and lose money in the process and never make a dime or have minimal earnings. >> i am fascinated by this. studied it. as soon as prices increase, yet more people entering the business. you just have too many real estate agents trying to divvy up to few homebuyers. >> do you live in new york? >> no, i don't. >> you're not that dumb. to be.s a lovely place >> thank you so much. >> thank you for having me. >> honored as always. are you going to be at the spring meetings at imf? >> i will not. i have another obligation. >> very good. the report this morning shows the better tone of the market with features that 19. sterling a little bit weaker.

>> coming up in the next hour, focusing on security with our guest host of mcafee. we go live to geneva for the new supercar. ♪ .

>> russia ends military exercises, even as warning shots

are fired in the crimea. putin in moscow, bailing out ukraine, he says that is the mission. we speak to john lipsky. mclaren mcclaren, fancy launches a sweet sports car in geneva, switzerland. good morning, everyone. this is bloomberg, surveillance. joining me as always, scarlet fu. from "bloomberg west," braving the cold new york city, cory johnson joins us. our guest host for the hour, michael caesar, president of .cafee's >> japanese salaries increased for the first time in more than two years after 15 years of deflation. european gas prices fell the putinn nine months as ordered troops back to the bases.

u.s. economic data today, but we do have earnings coming up before the bell. radioshack, a disaster. autozone should be pretty interesting. economicesson, information going out, but as i noted, the president will be unveiling his 2015 budget this morning, making his remarks at 11:30. tomorrow, ash wednesday. 'tis the season. >> let's move on. withny news, let's start disney and a groundbreaking deal, dish getting ready to carry shows from abc and disney on its web-based subscription service. this ended a legal standoff on technology called the auto hop. citigroup is bracing for a first-quarter trading slump, preparing investors for an earlier slide in revenue.

john hirschbeck said that trading revenue will probably drop by the high midteens percentage. jamie dimon last week said that revenue from fixed income dropped 15%. forurt tells bp to play up -- pay up or claims related to the gulf of mexico oil spill. the company tried to block payments, saying that they were not directly linked to the spill, but the settlement agreement did not require the business to prove that the damage suffered was caused by the spill. that is today's company news. and 174,s are up 20 news continues to come out of crimea, ukraine, and russia. all over europe. ryan, we just heard vladimir putin speak outside moscow. who was he speaking to? >> a good question. the russian people, the ukraine, and the west all-in-one. to give us a bit of clarity for the first time as to what he intends

to do. >> what does he intend to do? what did you see? what did you glean from the headlines? like he said there is no reason to send troops to the ukraine yet. a bit cryptic, because ukraine says that russia already has 16,000 troops in crimea, but presumably what president putin means there is no more, right? they think they have the right to have up to 25,000 troops around their base in the ukraine. he also said there was no need to send troops to the ukraine except for an extreme case, which presumably he does not see now. finally, russia will not fight with ukrainians, he said. >> how fractured are russian u.s. relationships right now? is secretary kerry there yet? >> he is on his way. are thesectured relations? it >> people are calling this

the worst in russian-american relations since russia became an independent country. i have heard that a lot of times, i have to say. the thing here is that ukraine is a large country, 45 million people. it matters a lot to the russians, which makes it a big deal, but you know that russians and americans have disagreed on a laundry list of issues for a really long time, relations have gotten very poor. but people do say that this is one of the worst cases. >> i wonder if vladimir putin made any mention of the economy? ae crumbling economy could be bigger risk for him. inflation was shown to have risen in february versus one year ago, faster than what had been anticipated. >> utley he did that twice in the press conference. he said that the political instability in the ukraine was not helpful for the fragile economic state, which i ess everyone would agree with,

including the new leaders of the ukraine. he also mentioned that the reaction in the u.s. to what happened in ukraine was what was responsible for the trouble on the markets, which is another interesting one. perhaps what he means by that, as he did not articulate what he means, but perhaps that what he sees as ahat what he heavy-handed approach, or a very strong worded response that he on from president obama friday and, subsequent to that, secretary kerry, really saying -- put a stop to this. how long do you expect secretary kerry to stay in key avenue and act almost as a human shield? -- key avenue -- key avenue, ukraine -- key avenue, ukraine as the, acting almost human shield?

>> he is off to western europe soon. he has two more countries he is already scheduled to visit. i mean, i guess human shield. >> thank you so much. secretary kerry is scheduled to visit key soon, to say the least. today, caesar is with us president of the cyber shop at mcafee. we have known him for decades. it has been decades, hasn't it? dominant.nd really speaking of ukraine and russia, when pros like you wake up in the morning, do you look at russia as a broad or eastern europe as a cottage industry? the people that we do not like in terms of security? >> it is not so much a matter of who we do not like as, this was brought up yesterday, one of the elements that occurred was compromised telecommunications systems in the ukraine. this is one of the first times we have seen cyber defense used as a weapon.

>> where russia compromised the ukrainian phone system? >> i brought this up yesterday with richard felker. georgeppened when underwent similar actions in 2008. the exact same kind of thing we is seeing, this offense cyber warfare, telecommunications is very different. >> it fractures the ability of the country to stay coordinated. how reliant are we on our telecommunications systems? when that is taken down, it can make quite a dent in the country. >> does that change the plans for mcafee? for intel? towe have to find new ways protect future uses? >> there is no doubt that the sophistication of the threats out there these days mean more attempts to change security.

>> how has your life changed from the -- from three years ago? >> when we look at who we are up against in the world, the technical abilities of the adversaries has grown exponentially. mcafee must grow exponentially as well. >> talk about the process of opportunistic attacks in the wake of this unrest. cyber criminals were very active after osama bin laden was killed. do you see that happening this time around? >> we have not seen that yet in the ukraine, but when you see this in virtually every area, whether it is ukraine or the .lympics is aur first customer representative for state jobs? >> that is right. >> how does that work, you were a big newbie?

-- came came a wrong along for the call. we sat indian style in the lobby of apple. >> really? larry? disclosure, i do not think i could do that. >> the question is, on which mobile device do you feel the least or most safe? >> what if i was on my kindle? >> is that yes? to tell me to change my passcode. let's get to the data check. we do not need a passcode for this. commodities off the news in the

ukraine, russia not pulling back but a much easier dialogue this morning. the nymex takes a breather, 103.42. 101 .91.r yen, gold, down a dollar today, a better feel led by u.s. futures. >> and stronger as well. stronger with more levity in the markets. coming up we are going to geneva for the motor show. when i think of mclaren i think of a baby stroller. but we are talking about the latest model to reach 62 miles per hour in three seconds.

morning, everyone. "bloomberg surveillance," i am tom keene. the president of mcafee, you know them as the security giants with sophistication. merchants like target have taken steps to cover up cyber security disasters. maybe they don't want to talk about it? a big issue that we hear about, but what don't we hear about? >> we do an incredibly growing amount of business online. when the holidays came back here there was as much made about

cyber monday as there was about black friday, showing off how much business is done online. so comes the risk. >> is it as basic as the two-step security process? are we all going for him password to two-step? >> the evolution will move from being simply a password to biometrics. when we are on a machine we can use the technology -- >> like the iphone finger thing? >> that is just one element. you can do a voice imprint, use the gps on the machine. comfortable with security? are they doing a good job? >> there is a lot of effort going from the banks to secure customers online. the world is evolving. we all want to do business online. i cannot remember the last time i walked into a bank at this point. when that is said, that is where the adversaries go.

>> how should viewers and listeners travel abroad? you spend money abroad? >> i use one credit card for all online transactions and i am careful to make sure that that is updated periodically. >> you mean the password? >> change the password. >> how often do you change your password? >> on my financials about every three months. working onmcafee right now in the two-month target? what is your number one target right now? >> we were acquired about three years ago from intel, making it exciting to put functionality on the cpu itself to communicate with security products and provide a better level of security. the cpu itself sees more on the machine than a security product would see without it. rivalry coming,

we are a long way from that battle? >> i think that what is interesting is that as the threat landscape has evolved and the bigger players have gotten into the attacks, security players have evolved as well. >> very good. coming up, the banks, they have their own headaches. citigroup, j.p. morgan, looking at a follow-up in the first quarter on this frigid day from the york city. good morning, "bloomberg surveillance." ♪

20 out of 22, dow futures up 183. me, scarlet with fu, top headlines. >> japanese salaries are up for the first time in two years.

1/10 of one percent in january. it is not much, but they will take it. pentagon's proposed budget calls for 25 billion less than what was forecast a year ago. the department had to come up with budget to put in place last year. a record-setting night for , dropping 61 points , 124 to 107. rice. the heat are hated globally, but i like the way that they play. i am a big dwyane wade fan. if you have the chance to sit courtside and watched lebron big. lay, he is so

>> what is the distinctive feature? >> e is a freak. he is huge and he is fast. >> he has short guy speed even though he is huge? >> with that shot, look at that. mr. jaynes is on the other end of the court putting it in. >> the motor show held in switzerland was kicked off today where the hottest supercars were unveiled. >> let's talk about mclaren, the million-dollar supercar. mclaren is here with his new

650. so it goes. congratulations, the car looks great. you are getting into territory that has been governed by lamborghini, for ari. it changes the nature of what you do a little bit. this is a supercar. >> what we do it, it is all about using technology to build the best sports car in the world. we have been choosy about it, we do generally want to use the market. we go in as the most technically advanced car. that is what we set out to do, to use technology.

does it dilute the brand in any way? >> i think that if we stay with the principle, the principle is to make the best cars for drivers. we use technology to do it. if we stay with that principle and pick the seconds that where we -- where we can go in, we cannot go right down. we cannot produce the cheap stuff with this level of technology in them, but i think that we can go to market with, ay, two thirds the price of 600 50 s. >> i have a question that everyone is talking about here, lamborghini making a decent suv. can you see something like that? >> i cannot. it is always dangerous in this light to say something like that, but there is no intention or discussion. we are all about driving pleasure. not what wesolutely

want to do. >> how big a part of the market is the united states for you? to ramp up thens u.s. even further? to 16 byl be going up the end of the year. it will not ramp up aggressively. the u.s. last year was a little over 40% of sales. now that we have started to develop in asia and china, september of last year, it will be more evenly spread, but it will still be $.37. i think we will be in north america. >> you have conquered this market that keeps growing. the upper end, the super luxury end of each market seems to continue to grow. is that sustainable? , we arembition here planning about $1500 per year. we think that is sustainable. to stay anng

exclusive brand. it is luxury. they are priced at quite a premium. there is absolutely demand out there for that as well. we announced at geneva last year, it was one million cap, in fact it was 1.2 million dollars. it literally sold out with a waiting list. to see you.e thank you for stopping by. ceo there of mclaren. back to you. >> guy johnson, hanging out at the geneva motor show. >> have you driven that? >> it might have been in the ford motorsports xbox game. >> was it an xbox game? >> where you live are there lots of these cars? we do not see many where we live. >> i live in piedmont, you live in the apple. there are some fancy cars around

their once in a while. >> ok. >> but a tesla is a dime a dozen in the bay area? >> they are. >> the u.k., looking for $15 million in aid. >> catching on fire. >> today's top headlines brought to you by bdo. ♪

this is "bloomberg surveillance." i am here with tom keene and cory johnson. we have company news headlines right now, the winner among asian carmakers last month, they put a 16% jump in sales in february, whereas sales at honda slid seven percent and toyota's

u.s. sales tumbled four percent. all to much, heading to pass the camera a this year. not even warren buffett can avoid the decline of newspapers. his newspaper properties saw bailey circulation drop according to their annual report. leadership fell at 26 of the publications that he owned. unilever has scrapped plans to force new jersey to embrace its reputation as the armpit of america. are you kidding? >> it was for dove products designed to show that armpits can be beautiful. new jersey residents made distinct. >> stink? i get it. >> that is your company news. >> who invented that? which young mba will get shot over this? ?> who probably someone from new york, my guess. is there an armpit of

california? say, having lived most of my life in this city, but being in this beautiful environment and that beautiful environment is different. it is not half bad. >> very politic. that's move on the big investment banks, from citigroup to jpmorgan, bracing for a slump in the first quarter that is not citigroup says that trading revenue will probably drop. the jpmorgan ceo, jamie dimon, said last week that revenue from fixed income is down 15%. putting this into perspective for us, joining us by phone, jason goldberg. jason, how much of this is priced in? >> we think a lot of it is. we think that we will see trading results coming out from citigroup and j.p. morgan.

you see it every day in the marketplace in terms of volume. ,aybe lower than anticipated investors and risk mode for the last few weeks. >> you make a nice distinction this morning about the venezuela laws. volume, as youh mentioned? or is this about something that went wrong? >> alternately it tends to be a terms ofng quarter in trading. if you look at the linked quarter basis, we still think it will be up 25%, 35%. most banks are just comping against the tough one q 13. currency markets on this quarter, we are seeing investors in a risk off appetite given global uncertainties. >> give us the core back a diamond dialogue this morning about who you write about where they pay out notices from the summer into next fall. how bad will the firings and

layoffs be if the first quarter is off the mark? >> we have seen the industry in general be very tight in terms of headcount. you have seen banks paring back. i think mostly it is a steady as she goes kind of move through the quarter in the hopes that things pick up as the year progresses. for the last several years we have seen traitor move -- trading move higher during the year and then trail off as the year regresses, so i think the company has been active in terms of fine tuning of -- fine tuning around this regulation. i would expect most not to flinch given the turmoil. >> i have to ask you about citigroup, the bank announced it is jet -- it is adjusting downward because of its disclosure results, but before that there was another disclosure. are we going to get more unexpected headaches from citigroup this quarter? >> when you are a big bank

operating in a lot of countries, there are a lot of places for things to go wrong. they did run into fraud issues theirico and in investigation with respect to anti-money laundering. i think that negative headlines for this industry seem to be part of the last several years, sometimes tough to predict, but in the context of a very big and global company, these are minor speed bumps. >> quickly, modeling single digit returns on equities, how >> we see return? them getting into double digits by next year and it is working down into breaking even, more effectively utilizing capital, continuing to focus and generate positive operating leverage. jason,k you so much, from barclays capital markets this morning. >> we have breaking news out of knowomm, something you

about well, boosting share buyback by $5 billion, boosting its quarterly dividend to $.42 per share from $.35 per share, coming as steve mulling cough was just promoted officially to ceo. >> good morning, everyone. right here on bloomberg television, bloomberg radio morning,, with me this scarlet fu as well. the president of mcafee and intel in security and cyber myurity, i have to change passcode? >> apparently you have to do it once every three months. >> i have to change my passcode. >> as a vladimir putin speaks out on ukraine this morning, the interim government has enlisted the international monetary fund following the treasury pledge. ukraine will seek about $3 billion in financing the first installment of a loan program where in total they want a $15 billion loan for the first

payment could be made in the next 14 days. >> very good, scarlet. to someone with terrific perspective on international monetary fund, the spring meetings of the imf that can. maybe it is g-seven-zero, john is a former imf deputy directing manager, he was the managing director for a spell, he now teaches at the john hopkins school for danced international studies. what is christine lagarde's topic number one? what does she need to do in the coming weeks? >> certainly ukraine represents an important challenge for the imf and the international community. it should be recognized, of course, that recently the news has been dominated by the political and, dare i say it,

political and geopolitical aspects and considerations, but underneath that has been a building crisis in the ukraine that on a set of policies were absolutely unsustainable and represented a road to ruin for the ukrainian economy. this has to be put right, if ukraine is to be in a sustainable situation, regardless of the political situation. >> for many years you fought off the critics of the imf, they are out again with knives, swords, and every other weapon they can find. they do not believe that the imf should meddle in the ukraine. defend the institution. >> i do not think that i have to. it is an institution of 100 88 countries, representing a broad international community, representing the consensus of the international community, setting the rules of the game for international, financial, and monetary relations. it does not need defense.

>> speak to the u.s. taxpayer. the imf has funds, they have always been a bit short on the budget, to be polite about it. will the u.s. have to come to the rescue of the ukraine with a cover for the international monetary fund? >> first and foremost, the issue has aaine, a country that fairly large population, 45 million, low per capita income, but a bright future if they could get their economy in order, the first order of business is to set policies right. they need a competitive exchange rate, abandoned a virtually crazy economic energy subsidy program that results in a very large budget deficit and results in a very large balance of payments deficit. these have to be fixed. they are fixable. that is the first order of business. >> imf headlines? >> this is from the u.s. treasury, announcing their

assistance plans, the $1 billion loan guarantee is planned and they plan to send technical advisers to the ukraine, saying the treasury will be at the center of international aid and the plan will live to the russian tree move. >> would you presume that the imf is speaking with russia? ofis there a lack communication there? >> certainly, they are members and are represented at the executive board my and executive director. i am sure that there is communication. but the important point here is the technical analysis of what is needed to put ukrainian economic policy in a sustainable and positive mode. then to arrange the financing necessary to make the implementation practical. you so much.k greatly appreciate that from our washington news bureau this morning. really talking about the clamps that have to be placed down in the process. >> with a context as well.

>> without question, the sequence. >> apple, on a hiring spree for these jobs. location,about location, location. we will tell you more when we come back. ♪

>> it is a good, good morning.

what a rebound, dow futures are up 100 81 points. i am tom keene and as always, scarlet fu is with me, cory johnson helping out at "numbered west." worldwide, look for that this afternoon. earlier you can watch betty liu on "in the loop." she is with us now. >> cory johnson is on all day long. >> all day long. >> cory's on. >> i love it. >> we have a couple of guests, one of the most influential venture capitalists in israel is in the united states and we are going to talk about the startup culture overseas and in the u.s.. he has helped dozens of companies come to the u.s. and list on the nasdaq. we will speak with him. also, the chairman of daimler. >> if lips came on with a

mustache? >> i love that. >> they have never been seen in the same place. botox for now, tom. >> guys, guys, he is live from the auto show. mercedes will be unveiling their new s class coupe. want to know what you drive, tom. >> 1953 ambassador. >> is that a good one? would fitt know if i in that car. >> betty liu, thank you so much. morning movers right now, scarlet, get us started. >> six percent in the premarket, up nine percent, maybe, jcpenney is no longer going to provide monthly sales updates. they started doing that last year to really shine light on their turnaround effort, which is now taking hold, and now they will stop giving these updates.

it is interesting, walmart does not really do that either, so now they are pushing back on giving these updates. >> what do you have, cori? >> facebook is in talks to purchase titan aerospace, $60 million according to techcrunch. they want drones? they want internet everywhere. >> from mcafee, security and all the new technologies, if you were to talk to facebook this morning, what would be your message to mark zuckerberg? most important thing is having this massive online presence, make sure the security can deal with that from the beginning. >> isn't it just doubling and tripling passwords? >> i don't think so. if you share your digital footprint online, that is your identity. >> one of my passwords was -- who is your high school girlfriend, i could not

remember. >> you could not figure out which one to go with? >> that is right. >> the changing roles, lots of people really wrestle with them. >> i'm serious, changing my passwords. >> especially for my bank. >> done. >> girlfriend number two, coming up. kerry in kiev, next. ♪

guest host right now, the president a, still with us. let's get you some company now from the files of "bloomberg west yuriko cbs plans to sell advertisements to old shows, including ncis, three days after they are first broadcast as part of a move to generate revenue from audiences who watch these shows on a delayed basis. firing back at carl icahn, he said he recused himself when they sold skype to a group of investors that included his venture firm. as you know, he has accused andreessen of benefiting from the deal and shareholders. apple is on a hiring spree in

asia. they have hired hundreds of engineers and supply chain managers in china and taiwan. the hiring comes as apple tries to speed up product development and introduce a wider range of devices. that is today's company news from the files of "bloomberg west." surprising that more companies are not enjoying this. >> apple certainly gets more headlines. .ne of the early secrets >> none of yours know? >> it is a secret. but when you are in doubt, go to apple. >> why is this? why this fixation? >> apple. >> with apple? >> because of the user experience. they make products that customers want to use. >> is it enough to move to smog choked beijing to work for apple? it is one thing to love the experience of the product, but another to put your health at the expense of your children.

>> growth globally, there is a very attractive brand around these tier one high-tech companies. of the things that you have great perspective on is the geography of this. silicon valley, losing magic like others, like new york city? >> it is thete, kale, man, the kale. >> the weather is fantastic, but the other thing you have to education. again in you can get talent in so many different countries that you were not able to get five years ago. >> you talked about how san francisco was becoming the home base, not the valley. that has got to increase the tensions with the people living there already.

we keep hearing about the income inequality debate raging there. >> it is amazing. 10 years ago it was all about silicon valley and now companies are moving into san francisco. >> how the do you recruit engineers and the people around the engineers that let the isineers engineer? >> it definitely a high competition for jobs these days. a lot of people are coming out with jobs that are growing. we want the top engineers that are out there. university systems, you try to get close to them. >> who you sell your intel? >> we are an innovation company. we are known as a great place to work for engineers. >> i knew that you were going to say that. what were you going to say, no? we are lousy, the coffee is bad? what not as bad as bloomberg. >> we asked everyone, which no -- which mobile device do you feel is the least or most say. thee is the most safe,

first answer. android is the least say. is that stereotyping? or is that true? >> when you look at the bad guys out there who have to write the malware that they write, as more and more people migrate words android and apple, more bad guys will migrate there as well. we are doing critical business applications on mobile devices, makes it -- making them more attractive. >> the second answer here, android is the safest, because of the range of security apps. >> is that true? >> definitely not true. there is more targeted malware because of the growth in users of android. you're talking about the biggest platforms out there, they both have their challenges. >> i wonder, fund the let -- fundamentally, when does the mcafee acquisition of intel show itself? we see intel with

mcafee protection wired into it? >> the production of silicon, getting it into the industry, that was a slow process. the first couple of years was about running out of things that exist. now it is about designing products side-by-side to leverage security, like mcafee. operatingar the profits were zero. why intel is so excited about security. fast-growing, a highly profitable industry, that is definitely the propos kiss. >> do you think that operating profits from your division will increase? >> over the next couple of years security will become a bigger part of the picture overall. >> might i point out that intel brings down $.18 on the dollar to the dash to the bottom line?

even if you are breaking even or at a loss, they are $.20 on the dollar. were the biggest security company when we were acquired back then. the intel acquisition only helps. >> look at the dividend. i did not know that. >> the second-largest market cap. >> can i do a surveillance correction? we need to have a surveillance correction. earlier when i said the bloomberg coffee was bad, i was completely wrong. connecticut, thank you for e-mailing that. >> let's get to our agenda as well. as tom flavors his coffee. thet has got to be president with his deficit.

we do this different than anyone else. it bears a little bit of respect , the people that we love to hate in washington have quietly gotten the vector right. whatever the politics are, the fact is that we are miles, miles from the train wreck that we were three years ago. >> there is no mention of entitlements whatsoever in this budget, they are putting it off until the midterm elections. >> i think that that is a positive story. >> i would not call it a positive story. awould attempt to have discussion. >> let's talk about banks. citigroup and others racing for a trading slump, mid to high teens, the jp morgan ceo jamie dimon talked about equity and fixed income trading.

barclays told us that most of this is priced in right now. >> jason goldberg made it clear that this is much more volume like them losses here. right now we have got a continuing story of the ukraine, secretary kerry has landed in kiev. in dear a locked non-joins us. what is the to do list for the secretary this morning? onhe just arrived in kiev this blustery afternoon and he is bringing with him a package of u.s. assistance that consists of $1 billion in u.s. loan technical, as well as assistance from the treasury department on a variety of things, from helping ukraine reduce dependence on imported with the reduction in energy subsidies they used to to from russia, helping recover stolen assets and

election monitors. it underscores the support of the u.s.. quickly, that, very how will the senator link with these efforts? is that the point team is here and it is meant to be the u.s. backing them up, putting these loan guarantees behind whatever international loans come to the ukraine. .> thank you so much she just landed there in kiev, thank you for the rush there with secretary kerry this morning. >> thank you for joining us this morning from mcafee, thanks for coming with me across the coast. we will head back soon. >> we have much more coming up, continuing on radio. tom, not a lot of economic data, but the markets are certainly feeling better. >> the yen is really holding up as i put my litmus paper on it. a much better morning.

>> russia strengthening for a change after being in freefall. >> that is right. >> "in the loop," next, have a great morning everyone. ♪

>>'s proposed budget to congress today. and billion senate retirement savings plan. the president is expected to block the budget and offer one of the wrong. assistanced economic package for the ukraine and a $1 billion loan guarantee. typical assistance and support to withstandry politically motivated transactions by russia. global markets bounced back -- selloffe sellout yesterday. anywhere from one percent to two percent. futures indicating stocks will after an higher today ugly and grim monday. president obama'2015 budget being sent to congress, as you m